Canada New Democrats vow to hike corporate taxes, run surpluses

Wed Sep 16, 2015 3:27pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's left-leaning New Democratic Party said on Wednesday it would raise the corporate tax rate to 17 percent from the current 15 percent in its first term in office if it wins the Oct. 19 federal election.

The party, which has never governed federally, also vowed to run budget surpluses between C$3.02 billion (US$2.29 billion) and C$4.11 billion in each of its first four years in power.

Polls show the New Democrats are slightly ahead of Canada's ruling Conservatives, who say their opponents' promises would require billions of dollars of tax hikes or deficits.

"When governments are focused and choose to live within their means, they can do great things ... my plan will kick start the economy," NDP leader Thomas Mulcair said in a statement.The leaders of the three main parties are due to hold a televised debate on economic policy on Thursday.

Because the polls suggest none of the parties would win a majority, they would have to rely on each other's support, making their fiscal plans somewhat notional at this stage.

The NDP's tax proposal, released in a fiscal framework, is a retreat from its 2011 pledge to boost the corporate rate to 19.5 percent. Mulcair said the new rate would keep Canada competitive internationally while bringing in revenue to fund party priorities.

The NDP said the corporate tax hike would raise C$3.7 billion for each of its first four years in power.

In total, the party said the tax increase and other measures such as cracking down on tax avoidance and ending some breaks for high earners would bring in an extra C$7.16 billion in 2016/17, and rise to C$7.54 billion in 2019/20.   Continued...

Canada's New Democratic Party (NDP) leader Thomas Mulcair speaks during the Maclean's National Leaders debate in Toronto, August 6, 2015. REUTERS/Mark Blinch