Alternative Federal Budget would lift 1.1 million out of poverty, create 520,000 jobs

March 10, 2016

OTTAWA—The 2016 Alternative Federal Budget (AFB), released today by the Canadian Centre for Policy Alternatives (CCPA), projects a federal deficit of $29.2 billion for 2016-17 when Liberal platform measures are taken into account. It also delivers a blueprint showing how the government could take on a $37.9 billion deficit and still maintain Canada’s debt-to-GDP ratio.

The AFB, now in its 21st year, brings together leading Canadian economists and sectoral experts to produce a detailed progressive economic plan—and the means to pay for it. The measures in the Alternative Federal Budget would lift 1.1 million Canadians out of poverty, reduce income inequality, boost economic growth, and, at its peak, result in 520,000 new jobs, bringing Canada’s unemployment rate to 6.0%.

“We shouldn't let the idea of federal deficits, even relatively large ones, scare us off making much needed investments in Canada. Every dollar of a federal deficit puts a surplus dollar in the pocket of the provinces, Canadian families or businesses.” says David Macdonald, Senior Economist. “The Alternative Federal Budget illustrates how well structured spending more than makes up for any additional debt through a stronger economy.”

The Alternative Federal Budget raises the bar on transparency by providing an accounting of the distributional impacts on Canadian families of all proposed changes in taxation, transfers, and program spending—something no government budget, federal or provincial, has ever undertaken.

The AFB also stresses policies to address income inequality—not exacerbate it. The bottom 90% of families (those earning less than $165,000 a year) would see a net benefit from the AFB’s program spending and tax and transfer measures while the top 5% of earners will see tax increases equivalent to about 2.6% of their average income. 

Total federal spending as a share of the economy is the lowest it’s been since before the Second World War. The last time the federal government was this small Canada had no national health care plan, no pension plan, no guaranteed income supplement, and no employment insurance.

“There is no deficit in the capacity or imagination of this country,” says Senior Researcher Kate McInturff. “There is more than enough fiscal room to ensure that everyone can have a better future. What we need now is growth that raises everyone’s standard of living, rather than more savings for the wealthy few.”

The AFB plan:

  • introduces a national carbon tax at $30 a tonne with a refund for low-income families;
  • fosters a highly skilled workforce by eliminating university tuition fees;
  • tackles the ongoing crisis for First Nations housing, drinking water, and education;
  • enacts a comprehensive federal poverty reduction plan that would cut seniors’ poverty in half and cut child poverty by a quarter;
  • integrates long-term care, home care, and pharmacare into Canada’s publicly funded health care system;
  • repairs our cities by providing $7 billion a year for municipal infrastructure renewal; and
  • meets the needs of today’s families by investing in affordable child care and enhancing parental leave.

“There is a broad consensus that large deficit spending is necessary in Canada. The Alternative Federal Budget proves we can fight climate change and create jobs at the same time, and shows how we can reduce poverty through responsible economic growth,” says Macdonald.


Alternative Federal Budget 2016: It’s Time To Move On is available on the CCPA website:

For more information, contact Kerri-Anne Finn, CCPA Director of Communications, at 613-563-1341 x306.