Here are some thoughts on last week’s release of our government’s 2017 fall fiscal update:
Our economy is stronger now than it’s been in over a decade (ex. 450,000 jobs created since late 2015) and, as a result, government revenue has also increased.
The additional revenue will mainly be used to reduce our modest deficit, but our government also announced the following additional spending:
1. The Canada Child Benefit will be indexed to inflation next year, two years ahead of schedule, meaning increased support for families in need.
2. The Working Income Tax Benefit will be increased by $500 million per year by 2019 (plus the previously announced $250 million, it amounts to a 65% increase), giving direct support to low-income working Canadians.
3. We are meeting our platform commitment to reduce the small business tax rate from 11% to 9%.
First, I have been pushing for an increase to efficient and compassionate basic income support programs like the Working Income Tax Benefit, so it’s good to see those advocacy efforts rewarded. We need to keep pushing to end poverty in our country.
Second, for those concerned about continued deficits, it’s important to note that we will continue to reduce our debt-to-GDP ratio, and that a recent report from the independent Parliamentary Budget Office found that our financial situation is sustainable.
“Current fiscal policy at the federal level is sustainable over the long term.” – Fiscal Sustainability Report, October 2017, Parliamentary Budget Office.
“What really does matter is the debt to GDP ratio and the government does have a declining, flat, debt to GDP ratio, which is a very good thing. The PBO’s work that’s come out on this said that the government is in a fiscally sustainable position and my institute agrees with that as well.” – Randall Bartlett, Chief Economist of the Institute of Fiscal Studies and Democracy
“October 24, 2017, was a good day for social policy. While there is still substantial work to be done to improve the efficacy of income programs in Canada, several key pieces on the chess board have definitely moved in the right direction.” – Caledon Institute of Social Policy
CTV News Article, including the entire Fall Economic Statement 2017 document.