The Liberal government should abandon most of its $100-billion stimulus plans and increase GST as a way to recoup massive COVID-19 spending levels, according to a new report that says Canada is in need of a considerable fiscal reset.
The C.D. Howe Institute, a Toronto-based think tank, laid out a long list of recommendations on Wednesday for Ottawa’s upcoming budget, and warned about a “bleak outlook” for Canada should the government under Prime Minister Justin Trudeau neglect to correct course.
Among the proposals are a two per cent hike in the federal Goods and Services Tax (GST), a reversal of the expansion of employment insurance, and a reduction in corporate tax rates, among other things. It also calls on Finance Minister Chrystia Freeland to abandon up to $100 billion in additional stimulus funds — promised in her fiscal update last year — as it is likely to add on to the debt burden while providing little economic benefit, according to the report.
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