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Comparing
the Platforms - Which party is the Better Choice for working Canadians?
A better choice for working Canadians
June
18, 2004
Press
Release
Canadian
Labour Congress Analysis of the Major Party Platforms
Press Release
OTTAWA -
The Canadian
Labour Congress released its analysis of the major
national parties’ election platforms today, urging the three
million full and part-time workers who belong to its member unions
to vote for candidates who will make better choices that improve their
lives, help their families and invest in their communities.
“For working
families, the important issues are clear. We want good jobs in a stronger
economy and a health care system that is there when we need it. We
want education and training opportunities that give working people
and their children the skills to succeed, including a national child
care program. And we want secure pensions for every Canadian,”
says CLC Secretary-Treasurer Hassan Yussuff.
Yussuff says the
federal government has done little to advance the standard of living
or improve the quality of life of working people and their families
in recent years. He says it’s because the government made bad
choices.
Since 1999, the
federal government chose to give away billions of dollars in tax cuts
to already profitable businesses. It also chose to spend $50-billion
on debt payments instead of using that money to fix health care, or
keep past election promises like a national child care program or
extending medicare to cover pharmaceuticals. Instead of using billions
of surplus dollars it collected from workers to help them when they
were unemployed or help them remain employable, the federal government
loaned that money to itself to balance its budgets.
“This election
is about making better choices for Canadians,” says Yussuff.
Written by senior
economist Andrew Jackson, the CLC’s analysis is based on the
priorities identified by working Canadians in the months leading up
to the election campaign: health care, pension security, good jobs,
education and training, child care, employment insurance, and investing
in our communities.
According to Jackson,
the NDP platform clearly makes more of the better choices working
Canadians want from the next federal government, followed by the Liberals
(if they keep their promises), with the Conservatives promising to
continue making the same bad choices that don’t help working
families.
While Jackson’s
analysis did not include a review of the Green Party platform, a recently
published review by Murray Dobbin shows that voters looking for better
choices, even about protecting the environment, should consider looking
someplace else.
The Canadian Labour
Congress, the national voice of the labour movement, represents 3
million Canadian workers. The CLC brings together Canada's national
and international unions along with the provincial and territorial
federations of labour and 137 district labour councils. Web site:
www.clc-ctc.ca
contact info:
Andrew Jackson, Senior Economist, 613-526-7445,
Jean Wolff, 613-526-7431 and 613-878-6040
Canadian
Labour Congress Analysis of the Major Party Platforms
Publish date:
June 18, 2004
Author: Andrew Jackson
Social
Investment, Tax Cuts or Debt Reduction?
The
CLC wants a new government to focus on creating good jobs and improving
our social programs and public services. There are many key issues,
but in this note we focus on the key priorities of each of the three
major national parties, on what they propose for social programs (health
care, EI, pensions, child care, housing) and on their approach to
jobs and the economy and to investment in our communities.
It is difficult
to directly compare the three party platforms in terms of numbers.
All have different starting points, and present details in different
ways. But we know that most economists expect the Canadian economy
to grow by about 3% per year over the next five years. This will produce
rising budget surpluses.
The most fundamental
differences between the parties are over how they would spend these
surpluses, how they would change the tax system, and how they would
address debt.
The Liberals promise
to run surpluses of $3 Billion per year to pay down debt, and would
then spend the remainder of surpluses – which they now estimate
at $40 Billion over 5 years – on new social program spending.
However, the Liberals
promised re-investment in programs in the past, and failed to deliver.
After the deficit was eliminated in1997, they promised that half of
all future surpluses would be re-invested in programs. But, since
1997, they have delivered big tax cuts which reduced revenues by more
than 2% of national income and have paid down more than $50 Billion
of federal debt. Spending on social programs has basically remained
flat.
Liberal promises
for more social spending this time around sound big in dollar terms
but are added up to give a five-year total and are really very modest.
Probably the new spending would mainly be postponed to late in their
mandate, if they were re-elected. If spread evenly over the five years,
program spending would rise by well under one half of one percent
of national income or GDP, leaving the previous Liberal cuts to social
spending as a share of the economy more or less intact.
The Conservatives
promise a big income tax cut for some Canadians, but are less than
clear about how fast it would be implemented. They also promise significant
spending increases in two areas, health care and defence. The only
way they could both cut taxes and raise spending is to cut spending
significantly in other areas, or by running deficits. They are unclear
about exactly where they would cut and by how much.
