Last week, the economists at TD Bank put out a helpful paper in which they tried to calculate a) how much extra money the federal government is likely to have between now and March 31, 2020 and b) how much it will cost the federal treasury to do the things Prime Minister Stephen Harper promised to do during the 2011 election once the budget was in balance.
The result of their number-crunching? From the 2014 fiscal year through to the 2020 fiscal year, Ottawa should post a combined surplus of $71.1 billion. (Reminder: Ottawa’s fiscal year ends on March 31 so “fiscal year 2015 or FY15” is the current fiscal year which began on April 1, 2014 and ends on March 31, 2015. By convention, fiscal years are denominated in the year they end.)
TD Bank says the cost of the 2011 campaign promises — which the Conservatives have already started to implement — will be a cumulative $19.9 billion through to FY20.
So: Subtracting the five-year cost of all the things the Conservatives said they would do once our budget is in balance from the cumulative surplus at the end of FY 20, we end up with a combined surplus of $46.3 billion.
Now, I’m sure the Conservatives can do the same math and, it would be my bet, they would likely introduce some additional measures in Budget 2015 to reduce that cumulative surplus even further with even more tax cuts, more debt reduction, or some new spending plans.
But for now, let’s assume that that is all the Conservatives do and that that is not enough to win them re-election next fall. Instead, let’s assume Canadians give Thomas Mulcair and the NDP a chance at government.
If Mulcair become comes PM in 2015, he has some pricey commitments himself to keep.
In August, he told Canada’s doctors that he would increase federal transfers to the provinces for health care by what amounts to about $6 billion a year. He’d get his first chance to do that in FY17 (through the budget that would be tabled in the spring of 2016 after an election in 2015 which we’ve given him) So that would be three fiscal years multiplied by $6 billion a year through to FY 20. Let’s update TD Bank’s math. (Let’s also assume, for now, that the Mulcair government does not reverse any of the tax breaks the Conservatives will introduce between now and the next election.)
TD Estimated five-year surplus: $71.1 billion
Minus: 2011 CPC election promises: $19.9 billion.
Minus: NDP promise to boost health care transfers: $18 billion.
Result: $33.2 billion surplus
Today, Mulcair has promised a national childcare plan based on Quebec’s model. The NDP believes this would cost a cumulative $3.97 billion to FY 19. (There are many who would argue it would cost much more but for now, let’s take the NDP at their word.) Since we’re working on a time frame extending to FY20, let’s assume that the cost in FY20 of the NDP childcare plan is about $2 billion. So total cumulative cost would be about $6 billion.
Let’s update the math again:
TD Estimated five-year surplus: $71.1 billion
Minus: 2011 CPC election promises: $19.9 billion.
Minus: NDP promise to boost health care transfers: $18 billion.
Minus: NDP childcare plan: $6 billion
Result: $27.2 billion surplus
Could Canada be the luckiest country on earth, then? Able to lower taxes, lower debt, boost spending on health care and institute a big huge national daycare program?