Parliament’s fiscal watchdog says Finance Minister Chrystia Freeland’s plan to reduce deficits lacks credibility.
According to Blacklock’s Reporter, the Parliamentary Budget Office says Freeland’s prediction that the budget deficit will fall from $113.8 billion to $8.4 billion is not credible.
“I personally don’t believe it’s credible that there will be that level of spending restraint in the period from 2024 to 2027 given all the expenditures that remain to be implemented by the government over that period of time,” said Parliamentary Budget Officer Yves Giroux.
According to Giroux, reducing the ballooning deficit so significantly would require an “austerity plan” even more severe than the response to the 2008 financial crisis.
“It is a level of growth we have not seen in a long, long time. The reductions would require an austerity plan eclipsing budget cuts that followed the 2008 financial panic,” said Giroux.
“That would probably be fiscal tightening or expenditure restraint more severe than what we had seen under the Conservative years in the early 2000s, 2010. That’s one point. Also that is not taking into account government priorities announced in the electoral platform last year.”
Giroux also said that the Liberals’ 2021 campaign promises could also cost billions of dollars.
“There is a tremendous amount of spending pressures the government is faced with,” he said. “The demands on the public purse are numerous and they account for significant amounts of money which are not factored into the budget that was tabled in April.”
Giroux’s comments come only a week after he slammed Freeland’s luxury tax pitched in the 2022 budget as being a job killer and costing Canadians $604 million.
“It is difficult to determine the extent of job losses but it is quite clear that with such a reduction in sales there would certainly be job losses,” said Giroux of the proposed tax on luxury vehicles, boats and jets.
“Because of the reduction in sales there will undoubtedly be a reduction in sales taxes collected, the extent to which is difficult to estimate because it is a niche market obviously.”
In April, the Liberals unveiled $56 billion in new spending which included $8 billion on defence, a $10 billion housing plan and more.