VANCOUVER (NEWS 1130) — Economists believe there are better ways to stimulate the economy and promote growth than what the BC NDP and BC Liberals proposed this week.
The BC NDP’s promise of a COVID-19 relief payment through direct deposit and the BC Liberal’s sales tax elimination pledge are causing some skepticism as to how effective either move with be.
The NDP and BC Liberals are both out with proposals this week they claim will stimulate the economy. Listen @NEWS1130 as we hear from two economists who believe there are better ways to go about doing that than a direct deposit or eliminating PST. #bcpoli #BCVotes2020
— Martin MacMahon (@martinmacmahon) October 7, 2020
UBC Sauder School of Business associate professor Werner Antweiler isn’t convinced either plan would boost the economy, though he does expect it could stimulate voting.
“I think I would have preferred to hear, from both parties, a clearer vision as to where we can bring money to work in our economy to build productivity and infrastructure in the years to come,” he said.
Steeve Mongrain, a professor of economics at SFU, suspects the Liberals eliminating the sales tax would promote some spending, but it would be pricey.
“In a situation where already the B.C. government has suffered important shortcomings in terms of revenue and increasing expenditure, it might not be the wisest thing to do,” he said.
“So a little bit more of a downplay approach by the NDP, but it is trying to target more people who would need it. I found that a better solution.”
According to Antweiler, the danger with the NDP direct deposit promise is that people might save the money, or they might use it to pay off debt, neither of which would stimulate growth.
“As an economist, I look at the best way to stimulate the economy, that’s spending on something that is creating activity,” he said.
Antweiler noted building infrastructure can provide more of a boost for the economy. And while the NDP and Liberals are promising various infrastructure projects as part of their platforms, Antweiler said both have their problems.
“Both proposals suffer from a leakage effect. The way to generate more of a positive effect in the economy is to actually spend money directly on activities,” he said.