As posted on http://www.cbc.ca...

Party spending promises: Costing them all out
CBC.ca Reality Check Team | Dec. 23, 2005

As the party leaders slow their pace for the holidays, we bring you a tally
of the spending promises so far from the campaign trail. Not quite halfway
into the eight-week campaign, Stephen Harper's Conservatives are in front
and setting a torrid pace with nearly $80 billion in promised tax cuts ($73
billion) and spending initiatives ($6.6 billion) over the next five years.
They also own the single most costly item of the campaignthe $27-billion
plan to cut the GST by one and ultimately two percentage points within five
years. The Conservatives haven't costed this out themselves, but they
acknowledge that a one percentage point GST cut, which they are promising
to do right away, will dock the treasury $4.5 billion a year. Our math
assumes the second percentage point cut won't come until year five, though
the party platform says it might come earlier.

The NDP has the second most expensive set of campaign promises: $40.8
billion in tax cuts ($17.3 billion of that is found in the party's proposed
new child tax credit) and $26.8 billion in spending for a total of $67.5
billion. Then come the Liberals at $56.5 billion: $32.5 billion in tax
cuts, $24 billion in spending. They are followed by the Bloc Quebecois at
$55.8 billion, a platform that breaks down over three years. And the Greens
at $27 billion.

January may well bring a host of further announcements as well as the
official party platforms. With the exception of the Bloc, the tallies below
are five-year totals for what have been pledged since the start of the
campaign. They also include the commitments made in the Liberal
government's economic and fiscal update on Nov. 14, parts of which both the
Conservatives and NDP have said they intend to support. The NDP, for
example, says it agrees with about 80 per cent of the Nov. 14 initiatives.
The Conservatives are planning to keep the reduction in the tax bracket for
low-income earners from 16 per cent to 15 per cent, a tax cut that will
cost the treasury $23 billion over six years (it's retroactive), when the
top-up to the basic personal exemption is added in.

Reality Check double-checked the figures with officials at the respective
campaigns, as well as with some independent economists. Still, the totals
should be taken with a drop of caution. The main thing to remember is that
these costs represent the best estimates of new plans and directions but
not necessarily new spending. Some, perhaps many, of these plans will come
about by shifting existing expenditures within departments. The parties
have not clearly set out what in their plans amounts to new spending and
what does not.

The other thing to remember is that five years is a long time in the life
of a minority Parliament, which is the expected outcome after Jan. 23. The
Nov. 14 update projected federal surpluses totalling $54.5 billion by
fiscal year 2010-11, and many economists believe that is a reasonable
estimate. So there may well be money in the kitty. Projecting that far out,
though, is something of a mug's game.

The Liberals have consistently underestimated surpluses in recent budgets:
the current 2005-06 federal surplus is now estimated to be $8.2 billion, up
from the $4 billion put forward in February. Still, counting that many
chickens before they are hatched is not something promise-making
politicians should undertake lightly.

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