Delayed infrastructure funds key to Conservatives' balanced budget plan

TSAWWASSEN, B.C. — The Conservatives are promising to balance the federal budget within five years by delaying billions of dollars' worth of federal infrastructure investments, slashing billions more in government spending and cracking down on tax evasion.

Conservative Leader Andrew Scheer released his long-awaited platform Friday on a beach south of Vancouver, where he was flanked by two dozen of his candidates.

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He pitched his plan to eliminate Canada's budgetary shortfalls as the "responsible" alternative to the Liberal program, which does not have a timetable to return to balance.

The Conservative measures, Scheer argued, would also help deliver his promised tax cuts, make Canada more resilient during a downturn and lift the overall economy.

"More money in people's pockets means more money at their disposal to invest in their homes, to invest in their children — to basically spend as they see fit," he said in Tsawwassen, B.C., in a riding won by the Liberals four years ago.

"And that's the biggest difference between Liberals and Conservatives. Conservatives believe that the dollar left in the hands of the hard-working taxpayer who earned it is always better spent than in the hands of the politician who taxed it."

To boost government revenues, the Conservative platform also pledges to levy a tax on tech giants, force tobacco companies to pay for anti-smoking campaigns and save billions through previously announced cuts to foreign aid and what it describes as "corporate welfare."

The Conservatives' balanced-budget vow has attracted criticism, including from the Liberals and NDP, that the cuts would be too deep and would eat away at social programs.

The Greens have also promised to balance the books within five years, while the People's Party of Canada would seek to eliminate the shortfalls in two years.

To respond to concerns, Scheer insisted Friday that his plan would gradually increase the near-sacred federal transfers to the provinces for health, education and social programs. Core services to Canadians would be left untouched, he maintained.

Under the plan, the savings and new sources of revenue would provide more and more fiscal room each year. They would help grind down the deficit — from $23 billion in 2020-21 to a $667 million surplus in 2024-25.

They would also help offset billions in new Conservative commitments, which are mostly in the form of tax cuts and tax credits. The party's signature pledge is its "universal tax cut," which would lower the tax rate for income under $47,630 to 13.75 per cent from 15 per cent.

Scheer said the Conservatives would spread the massive, $187-billion infrastructure program, created under the Liberal government, over 15 years instead of 12. He insisted his party would still follow through on the existing infrastructure commitments.

Scheer rejected Liberal accusations that he would cut infrastructure spending. He also argued the Liberals had yet to fully cost their own promises.

The Conservatives' tax on tech giants — such as social-media platforms, search engines and online marketplaces — would be a three per cent levy on revenues. It would apply to firms with worldwide revenues of more than $1 billion and revenues in Canada of more than $50 million.

The Conservatives also aim to encourage big tech firms to re-locate to Canada by enabling them to deduct the new technology tax from their Canadian corporate taxes.

The party maintains it would also generate billions of dollars in fiscal space with cuts to government spending, focused in areas like consultant costs and travel and hospitality. If elected, it would also sell federal real estate.

However, Scheer vowed to maintain the number of civil servants at existing levels.

"It's time to turn the page on four years of negativity and broken promises," he said, referring to the Liberals' record.

"It's time for us to look to the future once again with confidence and optimism."

Most of the promises in the 103-page document had been announced over the first few weeks of the campaign or in a series of speeches Scheer made earlier this year.

The platform's new commitments include:

- Tighter oversight of pensions.

- An expansion of powers for Canada's spy agency.

- Laws designed to prosecute Canadians who travel overseas to engage in terrorism (but also new measures to protect their children).

- An extension of employment insurance for parents when an infant dies.

- Legislation to address cyberbullying. It includes a measure to make parents or guardians of cyberbullies potentially liable for the cyberbullying activities of their children.

- A promise to require any new budget proposals to cost no money or be offset by savings or specified new revenues.

- Balanced budget legislation that would require the federal government to maintain a balanced budget once the current deficit is eliminated.

Scheer had previously said he would find fiscal room by withdrawing Canada's $256-million investment from the Asian Infrastructure Investment Bank. The platform, however, shows that pulling out of the bank would only return $45 million over five years to the treasury.

Scheer's party is the last to release a costed platform, and it came as advance polls opened Friday.

The Conservatives had been repeatedly attacked for delaying the full release and Liberal Leader Justin Trudeau went at the Conservatives again Friday.

"The reality is, I think we all know it, you don't release your best work at 6 o'clock on the Friday of a long weekend," Trudeau said.

A think tank led by former parliamentary budget officer Kevin Page gave the Conservative platform an overall rating of "pass."

The assessment, released late Friday by Page's Institute of Fiscal Studies and Democracy at the University of Ottawa, said the plan merits a "pass" rating on the principles related to realistic economic and fiscal assumptions as well as transparency. It received a "good" rating with respect to responsible fiscal management.

The Liberals, for their part, got a "good" rating overall on their platform costing, including a "pass" for realistic assumptions and "good" on the other two principles.

This report by The Canadian Press was first published on Oct. 11, 2019.

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