Our fiscal approach

For too long, governments have cut, under-funded, and failed to provide the basic services and supports that Canadians need from universal pharmacare to affordable transit. Rather than invest in people, Liberal and Conservative governments have chosen to spend public dollars enriching their friends in rich corporations. As a result, good jobs, a clean environment, quality health care, and a dignified retirement are harder and harder to come by for more and more working people.

It’s no wonder that Canadians are worried about the future and what it means for our kids.

This election, the Conservatives are offering the same old approach they always take – privatization and cuts to services that tell Canadians that they will have to go it alone to confront the challenges we all face.

Justin Trudeau and this Liberal government have let people down. Last election, he talked a good game about the importance of inequality and tackling the big problems of our time, but in government he has been out of touch with how urgently Canadians need help. Trudeau’s actions don’t match his sales pitch. The Liberal government is telling Canadian families that they have to wait, failing to deliver on key priorities, and making choices that leave people behind.

We have to make different choices if we want different results. Jagmeet and the New Democrat team are committed to making it easier for people to get ahead, with a bold vision that offers a new deal for people. We will stand up for everyday people and deliver the solutions that families need now, before it’s too late – and our fiscal choices reflect these priorities.

Growing our economy and making the investments families need now

It’s time to make investments that pay off where it counts: in communities and families. Our new deal for Canadians makes historic investments that will drive economic growth and make life better for everyone. By redirecting public funds towards priorities like community infrastructure and transit, affordable housing, pharmacare, child care, and training, we will create hundreds of thousands of jobs in a first mandate alone.

Strong public services are good for Canadians, and good for business – expanding the social programs that we all rely on and ensuring that all people have the opportunity to reach their full potential will drive economic growth and attract investment. This is particularly true when revenues for these measures are raised by asking the top one percent to pay more, not everyday people.

Together, the fiscal offer in this document will boost economic growth today with immediate investments, and into the future as a result of measures that will expand our labour force, from universal child care to public pharmacare. With Canada's economic progress slowing, these measures are essential to return to strong growth. This combination of spending and revenue tools will also drive a substantial reduction in inequality and help make life more affordable for everyday people in Canada.

Using the PBO fiscal baseline over the next 10 year fiscal horizon, our new deal will make new investments in the Canadian people each and every year. New Democrats will make these investments to make life more affordable for Canadian families who are struggling to get ahead and improve the services we all count on. In all cases, we will manage debt and deficits responsibly, borrowing when required to defend the services that Canadians and their families rely on, and moving to balance when prudent.

By carefully focusing on Canadians' priorities and showing the courage to raise fair progressive revenues from those at the top, our fiscal approach ensures that Canada's debt-to-GDP ratio falls over our 10 year fiscal horizon.

Canada's long-run finances will be fiscally sustainable according to the PBO's fiscal sustainability measures. Further, by assisting the provinces in areas from pharmacare to child care, we will help to relieve the fiscal sustainability squeeze impacting the vast majority of Canadian provinces.

Raising revenues through new, fair and progressive sources

A New Democrat government’s revenue policies will put Canadian families first, finally begin to tackle the inequality crisis facing our country, strengthen the integrity of our tax system, and ensure that large, profitable corporations and the very richest pay their fair share.

Canada’s Liberal and Conservative governments have time and time again chosen to put rich corporations first with drastic reductions in the corporate tax rate. In addition to years of declining corporate income taxes, large corporations in Canada have benefited from loopholes and special breaks that reduce their effective tax rate even more.

These "no strings attached" tax cuts have not translated into more business investment or good jobs for Canadians. In fact, tens of thousands of Canadians have seen their jobs disappear in the very corporations that have taken advantage of these tax handouts and other forms of corporate welfare. Despite this, the Liberal government kept Conservative corporate tax cuts in place, and added billions in new corporate giveaways on top of them.

While profitable corporations benefit from these generous breaks, everyday Canadians are paying the price and falling behind. New Democrats believe that it’s time to rebalance our revenue sources. We will roll corporate tax cuts back to their 2010 levels, or 18 percent, while maintaining the small business tax rate at its current level, raising several billion dollars in revenue annually.

While corporate taxes play a role in determining where corporations invest their money, they are far from the only factor. As the OECD has noted, good regulation and workforce skills are also key – and strong public services, infrastructure, and access to education can be more important than tax rates for attracting investment. These will all be significantly strengthened though our plan, bringing investment to our communities and making life better for Canadians

For the highest income individuals in Canada (those making over $210,000), we will increase the top marginal tax rate by two points to 35 percent, raising over half a billion dollars annually. Those at the very top – super-rich multi-millionaires with over $20 million in wealth – will be asked to pay more towards our shared services with a one percent wealth tax generating several billion dollars annually. The revenue raised by these two measures will build a more secure future for everyday families. By reinvesting those funds to deliver the services that Canadians need, we are building a fairer Canada for everyone.

To make our tax system fairer and more progressive, a New Democrat government will also increase the amount of investment profits subject to capital gains taxation to 75 percent, the rate that was in place in 2000. This will generate almost $3 billion more in government revenue every year to fund the services Canadians need, like pharmacare, child care, education, and housing.

It will also ensure greater equality for our tax system, as 88 percent of this billion-dollar benefit currently goes to the richest one percent of Canadians.

We will also have the courage to strengthen enforcement to stop the tax evaders and others who have benefited from offshore tax havens for too long, force corporations to prove the economic substance of their offshore transactions, close tax loopholes like the CEO stock option deduction, and review and reprofile tax expenditures that don’t benefit everyday Canadians. We estimate that these measures will increase government revenues or save tax expenditures of over a $1 billion per year.

Finally, to help prevent housing markets from overheating and ensure that Canadians have the option to buy a home they can afford, we will put in place a 15 percent foreign buyers tax on purchases of residential property by foreign corporations or people who are not citizens or permanent residents. We estimate that this will raise substantial revenues, while contributing to stabilizing the residential housing market across the country.

For decades, governments in Ottawa have been making choices that hurt everyday people, while benefiting the richest people and most profitable corporations more and more.

It’s time for a new deal for all Canadians.

Together, we can make better choices that put regular people at the centre of every decision. We can make life more affordable for people, improve health care and other services people count on, and provide security for families and communities for decades to come – with good jobs, a clean economy, and a brighter future for our kids.

That’s our commitment to you.