天辰注册

Tax hikes ‘unavoidable’ to offset raft of COVID-19 spending, federal budget watchdog says

作者:admin 2020-06-02

OTTAWA — The government will eventually make the “unavoidable” decision to seek new sources of revenues through tax hikes, as policymakers look to offset a raft of recent Liberal spending measures, the federal budget watchdog says.

In testimony before the Senate Finance committee on Tuesday, Parliamentary Budget Officer Yves Giroux said Ottawa will have to make a “sharp turn” in its fiscal approach in coming months. The Liberal government has introduced around $146 billion in financial aid programs since early March, aimed at shielding businesses and Canadians against the economic fallout from COVID-19.

But those programs will soon need to taper off as the Canadian economy gradually returns to health, Giroux said.

“It’s not sustainable for more than a few years,” he said.

“These measures have to be allowed to sunset, otherwise we’ll be looking at a level of taxation that’s not been seen since for generations.”

As the Canadian economy reopens, rising GDP is expected to cover some portion of the government’s fiscal shortfall, which the PBO estimates could reach $260 billion in 2021. But some economists say tax hikes will be required in order to fill the gap.

Academics and economists around the world have proposed a number of different tax options to fill fiscal shortfalls, including anything from a tax on international tech giants to a proposal in the U.S. for a one-time wealth tax.

In an interview with the CBC earlier this month, Finance Minister Bill Morneau said Ottawa was not currently contemplating a tax hike on Canadians. The Liberal government campaigned in 2019 on a tax cut for middle income earners, and in December announced changes that would widen exemptions for some taxpayers.

“We know that we are going to need to face up to those [fiscal] challenges,” Morneau told the CBC. “We also recognize that raising taxes is not what Canadians want us to do.”

Finance Minister Bill Morneau. Adrian Wyld/The Canadian Press/File

The PBO estimates that GDP will fall by 12 per cent in 2020, the largest drop ever recorded. But Giroux also stressed that Ottawa’s fiscal position remains relatively strong, and maintains a net debt to GDP ratio that is among the lowest in developed countries.

“The government, if needed, could still borrow significant amounts” of capital, he said. Ottawa spent $23 billion servicing its debt in 2019, compared to a total budget of $340 billion.

The PBO on Tuesday also raised slightly its estimate for the federal deficit in 2021, from $252 billion to $260 billion. The office is planning to release official updated estimates for federal spending and GDP sometime in June, he said.

Giroux urged Morneau to release his own outlook for the federal balance sheet as soon as possible. Morneau has already delayed the tabling of his annual budget, and has declined to provide a fiscal update due to the high level of volatility in the global market.

Giroux said Finance officials could manage that uncertainty by providing Canadians with a range of potential scenarios, similar to recent projections by the Bank of Canada that outlined one “favourable” and one “severe” outlook.

“The government could do the same thing,” Giroux said.

He also expressed concern over the “sweeping, broad powers” that Morneau gave himself with the passage of Bill C-13, which equips Ottawa with tools to address the economic fallout from COVID-19.

The legislation gave Morneau the “unprecedented” ability to borrow without limit, take stock options in companies, and create Crown corporations, all with without parliamentary oversight, Giroux said. It also provides the Employment Minister with the authority to retroactively amend the Employment Insurance Act, also without oversight.

• Email: jsnyder@postmedia.com | Twitter: jesse_snyder

目前有 0 条留言

发表留言

◎欢迎参与讨论,请在这里发表您的看法、交流您的观点。