Consumers expected to pay the price for election promises

VANCOUVER -

The Liberal party now has a minority government and will likely act fast to try to deliver on some of its election promises. The party's election platform packed with promises will cost about $78 billion over the next five years.

According to the prime minister, the big ones are health, housing, child care and efforts to combat climate change.

If you have taken the time to read the long listed document, you may have come away wondering how the government plans to pay for all those initiatives because there is a lot to chew on.

"It's almost as if that they think that we've gone to a buffet restaurant and they can invite everybody in and we can all eat as much as we want and the service staff will never bring us the bill," said Kris Sims, B.C. director of the Canadian Taxpayers Federation.

Prime Minister Justin Trudeau's Liberals plan to go after the rich and tax the banks.

"Where do you think the banks are going to get that money from?" asked Sims.

Her point is valid. Often times when companies have to pay more, they find a way to balance out the books, either by increasing fees and surcharges on consumers or by laying off staff.

Liberal promises to tackle the myriad issues facing Canada will require support from the NDP, which could lead to even higher spending. The NDP's planned vision for the country was estimated to cost about $214 billion, so you can bet that they are going to want some of their programs implemented as well before agreeing to support the Liberal initiatives.

"When we deficit spend like we are, it's the Bank of Canada that's often buying up those deficit dollars and guess what? The Bank of Canada then produces more money," said Sims.

Consumers are already paying the price on groceries and other items. Deficit spending can lead to increased inflation, which is already up four per cent over last year. Inflation caused by deficit spending is essentially a hidden tax. The government's proposed debt-to-GDP ratio is predicted to hover around 50 per cent over the next five years.

The forecast also relies on finding new sources of revenue. There are plans to spend money to beef up the Canada Revenue Agency's budget to go after tax cheats and close tax loopholes. The Liberals estimate this will recover about $1 billion in additional tax revenue but it is a gamble because it may not happen.

Data from the CRA shows recent efforts to combat tax evasion by the super-rich have not resulted in any prosecutions or convictions. The government plans to put the new effort into tax avoidance this time around. We will see if it works.

The Canadian Taxpayers Federation is skeptical.

"I first heard that, I think back when Ed Broadbent was leader of the NDP. So if the feds can do it this time around all the power to them," Sims added.

Bottom line, to fulfill its promises the money has to come from somewhere.

"The bill will come due and so this is where we're asking the adults in the responsible adults in the room to say, 'Whoa, whoa,'" she said.