NEW DEMOCRATIC PARTY
The New Democratic Party has positioned itself between the other two, with a fiscal commitment to balanced budgets over the next four years but with plans to raise corporate taxes to help finance more spending on services.
The party wants to introduce a national child care plan modelled in part on the subsidized daycare plan in effect in Quebec. It also pledges to increase transfers to the provinces for health care. Together, the two promises will have an annual cost of $ 5.1 billion by 2019- 20.
Where will the money come from?
The NDP pledges to raise corporate taxes to 17 per cent from 15 per cent, reversing cuts made by the Harper government in recent years. Party leader Tom Mulcair argues that at 17 per cent, the rate would still be lower than the 17.5- per- cent average that prevailed in Canada in the Harper years. Corporate tax rate on income was as high as 21 per cent in 2006 and 2007.
However, some economists puzzle at the logic of cutting the small- business tax rate, as the NDP proposes, while raising the tax on larger businesses.
“What’s the theory behind this?” asks Cross. “We want to penalize people for being successful and becoming large corporations?”
The NDP says the two- percentage- point hike in corporate tax would raise $ 3.7 billion, but that’s assuming companies don’t move investment projects and jobs out of the country to avoid the higher rate. Tax increases often fail to deliver the intended return.
Jack Mintz, a University of Calgary tax export, argues in a paper for the Canadian Council of Chief Executives that low taxes on big business make sense because these are the companies that deliver the biggest returns to the economy.
Other features of the NDP plan include repealing income- splitting for couples with children and rolling back the contribution limit on Tax Free Savings Accounts.
It would also close tax “loopholes” on stock options for corporate executives.