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Last updated: September 18 2019
Federal Election Campaign Round-Up
Beth Graddon
If you are a Canadian investor, business owner, or average taxpayer concerned about the overall affordability of living in Canada heading into the federal election on October 21, you will want to take a close look at the tax and economic proposals included in the major party’s campaigns. We’ve done a comparison and there are some eyebrow raisers!
Conservatives – The Conservatives are focused on the introduction of a reduced tax rate for the lowest tax bracket that’s being referred to as a “Universal tax cut” that takes the lowest tax rate down to 13.75% (incomes under $47,630). This tax cut will also impact the value of non-refundable tax credits. In addition, the party has promised refundable fitness and arts credits, a “green” public transit credit, and tax-free EI maternity and parental benefits. The party also just announced yesterday that they intend to increase the federal contribution amount for the Canada Education Savings Grant, under the RESP program, from 20% to 30% for every dollar families contribute, up to $2,500 per year.
Liberals – The Liberals are focused on continuing to implement provisions from recent federal budgets. Changes include the 1% tax on real estate owned by foreign buyers; the Canada Child Benefit; reduction in the small business tax rate; the carbon pricing plan, the Climate Action Incentive Payments; and the First-Time Home Buyer Incentive.
NDP – The NDP intends to increase the top federal income tax rate and implement a 1% Wealth Tax on incomes over $20 million; increase the capital gains inclusion rate to 75% (one would hope with a V-Day provision); raise minimum wages to $15 an hour; make affordable housing more accessible by re-introducing 30-year terms on CMHC mortgages and eliminating federal portion of GST/HST on the construction of new and affordable housing units, among other changes.
Green – The Green Party is placing priority on tax reform for a fairer tax system by placing focusing on establishing the Federal Tax Commission. However, they are advocating for a 100% income inclusion rate for capital gains. They also want to see minimum wage increase to $15/hr, maintain the carbon pricing established by the Liberals, and increase the corporate tax rate from 15% to 21%.
For further details on the campaigns for each party, check out the table below. Click here for a PDF version that outlines campaign details for all major parties.
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Election Campaign Positions |
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Issue |
Conservative |
Liberal |
NDP |
Green |
Bloc Quebecois |
People’s Party |
|
Personal Tax |
Reduce tax rate on income under $47,630 from 15% to 13.75%. |
1% tax on real estate owned by foreign buyers. |
Increase top federal income tax rate from 33% to 35%. 1% Wealth Tax on income over $20 million. |
Creation of a Federal Tax Commission focused on establishing a fair tax system. No GST on bicycle purchases. |
Have province collect income taxes instead of CRA. |
Simplified two-bracket federal income tax system. Income over $100,000 pays 25%. |
|
Capital Gains |
Increase to capital gains inclusion rate from 50% to 75%. |
Increase to capital gains inclusion rate from 50% to 100% |
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Personal Tax Credits |
Continue CCB implemented by Liberals in 2016. Tax-free EI Benefits (maternity & paternity leaves) Green Transit Tax Credit: 15% credit on weekly /monthly transit passes. Green Home Tax Credit for energy savings. Exempt home heating costs from GST. Revive children’s fitness and arts tax credits and make them refundable |
CCB implemented in 2016 under Liberal government. |
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Corporate Tax |
Lowering tax from 15% to 5% for green tech companies. |
Increase corporate tax rate from 15% to 21%. Corporate tax to apply to tech biz like Netflix, Facebook, Google, Air ‘bnb, & Cryptocurrency |
Corporate tax to apply to online biz like Facebook, Netflix, Spotify. |
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Issue |
Conservative |
Liberal |
NDP |
Green |
Bloc Quebecois |
People’s Party |
|
Small Business |
Small business tax rate reduced from 10% to 9% in 2019. 2,000 entrepreneurs to receive $50,000 to build start-ups. Eliminate taxes on “swipe fees” merchants pay to credit card companies. |
Tax rate for small business to remain at 9%. Change income splitting rules for family transfers based on concerns about unfair tax treatment. Cap fees small businesses pay to credit card companies. |
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Climate Action |
Repeal carbon tax and let provinces set their own carbon prices |
Continue carbon pricing plan and rebates implemented. |
Continue carbon tax put in place by the Liberals. |
In favour of carbon tax |
In favour of carbon tax and want to employ higher taxes for provinces with high greenhouse gas emissions. |
Eliminate carbon tax. |
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Employment |
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Minimum Wage |
Raise minimum wage to $15/hr. |
Raise minimum wage to $15/hr. |
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Student Internships |
Ban unpaid internships if they don’t count towards school credit. |
Ban unpaid internships if they don’t count towards school credit. |
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Other Employment Changes |
Employers to spend 1% of payroll on annual employee training. |
Explore raising minimum vacation amount and implementing shorter work-weeks. |
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Housing |
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First Time Home Buyers |
First-time home buyer’s incentive – subsidizing 10% on a new home purchase, and 5% on re-sale homes. |
Re-introduce 30-year terms on CMHC mortgages to first-time buyers. |
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Housing Affordability |
Eliminate federal portion of GST/HST on the construction of new affordable housing units. |
Re-think CMHC and increase affordable housing resources and housing co-ops. |
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Education |
Increase federal RESP (CESG) contribution from 20% to 30% contributions up to $2,500. |
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Issue |
Conservative |
Liberal |
NDP |
Green |
Bloc Quebecois |
People’s Party |
|
Transfer/. Equalization Payments & Health Care |
Social and health transfer payments to the provinces will increase by at least 3% annually. |
3% annual health transfer increase with more funding for mental health, addictions, and home care. Working towards universal pharmacare plan proposed into the 2019 federal budget. |
Make the provinces and territories responsible for funding and managing health services. |
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© 2003-2019 Knowledge Bureau™. All Rights Reserved
Will these election promises help you? Some of them certainly are killers of jobs and incentives for investors to take risks. Your thoughts are welcome. Knowledge Bureau will continue to provide you with ongoing coverage of election campaign positions on a weekly basis.
Resources:
Additional educational resources: Post election results will be covered at the Vantage Series in Toronto on October 28 – limited seating. Also, the CE Summits will cover year end planning based on the election and budget measures implemented for 2019/2019.
CE Summit workshop tours taking place at various points throughout the year, discuss the personal, corporate, investment, and small business tax changes all financial professionals need to know. Take advantage of our trio rates to attend multiple events or bring your group of 6.
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