As we head into the Federal election, the parties are campaigning for your vote. A popular issue is always how much money they’ll put into your pocket.
Government grants, benefits, tax credits, reduced taxes, job creation, subsidies, and more directly impact how much money you have. Here’s how the party platforms compare when it comes to your personal finance:
The New Democratic Party of Canada campaign promises will have an impact on your money. But by how much? Here’s a detailed breakdown of how the tax cuts and credits will affect your bank account!
Don’t forget to check out the other posts in this series:
- How the Conservative Party of Canada Campaign Promises Will Impact Your Finances
A federal minimum wage of $15/hr and no unpaid internships
New Democrats propose raising the federal minimum wage to $15 an hour. This is already the minimum wage in provinces like Alberta. They also want to ban unpaid internships if they don’t count for school credit.
This offering targets some of the most vulnerable Canadians who typically work minimum wage jobs. This includes youth, students, women, seniors, and single parents. It would also undermine provinces that have tried to circumvent their own minimum wage laws, like the United Conservative Party in Alberta introducing a “youth minimum wage” that pays employees under 18 only $13/hour.
Increase taxes on the ultra-wealthy
The New Democrats propose hiking the rate for capital gains inclusion from 50% to 75%, which means people will pay more tax on profits from the sale of investment properties and stock market securities.
They also want to increase the top federal personal income tax rate from 33% to 35% and impose a 1% wealth tax on those making more than $20 million dollars per year. 1% of $20 million is $200,000. That is per person. Imagine what a difference that money could make in providing essential services for vulnerable Canadians.
Implement universal affordable, accessible childcare
The New Democrats would commit $1 billion to affordable, not-for-profit childcare in 2020 and increase it yearly. They plan to build on child-care programs already in place in some provinces, including Quebec, British Columbia, and Alberta.
Providing affordable, accessible childcare helps women re-enter the workforce which is an economic boon to both individual households and the nation’s GDP. In nations and provinces (like Quebec) that provide universal childcare, it has been found these programs actually pay for themselves. The income tax revenue collected from women returning to the workforce more than pays for the cost of their child in government childcare.
Expand current healthcare to include mental health, dental, eye and hearing coverage
Canada has one of the best universal healthcare programs in the world. However, it doesn’t cover everything. The NDP wants to increase healthcare coverage to include dental, vision, hearing, and mental health services. Currently, Canadians rely on a private insurance provider, employer benefits, or pay these expenses out of pocket.
How much Canadians spend out of pocket for dental, vision, drug, and paramedical costs varies greatly. Where students and employees might have coverage through school or work, one of the most vulnerable populations is retired seniors who have both high medical expenses and no employer coverage. The average Canadian over 65 actually spends nearly $5,400 on out of pocket medical expenses.
Like the Liberal party of Canada, the NDPs are also proposing a universal Pharmacare plan, covering Health Canada-approved drugs by late 2020. It would cost an estimated $10 billion annually, which is actually cheaper than the plan being looked at by Liberals.
Affordable housing for renters and homebuyers
The New Democrats want to build 500,000 affordable housing units over 10 years. In the meantime, they propose a rental subsidy of $5,000 per year to help families struggling to pay rent. They also want to scrap the federal GST/HST for those constructing new affordable units.
Like the Conservative Party of Canada, the New Democratic Party would reintroduce 30-year terms for mortgages insured by the CMHC for first-time buyers and give low-interest loans to retrofit houses.
Price cap of cellphone and internet bills to set them at OECD averages
The New Democrats propose putting a price cap on cellphone and internet bills. This will set them at the global average of OECD countries. They also say they will force companies to create basic plans modeled off affordable examples in other nations.
Free public transit and no federal tax on zero-emission vehicles
The NDP says they will work with municipalities to make all public transit fare-free. This can save Canadians that rely on this for transportation as much as $1,800 per year.
The New Democrat Party of Canada will also waive the federal tax on zero-emission vehicles which is great news for anyone thinking of buying a Tesla.
Continuation of the federal carbon tax
Liberals have imposed a carbon tax on businesses and individuals in provinces with no federally approved carbon price plan. This includes Saskatchewan, Manitoba, Ontario and New Brunswick. However, in those provinces, the government is handing back carbon tax rebates to most residents.
Despite the uproar over the carbon tax, most taxpayers will get more money back than they will pay in carbon taxes. In other words, the implementation of the carbon tax will give you more money.
New Democrats are in favour of continuing with a carbon tax and the rebate program. However, Leader Jagmeet Singh wants to crack down more on heavy emitters.
Comparing the NDP to the Liberal Party and Conservative Party
The New Democratic Party of Canada is actually making some unique promises in comparison to the other parties in the race. When you compare the platforms of the two parties currently leading, you notice right away that they’re targeting the same voters because they’re focused on the same things: tax-free parental benefits, universal tax cuts, energy-efficient home renovations.
Meanwhile, the NDP is touting platform promises the other parties are neglecting: universal childcare, a federal minimum wage increase, a wealth tax, and rental subsidies. As a result, they don’t fit as neatly into the table we’ve made to compare the parties:
Liberal Party of Canada
Conservative Party of Canada
|Canada Child Benefit||Increase CCB by 15% for children under age 1|
(potential benefit $995 per child)
|Maternity and parental leave benefits||Tax-free when disbursed||Parents receive a 15% tax credit following year|
|Universal pharmacare||Committed $35 million to Canadian Drug Agency, a first step towards universal pharmacare||None|
|First Time Home Buyers||Introduced the First-Time Home Buyer Incentive, a shared equity mortgage with the government that provides up to 10% of a home's value as a down payment||Remove the mortgage stress test
Increase maximum term to 30 years (you will pay an 25% more interest on your mortgage)
|Affordable housing||Impose a 1% tax on absentee foreign owners||Home heating costs exempt from GST
(approximate savings $180)
|Green Homes||up to $40,000 interest-free loan with a 10 year term to retrofit your house or apartment for energy efficiency|
(approximate savings $18,000 in interest that would otherwise be paid on a 10 year loan @ 8%)
|Green homes tax-credit for energy efficient renovations
(approximate savings $2,800)
|Carbon Tax||Carbon tax on individuals living in a province with no provincial carbon tax. Most individuals will receive a rebate greater than the amount they pay.|
(approximate rebate $250 to $600 per year)
|No federal carbon tax. Will leave it up to provinces to decide if they want to impose a carbon tax.|
|Tax Cut||First $15,000 of income earned is tax-free|
(approximate savings $300 per year)
|Reduce taxes from 15% to 13.75% on taxable income under $47,630
(approximate savings $400 per year)
|Canada Student Grant||Increase number of students eligible||Increase number of students eligible|
|Cellphone bills||Reduce by 25% within 2 years|
(approximate savings $1,000 per year)
|Student Loans||Interest free for the first 2 years after you graduate|
No payments if your income is less than $35,000 per year
No payments & no interest for new parents, until their youngest child turns 5
However, the Liberal and NDP often align in values, if not campaign promises. What we can most likely expect from the Canadian election is a Liberal minority government, buffered up by the NDP. This might look like a blend of values, as the NDP will support the Liberal government on their campaign promises for economically vulnerable Canadians, parents, and motions to reduce the impacts of climate change.
Seems at the very least we’ll get affordable cellphone bills.
When it comes to how the New Democrat Party platform will impact your finances, the result is par for the course for this party: the largest benefits go to the most vulnerable Canadians, the average citizen stands to gain a fair bit as well, and the ultra-wealthy will actually be somewhat penalized.
This article will be updated as more New Democratic personal finance promises are made.
Don’t forget to check out the other posts in this series: