OTTAWA — Tom Mulcair has nailed down three more planks in the NDP election platform, unveiling promises of tax relief for small business and manufacturers.
The NDP leader announced Tuesday that a New Democrat government would cut the tax rate for small businesses to nine per cent from the current 11 per cent.
It would also extend for an additional two years the accelerated capital cost allowance for machinery or equipment used in manufacturing, a tax break that is scheduled to expire this year.
And it would create an innovation tax credit to encourage manufacturers to invest in machinery, equipment and property used in research and development.
“With strategic investments and a concrete plan, we can provide the squeezed middle class with a stronger economy and better shock absorbers to ensure they weather the storm in the coming months and years ahead,” Mulcair told the Economic Club of Canada.
The trio of measures are part of a bid to show that New Democrats have a plan to spur 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 oil price drop is sucking billions from the federal treasury and stunting economic growth.
An NDP backgrounder offered some cost projections for the promises. Reducing the small business tax rate to 10 per cent immediately would cost $600 million a year, with the final drop to nine per cent coming when finances permit .The innovation tax credit would cost about $40 million a year, while extending the capital cost allowance would cost $1.2 billion over two years.
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-a-year income-splitting scheme which critics say would benefit less than 15 per cent of the wealthiest families.
Mulcair has promised to scrap the income-splitting plan; he’s also pleding to reverse the Harper government’s tax cuts for big business, bringing the 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 per cent.
While Mulcair has denounced corporations as freeloaders who aren’t paying their fair share, he said small businesses, which create “80 per cent of all new jobs in this country,” deserve a break.
In a bid to reverse sagging NDP fortunes, Mulcair began unveiling platform planks last summer, more than a year ahead of the election scheduled for this October and before oil prices began their nosedive.
Among other things, Mulcair has promised that the NDP will create one million new day care spaces that will cost parents no more than $15 a day.
He has also promised to reinstate a $15-an-hour federal minimum wage and to restore the annual six-per-cent increase in health care transfers to the provinces, which could cost upwards of $30 billion over nine years.
The parliamentary budget officer forecast Tuesday that the federal government will run a deficit of $400 million this year if oil prices remain below US$50 a barrel.
While Mulcair has made it plain he has no confidence in the government’s assertion that it’s still on track to balance the books, Mulcair would not say Monday if an NDP government would be willing to continue running a deficit in order to stimulate economic growth — as some economists have advocated.