Think tank projects federal deficit for 2015-16 - Alternative Federal Budget advocates for stimulus to boost economic growth

OTTAWA, March 19, 2015 /CNW/ - The 2015 Alternative Federal Budget (AFB), released today by the Canadian Centre for Policy Alternatives (CCPA), demonstrates that the federal government's continued obsession with austerity and balancing the budget comes at the cost of higher household debt, fewer services, and weakened job growth.

The AFB, now in its 20th year, brings together leading Canadian economists and sectoral experts to produce a progressive economic plan with the means to pay for it. The Alternative Federal Budget would lift 893,000 Canadians out of poverty, reduce income inequality, boost economic growth, and create or sustain 300,000 jobs a year, bringing Canada's employment rate back to its pre-recession level.

"The Canadian labour market has seen little recovery since the recession and next year's economic growth is projected to be at its lowest since 2009. Federal spending cuts, in the midst of these trends, have further impaired Canada's recovery," says CCPA Senior Economist David Macdonald. "Governments should be helping citizens during these uncertain times by pushing against weak growth, not cutting access to services."

No federal or provincial government has ever measured the distributional impact of its fiscal and tax policies. This year, the Alternative Federal Budget does precisely that—demonstrating the aggregate impact of its proposed taxation, transfers and program spending changes.

"The Alternative Federal Budget demonstrates that we can afford to make different choices," says CCPA Senior Researcher Kate McInturff. "The AFB would ensure that every community has safe drinking water, affordable housing, and effective infrastructure. Our budget would provide affordable childcare for working parents, and access to necessary prescription drugs and dental care for those who can't afford it."

Under the AFB:

• The poverty rate for seniors would drop by 43% and child poverty would be reduced by 25%.
• The bottom 70% of Canadian families would see a net benefit from the AFB's program spending, tax and transfer measures.
• Canada's personal and corporate tax system would be reformed to restore fairness and progressivity.
• Small federal deficits would be created as a necessary means for achieving sustained economic growth, particularly next year, without affecting the federal debt-to-GDP ratio.

"The collapse of oil prices has exposed the folly of economic policy built on a bitumen boom doomed to eventually go bust," says Macdonald. "We outline a plan to offset unsustainable oil sands development with a carbon tax while diversifying the Canadian economy."

"The AFB puts forward a progressive public policy agenda consistent with the values of millions of Canadians," says Bruce Campbell, CCPA Executive Director. "In the lead-up to the federal election it provides a benchmark for what is possible."

Alternative Federal Budget 2015: Delivering the Good is available on the CCPA website: http://policyalternatives.ca/afb2015

SOURCE Canadian Centre for Policy Alternatives

Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.