Justin Trudeau proposes ‘modest’ deficits to double infrastructure spending
WATCH ABOVE: Liberal leader Justin Trudeau joins Global’s Chief Political Correspondent Tom Clark to discuss his infrastructure announcement, how much it will cost the provinces, how much the proposed deficits will cost Canadians.
OAKVILLE, Ont. – Justin Trudeau doubled down Thursday on his effort to differentiate himself and the Liberals from the rest of the political pack by pledging to run short-term “modest” deficits until 2019 in order to jump-start the economy.
The party’s latest platform plank, which proposes doubling current federal infrastructure funding, says shortfalls in the federal treasury over the next two years would amount to no more than $10 billion per year.
There is a caveat, though.
The platform acknowledges the volatility in global markets and the Liberals have left themselves wiggle room on the numbers, saying, “If the fiscal situation deteriorates due to a further slowdown of the economy in the weeks ahead, Liberals will be honest with Canadians about the facts.”
WATCH Liberal leader Justin Trudeau announces the party would invest $60 billion dollars over 10 years in infrastructure across Canada.
The Liberals based their estimates and plans on recent data from the parliamentary budget office, and are building in contingencies as the economy takes further hits, Trudeau said.
He insisted the deficits are only short-term and the measures he’s proposing do not represent a return to the structural deficits both his father, Pierre Trudeau, and Brian Mulroney ran in the 1970s, 1980s and 1990s.
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“We are committed to balancing the budget in 2019,” Trudeau said in front of a crowd of party supporters and construction apprentices at a heavy equipment training centre.
Harper, for his part, sounded incredulous when asked about the Liberal plan to run “small deficits” in each of the first three years.
“He has no idea what he’s talking about when it comes to these things,” the Conservative leader said.
“That’s why you could be sure that his small deficits will become large deficits and would get Canada into the same pickle of high taxes and program cuts that we had under the last Liberal government.”
The country is in recession and facing a shortfall of undetermined size – one that Trudeau claims Harper can no longer manage.
“Mr. Harper has been unable to create the growth necessary to get beyond a structural deficit,” he said. “The key to creating strong economies is growth to get out of deficits, not cuts. Mr. Harper hasn’t understood that.”
New Democrats, on the other hand, have committed themselves to balancing the budget in the first year of an NDP mandate.
Andrew Thomson, the NDP candidate in Eglinton-Lawrence and Saskatchewan’s former finance minister, repeated earlier criticism that Trudeau has been all over the map on the issue.
“It’s clear he has been inconsistent for a long time, but it seems the pace of his changing views accelerated this week,” Thomson said Thursday.
One of the main pillars of the Liberal growth plan is a staggering $125 billion in infrastructure investment over the next decade – up from the estimated $65 billion currently being spent.
The investment would start right away, Trudeau said.
“Government has a responsibility to act decisively and for the public good. Canada’s economic growth was made possible by building ambitiously,” he said.
“We must do so again if we are to transform our transit and transportation systems, create more livable communities, and ensure that we adapt to a changing climate.”
In a later interview with the CBC in Halifax, Trudeau made it clear a Liberal government would not touch the national shipbuilding program, created by the Conservatives to recapitalize the navy.
Harper said under the Conservatives, infrastructure investments have increased by three times what the former Liberal government spent, all while cutting taxes and balancing the budget.
Liberal insiders say the infrastructure plan was drafted in consultation with members of the Federation of Canadian Municipalities, among others. There is a host of enticements for cities, towns and villages in the policy plank.
Raymond Louie, president of the federation, said the Liberal proposal has the potential to meaningfully improve the quality of life of Canadian in cities and communities across the country.
“It also recognizes municipalities need to be at the centre of any plan to build a stronger economy,” Louie said in a statement.
Aside from the social housing proposal – something municipalities have been demanding for over a decade – the Liberals say they will automatically transfer leftover infrastructure cash each year into a top-up of the federal gas tax fund, which is the pool of money communities use to repair existing roads and bridges.
© 2015 The Canadian Press