How the three major parties are pitching a pandemic recovery

Canada’s federal election campaign began Aug. 15 with Justin Trudeau saying voters had a choice about how they wanted to rebuild after the COVID-19 pandemic.

Analysts are forecasting national debt to hit $1.2 trillion by the end of the year.

Each party has identified the growing debt as a concern that needs to be addressed after Monday’s election, but how will they accomplish it? What exactly are they promising?

Looking at each party’s platform, direct government spending, subsidies and of course taxes are the easiest ways of keeping the economy moving.

Jason Childs, associate professor of economics at the University of Regina, suggests the Liberals are looking to guide spending over the next five years to recover from the pandemic.

“It’s very centralized. It’s very Ottawa-driven,” Childs said.

Some of the earmarked funding includes a temporary wage and rent support up to 75 per cent for the tourism industry and money for provinces and territories to hire more doctors.

“These things are more driven to give Ottawa a lot more control and room to manoeuvre. We’re seeing a centralization of power,” Childs added.

The Liberal platform promises $78 billion in new spending, focusing largely on its previously identified priorities like climate change, Indigenous reconciliation and the arts and cultural sector.

That approach differs from the Conservatives, who plan to inject money into keeping people working or attracting people back to the workforce.

One proposal includes “Super EI,” which takes sharp ramp-ups into employment insurance premiums in the event of the recession to replace wage subsidies and emergency benefits that have become common in the pandemic.

“Such a policy would really sort of supplant a lot of the temporary programs the Liberals have put in place, and that the Liberals and NDP are looking at making permanent,” Childs said.

The Conservative platform calls for $52.5 billion in new spending over five years, with $29.6 billion planned for 2021-22.

The costing predicts a deficit of $168 billion in 2021-22 that would decline gradually to $24.7 billion in 2025-26.

All parties have promised to create 1 million jobs, roughly the same number lost during the pandemic. While spending differs slightly between each party, there isn’t enough deviation from one platform to another on the macroeconomic level.

“They’re big-spending, big-deficit platforms,” Childs said. “It’s when you start to drill down and look at the details is where you start to see a little more of a divide. The Conservative platform tends to be a little more heavy on the use of tax incentives, where the Liberal platform tends to be more focused on direct government spending.”

The NDP is promising to spend a whopping $214 billion over the next five years, according to a costing breakdown of its platform commitments released Saturday.

It’s also promising to offset that spending with $166 billion in revenue raised during the same period through a series of new taxes targeted at wealthy individuals and large, profitable corporations.

Health-care spending, a universal prescription drug plan and climate change are some of the pricier items.

With new revenues, the NDP is actually projecting lower deficits than the Liberals or Conservatives in the next five years.

The platform which best positions the country to recover economically from the pandemic is that of the Conservatives, according to Childs.

A pitch to double the workers’ benefit is seen as a small but key strategy that could separate the Conservatives from the other federal parties.

“I think that will do a lot more than some of the wage subsidies,” Childs said. “I like those earned income tax credits. I think they tend to work more than say direct payments to individuals.”

As far as Saskatchewan’s recovery, Childs said massive investments from BHP for the Jansen Lake mine revival, Brandt acquiring Cervus equipment and a injection of funding from the province into the timber sector will ensure a strong provincial economy going forward.

“With the news that we’ve seen coming out of Saskatchewan … we’re set up pretty well to recover fairly quickly,” Childs said. “It’s other regions that are going to have a lot more struggle with.”

The worst-hit areas are ones dependent on tourism and service industries, which have been greatly affected by COVID’s spread.

Childs did caution that spiking COVID-19 cases during the Delta fourth wave could set the economy back further if lockdowns are reintroduced across the country.