Be afraid -- very afraid

Boo! Scared you, didn’t I? But not nearly as scared as you’re gonna be, kids, when I tell you all about that scarrry Tory platform. Boy, that’s some scary, scary stuff, boys and girls. Owooo

Deficit! Ha, got you again! The Tory platform would put us back into deficit, and that’s one scary word. Who says? Paul Martin, that’s who. If you add up all those Tory numbers, then perform a secret incantation over them known only to Liberal war-room operatives, it adds up to a $12-billion deficit. Say that with me, boys and girls: $12-billion. Owooooo!

Mind you, that’s $12-billion over five years, or about $2.5-billion per year, less than the $3-billion annual contingency reserve. Now technically that means they wouldn’t be in a deficit at all -- they’d just use up the reserve. But still: on paper, they’d have a $2.5-billion deficit. On a $1.5-trillion economy. Why, that’s, that’s 0.17% of GDP. You don’t think that’s scary? I’m getting chills just thinking of it. Chills, I tell you.

Now, the Tories deny that, but of course they would, wouldn’t they? That’s just what they would do. They, and their economist friends, like Paul Darby of the Conference Board or Dale Orr of Global Insight, both of whom say that not only would they not run a deficit, but they’d have billions of dollars left over in unallocated surplus. Well of course they would! They’d have all those unused billions, because of all those scarrrry cuts in spending they’ve got planned. Billions of dollars worth! Only they’re not telling us about them, are they?

Or rather, they are. They admit they’d have to cut $23-billion. It says so right there in the Tory platform: $22.7-billion in “moderating spending.” All right, granted, once again that’s $23-billion over five years, a period in which total spending is projected to sum to about $920-billion -- $171.6-billion this year, rising to $198.8-billion in year five, or about 3.75% per year. But still, it would rise less rapidly than it otherwise would have. How much less? Lemme see … 23 over 943, comes to ... 2.4% less. Owoo! Ow, ow, owooo!

Where on earth are they going to find 2.4% to cut out of federal spending? Why, that’s almost one-sixth as much as the Liberals added to spending in the past year!

As if that wasn’t scary enough, there’s that “black hole” in the Tory numbers. This is so scary, I’m telling you, I can barely get the words out: They haven’t costed their promised redress of the so-called “fiscal imbalance.” (Fiscal imbalance, boys and girls, is the provinces’ very scary way of saying “more.” As in, we want to spend more, but we don’t dare tax more, so we’ll just make Ottawa pay more.)

How much will it cost to fix the fiscal imbalance? They haven’t said. Boo! Deficit! Billions of dollars! All right, all right: so the Liberals deny that there is a fiscal imbalance. In which case, you’re probably asking, how can they also claim it would cost billions? Never mind! I’m telling you, kids, it will cost billions! How many billions? As many billions as the Tories choose to spend on it, since whatever they give the provinces is entirely at their discretion. So, if they’ve got $23-billion in unallocated surplus, it could cost as much as … $23-billion! Which means, which means ... they’d still balance the budget. Rats.

But I’m not finished kids! I’ve saved the best for last! Oh boy, you’re in for a horrifying good time! The Tories would let people avoid paying tax on capital gains, so long as they reinvested the gain within six months. Owoo! They say it would only cost $150-million a year, but in fact the Liberals calculate it would cost $8.7-billion. Over five years, but you get the point.

How do they get that number? Well, every year individuals declare about $8.3-billion in capital gains, on which they pay about $2.4-billion in tax. “Assuming,” as a Liberal background paper puts it, three quarters of those gains would no longer be taxed, that works out to $1.7-billion in lost revenues every year, $8.7-billion over five. Why do we “assume” that? Because, boys and girls, $8.7-billion is a very scary number.

Mind you, people don’t pay tax on capital gains now, so long as these remain unrealized, ie so long as they don’t sell the asset. If they choose to do so, even though they have to pay tax on it, it’s probably because they need the money for some reason or another. So why, you may be asking, would three-quarters of these people suddenly choose to reinvest it instead?

Kids, kids. Whatsamatter? You don’t like being scared?