Thomas Mulcair and the NDP are riding an unprecedented high months before an election, but their weakness is still the same: Voters worry they would be big spenders.
This time, their major spending promises seem modest when they cost them out over a four-year mandate. But over the longer term, eight or 10 years from now, they are growing commitments that would eat up a big, increasing portion of the federal budget.
Politically, their saving grace is that those promises focus on things Canadians really care about: health care and child care. The question is whether they're willing to commit to a track of substantially higher spending down the road.
Mr. Mulcair and his party have worked to shed the big-spender image. They rely on the same fiscal projections as the Conservative government and promise there will be no increase in personal taxes. Their economic policies are middle-of-the road: Although they would increase corporate taxes, they would cut small-business taxes and provide tax breaks to aid manufacturers.
And they have constructed their major social-policy promises so the near-term price tag – for the four years of a government mandate – isn't huge.
The two biggest – uncapping health transfers to the provinces and a national child-care program – would cost about $3.5-billion a year in 2018-19. In federal budget terms, that's relatively modest, just more than 1 per cent of spending.
The problem is the costs of those commitments will spiral after that, so 10 years from now the additional cost will be $15-billion to $18-billion a year.
One reason the near-term costs are more affordable is that the NDP's child-care program would be phased in, so it wouldn't be universal for eight years. It will be expanded as Ottawa strikes agreements with the provinces, Mr. Mulcair has said. The NDP says it would cost $1.9-billion in 2018-19 but $5-billion in eight years.
But the bigger impact comes from the NDP's pledge to undo the planned tightening of federal health transfers.
Right now, Ottawa transfers $34-billion a year to the provinces for health care, and that amount goes up 6 per cent a year. Stephen Harper's Conservative government plans to slow down those increases so that after 2017 transfers will increase in line with nominal growth in the economy, which the Parliamentary Budget Officer estimates at 3.9 per cent a year.
The NDP promises to undo those "cuts" and keep the 6-per-cent annual increases.
That seems to match what the public wants. Polls place health care atop the list of public concerns and suggest Canadians would accept sacrifices to pay for it.
Costs are rising: Health care accounts for half of provincial program spending, and it's on track to grow at 6 or 7 per cent a year, says economist Don Drummond, the Matthews fellow in global public policy at Queen's University. Under the Conservatives' plan for health transfers, the federal share of health-care funding will fall dramatically, he noted. Ottawa would shrink its role in medicare – and its leverage to insist on national rules.
But there's a long-term fiscal problem with the NDP plan: Costs would accelerate quickly. If a major budget item grows much faster than the economy, it squeezes out other things. Ten years from now, NDP health transfers would be at least $10-billion more per year than the Conservative plan. Eventually, other things would have to be cut or taxes increased.
Mr. Drummond argues the public is probably willing to allow health care to crowd out some budget items, but 6-per-cent annual increases might be too much. He thinks it's possible to find reductions in health-care costs so they grow at a somewhat slower rate, so Ottawa might set transfer increases at 5 per cent.
For the NDP, the problem isn't just two promises, on child care and health care, that would grow in cost. They also favour other policies, like national pharmacare and undoing Mr. Harper's plan to raise Old Age Security eligibility from 65 to 67, which entail big, growing costs 10 or 15 years from now.
Now that Mr. Mulcair is on a roll, perhaps even the front-runner, his party still faces voters' concerns about how they'd spend – and they should be explaining not just how much they'd spend over four years, but the cost they'd commit to for the next decade.
Campbell Clark