Election Issue: Jobs

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Hello, Dear Readers,

So begins my second election issues post. Slowly, but surely, the political parties are rolling out their platforms. While the argument still seems to be revolving around families, both the Conservative Party and the New Democratic Party announced measures to stimulate job growth in small to medium sized businesses. Less of an emphasis on job creation has been promoted by the Liberal Party, but I checked their website and found some movement on this front.

So, let's talk jobs!

Conservative Party of Canada: Free-Trade and Hiring Credits

Stephen Harper announced that his government, if 

re-elected, would continue to pursue free trade with the European Union and India. With the majority of our trade happening with the United States, arguments have been made for diversification to protect us further from economic downturns like the one that began in 2008. Beyond free trade, the Conservative Party has announced a one time tax credit for small business (with 25 employees or fewer). Where Employment Insurance premiums are less than $10,000 in 2010, small businesses will qualify for a tax credit for new employees up to $1,000. There are a lot of stipulations, but suffice it to say that the Conservatives hope their plan will encourage about 525,000 small businesses to hire 1-3 new employees for the next fiscal period.

      Pros: Free trade can create new markets for Canadian products, which can stimulate demand, and increase the desire to employ more workers. The Hiring Credit gives a certain incentive for increasing the number of available positions and decreasing unemployment. 

      Cons: Free trade is a slippery slope. You either love it or you hate it. It can lead to increased demand for domestic products, but it can also decrease the demand for domestic employment and encourage jobs to be "shipped overseas." As well, the Conservative Hiring Credit is a short term election promise. It would only affect the coming year and doesn't involve a long-term plan or incentive to continue job creation.  

Liberal Party of Canada: Youth and Entrepreneurs

The Liberals haven't really announced a 

plank of their platform that deals directly with jobs and job creation. Their website mentions a Youth Hiring Incentive that would encourage medium to small business to employ young people. Businesses hiring youth would face no increase in their Employment Insurance premiums for these youth hires. As well, Navdeep Bains, an incumbent Liberal candidate in Mississauga has suggested a national strategy for helping entrepreneurs in high growth sectors.

      Pros: As the baby boomers retire, Canada will increasingly have to rely on young workers entering the job market. Encouraging youth hiring will create important job opportunities for training and preparing for future employment and can help increase the skills of our upcoming breadwinners. As for the national strategy for entrepreneurs, it's important to have a pan-Canadian strategy to ensure competitiveness is similar across the country.

      Cons: So far, there is little to help those who are in the middle of their careers and have lost their jobs to the recent recession. There is also little meat to the national strategy for entrepreneurs. I'm looking forward to hearing more on jobs and job creation as the election goes on. I guess I'm hoping that the only plan for employment isn't just to support upcoming workers and retiring workers.

New Democratic Party: Tax Credits and Corporate Income Taxes

Jack Layton announced a plan to decrease the small business tax rate from 11% to 9% and create a Job Creation Tax Credit of $4,500 per new hire. To help pay for these changes, the NDP have proposed returning the Corporate Income Tax Rate to its 2008 level. This would entail an increase from 16.5% to 19.5%.

      Pros: A decrease in the small business tax rate can help small businesses operate and compete in an increasingly global market. The tax credit, much like the Conservative's plan, will encourage new hiring through monetary incentives. Increasing the Corporate Income Tax rate will create more income for the government to pay for the cut in the small business tax rate and and the hiring credit.

      Cons: As I mentioned in my previous post, corporate taxes are often linked to economic competitiveness and prosperity. An increase could harm Canada's economic growth and punish larger businesses who contribute to local, regional, national, and the global economies.

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