The biggest tax
change the Conservatives propose is elimination of the 22% federal
tax bracket which now applies to taxable incomes between $35,000 and
$70,000. This means that income between $35,000 and $70,000 would
be taxed at a rate of 17% instead of 22%, producing a maximum tax
saving of $3,500 for people making $70,000 and over; and no tax saving
at all for persons making less than $35,000. An average full-time
worker, who makes about $35,000 per year, would gain very little.
They also promise a child tax deduction of $2,000 which is worth about
$500 in lower federal taxes to most taxpayers (more to those in top
tax brackets) and, in a nod to low income Canadians, an increase in
the GST credit.
The Conservatives
make their numbers add up by projecting a very low rate of increase
in total federal government spending over the next five years. They
suggest that their cuts would fall almost entirely on regional and
economic development programs rather than social programs, but are
silent about huge areas of federal government activity such as culture
and communications and training. Their program clearly threatens public
sector jobs and the federal government’s role in many areas.
The NDP bases
its platform on the same economic assumptions as the Liberals. Almost
all of the increased investment proposed could be financed from future
surpluses. The NDP projects bigger surpluses than the Liberals, based
on the Liberal track record of under-stating them by considerable
amounts. However, the NDP platform projects lower surpluses than the
Conservatives.
The total NDP
spending package is the biggest of the three parties in dollar terms.
However, they are promising to boost federal spending on programs
from 11.9% of GDP today to a new and higher level of 12.4% of GDP.
This is significant, but hardly dramatic. The NDP even promises to
increase spending by a lesser amount if this is needed to balance
the books.
The NDP can spend
more than the Liberals and still balance the books because it will
not run large surpluses just to pay down debt. (Just balancing the
books means debt will fall almost as fast as a share of the economy
as would happen under the Liberal plan.). And the NDP would raise
some taxes, while cutting others. In the first few years, the NDP
tax package boosts spending on programs a little, but the tax package
is balanced at the end of five years.
The NDP tax package
includes tax increases for very high income earners ($250,000 and
more) and large corporations, plus a tax on large inheritances of
more than $1 million. Almost all of the new revenues from these tax
increases would go to fund NDP tax cuts. The priorities here are to
hike child tax benefits very significantly, as much as $4,900 per
child, to eliminate income taxes for people earning less than $15,000,
and to eliminate the GST on family essentials.
The NDP tax package
would be of far greater benefit to working families with children
than the Conservative package, and would not impact on the government
revenues needed to fund social programs.
Health
The CLC has called
for the federal government to increase its share of provincial health
spending to 25% and thus to become a reliable long-term partner in
the system; to kick-start national home care and drug programs; and
to use its expanded role in the health care system to block privatization.
The Liberals promise
some extra funds on top of current federal-provincial health accord
this year and next, a new Waiting Times Reduction Fund and “stable,
predictable, long-term funding for the provinces.” Funding is
also promised for home care and a national drug plan. However, there
is no specific commitment to a 25% long-term funding formula. They
also promise to enforce the provisions of the Canada Health Act, through
an independent, expert panel. But this effectively ensures only that
the public health care system will cover treatment costs, and the
Liberals would not exclude private corporations from playing a greater
role in health care delivery.
The Conservatives
say they would also deliver stable, predictable funding to the provinces
and promise more money for health care than the current accord. They
also promise to introduce a federal plan to cover very high drug costs.
However, they make no commitment to assume a fixed share of public
health care costs, and are prepared to let the provinces privatize
delivery of services so long as the costs are paid through public
insurance.
The NDP would
provide the biggest increase in health care transfers to the provinces,
enough to take the federal share to 25% in two years. The NDP would
then increase the federal share in line with provincial costs. The
NDP would start a national home care program and a national drug plan,
starting with catastrophic drug costs. The platform also proposes
measures to reduce some of the main factors driving up health care
costs up in a wasteful way, such as drug patents. The NDP explicitly
promises to stop privatization of hospitals and medically-necessary
diagnostic services.
Employment
Insurance (EI)
The CLC has called for an arms-length EI fund and benefit reforms
to increase coverage for unemployed workers.
The Liberals promise
to “correct anomalies” in the EI system but provide no further
detail. The Conservatives say they would eliminate the EI surplus
through a premium cut.
The NDP promises
a major EI reform program which is close to what the CLC has called
for. This includes a separate EI Fund; a new qualifying threshold
of 350 hours; a higher replacement rate; no two-week waiting period;
and expanded eligibility for maternity/parental leave, including for
some self-employed workers.
