The government could take on a $37.9 billion deficit and still maintain Canada’s debt-to-GDP ratio, argues the Canadian Centre for Policy Alternatives in its 2016 Alternative Federal Budget (AFB).
The think tank says the AFB would lift 1.1 million Canadians out of poverty, reduce income inequality, boost economic growth, and result in 520,000 new jobs, bringing Canada’s unemployment rate to 6.0%.
The AFB suggests the government integrate long-term care, home care and pharmacare into Canada’s publicly funded healthcare system, and meet the needs of today’s working families by investing in affordable childcare and enhancing parental leave.
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“We shouldn’t let the idea of federal deficits, even relatively large ones, scare us off making much needed investments in Canada. Every dollar of a federal deficit puts a surplus dollar in the pocket of the provinces, Canadian families or businesses,” says David Macdonald, senior economist at the Canadian Centre for Policy Alternatives.
The bottom 90% of families (those earning less than $165,000 a year) would see a net benefit from the AFB’s program spending and tax and transfer measures, while the top 5% of earners would see tax increases equivalent to about 2.6% of their average income.
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The AFB plan also include:
- introduces a national carbon tax at $30 a tonne with a refund for low-income families;
- fosters a highly skilled workforce by eliminating university tuition fees;
- tackles the ongoing crisis for First Nations housing, drinking water, and education;
- enacts a comprehensive federal poverty reduction plan that would cut seniors’ poverty in half and cut child poverty by a quarter; and
- repairs our cities by providing $7 billion a year for municipal infrastructure renewal.
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This article was originally published by Benefits Canada’s companion site, Advisor.ca