Canada’s Opposition Liberal Party, under fire for promising to run budget deficits if they win an October 19 election, said yesterday they would raise billions by cracking down on tax loopholes and trimming expenditure.
Most recent polls show the center-left Liberals stuck on around 30 per cent with both the rival New Democrats and the ruling right-of-centre Conservatives, who are trying to pull off a rare fourth consecutive victory.
The Liberals say they need to run deficits for three years to help finance a national infrastructure programme needed to bolster a sluggish economy. Rival parties, who promise to keep the budget balanced, say the Liberals will run short of money and the deficits would be crippling.
In a detailed costingof their program, the Liberals said that by the 2019/20 fiscal year they would raise C$3 billion ($2.3 billion) annually by cutting expenditure and boosting personal income tax revenue.
“We are very confident we can find these savings... I think it is the responsibility of any government to continue to seek ways to spend taxpayers’ money prudently,” said Liberal legislator John McCallum, a former national revenue minister.
The Liberals promise to cut tax benefits for those earning more than C$200,000 a year, cap how much people can claim through stock option deductions and clamp down on tax evasion.
Leader Justin Trudeau has already vowed to raise taxes on the top one percent of earners and cancel child benefits paid to all parents, focusing relief instead on those who need it.
The costing said the deficit under a Liberal government would be C$9.9 billion in 2016/17, C$9.5 billion in 2017/18 and C$5.7 billion in 2018/19. The budget surplus in 2019/20 is due to be C$1.0 billion.
The party it would lower the federal debt-to-GDP ratio to 27 per cent from the current 31 per cent.
In a statement, the New Democrats said Trudeau’s spending commitments “continue to pile up along with the questions about how he’s going to pay for them”.
Earlier this month the New Democrats – who have never governed federally – said they would raise the corporate tax rate to 17 per cent from the current 15 per cent and crack down on tax avoidance.