- Plan would run C$25.1 billion in deficits over the three years
- Liberals also proposing to cap stock options benefits
Canada’s Liberal Party is pledging C$25.1 billion in deficits over three years in a bid to stimulate the country’s sluggish economy.
The Liberals would run a deficit of $C9.9 billion ($7.42 billion) in 2016-2017, followed by deficits of C$9.5 billion and C$5.7 billion before returning to a C$1 billion surplus in 2019-2020, according to the fiscal plan released Saturday. The Liberal plan forecasts a declining debt-to-GDP ratio, to 27 percent by 2019-20, from about 30 percent next year.
Liberal Leader Justin Trudeau is the only major party leader proposing deficit spending, and has been criticized on the campaign trail by his rivals. The party is releasing its plan now to quell attacks from its rivals that it had not provided enough detail on its spending.
The three main party leaders are due to attend their fourth debate of the campaign Monday in Toronto. The Liberals entered the campaign in third place and have rebounded to narrow the three-way race ahead of the Oct. 19 election. The party had not, until Saturday, specified the sum of its proposed deficits.
The Liberals would place an unspecified cap on stock option benefits and cancel part of a Canadian Exploration Expenses tax credit in the energy sector. It is the second party to propose a change to stock option rules -- currently, Canada considers only 50 percent of the benefit from employees’ stock options taxable. The Liberals would "cap" the deduction that can be claimed, though said people with C$100,000 or less in annual stock options benefits would not be affected.
The NDP have also proposed making all stock options benefits taxable, though have not specified their plan. NDP Leader Thomas Mulcair wrote to business leaders Friday after complaints the changes would hurt startups, pledging to tailor his plan to aim it at high-earners with options from large, established companies.
The Liberal plan reiterated previous pledges to overhaul child benefit payments, cut taxes on the middle class, increase them for high earners, decrease planned cuts in employment insurance premiums and cancel an income-splitting tax measure and tax-free savings account increase implemented by Harper.
The party also proposed to cut the small business tax rate to nine percent from 11 percent -- all three major parties favor doing so. The Liberals would, however, make unspecified changes to ensure "high-income earners" are not using corporations "as an income splitting tool."
The Liberals propose to beef up the powers of Canada’s budget watchdog, the Parliamentary budget Officer, extending the office’s powers to costing of political party platforms so that in the next campaign Canadians can get a "credible and comparable baseline" on election promises.
The party is also pledging C$6.5 billion in largely unspecified "Harper spending review" revenue if elected -- savings to be found in the current budget, including reducing spending on government advertising.