IssuesEconomy

Economy

First Published: Sep 24, 2019
Last Updated: Sep 24, 2019
Monitored by: Roberto Chavez

Background

When it comes to elections, voters care most about their own financial well-being and vote accordingly. Economic performance will be amongst the top ballot issues come the fall, with competitiveness, affordability and taxation all expected to be main themes.

The Liberals say there are a million more jobs in this country than there were in 2015. Whereas Provincial Conservative campaigns in four provinces (Ontario, Alberta, New Brunswick, and PEI) have all ran successful campaigns based on a promise to improve the economy and make life more affordable. At the Federal level, Conservatives will be replicating this message.

Another key item come the fall election will be competitiveness, the Liberals will run on three key themes: re-negotiating NAFTA with relative success, finding a balance between environmental and economic priorities, and implementing measures to enhance competitiveness such as the capital cost allowance and lowering the small business tax rate.

On the other hand, Conservatives will go on the offensive on failing to get new trade deals with China and India, not getting pipelines built, and implementing legislation that will hurt the resource industry such as the price on carbon, the tanker bans on the West coast, passing the impact assessment act, and developing a clean fuel standard. Likewise, they will propose measures such as tax credits, promoting an energy corridor, and supporting resources sector.

Current Status

Key items at present that are impacting Canada’s economy are the current international dispute with China, which has resulted in the ban of Canadian imports of Canola and pork to China.

Further, the impact of environmental regulations such as the carbon price and the clean fuel standard will also have an impact across many voting groups.

Issues such as the energy sector, manufacturing, regulation, and access to export markets for Canadian agricultural goods are all economic issues currently on the agenda.

Liberal

No specific proposals yet.

Conservatives

  • Appoint a Quebec Minister of Canada Economic Development and a political Minister from Quebec
  • Remove the Goods and Services Tax (GST) from home heating and energy bills
  • Scrap the carbon tax
  • A number of tax credit measures on the environment front, including: certifying green investments, a green home tax credit, a green patent credit and green technology and innovation fund.

NDP

Per its Campaign platform, the NDP’s vision for the economy is centered on: “Making the economy fairer and deliver the results we all want – less inequality and a path to the clean jobs future that we need.”

Their concrete measures include:

  • Increase the capital gains tax inclusion rate from the current 50 to 75 per cent
  • Close stock option loopholes and crack down on shell companies operating in tax havens
  • Close tax loopholes that favour web giants
  • Put in place a federal minimum wage of $15 an hour that will cover 900 000 workers
  • Make it easier for the family business to be passed on to future generations, with new legislation to end the unfair tax treatment of family transfers of small businesses
  • Scrap the Invest in Canada agency and create ICanada, a one stop shop inside the federal government to help attract investors to Canada

Green Party

No specific proposals yet.

People's Party

  • Equalization is Unfair
  • Scrap the Carbon tax
  • End all barriers to trade between provinces
  • Permanently expand the accelerated capital cost allowance to all sectors
  • Eliminate all corporate welfare
  • Drop Corporate Income Tax from 15% to 10%

Bloc Quebecois

No specific proposals yet.

September 24, 2019
Roberto Chavez

On Tuesday, Andrew Scheer pledged to repeal tax changes for small business investments brought forward by Finance Minister Bill Morneau in 2018. It includes a pledge to restore access to the small business tax rate for businesses with a passive annual income of more than $50,000, as well as allow such firms access to refundable taxes for corporations on the distribution of eligible dividends.

As well, Scheer wants to exempt spouses or common law partners of small business owners from Liberal changes restricting the savings from income sprinkling, a strategy used by wealthy owners of private corporations to divert their income to family members with lower personal tax rates. Small business tax changes were first proposed by Morneau in the summer of 2017 and then tweaked in 2018 following a strong outcry from certain business owners, including family doctors operating their own practice.

The Tory leader is also pledging to reduce federal regulations by 25 per cent.  While Scheer did not offer specific examples as to what red tape can be cut, he committed to eliminate outdated regulations he described on Tuesday as “low-hanging fruit.”

The Montreal Economic Institute, a think tank promoting liberal economics, estimated last year that there were 136,121 federal regulations, meaning a Scheer government would have to cut more than 34,000 measures.

Scheer is also vowing to appointing a minister to lead red tape-cutting efforts, as well as removing two regulations for every one adopted — echoing a commitment in Ontario by Premier Doug Ford.

Kevin Milligan, an economist at the University of British Columbia, said rolling back the Liberal government’s changes would benefit some of Canada’s wealthiest. In a Twitter thread, he said the passive investment proposal would affect the top 2.9 per cent of private companies, but would receive 88 per cent of such income.

“These proposals clearly benefit the highest earners who have private corporations,” Milligan said. Canada’s independent budget officer estimated repealing Liberal measures on passive income would cost more than $500 million annually, totalling $5.4 billion between 2020-21 and 2028-29.

Exempting spouses from taxes on income sprinkling would cost $334 million over nine years starting in 2020. A commission tapped to review tax competitiveness would cost $20 million.

