Empty cupboard but Morneau not planning to hike GST
Published Monday, January 11, 2016 3:01PM EST
Last Updated Monday, January 11, 2016 11:32PM EST
Political strategists say that Finance Minister Bill Morneau will need to lower expectations as he crosses the country during his pre-budget consultation tour, and one says the economy is so bad he might consider hiking the GST.
Greg Weston of Nanos Research told CTV Power Play that the pre-budget tour could be called the “empty cupboard tour” because “there’s no money.”
Weston added that, “the volume of promises vastly exceeds the government’s ability to pay for it,” even when taking into account the up-to $10-billion annual deficits proposed during the election campaign.
Morneau told an audience at the Halifax Chamber of Commerce Monday that falling oil prices mean the government is now projecting a $15 billion per year drop in GDP starting this year, compared to what was projected in the last budget.
Morneau called the fiscal situation an “uphill battle,” although he said Canada is “facing these challenges from a position of strength.”
Morneau also said he “confident and optimistic” that the Liberal plan of tax cuts for the middle class and infrastructure spending will create long-term growth and in turn encourage Canadian businesses to hire people.
“We have a clear-eyed view of what things look like right now and we believe making investments will make a real difference,” Morneau told reporters after his speech.
Morneau also reiterated, in response to a reporter’s question, that the Liberals are not considering raising the GST in order to pay for campaign promises without going deeper into debt.
Earnscliffe Strategy Groups’ Robin Sears told CTV Power Play that raising the GST is something the Liberals could consider.
“The most successful Liberal prime minister of our generation recognized that he shouldn’t keep a promise to abolish the GST when he came to power,” Sears said.
Jean Chretien broke a promise made during the 1993 election to eliminate the GST and was twice re-elected.