Mulcair unveils tax relief for manufacturers
NDP plan to boost economy a sharp contrast to Harper government.
OTTAWA — Tom Mulcair is poised to nail down more planks in the NDP election platform, unveiling promises of tax relief for small business and manufacturers.
The NDP leader is to announce the latest proposals in a speech to the Economic Club of Canada.
They’re part of a bid to show that New Democrats have a plan to goose the sputtering economy that’s in sharp contrast to the approach taken by Prime Minister Stephen Harper’s Conservatives in the face of plunging oil prices.
But they’re also likely to raise more questions about how Mulcair intends to pay for his promises at a time when the collapse of oil prices is sucking billions from the federal treasury and stunting economic growth.
Harper has vowed that the oil price plunge won’t knock the government off its plans to balance the budget in the coming year and deliver on pricey promises of tax benefits for families with young children – including a controversial $2.4-billion-per-year income splitting scheme which critics say would benefit less than 15% of the wealthiest families.
Mulcair has promised to scrap the income splitting scheme; he’s also promising to reverse the Harper government’s tax cuts for big business, bringing Canada’s corporate tax rate closer to the average of G7 countries – which would mean a hike of as much as 4.5% percentage points from the current 15%.
While Mulcair has denounced corporations as freeloaders who aren’t paying their fair share, insiders say his speech will champion a tax cut for small businesses, which New Democrats contend are the real job creators.
According to insiders, the move is inspired by Manitoba’s NDP government, which slashed its small business tax rate to zero from 8% in 2010. The Canadian Federation of Independent Business lauded the measure for allowing small businesses to keep more of their profits to reinvest in their companies and their employees.
It’s unlikely Mulcair will promise to do away entirely with the 11% federal small business tax rate. In the 2011 election, the NDP promised to reduce the rate to 9%, at a cost of $1 billion a year to the federal treasury.
“For us, it’s a priority to continue to look at the creation of good middle-class jobs, permanent jobs, full-time jobs,” Mulcair said.
“So, for example, the creators of jobs in our country are mostly the small and medium-sized businesses. They’re the ones who should be getting the break. Instead, Mr. Harper has given mostly the largest corporations in Canada $50 billion in tax reductions.”
Mulcair is also expected to promise to extend the accelerated capital cost allowance for machinery or equipment used in manufacturing, a tax break that is scheduled to expire this year.
“We’ve lost almost 400,000 well-paid manufacturing jobs since the Conservatives came to power,” Mulcair said.
“Let’s start creating the next generation of well-paid middle-class jobs in our country.”
Mulcair has promised that the NDP will create one million new day care spaces that can be accessed for no more than $15 per day – at a cost of $5 billion annually to the federal treasury, once fully implemented over eight years.
He has also promised to reinstate a $15-per-hour federal minimum wage and to restore the annual 6% increase in health care transfers to the provinces, which could cost upwards of $30 billion over nine years.
© 2015 The Canadian Press