Such efforts would ultimately widen the hole in federal revenues, although Scheer said Tuesday a fully costed platform will be released soon that shows a path towards balanced budgets in five years.

September 24, 2019
Roberto Chavez

Liberal Leader Justin Trudeau announced that if re-elected, his government would cut corporate taxes by 50% for clean technology companies that fosters the “zero emissions economy”, including companies developing zero emissions vehicles.

September 24, 2019
Roberto Chavez

On September 24th, Liberal candidate for Ottawa Centre and Minister of Environment and Climate Change for the Trudeau Liberal Government currently running for re-election announced a number of environment related commitments if a Liberal Government were re-elected. The measures include:

  • Commit Canada to achieving net-zero emissions by 2050, joining 65 other countries and the European Union that made the pledge
  • Set legally-binding, five-year milestones, based on the advice of the experts and consultations with Canadians, to reach net-zero emissions by 2050;
  • Appoint a group of scientists, economists, and experts to recommend the best path to get to net-zero;
  • Exceed Canada’s 2030 emissions goal; and
  • Ensure energy workers and communities can shape their own futures by introducing a Just Transition Act, giving workers access to the training, support, and new opportunities needed to succeed in the future economy.

The Liberal Party press release reads that “these commitments build on the Liberals’ climate record that already includes over 50 measures to cut pollution and protect our environment.” Items highlighted on the release include:

  • Banning harmful single-use plastics and microbeads;
  • Phasing out coal power by 2030 and investing in renewables like wind and solar;
  • Putting a price on carbon pollution so it’s no longer free to pollute anywhere in Canada, while putting more money back into Canadians’ pockets;
  • Building 1,200 public transit projects across the country;
  • Making zero-emission vehicles more accessible and affordable; and
  • Investing in energy efficiency to help families and businesses save money.

September 23, 2019
Roberto Chavez

The Liberal leader Justin Trudeau  promised to cut cellphone bills by 25 per cent. He said he would encourage companies to reduce their bills by that amount over the next two years, and if they are unable to meet that target, the Liberals would introduce further competition.

September 23, 2019
Roberto Chavez

Trudeau announced he would make the first $15,000 of income tax-free for most Canadians if given a new mandate.

The Liberals would raise the basic personal amount by almost $2,000 over four years for people earning under $147,000 a year. It would save the average family $585 a year, Trudeau said.

The announcement follows a pledge from Conservative Leader Andrew Scheer to cut the tax rate on the lowest federal income bracket (up to $47,630) to 13.75 per cent from 15 per cent over four years, which the party says would save a two-income couple earning average salaries about $850 a year.

September 18, 2019
Hugues Théorêt

On September 18, Conservative Leader Andrew Scheer announced he will cancel hundreds of millions of dollars in corporate welfare handouts to wealthy executives, shareholders, and foreign companies and instead put that money in Canadians’ pockets so they can get ahead. Scheer also said a new Conservative government will conduct a review of all business subsidy programs in order to eliminate $1.5 billion in corporate handouts that don’t create jobs and support economic growth in Canada.

September 13, 2019
Roberto Chavez

Liberal Leader Justin Trudeau says a Liberal government would eliminate the so-called "swipe fee" on sales taxes that merchants must pay to credit-card companies on every transaction.

September 5, 2019

‘The Alberta economy needs to be a ballot question for you’: Conservative MP Michelle Rempel’s message to Canada.  Ms. Rempel, who is running for re-election in Calgary Nose Hill, is working to bring the concerns of her community and Alberta to the forefront of the election campaign this fall.

Alberta has been dealing with an economic downturn amid collapsing oil prices in recent years, a situation Ms. Rempel says the Trudeau government has exacerbated through its energy policies. She is concerned about growing separatist sentiment in the province as Albertans who once worked in the oil and gas sector struggle to make ends meet.

Frustration with Prime Minister Justin Trudeau’s government is on full display at Ms. Rempel’s campaign office, with signs reading “Trudeau must go" on the walls.  Alberta has lost nearly a quarter of its oil and gas jobs since commodity prices crashed in 2014, according to a Petroleum Labour Market Information report. Ms. Rempel accused the Trudeau government of leading a “hostile attack” on the province’s energy sector, citing its failure to get a pipeline built.

Liberals say that while they have tightened environmental-assessment rules and introduced carbon pricing to reduce greenhouse-gas emissions – two measures that are not popular in the oil patch – they have tried to support oil and gas workers. Last year, the government purchased Kinder Morgan’s Trans Mountain pipeline expansion project for $4.5-billion but construction was stalled when the Federal Court of Appeal quashed the federal permit last August and will start up again only this fall.

Natural Resources Minister Amarjeet Sohi, who represents the riding of Edmonton Mill Woods, defended the Trudeau government’s efforts to boost the province’s economy, pointing to the Trans Mountain purchase.

