‘Canada needs decisive and bold action’: Scotiabank VP Rebekah Young
Rebekah Young, Vice President, Head of Inclusion and Resilience Economics, Scotiabank / SCOTIABANK PHOTO
A new economic note from Scotiabank’s Rebekah Young highlights the ambitious spending plans from both the Liberals and Conservatives, warning that “fiscal expansion looks set to continue” regardless of who wins. The Liberals are pledging $129 billion in gross new spending over four years, compared to $110 billion from the Conservatives. But both parties rely on questionable savings plans, with the Conservatives projecting $148 billion in offsets — $41 billion more than their spending — with over a third based on “dynamic revenue” assumptions tied to growth. Excluding these, both parties face an estimated $15 billion shortfall.
“Canada needs decisive and bold action. The country’s next leader may not have much control over policies south of the border—and frankly doesn’t have as much authority within its own boundaries as it might hope—to get all the way to another half a trillion in output or investment dollars in a highly uncertain environment. But it does have half a trillion annual spending plan and solid balance sheets at its disposal. Stronger investment begets higher productivity which should, in turn, foster greater living standards for Canadians. The aspirations are there but the gains will be in execution.”
Neither party is campaigning on fiscal austerity. Young notes the Liberals would boost annual spending by more than 0.5% of GDP, while the Conservatives propose slightly tighter deficits — depending on growth assumptions. Both rely heavily on efficiencies, tariffs, and infrastructure plans to balance the books.
Housing remains a central issue, with both parties proposing over $19 billion in related spending. The Liberals are pushing a new Build Canada Homes initiative, while the Conservatives promise to build 2.3 million homes in five years through development incentives and tax cuts.
However, Young warns that “the next leader does not likely have a wide margin for policy missteps,” especially with trade risks rising and global uncertainties mounting. Neither party accounts for a potential tariff-induced recession, which could “materially tilt deficit and debt projections back up.”
Despite big promises, execution will be key. “The aspirations are there,” Young writes, “but the gains will be in execution.”
