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The NDP platform: ambitious promises, lots of uncertainty | - News

The NDP platform: ambitious promises, lots of uncertainty | - News

Jagmeet Singh has finally released his platform costing, but questions remain.NDP leader Jagmeet Singh answers question from the media during a campaign stop to unveil his platform costing in Ottawa on Friday, October 11, 2019. (Nathan Denette/Canadian Press)The claim: “The system is rigged. And the NDP is going to un-rig it to work better for everyday people.” — Jagmeet Singh, the leader of the New Democratic Party, unveiled the costing for his party’s platform in Ottawa, Friday morning. The facts: The NDP has finally put a price tag on the 70 new spending measures it has proposed during the federal election campaign — $35 billion in fiscal year 2020-21. And the party also has explained how it hopes to pay for them in part, forecasting $30.5 billion in new revenues in 2020-21, rising to $34.34 billion a year by 2023-24. Under their plan, the New Democrats would run a $32.7 billion deficit (including a $4.58 billion contingency fund) during their first year in power, and then whittle the shortfall down over the course of their mandate to $16.57 billion in 2023-24. The party’s ambitious spending measures range from a plan to spend $13 billion over four years to build 500,000 new affordable homes, to $5.8 billion for clean transit and transportation, to $43.1 billion for a national pharmacare program. Over the course of an NDP mandate, there also would be $10 billion for universal childcare, $2.5 billion for green home renovations and $2.4 billion to provide clean drinking water to Indigenous communities. Most of the new revenue would come from tax increases on businesses and wealthy Canadians — like a three per cent rise in the corporate tax rate that would bring in $27.65 billion over four years, or $21.75 billion realized from “cracking down on corporate tax havens.” And the NDP has taken a page from the Liberals by also promising a tax on luxury boats, aircraft and vehicles, setting it at 12 per cent — two points higher than Justin Trudeau’s proposal. The 13 new tax measures have all been costed by the Parliamentary Budget Officer (PBO). But just three of the spending measures — pharmacare, free dental coverage for families making $70,000 or less, and eliminating interest on future and current student loans — have been put under the same scrutiny.  The University of Ottawa’s Institute of Fiscal Studies and Democracy (IFSD), overseen by former PBO chief Kevin Page, has produced a quick analysis of the NDP costing giving the party a barely-passing grade on its fiscal projections and management — 3 out of 6, and 3.5 out of 6, respectively. However, the institute failed Singh on transparency, noting that, like the Conservatives, the NDP waited until after the debates to release their costing … on the Friday before a long weekend, just 10 days out from the Oct. 21 vote.  “Overall, the fiscal strategy in the NDP Party Platform Costing is one of significant fiscal expansion and a commitment to a reduction in the debt-to-GDP ratio over the medium-term,” says the report-card. But it warns that the “historic” tax increases “come with significant economic and fiscal risk,” and that the equally huge spending increases likely would require tough and bitter negotiations with the provinces. “The New Democrats are proposing significant changes to the tax and spending structure of the federal government,” Mostafa Askari, the chief economist for the IFSD, told CBC News. “Those objectives are very difficult to achieve without causing significant disruption in the economy.” The NDP costing doesn’t provide much detail about its spending promises. And there is reason to question the accuracy of the party’s revenue projections as well. The PBO judged nine of the 13 new tax measures to have “high uncertainty” due to incomplete or old data, and the well-recognized reality that the ultra-rich have the means and motivation to frustrate, or even evade, collection attempts. In total, $30.2 billion of the NDP’s projected $32.2 billion in additional revenue in fiscal 2021-22 is rated highly uncertain by the PBO.  Take, for example, that $5.562 billion that the party is hoping to bring in that year from its tax haven crackdown. To date, the Canada Revenue Agency (CRA) has a woeful record when it comes to finding money that Canadians have hidden offshore — even when they are provided with a roadmap. It’s been more than three years since the leaked Panama Papers — 11.5 million documents from 200,000 accounts — revealed the sheltered assets of the world’s financial elite. Countries like the U.K., France and Spain have used the information to collect hundreds of millions of dollars in taxes and penalties. As of June, the CRA had only examined 116 of the 894 Canadians implicated, assessing just $14.9 million in taxes and fines. And it’s not clear how much — if any — of that money has actually been collected. Percy Downe, a senator for P.E.I and former chief of staff to Prime Minister Jean Chrétien, has been studying offshore tax havens for years and said he is mystified by how successive governments — Conservative and Liberal — have shown so little interest in cracking down. “There’s a terrible double-standard. The CRA does an excellent job on domestic tax evasion. The chances of being detected, caught and jailed are very high,” he said. “But the corresponding effort for overseas tax evasion is simply not there.” That could change with a government that makes enforcement a priority, said Downe. But it won’t happen overnight, as the NDP (and the Green Party) are forecasting in their platform costings. “We have a massive problem that has gone from the very rich, to the rich, to the upper middle class,” said Downe. “It won’t be easy to fix.” The NDP isn’t alone in offering a mix of perhaps-over-estimated revenues and probably-under-estimated costs. The Greens, who had the PBO cost 23 of their 102 promises, saw 13 of them come back tagged “high uncertainty,” throwing $49.73 billion of the $63.98 billion in new revenue that the party hopes to collect in 2021-22 into question. The Liberals submitted 24 of their 55 spending and revenue proposals to the PBO. Ten of them were judged to have “high uncertainty,” accounting for $3.073 billion of the $6.285 billion in new revenue the party is counting on for 2021-22. And the Conservatives, who also released their platform costing on Friday, have sent 44 of their 81 promises for scrutiny at the budget office. Seven were found to have heightened uncertainty. But with a relatively small footprint — the Tories are projecting $8.5 billion in tax breaks and new spending in 2021-22, versus $8.89 billion in additional revenue and program cuts — the nine shaky estimates total just $2.6 billion. Askari said the IFSD found that the Liberals and Conservatives were both “inside the box” of traditional government spending and taxation. The NDP and the Greens, on the other hand, are dreaming big. “It’s very ambitious,” said Askari. “But it may not be feasible, or doable.” The verdict: It’s complicated. The NDP are aiming to fundamentally transform Canada if elected. They’ve attached price tags to their promises, and the PBO has checked some of their math, but their assumptions on the revenue side might prove to be overly optimistic.  Sources: A New Deal for People: Our Fiscal Plan, New Democratic Party of Canada; Liberal Party Costing Estimate: Luxury Goods Sales Tax, Office of the Parliamentary Budget Officer; 2019 Election Proposal Costing: New Democratic Party, Office of the Parliamentary Budget Officer; IFSD Fiscal Credibility Assessment: New Democratic Party (NDP) Platform 2019 Costing, Institute of Fiscal Studies and Democracy; Panama Papers spur billion-dollar global tax windfall, with $15M found in Canada, CBC News; Why Can’t the Canada Revenue Agency Catch Tax Cheat?, Policy Options; Green Party Costing Estimate: End offshore tax dodging by corporations, Office of the Parliamentary Budget Officer; A Responsible Fiscal Plan, Liberal Party of Canada; Platform 2019 Costing, Green Party of Canada; Andrew Scheer’s Plan for you to get ahead, Conservative Party of Canada.

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