Conservatives would balance budget with economic ramp-up and 'without cuts': O'Toole

Photo: The Canadian Press

Conservative Leader Erin O'Toole walks off the stage after speaking to the media on Tuesday, August 31, 2021 in Ottawa. Canadians will vote in a federal election Sept. 20th. THE CANADIAN PRESS/Frank Gunn

Erin O'Toole is stressing the Conservative goal to balance the budget "without cuts" within 10 years.

At a campaign event from the party's broadcast centre at an Ottawa hotel, the Tory leader said Canada effectively borrows more than $400 million each day, resulting in a $354-billion deficit last year amid emergency spending measures prompted by the COVID-19 pandemic.

O'Toole said that, if elected, he will roll out more stimulus spending but will end much of it after the first year and wind it down completely over five years.

“We will help highly affected sectors caught by the pandemic so that those jobs are preserved. We will grow the economy so that we can get back to balance in a responsible and equitable way without cuts," he told reporters.

Conservative officials have said the robust economic recovery on which the Tory plan rests assumes annual GDP growth of roughly three per cent, a target reached only once since 2011.

Neither the Liberal budget nor the NDP platform specifies a horizon for fiscal balance, with both parties saying investment in economic and social programs can rev the economy and generate revenue more effectively than slashed budgets.

Earlier Tuesday, Statistics Canada released numbers showing the country's economy had its worst quarterly stretch since the start of the pandemic, contracting by 1.1 per cent at an annualized rate between April and June and possibly dropping further in July.

“Under Justin Trudeau, we are heading further down the road of recession, not the road to recovery,” O’Toole said of the Liberal leader.

O’Toole, whose platform is not costed, also pointed to a report from the Organization for Economic Co-operation and Development that shows Canada trailing the United States in its economic rebound.

The Liberal budget in April unveiled major spending on social programs and vowed a return to small deficits by 2025.

Like the Conservative plan, a Trudeau-guided recovery hinges on strong growth in gross domestic product this year and next.

Singh said Monday that measures to raise revenue such as cracking down on wealthy tax dodgers and hiking the tax rate for corporations and the highest income bracket can help pay for big-ticket programs like universal pharmacare, a guaranteed livable income and affordable housing.

"In all cases, we will manage debt and deficits responsibly, borrowing when required to defend the services that Canadians and their families rely on, and moving towards balance in the future when it’s prudent to do so," the NDP platform reads.