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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Election Post #1: Families

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Good Morning!

Here's day one of my election promise of knowledge expansion. Today's post will not be following the outline I proposed yesterday. I've learned that this early in an election, when parties have not made a lot of policy and platform announcements, it's hard to find one issue that all the parties have talked about. I could write something about a coalition, I could write something about the "expiry-date" of seniors, I could even write something about sweaters, eyebrows and mustaches. These aren't issue topics. My goal for this blog is to write about substantial policy items. I want to know the party plans for tackling climate change and environmental issues, education and pensions, the oil sands and national defence. Apparently, the Liberal Party's platform is being rolled out in its entirety this week, and we've seen the Conservative Party and the New Democratic Party announce a few tidbits already.

So here's my plan for today. I'm going to talk about what the parties have already announced:
It's a family sort of thing. All of the parties have framed their policy announcements around how they will help families. Families need tax cuts, families need education, families need help with their personal debt. Here's just a snap-shot of what the parties are doing for families today.

Conservative Party of Canada: Family Tax Cut

Yesterday, the Conservative Party of Canada announced a plan to allow
families to split their income. It's a plan that will allow families with children under 18 to pool the income of both parents for tax purposes. This election promise will not take effect until after the deficit has been eliminated (which the Conservative Government projects to be in the 2015-2016 fiscal year) and will allow $50,000 of household earnings to be shared among spouses.
      Pros: Families with children will, to a certain extent, receive a tax break. The Conservative Party's website has a nifty little backgrounder on the plan that shows that families who are able to split their income for taxes will pay less as a whole.
      Cons: This plan does nothing to help working families with no children, working families with over-age dependents (or those caring for elderly parents), and single people or unmarried couples. As well, it will not become policy until the deficit is eliminated, which could be beyond the 2015-2016 timeline and even beyond the next election.


Liberal Party of Canada: The Learning Passport
This morning, Michael Ignatieff announced his plan for post-secondary education. The Learning Passport will provide $4,000 over four years (tax free) to high-school students who choose to attend a post-secondary institution.
Children from low-income families will receive more funds, up to $6,000 over four years. The funds will be provided through the Registered Education Savings Plan (RESP), granting an account is opened in the student's name. The money will only be available for education purposes (be it tuition, textbooks and the like), and will remain available until all funds are used up (in other words, if you don't use it all in the first round of education, you can use it to upgrade later in life). 
      Pros: It will be easier for families to send their children to post-secondary educational institutes. It will provide about $1 billion in funding to education. The Liberal's would fund the program by cancelling the proposed corporate tax cuts and replacing the current textbook credit and education tax credit currently in operation. According to a report by Miner Management Consultants, 77% of the future work force will need some sort of post-secondary education. Currently, only about 60% of people have post-secondary education, and projections only estimate that number rising to 66% by 2031. There's going to be a skilled-labour shortage if something isn't done. This plan may be a large part of the solution.
      Cons: Depending on how you feel about corporate taxes, the corporate tax cuts would be eliminated. The argument for corporate tax cuts is that they stimulate economic growth by helping companies spend more. The trade off is fewer funds for governments to fund programs like health care and education. 

New Democratic Party of Canada: Cap on Credit Card Rates
This morning, Jack Layton announced that if elected, the NDP would cap credit card rates at five percentage points above prime. This would mean that 25% interest rates would be a novelty of the past. The highest the rate could
currently go is 8% as prime is just 3%. The plan is geared to help working class families who are facing increasing debt loads and are turning to credit cards to pay for their day-to-day expenses like groceries and gas. He also would like to give financial regulators the power to ban excessive fees on credit cards and create a mandatory code of conduct for credit card companies.
      Pros: It would take effect immediately. Layton is comparing it to Harper's income splitting plan (outlined above) in that the NDP would help families now, rather than waiting until government follies are fixed with a balanced budget.
      Cons: It's either too big, or too small... jury's out on that. It's too big in the sense that it seeks to nationally regulate an industry that is global in nature. It's too small in that it does nothing to really reduce current debt, it just slows the accumulation of debt.

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