Liberal leadership candidate Mark Carney has pledged to rein in government spending to make room for income tax cuts, and cap the size of the federal public service.
“The essence of this is to spend less and invest more. That means reining in government spending so that Canada can invest more as a country,” Carney told reporters in Scarborough on Feb. 19.
Carney, who was formerly the governor of the Bank of Canada and Bank of England, said he would deliver a more efficient government that is focused on “maximizing the outcomes achieved, not on the dollars that are spent.”
To do this, Carney pledged to cap the size of the federal public service, review program spending with an emphasis on outcomes, and use technologies like AI and machine learning to create “efficiencies within programs and across government.”
Carney also said a government led by him would focus on increasing private investment across Canada, with an emphasis on building millions of new homes, expanding both traditional and clean energy systems, procuring more defence equipment, and adding new port and rail infrastructure.
Carney noted that federal spending has grown by an average of 9 percent and the workforce had grown by 40 percent per year over the course of the last decade. During the same period, business investment has fallen from 14 percent of Canada’s GDP to around 11 percent, he said.
When asked how much money would have to be cut from the federal budget, Carney said Ottawa would have to be “much more disciplined” around government programs and investments. He said the official costings would be revealed once he is elected as Liberal leader.
“I have worked in the federal public service. I assisted in that role in the preparation of seven different budgets over time. I’ve seen both how to do program reviews, reviews of government spending that yields results, and how not to do it to yield results,” he said.
Carney also said he would not raise taxes as prime minister, as his government would be “looking at a middle-class tax cut to deliver directly to Canadians.”
In a statement released following Carney’s press conference, the Conservative Leader Pierre Poilievre accused Carney of attempting to “cook the books with a sneaky accounting trick.” He said that under the current rules for financial statements, capital investments are already spread out over the life of the assets following standard accounting principles.
But Poilievre said Carney’s suggestion would amount to “tens of billions of dollars of new spending to be hidden from the budget altogether, despite the fact that Canadians will have to pay for every penny of them.”
The Conservative leader said the proposed spending would need to be paid for through raising taxes or “inflationary debt and money printing, all of which Canadians end up paying for.” He said Carney’s announcement was “déjà vu all over again,” and noted that Prime Minister Justin Trudeau had pledged to run three small deficits in 2015, but saw government spending surge.
Poilievre reiterated that his government would bring in a dollar-for-dollar law, meaning that every new dollar in government spending would need to be accompanied by a dollar in savings.
