Prime Minister Justin Trudeau has pledged $78 billion in spending initiatives over five years that, he says, will be financed by taxes raised from an expanding economy.
The new spending was outlined in the Liberal Party’s election platform that was unveiled on Wednesday (September 1). It includes 100 new spending measures that will cost roughly $78 billion over a five-year period – including many projects that have been previously announced.
New tax-revenue measures, including a 3% tax on bank profits and a 15% minimum rate on high earners, would bring in $25.5 billion over five years, according to the platform.
The hefty spending increase comes as polls show the Liberals in a fight to stay in power, in a statistical tie with the opposition Conservative Party of Canada.
The Liberals say they expect budget deficits of $336 billion over five years, similar to the $331.9 billion shortfall projected in the current budget. That’s well above the baseline projected by the Parliamentary Budget Office of $266 billion.
The budget watchdog believes Canada’s economy will be more than $100 billion larger per year than what had been forecast in the budget, with tax revenue coming in about $15 billion higher annually.
Trudeau says government revenues will be boosted by a suite of new tax measures targeting large companies and high-income earners. The 15% minimum tax would impact people who earn more than $214,368 a year. The 3% surtax on profits for Canada’s largest banks and insurers will bring in around $5 billion over five years, according to the Liberal platform.
