OTTAWA (Reuters) - Canada’s opposition Liberal Party, under fire for promising to run budget deficits if it wins an Oct. 19 election, said on Saturday it would raise billions by cracking down on tax loopholes and trimming expenditure.
Most recent polls show the center-left Liberals stuck on around 30 percent with both the rival New Democrats and the ruling right-of-center Conservatives, who are trying to pull off a rare fourth consecutive victory.
The Liberals say they need to run deficits for three years to help finance a national infrastructure program needed to bolster a sluggish economy. Rival parties, who promise to keep the budget balanced, say the Liberals will run short of money and the deficits would be crippling.
In a detailed costing of their program, the Liberals said that by the 2019/20 fiscal year they would raise C$3 billion ($2.3 billion) annually by cutting expenditure and boosting personal income tax revenue.
“We are very confident we can find these savings ... I think it is the responsibility of any government to continue to seek ways to spend taxpayers’ money prudently,” said Liberal legislator John McCallum, a former national revenue minister.
The Liberals promise to cut tax benefits for those earning more than C$200,000 a year, cap how much people can claim through stock option deductions and clamp down on tax evasion.
The Conservatives, who insist they are the only party capable of managing the economy, said careful study of the documents revealed Liberal leader Justin Trudeau was in fact hiding a $6.5 billion hole.
“(His) recklessness means $6.5 billion in new tax hikes on top of the billions in tax hikes he has already promised, all while running massive deficits,” said Employment Minister Pierre Poilievre.
Trudeau has already promised to raise taxes on the top 1 percent of earners and cancel child benefits paid to all parents, focusing relief instead on those who need it.
The costing said the deficit under a Liberal government would be C$9.9 billion in 2016/17, C$9.5 billion in 2017/18 and C$5.7 billion in 2018/19. The budget surplus in 2019/20 is due to be C$1.0 billion.
The party said it would lower the federal debt-to-GDP ratio to 27 percent from the current 31 percent.
The New Democrats - who have never governed federally - say they will raise the corporate tax rate to 17 percent from the current 15 percent and crack down on tax avoidance.
($1= 1.33 Canadian)
Reporting by David Ljunggren; Editing by Dominic Evans and Matthew Lewis