Progressive tax code, smart investments will lift close to a million out of poverty and curb inequality: think tank

Policy experts urge Liberals to go the distance on progressive promises
February 22, 2018

OTTAWA—The 2018 Alternative Federal Budget (AFB), released today by the Canadian Centre for Policy Alternatives (CCPA), delivers a roadmap to where the country could be on the eve of the next federal election, if the government moves forward with bold action to deliver a progressive economic plan that leaves no one behind.

If implemented, the 2018 Alternative Federal Budget will reduce income inequality, lift close to a million people out of poverty, close unfair and expensive tax loopholes, and create 600,000 jobs while locking in the unemployment rate in the five per cent range.

“While the economy enjoyed a surprise jolt in 2017, that strong performance is not expected to last, and poverty and inequality remain at stubborn levels,” says David Macdonald, CCPA Senior Economist. “It’s crucial we make the most of good economic news and invest in key programs to maintain forward momentum. It would be a mistake to fall back on the old habits of deficit reduction, austerity and an overreliance on the private sector for guiding new growth.”

Under the AFB plan, the 95% of Canadian families who earn less than $249,000 a year will be better off on average by about $2,000 including both tax/transfers changes and new programs, including on a national pharmacare plan, universal child care, and free tuition. While the AFB runs a higher deficit in the near-term, it does so to invest in First Nations communities. To partially offset this, it plans to close unfair tax loopholes benefiting mainly the wealthy, which will raise up to $18 billion a year. 

“Halfway through this government’s mandate, some promising steps have been taken. But we need to go the distance,” says CCPA Director of Policy and Research Gauri Sreenivasan. “From achieving justice for Indigenous peoples to closing the gender gap—our route is clear and we can afford to take the high road.” 

The AFB plan:  

  • Boosts direct transfers to low-income families in ways that would lift 600,000 children and adults out of poverty and reduce child poverty by roughly a third;
  • Eliminates all fossil fuel subsidies and creates a Just Transition Fund to help ease energy sector workers into new roles in a fully green economy;
  • Tackles historic under-investment faced by First Nations communities through a $9-billion investment this year in urgently needed infrastructure, clean water, education and health care on reserves;
  • Acts immediately to implement pay equity legislation and invests heavily in child care so women’s labour is no longer discounted as a result of discrimination;
  • Slashes senior poverty rates by 30% by increasing the Canada Pension Plan income exemption for the Guaranteed Income Supplement by $3,000 and boosting the top-up amount by $1,000;
  • Accelerates the national carbon price to reach $50 per tonne by 2020, while investing in training, apprenticeships and green infrastructure.

“The government has work left to do to fulfil its promises of an inclusive economy, access to pharmacare, and take action on catastrophic climate change,” adds Macdonald. “This isn’t the time to delay. Canadians are getting of tired of asking, ‘Are we there yet?’”

About the Alternative Federal Budget: Now in its 23rd year, the AFB is a collaborative effort bringing together leading Canadian economists and sectoral experts to present progressive policy solutions with the means to pay for them. Alternative Federal Budget 2018: Getting There is available for download at


For more information or to arrange interviews contact: Alyssa O’Dell, CCPA Media and Public Relations Officer, at 613-563-1341 x 306, cell 343-998-7575 or [email protected].