Stephen Harper’s pre-election spending binge isn’t the final word

Posted on November 13, 2014 in Governance Debates – Opinion/Editorials – The NDP’s Tom Mulcair and Liberal Justin Trudeau should challenge the Conservative narrative that Canada can’t afford ambitious policies.
Nov 12 2014.   Editorial

To hear Prime Minister Stephen Harper’s government tell it, the Conservatives have pretty much burned through the kitty by rolling out their $26.7-billion package of middle-class tax breaks and family support programs well before the coming election. The measures will bore a deep hole in anticipated federal surpluses over the near term.

So if the opposition New Democrats and Liberals promise Canadian voters anything ambitious in the coming election, they’ll risk looking reckless, or worse.

That was the not-so-subtle subtext of Finance Minister Joe Oliver’s dire warning that this isn’t the time for “risky experiments,” as he unveiled his fall economic update on Wednesday. The Tories clearly hope to put the opposition on the defensive.

The government’s latest spending announcements ensure that Ottawa will face a $2.9-billion deficit this year instead of a surplus, and will see only a thin $1.9-billion surplus next year. If the opposition promises big-ticket items like national child care or additional infrastructure, the Tories will no doubt demand that they tell the electorate whether they intend to raise taxes, cancel the government’s populist giveaways or push the books back into the red.

But NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau need not shy away from such a debate. The Tory fiscal narrative deserves to be shown up for what it is: a dubious mix of bad policy and sheer flim-flammery. There are better ways to allocate federal tax dollars.

As the parliamentary budget office has reported, Conservative income-splitting measures under the so-called Family Tax Cut will drain $12.6 billion from the coffers, a policy that will disproportionately benefit affluent households rather than working families. An enhanced Universal Child Care Benefit will cost Ottawa $26 billion and provide $160 monthly per child, far too little to cover child care for working parents. And a modestly bumped-up Child Care Expense Deduction will cost Ottawa nearly $400 million while putting only a few dollars more a day into family hands.

At the same time, the Conservatives propose to claw back $12.5 billion from taxpayers, mostly by cancelling the Child Tax Credit and by taxing the enhanced new child benefit. That’s the equivalent of a third of their new giveaways. Except for affluent households this Tory largesse turns out to be considerably less than meets the eye.

Rather than let the Conservatives get away with the claim that this bad deal is done and settled, Mulcair and Trudeau owe it to Canadians to come up with better approaches. They have options. There’s still room to invest, given the cumulative $31-billion surplus that Ottawa projects in the next five years, after taking into account the latest government giveaways. And the opposition has good reason to roll back Harper’s regressive policies, if elected.

Harper can push the next budget through Parliament but he can’t bind a future government to his five-year spending plan.

As Mulcair and Trudeau both recognize, what Canada needs is a better mix of policies. Mulcair, to his credit, was especially combative on that theme, promising “there will be a choice” put to voters in the coming campaign.

Much of the money Harper is frittering away would be better redirected to help underwrite the NDP’s affordable national child-care program, or to bankroll the additional job-boosting infrastructure, higher education and health care that both major opposition parties have rightly identified as priorities. That would provide more benefit to more working families and grow the economy.

As the Star has argued before, Canadians deserve more than a few gimmicky tax giveaways from their federal parties. The nation has pressing needs. We need progressive, ambitious policies to meet those needs. That gives the opposition plenty to talk about.

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