NDP platform pledges billions for child care
OMAR EL AKKAD
TORONTO
September 28, 2008 at 12:15 PM EDT
Globe and Mail Update — NDP leader Jack Layton has made child care the centrepiece of the New Democratic Party's 2008 election campaign platform, which was unveiled in Toronto Sunday morning and which the party plans to pay for the majority of by hiking corporate tax rates.
The single largest expenditure in the NDP's multibillion-dollar platform is a child benefit that will cost $500-million in 2009, double for the next two years and then more than double to $4.4-billion by 2012.
Under the program, the NDP says every family will continue to get the so-called "baby bonus" cheques of $100 a month under a program started by the Conservatives. But families with a net income less than $188,000 a year will qualify for a benefit of about $250 a month. Families with a net income of less than $38,000 will qualify for a benefit of $400 a month by the time the program is fully implemented.
As virtually every major federal party has done, the NDP promises not to run a deficit.
Like the Liberals, the NDP based its fiscal plan on the Conservative government's 2008 budget projected surpluses, which are more than six months old and are widely believed to be overly rosy in light of the economic slowdown in recent months. But by far the biggest revenue generator in the NDP plan is derived from reversing corporate tax cuts.
In 2009, the projected surplus from the reversal is $7.3-billion. By 2012, that number almost doubles to $14.2-billion.
Between 2003 and 2007, the corporate tax rate was 22.12 per cent. The NDP says the Conservatives lowered that to 19.5 per cent this year, and progressively down to 15 per cent by 2012. Under the NDP plan, the rate would climb to 22.12 per cent and stay there.
In a background briefing, an NDP official said the party is not raising the corporate tax rate, instead repeatedly insisting that companies will pay next year what they paid last year.
While the latter part of that statement is correct, the former is not. The NDP's own numbers show that the corporate tax rate in 2008 is 19.5 per cent. If the NDP is elected and the party implements its plan, the rate would climb to 22.12 per cent in 2009, a clear increase.
The NDP is also counting on what it calls a "peace dividend." That's the projected savings from the party's plan to withdraw combat troops from Afghanistan. NDP officials say the estimate comes from an Access To Information request to the Department of National Defence. The party estimates a savings of $600-million in 2009, rising to $1.1-billion in 2010 and the same amount in 2011.
In addition to the projected budget surplus, the corporate tax cut reversal and the peace dividend, the party also plans to save money by tightening up spending projections. The NDP argues that the government typically overestimates its spending by 3 per cent. By tightening that limit to 2 per cent, the NDP promises to save about $2.3-billion a year. However that number is based purely on recent government spending history and the NDP's assumption that such trends will continue in the future.
Once it is done paying for all its programs, the NDP projects a surplus of $3.375-billion in 2009, rising to $5.03-billion by 2011 and dropping back to $3.8-billion in 2012 (the "peace dividend" runs out between those two years). The party promises to spend all surpluses equally on infrastructure investments and debt repayment.
The NDP platform is clearly designed to present voters with a stark contrast between Mr. Layton – whom the party has framed as a leader whose primary concern is the average working family – and Conservative leader Stephen Harper, who the NDP paints as preoccupied with placating already-profitable corporations.
"We're making it clear with this platform today that our priorities are those of the kitchen table, not just the boardroom table," Mr. Layton said in a statement accompanying the platform's release. "Canadian families have a clear choice: Mr. Harper's corporate tax giveaways or New Democrats' investments in the priorities of families.
NDP officials attempted to justify the reversal of the corporate tax cuts by saying that the cuts, by definition, go to companies that pay taxes, and are thus profitable. Therefore, officials argued, already-profitable companies gain from the cuts, while struggling industries such as manufacturing and forestry do not.
Profitable companies receive few such perks under the NDP plan. Indeed, the vast majority of expenditures are aimed at middle- and lower-income Canadians.
Among the NDP platform promises:
• An affordable housing program that will cost $500-million in 2009 and climb to $1-billion by 2012.
• An energy retrofitting program aimed at low income Canadians, which will cost $200-million in 2009 and climb to $1.2-billion by 2012.
• A $5-billion commitment over five years in programs for First Nations, Metis and Inuit communities.
• A $1000 grant to all undergraduate students who qualify for student loans. The program is to be implemented in 2010 and will cost $1.5-billion by 2012.
• Additional funding for foreign aid and international development. The funding adds $250-million to Canada's current commitment in 2009, rising to an extra $1-billion in 2012.
