Canada is experiencing historically low levels of economic growth that are contributing to an extended decline in Canadian living standards, yet current federal fiscal policy will only make things worse for Canadians.
This paper models how the federal government could implement meaningful fiscal reform. The reform features an across-the-board 25 percent reduction in federal personal income tax rates accompanied by spending reductions aimed at balancing the budget within four years.
The reform is inspired by similar policy measures enacted by the Campbell government in British Columbia during the early 2000s, which helped transform the province from an economic laggard in the 1990s to one of Canada’s leading economies in the 2000s.
According to the model, if the federal government reduces annual nominal program spending by 6.7 percent over four years beginning in 2025/26, it could cut every federal personal income tax rate by 25 percent before balancing the budget in 2028/29.
The majority of this spending reduction could be achieved by fully eliminatin

Posted in

Valerie

Leave a Comment

You must be logged in to post a comment.