It’s the Economy, Stupid: Federal Campaigns Target the Middle Class
Oct 9, 2019
Nick de Pass
Amid the chaos and attack lines during the Federal leaders’ debate on Monday night, the goal was clear for each of the six main parties: woo middle class voters. Liberal Leader Justin Trudeau promised to give Canadians “the tools to succeed”. Andrew Scheer’s Conservatives have made it the centerpiece of the campaign, insisting that “It’s time for you to get ahead”.
With less than two weeks before Election Day on October 21st, there’s an opportunity for those in the financial services industry to enhance their visibility by analyzing the party platforms and explaining what they mean for Canadians’ pocketbooks.
If you haven’t turned your attention to politics yet, KLC has put together a handy cheat sheet of the various party platforms to help guide your strategic communications plan.
Liberal Party of Canada
Justin Trudeau’s Liberals rode into power in 2015 with a promise to balance the budget by 2019. They did not. This time around, they’re pledging an additional $9.3 billion in spending in 2020-21 and won’t return to balanced budgets until 2040 at the earliest. However, the party says that increased economic growth means their plan will shrink deficits relative to GDP, a key indicator of financial health. A recession would likely torpedo that pledge.
The Liberals are also promising to lower income taxes by raising the basic personal income tax deduction to $15,000 for those earning under $147,000. That loss in revenue will be partially offset by new taxes on luxury vehicle sales and on tech giants like Netflix, Google and Amazon generating sales in Canada. They have also promised to cut corporate taxes in half for companies manufacturing zero-emission technologies.
Conservative Party of Canada
Andrew Scheer has attempted to position himself as more fiscally responsible than his Liberal counterpart. The Conservatives have pledged to eliminate the deficit in five years, after initially promising to do it in two, while implementing a “universal tax cut”. If the Conservatives come to power, they plan to lower the tax rate on income under $47,630 to 13.75 per cent from 15 per cent over three years. The tax cut will cost an estimated $6 billion dollars, which the Conservatives plan to offset by reducing spending on foreign aid by $1.5 billion and eliminating $1.5 billion in corporate subsidies. Where will the other $3 billion in cost savings come from? It’s unclear.
Mr. Scheer has also promised to repeal the Liberal tax changes that eliminated income sprinkling, while scrapping GST on home heating costs and the carbon tax. He would bring back tax credits for public transit and children’s fitness and arts programs, while cutting taxes to 5 per cent from 15 per cent for companies manufacturing green technologies.
The Conservatives would also look to speed up the process for building pipelines, promising to use the Constitution to declare pipelines “in the national interest” if necessary.
New Democratic Party of Canada
Jagmeet Singh and the NDP have proposed a New Deal for Workers that would create 300,000 jobs through investments in clean energy and sustainable infrastructure, while increasing the minimum wage to $15 per hour and introducing universal pharmacare. The NDP have promised to balance the budget “when prudent,” but have not provided a timeline for doing so.
Mr. Singh has proposed rolling back corporate tax cuts, closing tax loopholes, raising the capital gains tax rate to 75 per cent from 50 per cent, and increasing the top federal personal income tax rate to 35 per cent from 33 per cent. The NDP would also create a one per cent “wealth tax” on those worth more than $20 million.
The party has been criticized for its muddled pipeline policies but have pledged to increase carbon taxes on the heaviest industrial emitters.
Green Party of Canada
Elizabeth May’s Green Party has pledged to balance the budget in five years through aggressive revenue generation. The party plans to raise the corporate tax rate to 21 per cent from 15 per cent and implement new tariffs that include a “wealth tax” that would generate $2 billion and taxes on financial transactions and sugary drinks. They would also close tax loopholes, increase taxes on tech giants like Netflix and Google, and explore ways to tax cryptocurrency. The Green’s would also create a new Federal Tax Commission to ensure the tax system is fair and accessible.
In terms of new spending, Ms. May has pledged a Guaranteed Livable Income, free post-secondary education, and will study the impact of adopting a shorter work week.
The Green’s would also support the carbon tax among a broader environmental strategy that includes no new pipelines and eliminating subsidies to the fossil fuel industry.
Support for Quebec sovereignty is near historic lows, but the Bloc is still hoping to increase its sway in the province. The party wants to bring control of Federal income taxes to the province and away from the Canada Revenue Agency, claiming it would make things simpler for Quebeckers. The Bloc also wants to tax tech giants and crack down on corporations utilizing offshore tax havens.
The party is also trying to position itself as a green alternative by pledging to increase the carbon tax in provinces where emissions per capita are higher than average (so, not in Quebec) and killing new pipelines – especially Energy East, which would run through Quebec.
People’s Party of Canada
Maxime Bernier created the People’s Party after his failed bid to lead the Conservatives. The party has mainly received headlines by courting controversy, including anti-immigration billboards and Mr. Bernier’s inflammatory comments about 16-year-old climate activist Greta Thunberg on Twitter.
When it comes to the public purse, Mr. Bernier has pledged to eliminate the deficit in two years by cutting spending on corporate subsidies, foreign aid, and Canada’s public broadcaster, the CBC. Once it has erased the deficit, the People’s Party has promised to cut income taxes.
Mr. Bernier has also put a focus on increasing the productivity of Canadian businesses. In addition to ending subsidies, the People’s Party has promised to cut corporate income taxes to 10 per cent from 15 per cent, scrap the carbon tax, and abolish the personal capital gains tax to encourage investment. The party is also pro-pipeline, with Mr. Bernier pledging to use the Constitution, if necessary, to get infrastructure built.