Parties offering clear choices to Canadians

If elections are about clear choices, Canadians are being presented with one between the Liberals and Conservatives. Even though Andrew Scheer’s party has not yet released its full platform, it’s dead certain it will go in the opposite direction from Justin Trudeau’s Liberals.

We can say now that the Liberal platform has been released. It is long on spending and investment and short on concern about deficit and debt. What we have seen of the Conservative platform suggests it will tilt toward austerity. It must, since Scheer promises to eliminate the deficit by 2024.

The Liberals have a different take on balancing the budget. They say the size of the deficit is less important than national debt compared to economic growth — Gross Domestic Product. They argue using that measurement, the current debt-to-GDP ratio of 30.9 per cent will decline to 30.2 per cent in 2023-24. They argue the economy is in good shape and has grown under their watch. Many economists agree. The Institute of Fiscal Studies and Democracy, which analyzes party platforms for transparency and reasonableness, gives the Liberals a passing grade, stating: “IFSD finds that the Liberal Party Platform Costing merits an overall ‘good’ rating with a ‘pass’ on realistic economic and fiscal assumptions and a rating of ‘good’ with respect to the principles of responsible fiscal management and transparency.”

It’s also worth noting that the Parliamentary Budget Office warns the platform’s projections for new revenue come with a high degree of “uncertainty” because of the variables involved.

All told, the Liberals are proposing new investments of $9.3 billion in 2020-2021, increasing to $17 billion in the final year of their mandate. The federal deficit would increase to $27.4 billion in 2020-2021, declining to $21 billion in 2023-2024.

Here are some platform highlights:

In an overdue move, the Liberals would tax digital companies — think Amazon, Google, Netflix, Facebook and Apple — with Canadian revenues of at least $40 million at a rate of 3 per cent on revenue from ad sales and user data. Finally, the playing field will be somewhat levelled for Canadian companies.

The platform also promises to find savings of $2 billion next year and $3 billion in four years.

There is help for students, increasing the maximum annual amount available from the Canada Student Grant program by $1,200 to $4,200. Also, interest would not be charged for two years or until a grad is earning at least $35,000. And if income falls below the threshold, interest would be suspended. Grads who are new parents would have an option to suspend loan payments until their child is five.

Previously the Liberals announced a Canada Child Benefit increase of 15 per cent for children under the age of one, an increase in the personal tax deduction to $15,000, a boost in Old Age Security for those over 75, interest-free loans of up to $40,000 to cover home retrofits with environmental benefits and tax cuts for firms developing clean technology.

Federal minimum wage would be increased to $15 an hour. And finally, pharmacare is still on the table, although it is not costed because, the Liberals say, that will depend on negotiations with provinces.

Will voters be attracted to all these “investments?” Will they worry that there’s no road map to a balanced budget, which could change things fast in the event of a global financial crisis? Or will they opt for Liberal largesse, which to be fair has contributed to near record low unemployment and robust economic growth? We won’t have to wait long for the answers. In days to come we will have a similar look at other platforms.