(Bloomberg) -- Conservative Leader Andrew Scheer unveiled plans to balance the budget within five years by making tax collection more effective and spreading budgeted infrastructure spending over a longer timeframe.
In a costed platform released Friday, the Conservatives detailed almost C$50 billion ($38 billion) over five years in new spending and tax cuts. Under the plan, Canada’s deficit would peak at C$23 billion next year, before dropping to C$5 billion in 2023 and moving into a surplus in 2024.
Scheer is seeking to limit Prime Minister Justin Trudeau to one term in the Oct. 21 election. His Conservatives are locked in a tight race with just under 33% support nationally, compared to 32% for the Liberals, according to aggregate polling data compiled by the Canadian Broadcasting Corp.
The plan to balance the budget opens up a key policy difference between Scheer’s Conservatives and Trudeau’s Liberals, who have so far avoided giving a fixed timetable for eliminating the deficit. The gap reflects a broader debate worldwide, as central banks in the U.S., Europe and Japan reduce already low borrowing costs further to combat an economic deceleration. Some economists believe governments will need to step in with fiscal stimulus to counteract the slowdown.
Both parties believe their budget proposals will create a safeguard in case the economy enters a downturn. The Liberals argue deficit spending is needed to stoke growth and provide struggling households with help. Scheer’s Conservatives counter that with less debt, the government can use more financial resources to weather a recessionary period.
Scheer’s proposals include a 25% reduction in foreign aid, eliminating C$1.5 billion in corporate handouts and rolling out C$187 billion in infrastructure investments over 15 years, instead of the 12 years the Liberals currently have planned.
The Conservatives are looking to ensure balanced budgets continue into the future by passing legislation. Such a measure would tie the salaries of the prime minister and cabinet members to achieving budgetary balance.
On housing, Scheer proposed measures that include extending amortization periods and adjusting mortgage stress tests, as well as rewarding municipalities who show progress on reducing developmental charges on home construction.