The Conservative Party is promising lower deficits if it forms government by spending significantly less on child care, and pushing back new health spending to a second mandate, while dramatically increasing payments through the low-income workers’ benefit.
The Conservatives released the costing details of their platform just hours before the start of the first official leaders’ debate. The Conservative plan proposes $51.3-billion in net new spending over five years, compared with the $78-billion proposed by the Liberals.
Conservative Leader Erin O’Toole released his platform on the second day of the election campaign. At the time, however, it included few price tags. The party said it was waiting for cost estimates from the non-partisan Parliamentary Budget Officer, whose office reviewed 31 Conservative policies.
The most expensive policy the Conservatives propose is doubling the Canada Workers Benefit, which would cost $24.1-billion over five years. The benefit is provided to low-income workers making less than $24,573 or families making less than $37,173. The Conservatives propose doubling the benefit, meaning individuals could receive up to $2,800 a year and families could get up to $5,000.
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One of the biggest differences between the Conservative and Liberal platforms is how much the parties would spend on child care. The Liberals propose spending $29.8-billion over five years for a national, $10-a-day child-care program. The Conservatives would scrap that and instead introduce a tax credit to help cover child care, estimated to cost the treasury $2.6-billion over five years.
The Conservative party said provinces would be allowed to keep the $3.1-billion budgeted this year for the Liberal child-care program, but the deals would be scrapped after that.
The Conservative Leader did not hold a press conference about the spending plan, but in a press release Mr. O’Toole said it “will get the economy firing on all cylinders and ensure workers benefit from higher wages, more secure jobs and better supports for families.”
Liberals derided the Conservative spending plans, saying in a statement it showed a “fundamentally different vision.” On health care, climate change and child care, Liberal spokesperson Alex Deslongchamps said “none of these are priorities for the Conservative Party.”
NDP Leader Jagmeet Singh has not yet released his party’s costed platform. In a statement, he said Mr. O’Toole’s plan “fails to close corporate tax loopholes and gives the ultra-rich a free ride, leaving everyday families to pay the cost of the pandemic.”
Unlike the Liberals, who don’t commit to balancing the budget, the Conservatives say they would rely on economic growth and fiscal restraint to end deficit-spending within 10 years. The party only released the numbers for the first five years. It shows that, in 2025-26, the Conservatives would run a $24.7-billion deficit, compared with the $32.1-billion proposed by the Liberals for the same year.
A proposed Canada Investment Accelerator, which would give companies a 5-per-cent tax credit for capital investments, would cost the treasury $13.8-billion over the next three years, according to the spending breakdown.
Retroactive changes to the fiscal stabilization program would see a Conservative government spend $9.7-billion in the first year. The program acts as an insurance policy for provinces that suffer a significant drop in revenues. At the briefing, Conservative Party officials said the one-time payment would largely go to Alberta, Saskatchewan and Newfoundland and Labrador.
A two-year program proposed by the Conservatives to replace the current federal wage subsidy, which expires in October, would cost $7.6-billion, according to the party. Called the Canada Job Surge Plan, it would pay at least 25 per cent of the salary of a net new hire, and the subsidy could reach a maximum of 50 per cent, based on how long the person was unemployed.
And the Tory plan to extend the employment insurance sickness benefit to 52 weeks is projected to cost $4-billion.
The Conservative spending details also show Mr. O’Toole’s much-touted plan to give provinces an extra $60-billion for health care will largely be realized if the party wins this election, as well as the next one. The estimates released on Wednesday show only $3.6-billion of that would role out in the first five years under the Conservatives.
The party is promising to increase health transfers by 6 per cent a year, in contrast with the current formula that has a 3-per-cent floor, but can be higher when the economy is growing faster. Because of expected strong growth over the next couple of years, there is not much difference between Conservative increases and the status quo in the short term.
Spokesperson Mathew Clancy said the party would guarantee a minimum 6 per cent starting in 2022-23.
The detailed costing released by the Conservatives also walks back the idea, contained in their platform, that they can balance the budget without cuts as long as the economy grows at “3 per cent or more per year.”
The party now says it can balance the budget over the next 10 years, even if growth is slower. The PBO expects real GDP growth of 6.1 per cent this year and 4.2 per cent next year, as the economy bounces back from the pandemic, before dropping down to an average of 1.7-per-cent GDP growth between 2023 and 2025.
Despite avoiding the 3-per-cent growth target in their costed platform, the party said it expects a number of its proposed initiatives – including a new advanced research facility, tax credits for capital investments, and lowering barriers to interprovincial trade – to increase productivity and enhance GDP growth.
With reports from Bill Curry