The federal Liberals under Michael Ignatieff have issued a big chunk of their election platform. It is being called the “Liberal Family Pack” because it contains many “family-friendly” goodies: help for families with college-bound kids, more child care spaces, time off for family caregivers, pumped up CPP payments, and help for people wanting to make their homes “greener” by adding insulation, etc.
As John Ivison reports in the National Post – Liberal ‘Family Pack’ no bargain the new red book proposals are not all they seem. Many have been recycled from previous campaigns or lifted from the other parties.
As Ivison says, paying for the goodies in the Liberal plan will come from increased revenues due to the Liberal pledge to increase the corporate tax rate. That rate has been steadily reduced by Harper. It now stands at 16.5% and is slated to move down to 15% next year. Ignatieff wants to move it back to 18%.
But the expected revenue from this increase is far from a slam dunk. Increasing the corporate tax rate will have a difficult to predict impact on corporate investment. The negative impact could be as much as $50 billion according to Jack Mintz of the School of Policy Studies at the University of Calgary. And you can be sure that if the overall Canadian economy grows less because of the tax increase than it otherwise would have, the net cost of the Liberal program will be greater than predicted.