Liberal Party re-election platform promises $94 billion in red ink, no plan to balance budget

Speaking at a rally in Premier Doug Ford’s backyard on Sunday at University of Toronto’s Mississauga campus, Prime Minister Justin Trudeau portrayed himself and his Liberal Party as a bulwark against Conservative austerity.

“Will we let Conservatives like Doug Ford and Andrew Scheer take us backwards? Or will we keep going, and build on the progress we’ve made?” said Trudeau in a speech that referenced Ontario’s leader nearly twice as many times as Trudeau’s federal challenger.

Trudeau’s choice of venue also dovetailed with the Liberals’ pledge to increase annual Canada Student Grant eligibility by 40 percent, or to a maximum of $4200. The PM caged it as a contrast to Ford’s cuts to public education, and beyond.

“(Ford) cut Ontario’s pharmacare program. And he scrapped Ontario’s cap-and-trade program,” said Trudeau. “Think about that. Cuts to education, to healthcare, to environmental protection.”

“We can’t afford to double down on the Conservatives – not here in Mississauga, not across Ontario, not anywhere in Canada.”

As Canadian taxpayers of the future will carry this additional debt burden, on top of more than $72-billion in deficits the Liberals booked since winning a majority in 2015, the party justifies it on the basis of a shrinking debt-to-GDP ratio.

The Liberals “platform debt/GDP ratio” falls from 30.9 percent in 2020, to 30.2 percent by 2024; the final year of their borrowing plan which proposes a $21 billion deficit, the lowest of the four fiscal years a Trudeau II government envisions.

“The critical thing for a government, is your capacity to carry a level of debt in a sustainable (way)…and that’s why the debt ratio is critical,” explained Public Safety Minister Ralph Goodale, who fielded questions during his party’s platform lockup with reporters in Ottawa.

Asked how the Liberals justify spending beyond the federal government’s ability to generate revenue, and why they continue to break their promise of delivering a balanced budget, Goodale said growing the economy is key.

“The critical requirement in the Canadian economy is to sustain more and more economic growth,” he said. “So the jobs can be there, the salary improvements can be there, the income security in retirement can be there, and people can see themselves moving forward.”

The national debt, an aggregate of federal deficit spending, currently sits at approximately $760 billion. Instead of balancing the budget, like Trudeau promised but failed to do in his last year of governing, the Liberals are promising four more fiscal years of deficits; $27.4-billion for 2020-21, $23.7-billion in the following fiscal year, then $21.8-billion (2022-23) and $21-billion (2023-24).

And the price tag for taxpayers on a range of new Liberal spending promises includes upwards of a billion dollars annually to cover increases to post-secondary student grants – $780 m in the first year of implementation and rising to more than $1 billion by 2023-24.

Proposed government revenue generators in the Liberal Party’s platform includes a three percent tax on incomes of companies like Google and Facebook, who offer targeted advertising or “digital intermediation services”.

But the Parliamentary Budget Officer’s independent analysis of the tech-tax, comes with a “high uncertainty” disclaimer and marginal revenue estimates; just $730 million in 2023-24 by PBO’s analysis.

The Liberals’ proposed “luxury goods sales tax” on personal automobiles, boats and planes worth more than $100,000 also earned a “high uncertainty” rating from the PBO for its revenue-generating potential.

In its first year of application, PBO estimates such a luxury tax would collect $585 million for federal coffers with the following proviso: “luxury goods are sensitive to uncertainty in the economic outlook,” writes PBO and “price sensitivity of consumers.”

At the other end of the vehicle affordability spectrum, the Liberal platform promises $2000 rebates for people who purchase second-hand electric cars.

Other platform promises include increasing Old Age Security payments for seniors 75 years or older and up to $40,000 in interest-free loans to homeowners that want to retrofit their residences with energy-saving technologies.

Liberals’ have also sweetened their first-time homebuyer’s incentive by raising the purchase price cap from $500,000 to nearly $800,000.

Under the scheme, Canadian Mortgage and Housing Corporation provide qualified buyers with an interest-free loan for up to 10 percent of the home’s value (new builds;) five percent for existing residences.