The Green Party platform is full of good intentions. It calls for robust measures to address catastrophic climate change while also tackling major social challenges such as big gaps in our public health care system and the lack of affordable housing. These are indeed laudable priorities.
The problem is that the plan just not add up to a credible fiscal program. It earns a dismal score of 1.5 out of six from the Institute of Fiscal Studies at the University of Ottawa, which is directed by Kevin Page, the former Director of the neutral and non-partisan Parliamentary Budget Office.
The report states that “the Green Party Platform Costing neither articulates fiscal challenges nor provides a plan for assessing them.”
The Green plan is very ambitious on the spending side. Among other big initiatives it calls for a national pharmacare program to be launched by the federal government, alone at the start; the elimination of tuition fees; and a form of Guaranteed Annual Income.
They propose to spend an additional $73.4 Billion in the few remaining months of the current fiscal year, which is an increase of about 25% from the current level of spending. And that does not even include the cost of the promised guaranteed income which would be a massive program.
Through a variety of programs, taxes and regulatory changes, the Greens promise to generate 100% of electricity from renewables in 2030, just over a decade from now, and to set and reach a goal of reducing greenhouse gas emissions to less than 60% of 2005 levels by 2030. They also say they will retrofit every (yes, every) building in the country over the next decade.
These are appropriately ambitious goals, but they surely mean a major movement beyond business as usual.
To pay for all this, the Greens propose a similarly large increase in taxes, such as ending tax loopholes for corporations and individuals, some of which indeed make a lot of sense and are also promised by the NDP.
But the shocker is that the Greens promise to balance the federal budget faster than was projected in the last federal budget. In fact, they plan to cut the deficit to less than $2 billion in 2021-22, and to run a surplus in 2023-24. But, as the Institute for Fiscal Studies report states, “notwithstanding a commitment to a balanced budget…there is no strategy to guide the change in fiscal stance.”
The introduction to the Green platform compares the scale of the response to the climate crisis to be equivalent to the Second World War. The spirit of Winston Churchill is invoked, quite rightly.
But neither Winston Churchill nor United States President Franklin Roosevelt talked about defeating the Nazis with a balanced budget. Governments racked up big debts to finance the War.
Today in the United States, the proponents of a Green New Deal are talking about using government spending to fund a major economic transition, on the scale of the New Deal used to successfully fight the Depression in the 1930s. As in the New Deal, change should be paid for by borrowing as well as new taxes on the rich.
Today, it is very widely recognized that the Canadian public debt is very low, and that very low interest rates (ten-year Government of Canada bonds pay just 1.5%, or nothing after inflation) allow governments the room to borrow to make large but worthwhile investments in our collective future.
Even the Conservatives, it should be noted, are not promising to balance the federal Budget until the end of the next Parliament.
The Green Party cannot credibly say that their ambitious platform can be implemented while balancing the budget at the same time. It just does not add up.
Fiscal conservatism should not trump a progressive agenda.
Andrew Jackson is the former Chief Economist for the Canadian Labour Congress and the Senior Policy Advisor at the Broadbent Institute.