Liberal Party
The Liberals were the last of the main political parties to release their economic platform, and at the time it was the only one fully costed by the Parliamentary Budget Officer (PBO).
In addition to running up a record deficit and debt, the Liberals are prepared to spend more than $78 billion over the next five years. The party is focused on recovery from the pandemic but did not come up with any notable new ideas from what was in April’s federal budget. It avoided national pharmacare and a universal basic income. The thrust of the Liberals’ approach focuses on green jobs, social support, and diversity and inclusion in all aspects of their economic plans.
Small business is the engine of the Canadian economy, and the Liberals are following up on their budget promises as well as offering larger loans. They are also offering micro-grants for the adoption of new technologies by small businesses.
The Liberals would work with the provinces on $10-a-day child care, continue to provide benefits for workers, and enact reforms for employment insurance.
For Canadian-controlled businesses, the Liberals would allow them to expense up to $1.5 million in growth-enhancing investments. The party has always supported supply management for dairy, poultry, and egg farmers.
The Liberals have not ruled out raising taxes and said they will tax the most profitable banks and wealthy companies to spread the wealth in an effort to alleviate the housing affordability crisis. They are contemplating a minimum tax rule so that those in the top income bracket pay at least 15 percent in income tax annually.
The Liberals don’t have a plan to balance the books but instead are counting on debt as a share of the economy—the debt-to-GDP ratio—to stay on a downward trajectory and for interest rates to remain low so that the interest expense doesn’t overwhelm government spending.
Conservative Party
The Conservatives have put forth detailed strategies for a number of sectors to get the economy going, and they are relying on expenditures as a way of stimulating the economy.
The party is proposing a few different tax credits to help businesses grow and invest, such as a 5 percent capital investment tax credit and a 25 percent tax credit for investing in a small business. Child care would also be dealt with through a refundable tax credit.
The Conservatives plan to make more loans available to small businesses. To make business investment more attractive, they aim to cut down on red tape, making that the sole focus of a new ministerial appointment.
For the oil and gas sector, the Conservatives would work to ensure adequate pipeline capacity. They say they will eliminate Bill C-69, which has been termed the “pipeline killer” as it creates a plethora of conditions needed to be met for the approval of new infrastructure projects, including gender and diversity considerations. The Conservatives provide strategies for mining, agriculture, forestry, and fisheries.
The party is putting emphasis on innovation and entrepreneurship and is earmarking $5 billion to fund initiatives in certain sectors. It also has a focus on patents, aiming to bolster Canada’s performance in this regard on the world stage.
Among all of the parties, the Conservatives have the most decisive plans for diversifying economic interests away from China and building global trading relationships in Asia.
Canada is an open trading nation and the Conservatives plan to focus on free trade with free nations. If elected, they will pursue CANZUK—trading with Australia, New Zealand, and the United Kingdom—as well as forging deeper ties with India as part of an Indo-Pacific strategy. They will also withdraw from the Beijing-led Asian Infrastructure Investment Bank, as part of a strategy of getting tough with communist-led China.
The Conservatives would scrap the Canada Infrastructure Bank, which was created by the Liberals to attract private and foreign capital but has failed to achieve the desired results to date.
The Conservatives say they would balance the budget over the next decade. They released the full PBO costing of their platform on Sept. 8, showing total net new spending of $51.3 billion over the next five years, with $29.7 billion of that in 2021–22, and a return to balance in about seven years if they are elected. According to the PBO, the Conservative budget deficit would fall to $24.7 billion in five years, down from $168 billion in 2021–22.
The party also aims to reform the tax system by establishing a panel of experts to devise ways to improve competitiveness and reduce tax rates and simplify the rules.
New Democratic Party
The NDP’s economic plan has a strong focus on moving Canada to a low-carbon future and thus aims to spend a lot of taxpayers’ money on investments in clean energy and social programs. The NDP also has various tax-the-rich schemes to try to offset the costs of expansive government spending, including a wealth tax.
The NDP claims that the public investments made will drive the creation of over 1 million jobs to address what it terms to be a “climate crisis.”
The NDP does not provide a plan to reduce the deficit, saying,“In all cases, we will manage debt and deficits responsibly … and moving towards balance in the future when it’s prudent to do so.” It would borrow when needed to provide the services it says Canadians and their families count on.
Among the social programs discussed by the NDP are $10-a-day child care, paid sick leave, and prescription drug coverage. In addition, they say they’ll work toward a guaranteed livable income for all Canadians and targeted support for impacted workers. Universal pharmacare was not brought up by the Liberals but the NDP said they will work toward it, claiming it can save businesses about $600 per employee.
The NDP would keep in place the COVID-19 support measures brought in by the Liberals, such as the small business wage and rent subsidies, until small businesses can fully reopen.
The NDP also emphasized expanding domestic manufacturing of critical supplies—a lesson learned from the pandemic when Canada had to depend on foreign suppliers of personal protective equipment, for example. Another area mentioned for government involvement is entrepreneurship, for example as applied to indigenous communities.
An NDP government would support unions in trade disputes, in light of the new trade deals Canada has recently signed. The steel and aluminum sector was singled out as one that needs support, given recent tariff spats. The NDP said it would fully protect supply management, a thorn in the side of the United States, which seeks to expand the market for its agricultural products.
People’s Party of Canada
The PPC’s main economic thrust is to improve productivity by encouraging more business investment and lowering government involvement. Canada has struggled to attract investment from foreign sources due to factors like high taxes and regulations that are said to make the business environment less hospitable. The PPC aims to lower taxes for businesses to encourage investment.
A great deal of productivity comes from the energy sector, and the PPC plans to repeal a couple of bills the Liberals passed—Bill C-48 on banning oil tankers and Bill C-69 on environmental assessments, dubbed the “pipeline killer” legislation. The PPC would approve pipeline projects and find a private buyer for Trans Mountain, which is currently owned by the government.
The PPC has ambitious plans to cut taxes. The party says eliminating taxes on capital gains would put about $7 billion in the pockets of Canadians, and lowering the corporate income tax rate from 15 percent to 10 percent would make $9.5 billion available to businesses.
The PPC plans significant cuts to government spending to balance the books as soon as possible, which would permit the tax cuts. Some of the government spending to be cut would include corporate subsidies and “inefficient government intervention.” The PPC says this would generate savings of $5 billion to $10 billion each year.
The party would also eliminate supply management, stating that it creates higher costs for consumers. This form of protectionism is found in certain industries like dairy and poultry, and the PPC says Canada would have had a better trade deal with the United States and Mexico if it had been willing to put supply management on the table, as requested by the United States.
The Green Party released its election platform on Sept. 7, focusing on a faster transition to net zero emissions as soon as possible and, by 2050, being net negative. The Greens would end all fossil fuel extraction and cancel all pipeline projects.
The Greens have generous spending plans, which include extending pandemic support programs like the wage and rent subsidies to small businesses until restrictions are lifted.The party would accelerate the incremental increases in the carbon tax, ban new nuclear power generation, and ban the sale of internal combustion engines for passenger vehicles by 2030.
The Greens do not discuss the federal deficit or debt in their platform but do propose raising the federal corporate tax rate from 15 percent to 21 percent, charging a 5 percent surtax on commercial bank profits, and, like the NDP, applying taxes on wealth and luxury items.
