Canadian Economists Warn Against Proposed Tax Cuts Amid Deficit and Recession Concerns

Economists are cautioning against proposed tax cuts by both the Liberal and Conservative parties in Canada, deeming them "not fiscally responsible" given the current economic climate. Former Parliamentary Budget Officer Kevin Page stated in February that balancing tax cuts, budget, and NATO commitments simultaneously would be difficult. Both parties have pledged tax reductions on the first $57,000 of income, with the Liberals proposing a 1% cut and the Conservatives a 2.25% cut. These measures carry significant costs, with the Liberal proposal potentially depriving the federal government of $5.9 billion annually and the Conservative proposal costing approximately $14 billion. These figures are substantial considering Canada's existing deficit of $61.9 billion and economists' predictions of a recession starting in the summer. Public finance expert Geneviève Tellier from the University of Ottawa suggests that lowering individual taxes will force the government to make difficult choices, potentially requiring cuts in programs to address the deficit.