Research Briefing | Sep 20, 2021

Canada | Leading parties open wallets in pandemic election bid

Leading parties open wallets in pandemic election bid - iPad

Canada will likely usher in another minority government when voters hit the polls on Sept 20, led by either the incumbent Liberals or the Conservatives, while the New Democrats (NDP) will likely hold the balance of power again.

What you will learn:

  • All three parties are pledging largely deficit-financed expansionary fiscal policies that would provide a short-term boost to the economy but would result in continued deficits and growing public debt over the next five years.
  • The Liberal platform would add about $70bn to federal debt by 2025-2026 with promises of $78bn in new expenditures, $26bn in new revenues, and $15bn allocated for Covid prudence. The Conservatives’ plan would increase debt by $54bn over the next five years, with $60bn in new expenditures and just $9bn in new revenues. 
  • Our preliminary modelling shows that the Liberal’s platform would provide the largest lift to the economy, boosting growth 0.6ppts above our baseline forecast to 5.1% in 2022. 
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