Canada’s budget watchdog says the federal government may not meet its fiscal anchors if it acquiesces to the Bloc Québécois’ demand to expand seniors benefits in exchange for keeping the minority Liberals in power.
Last week, Bloc leader Yves-François Blanchet confirmed his party will vote against a Conservative non-confidence motion set to take place this week, giving the Liberals enough support to avoid an imminent election.
In return, Blanchet is pushing Prime Minister Justin Trudeau’s government — through a private member’s bill — to expand the government’s increase in Old Age Security (OAS) payments to pensioners aged 65 to 74. The Liberals had announced an increase of 10 per cent in OAS payments in 2022, but only to those aged 75 years and older.
“We have deposed a law which is now at the very centre of the survival of this government. This is what we call power,” Blanchet told reporters on Thursday.
But in an interview with Vassy Kapelos on CTV’s Power Play Monday evening, Parliamentary Budget Officer Yves Giroux said a further expansion would be a pricey commitment for the federal government. He calculates the Bloc’s demand would come with an annual price-tag of more than $3 billion, with a total cost of $16.1 billion over five years.
“It would also be a bit tricky to make that fit within the fiscal framework that the government has indicated itself in the last budget. . . that would be a significant chunk of change, to say the least,” Giroux told Kapelos. He referred to the government’s targets to keep the deficit below $40.1 billion this fiscal year and reduce both the debt-to-GDP ratio and deficit-to-GDP ratio in 2024-2025. In addition, the government aims to keep deficits to one per cent of GDP by 2026-2027.
“All these constraints would be at severe risk if the government was to acquiesce to that demand without cutting expenditures elsewhere,” he said.
Deputy Prime Minister and Finance Minister Chrystia Freeland was asked Tuesday about the Bloc’s demand and whether the federal government can afford that expense. Freeland would only say “conversations are ongoing.”
“We are having good conversations about all possible economic measures with both the Bloc and the NDP,” Freeland said.
You can watch CTV Power Play’s full interview with Parliamentary Budget Officer Yves Giroux in the video player at the top of this article.