Toronto – July 26, 2019 – Conservative parties always like to raise the looming threat of high deficits and debt in order to scare people into thinking that austerity measures are needed. For conservatives, austerity means cuts to services that working people rely on, and tax cuts for corporations and the wealthy to supposedly spur investment in our economy.
We see this happening in Ontario and Alberta. Doug Ford’s Conservatives and Jason Kenney’s United Conservative Party both claim that the previous governments left the books in worse shape than they were led to believe and that their governments must bring down deficits and debt by gutting services and cutting taxes for corporations and the wealthy. This strategy – known as “trickle down” economics – has been applied by Conservative and Liberal governments for decades and has not only failed to rein in deficits and debt but has also led to growing inequality. In fact, over the last 26 years, Conservatives have racked up higher deficits and more debt than any other party in Canada.
In the 1990s, Conservative and Liberal governments waged a war against public debt that resulted in a severe increase in inequality as the social safety net was shredded and important social spending responsibilities were downloaded to the provinces. Public investment lagged behind rising needs, adding an infrastructure deficit to the social deficit.
But progressives would be mistaken to think that deficits and debt do not matter. Rising debt levels are serviced through rising interest payments that pad the pockets of the big banks and Bay Street elites, while diverting valuable resources away from social spending and public services.
That is why taxation is an extremely important tool in fighting inequality and tackling debt and deficits. Every dollar invested in education, health care, and other public services – like universal pharmacare – generates five times as much employment and economic growth as a dollar invested in corporate tax cuts. Clearly, then, we don’t need more tax cuts – we need to invest in Canada.
Thankfully, Jagmeet Singh and the NDP are not focusing on austerity as we approach the upcoming federal election. Their focus is on ending inequality by increasing corporate taxes and introducing a new wealth tax, and investing that revenue in infrastructure and better public services like universal pharmacare, vision and dental care, and child care. We see this happening in British Columbia, where John Horgan’s NDP government has increased taxes on the rich, made needed investments in affordable housing and other social programs, and arrived at a budget surplus in the process.
Heading into this year’s federal election, we cannot let Andrew Scheer and the Conservatives raise fear about deficits and debt while preaching the need for austerity. Instead it is time to talk about the richest in our society paying their fair share. We can eliminate tools like stock options and tax havens, which wealthy people use to avoid paying taxes. And we can use this additional revenue to invest in ordinary Canadians and the services they need. If we are really going to attack inequality and pay down debt, raising revenue and investing in Canadians is the route to go – not recklessly cutting taxes and public services.