Parties’ costed platforms get passing grades despite their wishful economic projections
OTTAWA — The costed platforms for the federal election are out, giving researchers a chance to dig into party numbers that reveal some wishful thinking on economic projections, and some promises that could be upended by global economic turmoil.
Here’s what you need to know.
News
Parties’ costed platforms get passing grades despite their wishful economic projections
Both Liberal and Conservative platforms assume fiscal conditions will improve next year, but neither claims they’ll slay the deficit
Liberal Leader Mark Carney, right, and Conservative Leader Pierre Poilievre squared off over key economic issues in last week's televised debate. Photo: The Canadian Press/Christopher Katsarov Luna
Liberal Leader Mark Carney, right, and Conservative Leader Pierre Poilievre squared off over key economic issues in last week's televised debate. Photo: The Canadian Press/Christopher Katsarov Luna
OTTAWA — The costed platforms for the federal election are out, giving researchers a chance to dig into party numbers that reveal some wishful thinking on economic projections, and some promises that could be upended by global economic turmoil.
Here’s what you need to know.
Passing marks: The Institute of Fiscal Studies and Democracy (IFSD), a think tank based at the University of Ottawa, assessed the platforms based on three criteria: transparency, responsible fiscal management, and realistic fiscal and economic projections. None failed, but some did better than others.
Talking Points
The Institute of Fiscal Studies and Democracy assessed the fiscal credibility of the three main parties’ platforms, calling the Liberal one “good” and giving a “pass” to both the Conservatives and the NDP
The Council of Canadian Innovators welcomed the Conservative proposal to defer tax on capital gains reinvested in Canada, and the role the Liberals see for entrepreneurs in the “Buy Canadian” procurement policy
Conservatives: Shrinking the budget deficit during a trade war is generally ill-advised for an advanced economy with a strong credit rating like Canada, the IFSD says, as it limits room for spending to stabilize the economy. The party’s assumptions about how much money will come from tax cuts and other measures is optimistic, the assessment says: “Most of the revenue increases are based on a significant increase in economic activities, which may not materialize, especially in the current period of heightened economic uncertainty.” Still, it adds, the relatively small amount of new spending mitigates the risk. Grade: 76 per cent (“pass”).
Liberals: The IFSD highlights the plan to put operating and capital spending into separate categories. (Kevin Page, the former parliamentary budget officer who founded the IFSD, has previously told The Logic he thinks this is a good idea.) The Liberals’ promised program review could serve to shift spending away from social programs, the assessment adds, but if viewed as a way to improve government efficiency, the review “will likely struggle to hit its fiscal target.” Grade: 80 per cent (“good”)
NDP: The platform gets some marks for its gloomier outlook on the impacts of the trade war, but the IFSD says focusing on support for individuals and households—rather than economy-boosting moves—falls short. Proposed higher taxes on the wealthy could slow economic growth, it adds, making it harder to pay for costly new priorities. Grade: 70 per cent (“pass”).
Meanwhile, the Council of Canadian Innovators (CCI) weighed in on what the Liberal and Conservative platforms have to say about the innovation economy. The non-partisan organization representing tech leaders found things to like in both, but says Pierre Poilievre and the Conservatives lack a larger vision for the role of entrepreneurs in the economy. As for the Liberals and Mark Carney, it says the test would be in the delivery of its promises.
CCI’s president, Benjamin Bergen, welcomed the Conservative proposal to go beyond cancelling the tax hike on capital gains by deferring taxes entirely on capital gains reinvested in Canada until the end of next year. “It helps build the flywheel that’s really required in the innovation economy,” Bergen told The Logic. It will help keep capital in Canada, Bergen said, while giving entrepreneurs a reason to stay and build their next venture here.
In the Liberal platform, Bergen welcomed the pledge to further increase the claimable amount under the scientific research and experimental development tax incentive program (SR&ED) and create a “patent box” system that would give companies a tax break on IP held in Canada. Specifying the role that innovators and entrepreneurs could play in a “Buy Canadian” federal procurement policy was, in Bergen’s view, another positive. “If you look at any successful innovation economy, those that use their domestic innovators in areas where they have advantages build firms, build wealth, build prosperity and build economic security and sovereignty,” he said.
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Photo: The Canadian Press/Christopher Katsarov Luna
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