Poilievre calls on Freeland to cut taxes, cap spending amid pledge of fiscal restraint

With the upcoming federal budget pegged for March 28, Conservative Leader Pierre Poilievre hopes it prioritizes lower taxes, caps spending, and removes 'gatekeepers' so that new homes can be built.

Poilievre calls on Freeland to cut taxes, cap spending amid pledge of fiscal restraint
The Canadian Press / Darryl Dyck
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Poilievre has consistently pinned the blame for current economic woes on the Trudeau Liberals, owing to eight years of Prime Minister Justin Trudeau.

The Tory leader accused him of fuelling inflation and making it harder for Canadians to feed and house their families.

"The people who do the nation's work are punished more and more each day in this country," said Poilievre.

His criticism comes amid frequent interest rate hikes by the Bank of Canada to curb high inflation spurred partly by outrageous pandemic spending, disruptions to supply chains, and the energy crisis from the Ukraine-Russia war. 

As a result, Canada's economy inches closer to an economic slowdown and possible recession.

Statistics Canada reported that Canada's economy failed to grow in the last quarter of 2022 and shrank in December by 0.1%.

The three-month slowdown ended five consecutive quarters of growth, caused by less spending by businesses and households.

Finance Minister Chrystia Freeland recently stressed that Ottawa would embrace fiscal restraint to avoid fanning the flames of inflation.

"Any new spending has to be targeted," she said. "We know that one of the most important things the federal government can do to help Canadians today is […] not to pour fuel on the fire of inflation."

The country's annual inflation rate peaked last summer at 8.1% and slowly fell to 6.8% in November. However, the average inflation rate in 2022 topped a four-decade high at 6.8%, doubling that of the previous year.

Despite her pledge, Budget 2023 will likely adopt additional measures to further Canada's 'just transition' to compete with the US on clean technology.

In front of the Senate finance committee in December, Freeland asked for $2 billion to create the Canada Growth Fund without providing details or tabling legislation (Bill C-32).

She dodged questions at the time, stating they needed to act quickly against climate change and the Americans

"I would say to you two things: One, the green transition, we have to act quickly, but from my perspective, the Biden administration's Inflation Reduction Act added to the urgency with which Canada needs to act," said Freeland. 

"They are deploying hundreds of billions of dollars to invest in the green transition. We must move fast, so getting this fund in place is more important than ever."

At the time, Bill C-32 had a meagre three paragraphs discussing the fund but not the corporation's structure in the main body of the bill.

Budget 2023 is also expected to account for billions in new spending on health care that will flow through bilateral deals with the provinces.

According to a Commons finance committee report, Freeland must also "close the growing income gap" by introducing new taxes in the budget.

According to Blacklock's Reporter, the committee report, Responding To The Challenges Of Our Time, recommended the finance minister "take steps to…generate revenue to fund poverty reduction programs by closing tax loopholes and ending the use of low-tax or non-cooperative jurisdictions for tax purposes, taxing extreme wealth and implementing a tax on excessive profits including windfalls associated with the pandemic."

In Budget 2022, Freeland introduced $1.1 billion in new taxes on banks and insurers, including a 15% Canada Recovery Dividend tax. Cabinet also raised the corporate tax rate on banks and insurers from 15% to 16.5%.

"Our pandemic deficits are and must continue to be reduced," she told the Commons at the time. "The extraordinary debts we incurred to keep Canadians safe and solvent must be paid down."

However, Conservative MPs on the finance committee issued a minority report opposing new taxes, as reported by Blacklock's Reporter.

"Stop the taxes," they wrote. "This includes cancelling all planned and new tax hikes such as the tripling of the carbon tax."

"Conservatives dissent to this report because it fails to address the inflation and cost of living crisis created by increasing tax hikes and out of control Liberal spending," said Conservative finance critic Jasraj Singh Hallan, who added his party cannot support the report's recommendations for those reasons.

Conservatives want the budget to make Canada a country "that works for the people who've done the work," said Poilievre over the weekend.

He outlined cutting taxes, reducing $1 in superfluous spending for each $1 in new spending, and removing "government gatekeepers" to increase the number of affordable houses for Canadians.

Poilievre added that getting rid of taxes that increase the cost of gas, heat, and groceries would lower interest rates "so Canadians can afford their mortgage payments once again."

He provided examples of where Ottawa could cut back, including defunding the CBC, less government outsourcing, and cancelling the federal confiscation program on 'prohibited' firearms.

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