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Left-Wing Canadian Economists Want Hipster Farms, Cheap Tuition, and a Tiny Military

The Alternative Federal Budget is here, and it's full of pie-in-the-sky ideas.
Justin Ling
Montreal, CA

This article originally appeared on VICE Canada.

Somewhere in the space-time continuum, there is an alternative universe. In it, there is bizarro Canada. The residents of that nation have cheap tuition, mandated equal pay for men and women, a massive childcare plan, rapid public transit in every city, and start-up family farms dotting the countryside. The people dress in bowler hats and ascots, and they are governed by what is known in our timeline as the Alternative Federal Budget.


And while this policy document, the brainchild of left-wing wonks at the Canadian Center for Policy Alternatives (CCPA), may seem absurd and unattainable in our bleak and austere reality, in their world of progressive think-tankery, anything is possible.

Here's the scheme: boost spending next year by more than $50 billion, and implement enough taxes to bring in about $35 billion. Then, cross your fingers and hope that all your investment and job creation plans pan out and the gap between those two numbers shrinks to about $9 billion, by the 2017 fiscal year.

That means we're looking at about a $5 billion deficit in three years, if you want to follow the CCPA down their yellow brick road. On the other hand, in that world we'll have a lot more wind turbines.

The CCPA releases these blueprints every year around the same time, as a window into how bizarro Canada functions, but this year is a bit different. Between cratering oil prices, slower-than-expected growth projections, and increasingly lean federal departments—and the fact that we won't even see a federal budget until April—things are a bit weird in 2015. So there might be a little more interest in this left-leaning exercise in hypotheticals this time around.

The CCPA doesn't appear to have a lot of faith that Stephen Harper will change course and adopt its socialist schemes wholesale, but the document does go over well in some circles within the NDP and Liberals.


Indeed, Thomas Mulcair's party shares quite a few ideas with CCPA. Creating a universal child care program, for one. ($6 billion over three years, in the alternative budget.) They've also voiced support in the past for yanking development subsidies from Alberta's tar sands. (CCPA thinks that will save the government about $1 billion by 2018.)

The report also advocates huge expansions in federal infrastructure projects and public transit (to the tune of about $13 billion over three years), which has been a favorite talking point of the Trudeau Liberals.

But it's unlikely that any party would latch on to all the hugely expensive spending proposals set out in the document. There's $4 billion in new international assistance, $14 billion to undo federal department budget cuts, well over $25 billion to expand medicare and create a national pharmacare program, and much more.

On the other side, if the think tank were to suddenly be installed as government in some sort of center-left coup d'etat, it would move to raise taxes on just about everything. The CCPA would eliminate income splitting, not just for families with children—which is the most recent controversial proposal from the Conservatives—but also for the elderly, for whom income splitting has proved immensely popular. They would also slap an inheritance tax on estates over $5 million, crackdown on tax havens, limit tax-free savings accounts, raise corporate taxes, and create a new tax bracket over $250,000. Oh, and there'd be a massive carbon tax that hopes to pull in $28 billion within three years. (They would return about half of this cash to, ostensibly, non-polluting citizens.)


The CCPA says their plan will do a lot to level the income gap between men and women, reduce income inequality, reduce CO2 emissions, and increase employment.

VICE asked Mike Moffatt, economics professor at the Ivey Business School and part-time member of Justin Trudeau's economic council, what he thought of the plan.

"It's certainly entertaining," he says.

He adds the thing is a mixed bag: some good ideas, some bad. But, generally, it's "unrealistic."

The whole report really relies on overly-optimistic job numbers based on the assumption that a rapidly-aging Canada could, overnight, get back to its overheated job numbers of 2007 despite massive new taxes. Even then, it still projects a budget deficit.

"I don't know who's going to be doing the hiring, given the billions of dollars of taxes they're putting on business," he says.

He highlights the fatal flaw that always crops up in pie-in-the-sky projects from progressive projections like this one.

"They're going to tax the snot out of every manufacturer in southern Ontario to the extent that they're going to Ohio, then they're going to offer them $450 million to come back," he says, referring to the "value-added" grant that the CCPA is proposing for industries like the auto sector. "It makes no sense."

But even if the Alternative Federal Budget wouldn't actually work in our dimension, the program still has some suggestions that are infrequently talked about on the national level. To that end, this is an exercise is forcing everyone to think outside the box.

For one, it proposes reducing tuition to 1992 levels (which was about $3,000, or half of what it is today). It also suggests massive amounts of funding in water conservation and improving wastewater mitigation. On gender equality, it proposes requiring gender-income parity for federal employers. For the rural hipsters and lumbersexuals who want to live off the land, there's $300 million in aid for young and new farmers.

The Alternative Federal Budget isn't all just taxes and spending, though—they also want to cut spending in some places. Namely, the military: they also propose cutting military spending by $1.5 billion by 2018.

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