Chantal Hébert
The NDP’s fiscal plan is a bit on the light side
OTTAWA— Jim Flaherty could have signed off on the fiscal framework the NDP presented on Wednesday. It borrows more from the late finance minister’s budgets than it offers in original content — at least at the front end of a New Democrat federal mandate.
That starts with the tax-cutting infrastructure Flaherty put in place over his near decade as Stephen Harper’s finance minister. Under a federal government run by Thomas Mulcair, its main pieces would remain untouched and with them the toll they take on the federal government’s capacity to finance programs.
The recent doubling of the annual contribution to a tax-free savings account would be reversed, but the concept itself would be retained as would the Conservative incomesplitting plan in as much at it applies to seniors.
The two-point cut in the GST, the universal child benefit — as recently enhanced by Flaherty’s successor Joe Oliver — would also be there to stay.
The NDP would reverse the decline in the corporate tax rate but at 17 per cent instead of 15 per cent that would remain over the average maintained under Flaherty.
As promised by Mulcair, the NDP, according to its fiscal framework, would deliver balanced budgets and, possibly, a surplus for every year of a full mandate — for a cumulative total of more than $14 billion.
The price that the New Democrats are willing to pay to beat the Liberals on the deficit front and the Conservatives at the surplus game is on the front of activism.
At least over the first few years, Canadians might not see much difference in the level of federal engagement on the social front.
There would not be a lot of money in the first years to lure the provinces into buying the ambitious national child-care program that is a centrepiece of Mulcair’s platform.
The promise to maintain the increase in the yearly health transfer at 6 per cent once the current arrangements run out in 2017 would come with strings attached for the provinces.
The extra money would be condi- tional on implementing the NDP’s agenda for — among other items — more palliative and long-term care, the recruitment of more doctors and the opening of more primarycare clinics.
The multi-year commitments to public transit and municipal infrastructures look modest when they are unbundled in annual instalments.
On Wednesday, party spokespeople described the commitment to raising Canada’s contribution to foreign aid to 0.7 per cent of Canada’s gross national product as “aspirational.”
By all indications, Mulcair’s pledge to balance the books is doable. Fulfilling his more ambitious promises could turn out to be another story. In many instances, one would not know until a second NDP mandate.
As for the political algebra that is behind the party’s fiscal choices, many questions remain.
A 2-per-cent hike in the corporate tax rate may sound modest but that does not mean it will be well received. In a rare show of agreement, the Conservatives and the Liberals instantly predicted that it would result in significant job losses.
At seven pages — including pictures — the NDP handout fell well short of a detailed platform or even a précis of one. According to the New Democrats, that’s because some of the measures the party has already factored in its spending plans have not yet been announced.
Still, as fiscal plans go, this one was on the light side. Most government or corporate business plans do not tend to list spending categories under headings such as “Help Where it’s Needed Most.” For those who wonder, the NDP would throw about $3 billion over four years in that generic pot.
Given all of the above, it is hard to connect enough dots to get a solid take on the big picture of the first NDP federal government. But reading between the lines of the fiscal framework, that government hardly looks like it was worth the 60-year wait of the Canadian Left.
By comparison, the manifesto published earlier this week by a group of high-profile activists comes across like a prescription for a revolution. Some of its leading signatories have long-standing ties to the New Democrats. It is hard to imagine that they inhabit the same planet as Mulcair’s NDP.