Pensions
The CLC has long
called for improvements to public pensions and has expressed growing
concern about liabilities in private pension plans.
The Liberals promise
to phase-in a 7% increase to the Guaranteed Income Supplement, which
functions as guaranteed annual income for seniors. The Conservatives
make no commitments.
The NDP would
introduce a federal pension insurance program covering private pensions
in the federal jurisdiction, which would be a benchmark for the provinces,
and also promise a review of public pensions.
Child Care
The CLC supports
a national child care and early education system which is affordable
and delivered by regulated, not for profit providers.
The Liberals promise
$5 Billion over five years on top of already-promised (modest) funding
to the provinces to begin a national program. Provinces will be expected
to deliver regulated (but not necessarily public or nor for profit)
services at affordable rates. This is a step forward, but the Liberals
made more or less the same promise in the famous Red Book of 1993.
The Conservatives promise nothing on child care, and indeed say they
would allow provinces to opt out from new national social programs.
The NDP has an
ambitious plan to create 200,000 child care and early childhood education
spaces in four years.
Education and
Training
The NDP promises
a training leave benefit under EI, as proposed by the CLC. The NDP
would pass a Post-Secondary Education Act to re-establish a federal
role, and promises to cut post-secondary tuition fees by 10% and then
freeze them at the lower level. A move from loans to needs-based grants
is proposed, with a tax deduction for interest on student debt.
There are no specific
Liberal and Conservative promises beyond promises made in the last
Budget to allow students to borrow more by increasing loan ceilings
and allowing student from middle-income families to borrow more.
Trade
The NDP would
use US demand for energy as a lever to gain greater market access
to the US for forest and other products, and would renegotiate NAFTA
to get rid of Chapter 11 which allows corporations to sue governments
for policy changes which result in lower profits. The platform speaks
to the need for some trade safeguards to protect jobs in industries
like steel.
The Liberal platform
is largely silent on trade issues. The Conservatives want to deepen
economic links with the US by moving towards a customs’ union,
which means harmonized tariffs and trade rules and, eventually, a
single-trade policy. This would threaten Canada’s ability to
stop trade rules from undermining our ability to provide public services.
Jobs and the
Economy
The Liberal platform
has little new to say on job creation, but emphasizes the importance
of low taxes, debt reduction, and selective investments in research.
Modest new spending is promised for regional and industrial development
programs, including a vague statement of support for auto investments.
By contrast, the Conservatives want to eliminate all regional and
industrial development programs to fund new business tax cuts.
The NDP emphasizes
job creation through a wide range of public investment and environmental
initiatives. The platform speaks to the many jobs that would be created
through higher spending on municipal infrastructure, energy conservation
and green energy programs, including a major building and housing
retrofits program, and more fuel efficient autos. It supports formal
labour involvement in industrial and trade policy. The platform also
speaks to better immigrant settlement programs, employment programs
for persons with disabilities, and expanded pay equity.
Our Communities
The CLC has supported
major new investments in public infrastructure and in community investments
in services and affordable housing. Cities have suffered from cuts
in transfers and lack the tax base to provide needed services.
The Liberals promise
to phase-in a transfer of 5 cents per litre of federal gas tax to
cash-strapped municipalities over five years (or a $2 Billion cash
equivalent.). The Conservatives promise “at least” 3 cents
of gas tax for cities, but also say they would phase-out current infrastructure
programs. The NDP would transfer half of the gas tax or 5 cents per
litre to municipalities with no conditions for matching funds from
the provinces, and would also introduce a permanent national infrastructure
program, and a comprehensive agenda to manage water resources.
For housing, the
Liberals would spend an extra $1-1.5 Billion over five years, building
on the very modest revival of social housing programs started in the
last two years. The Conservatives say nothing on this issue. The NDP,
by contrast, makes a major commitment to a 10-year program to build
200,000 affordable units.
Conclusion
The NDP platform is clearly much closer to the CLC agenda of better
jobs and more social investment. The Conservative priorities are tax
cuts and defence, with a nod to health care which would fail to stop
growing privatization. The Liberals once again have put forward a
social investment platform, but funding is very modest and debt reduction
remains a major priority. The NDP platform has been criticized as
expensive, but it only modestly raises social investment after years
of cuts. It is practical, based upon a reasonable economic outlook,
balanced budgets rather than large surpluses, and some progressive
tax changes.
Source:
http://www.clc-ctc.ca/web/betterchoice/platforms.htm
The
Canadian Labour Congress
has better ideas for you to think about before you vote.
Please visit www.betterchoice.ca.
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