Mark Carney Unveils Plans for Fiscal Discipline if Elected Prime Minister

Canadian Public Service Caps and Spending Review

Former central banker Mark Carney has pledged to limit the size of Canada's public service and conduct a comprehensive program spending review if elected prime minister. However, specific details regarding the extent of government outlay reductions remain undisclosed.

Budgetary Reforms

Carney proposes restructuring the government's budget to separate operating expenses from capital investments. His aim is to balance the operating budget within three years, while maintaining "a small deficit on capital spending that aligns with our fiscal capacity." Additionally, a fiscal rule would be adopted to ensure a decline in government debt-to-GDP ratio over the budget horizon.

Infrastructure Investments

Carney recognizes the need for significant infrastructure investments, including construction of new homes, creation of trade corridors, expansion of military capabilities, and enhancement of computing resources for artificial intelligence and innovation. He emphasizes leveraging government capital investment to catalyze private investment and economic growth.

Government Spending Reduction

To create fiscal space for personal income tax cuts, Carney plans to "slow the growth of government spending, initially cap the size of the public service, and review our spending with an emphasis on outcomes and technology to reduce inefficiencies." However, specific targets for the spending cap or program spending reduction have not been disclosed.

Fiscal Transfers

Carney affirms that fiscal transfers to individuals, such as pensions and unemployment benefits, as well as transfers to provinces for healthcare and other essential services, will not be affected.

Private Investment and Economic Growth

By fostering private investment while controlling core government spending, Carney aims to stimulate economic growth. He believes this approach will reduce the overall debt burden over time, while creating new jobs and increasing incomes for Canadians.

Program Spending Discipline

Carney emphasizes the importance of budgetary discipline in program spending. He claims to have previously assisted in federal program reviews and intends to release cost-effective recommendations if selected as Liberal leader.

Tax Policy

Carney rules out tax increases to fund his priorities. Instead, he proposes a middle-class tax cut "to deliver directly to Canadians."