Following one of the shortest campaigns in Canadian political history, Election Day will be September 20. In an attempt to appeal to voters nationwide, political leaders have announced plans to restart the economy amidst a one-in-a-century public health and economic crisis. Each party has detailed measures on issues such as taxes, child care, and jobs, affecting businesses, the economy, and your wealth.
Jobs, Post-Covid-19 Recovery and Proposed Measures
Both the Liberals and Conservatives have pledged to create one million jobs that have been lost due to Covid-19. As part of the Canada Job Surge Plan, the Conservative Party promised to pay up to 50 percent of the wage of new hires for a period of six months. All Canadian businesses will be eligible to apply for this subsidy. The Conservatives also pledged to implement credit incentives, tax breaks, and child care tax credit to support low income households and to create more jobs through loan financing.
Similarly, the Liberal Party has pledged to give credits to businesses that bring on new hires, thus extending the Canada Recovery Hiring Program to March 31, 2022. The Liberals also promised to create work and training opportunities for some 28,000 people who would aid medium-sized and small enterprises in implementing new technology in the workplace. The Liberal’s election platform covers all announcements made on employment issues, including workers’ right to disconnect, extending the work-from-home tax, and a new Employment Insurance benefit for self-employed individuals.
The Liberal Party has announced plans to raise corporate income tax on insurance businesses and financial institutions with annual revenue of $1 billion. The Conservative Party promised to strengthen the role of the Canada Revenue Agency to ensure it can combat wealthy tax evaders.
The Liberals plan to invest $30 billion over a 5-year period into a national child care system, which is a major part of their spring budget. The government already signed deals with 8 territories and provinces to reduce fees to $10 per day. The goal is to cut fees by 50 percent for child care and early learning in 2022. The plan also extends $2.5 billion in funding toward Indigenous child care and early learning.
In contrast, the Conservative Party would allow the territories and provinces that signed deals to keep the funding and would introduce a refundable tax credit for low income families. To cover child care costs, families with an income of $50,000 would be entitled to get $5,200 while those with an income of $30,000 would receive up to $6,000.
How Both Parties Fare
Both the Liberal and Conservative platforms cover measures to support Covid-19 recovery, create new jobs, and support businesses. The Liberal Party’s proposed measures translate into $78 billion in new spending over the next 5 years, adding $70 billion to the federal debt. While Trudeau insisted that the plan is transparent, prudent, and responsible, there is no timeline to balance the budget. Additionally not all promises have been costed by the parliamentary budget office. The budget deficit starts at $156.9 billion in 2021 and is projected to fall to $32 billion in 2025 – 2026.
According to the Institute of Fiscal Studies and Democracy, the spending measures proposed by the Liberal Party are relatively straightforward to implement but there is no discussion on economic and fiscal risks in the platform.
The Conservative Party has pledged to run a disciplined government and balance the budget in 10 years. If they succeed in forming government, the deficit would start at about $168 billion and fall to $25 billion by 2025 – 2026. One item on the Conservative agenda that will help curb the deficit is their child care platform. Instead of the national child care system introduced by the Liberals, the Conservative Party proposes a refundable tax credit in place of the existing child care expense deduction. The measure will cover up to 75 percent of child care expenses for households in the lower-income bracket.
Additionally, analysis by the Parliamentary Budget Officer indicates that a Conservative government could recoup billions of dollars by extending additional funding to the Canada Revenue Agency to enforce international taxation and taxation of large corporations and multinational firms. Such measures would result in additional $3.5 billion in revenue.
An issue that voters across the political spectrum find important is fair taxation and tax increases for wealthy corporations. A new Abacus Data poll reveals that 89 percent of Canadians believe a wealth tax should be part of Canada’s post-Covid-19 economic recovery. The overwhelming majority or 92 percent of respondents also believe it is important to prevent large corporations from booking profits in tax havens.
Most Canadians, including half of the Liberal voters, share that the Trudeau government could have done more to ensure that large corporations pay their fair share, thus helping to reduce income inequality.
In a statement, press secretary Katherine Cuplinskas noted that the government has already taken steps to reduce stock option deductions, implement a luxury tax, introduce a tax on multinational digital corporations, and implement tax on non-resident unproductive use of Canadian domestic housing. Yet, it seems that voters largely feel the Liberal government has not done enough to introduce measures that support income equality and help protect their wealth. Over 30 percent of Canadians are unsure which party’s platform would best support action in this direction. According to program director for the Broadbent Institute Katrina Miller, many Canadians are waiting to see which party is ready to make a commitment that voters believe in. In this year’s election, taxing wealthy corporations and fair taxation is an issue that both Liberals and Conservatives “should be looking to double down”, as Miller concludes.