NDP vow for balanced budget means big cuts, Liberals warn

Mulcair accused of ‘siding with Harper’ as Trudeau refuses to rule out running deficits

The Liberals are warning that NDP Leader Thomas Mulcair would be forced to pursue a policy of “austerity” in order to meet his promise to balance the budget in his first year in office.

“Thomas Mulcair talks a lot about looking out for average Canadians, but his only path to a balanced budget so quickly is massive cuts and backing away from the NDP’s spending promises,” said Chrystia Freeland, the Liberal candidate in University-Rosedale.

Daylight opened up between NDP and Liberal economic policies this week, after Mulcair pledged Tuesday to balance the budget and Liberal Leader Justin Trudeau refused to rule out running a deficit.

While touring a small manufacturing business in London, Ont., on Wednesday, Mulcair was resolute in his promise, saying the NDP is “not entertaining any thought” of running a deficit, even if global economic trends continue to worsen.

The party has yet to explain how it would avoid going into the red to fund its campaign promises, however. The pledges include a proposed $40-million tax credit for businesses that invest in innovation, as well as a proposal to cut the small business tax rate to nine per cent from 11 per cent.

The party would also have to find money to pay for its key campaign pledge of creating one million $15-a-day child-care spaces, which would require $5 billion a year when fully implemented.

Some of the party’s plans could be financed by scrapping Conservative Leader Stephen Harper’s $2-billion incomesplitting tax plan. Mulcair said the remaining details of his party’s platform will be forthcoming.

“We’re going to have a fully costed program. Everybody will get to see what the NDP plan is every step of the way,” he said.

In a move mirroring Conservative attack ads that claim Trudeau is “just not ready,” the NDP sent out a press release Wednesday afternoon asserting the Liberal leader’s position on the budget is proof “he’s not up to the job.”

“Thomas Mulcair’s phoney rhetoric is a mirage,” said Freeland in a press release. “He’s siding with Harper in favour of austerity instead of investment, jobs, and growth.”

Harper warned at a stop in Lancaster, Ont., that the alternatives offered “by the other two guys” would ruin the country’s finances.

Harper cautioned that Mulcair would “bring in an avalanche of tax increases” that would “wreck the economy,” while Trudeau would usher in an era of “permanent deficits.”

Sticking to the messaging he has deployed for the better part of a decade, Harper argued that under his leadership Canada has been an is- land of financial stability in a volatile global economy. He said the uncertainty lapping at the country’s shores this week, driven by the Chinese stock market crisis, is all the more reason for voters to stick with his party on Oct. 19. “Make sure we do not go down the route of high taxes and high deficits,” Harper said. “This government wants a balanced budget and low taxes, and that is what Canadians think the best course is for our economy.”

Trudeau, who was hitting the hustings in Newmarket, Ont., on Wednesday, said Harper is in no po- sition to criticize the Liberals’ fiscal plans, given that the Conservatives presided over eight consecutive federal deficits.

Although Trudeau’s refusal to commit to balancing the budget has opened him up to attacks from opponents eager to portray him as out of his depth, there’s no shortage of economic experts who believe reigning in government spending during a downturn will only worsen the problem.

On Wednesday, Trudeau framed his deficit position as a pragmatic strategy that would eventually put the country on sound financial footing.

“The way to grow out of deficits is through economic growth, is through investing in Canadians,” Trudeau said. “That is how you avoid structural deficits.” Trudeau also announced a new boutique tax credit, the latest one in a campaign that has seen all three main parties try to win over segments of the population with targeted tax relief. He promised to give teachers a credit for up to $1,000 worth of school supplies they buy for their students, which the Liberals say would save educators up to $150 a year.

The Conservatives countered that the plan is redundant because their employment tax credit, implemented in 2006, already covers teachers’ job-related supplies.