Tax Policies shape Parties' Investment Levels in Younger Canadians

The Conservatives plan to collect less revenue than the other parties.  This means they propose less total new spending on retirement, health, employment, infrastructure, families, education and housing.  New spending on these areas is between 25 per cent and 31 per cent lower than the other parties. 

However, Conservatives do not spread this lower level of new spending evenly across age groups.  The Conservatives will spend nearly as much on seniors as do the other parties; but 40 to 50 per cent less on Canadians under age 45.

By their own platform numbers, the Conservatives plan to collect less revenue than the NDP, Liberals or Greens in 2019/20. 

  • $7.5 billion (14 per cent) less revenue than the NDP;
  • $11.9 billion (22 per cent) less revenue than the Liberals; and
  • $21.4 billion (40 per cent) less revenue than the Greens (although the Green platform is based on outdated, more optimistic financial projections than the Government of Canada’s last budget, so likely overstates the revenue that will be collected by at least $5 billion).

Given that the Conservatives plan to collect less revenue, they also propose less total new spending on retirement, health, employment, infrastructure, families, education and housing.  New spending on these areas is between 25 per cent and 31 per cent lower than the other parties. 

However, Conservatives do not spread this lower level of new spending evenly across age groups.  An even allocation would have the Conservatives spend between 25 and 31 per cent less both on retirees and younger Canadians.  In actual fact, the Conservatives will spend:

  • 9 to 11 per cent less on retirees than the other parties; and
  • 40 to 51 per cent less on Canadians under age 45 than the other parties.

This means that the Conservatives prioritize lower taxes and/or less investment primarily at the expense of spending on younger Canadians.

Conservatives choose to operate with lower federal revenue levels than the other parties because the platform prioritizes collecting billions of dollars less from:

  • Corporate taxes than would the NDP and Greens
  • Canadians who earn $200,000+/year than the Liberals
  • Fossil fuel companies than the NDP, Liberals and Greens by retaining larger subsidies for these industries

The Greens will collect billions more in revenue than the NDP and Liberals from:

  • Legalizing and taxing marijuana
  • Pricing pollution
  • Wealthy inheritances valued above $1 million

Surpluses/Deficits and Prudence

Governments may decide to spend more money in a fiscal year than they collect in revenue.  Economic research often supports such decisions when the private sector economy is stalling.

The 2015 election is being fought in part over the question of how urgent is the need to stimulate growth and job creation through program and infrastructure spending.  The Greens would invest in green energy, municipal infrastructure, housing and transit in the first year of a new government faster than any other party.  The Liberals follow the Greens.  NDP and Conservatives propose to invest less in total for infrastructure (See Table 1).

To facilitate a more rapid pace of investment, the Liberals plan to run modest deficits in the first three years of the next mandate.  The Liberals are the only party reporting deficits in those years.  Proposed Liberal deficits will be smaller than the average deficits tabled by the Conservative government over the last decade.

The Greens report they will not run deficits (2015).  This reflects in part that they plan to raise billions in additional revenue from the sources identified above.  However, it also reflects that the Green platform is based on the most optimistic economic projections of any party.  It relies on revenue and spending projections that are higher than what the Government of Canada published in its 2015 April budget.

This means that Green budget numbers are the least reliable. In their defense, they also project by far the largest surpluses in each of the next four years – as much as $13 billion in 2019/20.  Consequently, proposed budget numbers can be inaccurate by a lot and still leave room for a Green government to balance its books.  However, readers should interpret the precise dollar values associated with Green budget promises with more caution than the promises made by other parties. 

The Liberal and NDP platforms are based on the most cautious assumptions about economic growth.  Their numbers build on analyses provided by the politically neutral Parliamentary Budget Officer in July 2015 after Statistics Canada data revealed that Canada was in a minor recession for the first half of the year.  The Liberals and NDP use these estimates to minimize the chance that promised budget outcomes do not materialize because the economy performs more poorly than expected. 

The Conservative platform is based on assumptions made in the Government of Canada (2015a, Table 5.2.5) budget that it presented in April of this year.  It’s assumptions for revenue growth fall in between what the Liberals and NDP use on one hand, and the Greens use on the other.


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Tax Policies shape Parties' Investment Levels in Younger Canadians
Tax Policies shape Parties' Investment Levels in Younger Canadians
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