The context of the current federal election in Canada is a little bizarre. The United States government is trying to extend its sphere of influence across North America and to reshore jobs lost to globalization over the last 80 years. What was supposed to be an election fought over changing a tired and out-of-touch Liberal government has become a patriotic call to fend off the intruders from the south. There is little that any government can do to provide certainty and sovereignty in a world turned upside down by polarized American politics. Still, it is the job of politicians to make us believe in our country and ourselves. One of the easiest ways to do this is to promise tax cuts, essentially negotiating down the cost of government services in order to attract voters. Here is a quick overview of the tax plans offered by the political parties.
| Party | Cost of tax cuts/benefits | Income group getting most benefit |
| Liberal | $5.4 B | $95-129K |
| Bloc Quebecois | $6.8 B | $24-31K |
| Conservative | $14.9 B | >$129K |
| New Democrats | $19.8 B | $24-31K |
| Green | $60 B | $95-129K |
There are a variety of approaches included in this analysis by the Centre for Policy Alternatives. Table 1 shows the total cost of increases to specific benefits and cuts in income and sales tax, as well as the income group that gets the most money back. The Liberals and Conservatives cut the taxation rate for the lowest income bracket while the Greens and New Democrats change the brackets so that low income earners pay no taxes at all. The New Democrats combine this approach with specific supports for disabled and elderly people (as does the Bloc), which tends to focus the benefit on lower income groups. The New Democrats also include a $3.3 B cut on GST for utilities and children’s clothes.
The most alarming thing here is that none1 of the parties are proposing methods to recover this lost revenue. When much of the rhetoric in the campaign has been about improving our productivity and military preparedness, the focus on cutting revenue seems misplaced. Still, one cannot take the fight to our opponents, real or imagined, until one has got the support of our fellow Canadians. I will follow up on the full budget proposals of the parties as they become available.
- The NDP are reintroducing the Liberal government’s previous proposal to change the capital gains tax to recoup $1.5 B from upper income groups. ↩︎