Canada's Conservatives pledge big spending, deficit reduction in election platform

·2 min read
FILE PHOTO: FILE PHOTO: Conservative Party leader Erin O'Toole at an election campaign visit to North Vancouver

By Steve Scherer

OTTAWA (Reuters) - Canada's Conservative Party is proposing C$52 billion ($41 billion) in new spending over the next four years to boost growth and create jobs while reducing the deficit more quickly than their Liberal rivals, according to figures released on Wednesday.

Conservative leader Erin O'Toole released his platform the day after the Sept. 20 election was called last month, promising to bring back jobs lost during the COVID-19 pandemic and balance the federal budget in a decade.

But the impact of the platform on the federal budget, which is calculated using a baseline set by the Parliamentary Budget Officer, were released only on Wednesday, and they show the deficit declining to C$24.7 billion in 2026 from C$138 billion in the current fiscal year.

That is lower than the C$32 billion deficit projected by the Liberals for 2026. In their platform, the Liberals promised C$78 billion in new investments over five years, which would be offset partially by C$25 billion in new revenue, mainly from a higher tax on banks and insurer profits.

"Even without the additional growth that will result from the plan, no cuts are needed because Conservatives will run a disciplined government that limits the growth of future spending," the Conservative party said in a statement.

To tackle the pandemic, the Liberals ran up a record national debt of C$1 trillion and pushed budget deficits to highs not seen since World War Two. O'Toole says he will stop the spending spree with making cuts.

But the Conservative platform actually hikes spending by more than double than the Liberal platform does in the current fiscal year, before dipping lower in the subsequent four years, and counts C$26.7 billion in savings by eliminating Liberal Prime Minister Justin Trudeau's national childcare plan.

Conservatives would also cut C$2 billion in budgeted money for "natural climate solutions" that includes the Liberal plans to plant 2 billion trees.

($1 = 1.2691 Canadian dollars)

(Reporting by Steve Scherer; Editing by Alistair Bell)

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