Liberals 'double down' on deficit spending amid improving economic outlook
The federal Liberal government has surpassed its own deficit projections by billions of dollars thanks to a roaring economy, but it has earmarked much of those savings for increases to the Canada child benefit and a more generous tax credit for low-income earners.
In his spring budget, Finance Minister Bill Morneau expected to post a deficit of $28.5 billion for the current fiscal year. Thanks to rising revenues from an economy that leads the G7, that shortfall is now expected to be $19.9 billion.
Morneau's fall economic statement pegs GDP growth at 3.1 per cent this year and 2.1 per cent next, with unemployment at rates not seen in more than a decade.
Rather than allocate those newfound dollars to further reducing the deficit, the government is pressing ahead with nearly $8 billion in new program spending over the next five years.
"With a little more wind in our sails, we're doubling down on a plan with proven results and reinvesting in the middle class," Morneau said Tuesday. "As the economy grows, we need to make sure the benefits are shared with the middle class, and those working hard to join it."
Morneau said that the Conservatives and NDP in the last election had campaigned on balancing the books "at all costs," but he said the Liberal plan to spend more is bearing fruit, evidenced by growth numbers that are among the best in the industrialized world.
"Our strong fiscal position allows us to do what other countries would like to do, but can't afford to do," he said.
Liberals 'double down' on deficit spending amid improving economic outlook - Politics - CBC News