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.
Extra spending to fulfill promises such as a national day care program and increased health funding to Canada’s 10 provinces would total C$5.75 billion in 2016/17, and rise to C$11.30 billion in 2019/20.
Neither the Conservatives nor the Liberals favor raising corporate taxes. The Liberals have yet to release a framework as detailed as that of the NDP.
Liberal leader Justin Trudeau, who has said the NDP promise to balance the budget means unnecessary austerity, is proposing to run budget deficits for three years to help finance a major national infrastructure program.
Reporting by David Ljunggren; Additional reporting by Randall Palmer in Ottawa; Editing by Lisa Von Ahn, Toni Reinhold