“If the Prime Minister doesn’t care about Alberta, why would he go to the lengths to invest those kinds of resources and protect a project that people like Michelle Rempel and other Conservatives feel that we don’t support?” Mr. Sohi said.

September 5, 2019

Manufacturers urge federal parties to address industry concerns, including labour shortages. The federal parties are being asked to make clear campaign pledges for boosting manufacturing jobs, including simplified tax breaks and plans to address labour shortages among skilled trades.

In a plan released Wednesday, ahead of the federal election campaign, the Canadian Manufacturers and Exporters association outlines 10 issues it would like the parties to address in their policy platforms.

At the top of the list are new measures to tackle what they say are labour shortages. Dennis Darby, the industry group’s president, says this can include encouraging young people to take up skilled trades and easing immigration rules for both entry-level and highly skilled workers.

The federal government routinely announces plans to boost competitiveness and innovation, but Mr. Darby says the bureaucratic hurdles involved in applying for various programs often frustrate company owners.

While the government boasts that Canada’s economic growth rate has been among the strongest in the Group of Seven recently, the CME points to less flattering statistics when it comes to the manufacturing sector.  “We’ve been falling behind relative to our peers,” Mr. Darby said.

A CME report released this year noted that Canada has had the second-poorest record in manufacturing productivity growth in the G7, ahead of only Italy, for a decade and a half. Between 2002 and 2017, labour productivity in Canadian manufacturing has increased about 20 per cent, compared with 50 per cent in the United States and more than 100 per cent in South Korea, Taiwan and Eastern Europe.

Manufacturing accounts for more than 10 per cent of the Canadian economy and touches a wide range of key industrial sectors, including automotive jobs, food processing, forestry, pharmaceuticals and energy production and transmission.

September 5, 2019
Roberto Chavez

Bank of Canada holds rates steady but flags global trade concerns.  The Bank of Canada kept its key interest rate unchanged at 1.75 per cent Wednesday, while warning that the U.S.-China trade conflict is having a more damaging impact on global growth than previously thought.

“As the US-China conflict has escalated, world trade has contracted and business investment has weakened,” the bank stated Wednesday in a news release. “This is weighing more heavily on global economic momentum than the bank had projected in [July].”

Domestically, the bank noted that Canada’s second-quarter growth was strong and exceeded the bank’s most recent forecast. Wednesday’s release pointed to stronger energy production and housing activity as contributing factors.

August 28, 2019
Roberto Chavez

According to the Globe and Mail, the Liberals will promise to help cut cellphone and internet bills in the upcoming election campaign amid widespread complaints about the cost of wireless communications, party sources said.

One option being studied is a cap on bills, the sources said, while another is to oblige major providers to offer wholesale access to Mobile Virtual Network Operators (MVNOs), which are smaller outfits without their own infrastructure.

August 26, 2019
Roberto Chavez

Minister of Environment Catherine McKenna has doubled back on her promise to stop the carbon price at $50 per tonne by 2022, suggesting that — if re-elected — the Liberal government will review the tax with provinces before making any definitive decisions.

McKenna originally pledged in June that the Liberals would not increase the price of the carbon tax beyond $50 per tonne. She was responding to a report released by the Parliamentary Budget Officer suggesting the federal government would need to increase the carbon tax to $102 per tonne to meet international GHG-reduction commitments.

While Ottawa is not currently planning to increase the tax beyond the original promise, McKenna reportedly told the Globe and Mail that a decision on future rates would be made “toward the end of the next mandate after consultations with provinces, territories, businesses and Canadians more broadly.”

August 26, 2019
Roberto Chavez

With Alberta’s governing Conservatives campaigning against Liberal candidates in the lead up to a national general election this fall, records show federal funding for a range of economic and social programs in the province has mushroomed under the Trudeau government.

A database of federal financial transfers going back to 2013 shows that Alberta’s share of funding on social and scientific research, universities, economic development, Indigenous and First Nation support and other areas increased by 34 per cent from 2014-2015 to 2017-2018.

Only the province of Quebec received a larger increase in its share of the federal funding, up by nearly 37 per cent from the governmental fiscal year 2014-2015, the last full fiscal year of the previous Conservative government, to 2017-2018, the latest fiscal year available of federal spending records under the Liberals.

The financial contributions of $100,000 or over include spending under agreements on health and social spending such as post-secondary education, but also programs where the federal government has discretion, such as spending on Indigenous, First Nation, Inuit and Metis support and science and environmental initiatives in collaboration with provinces. Universities are among the most-funded institutions each year.

Alberta’s federal transfer payments climbed from $7.4 billion in the fiscal year 2014-2015 to $9.9 billion in 2017-2018, with nearly all sectors receiving significantly higher funding than under the previous Conservative government.

The largest increases in federal spending in Alberta over that period went to health, social programs, family support and development for First Nation, Inuit and Indigenous communities – to $2 billion in 2017-2018 from $1 billion spent on those programs in 2014-2015.

That spending also included funding for self-government initiatives, negotiation and eventual implementation. The funding came from Health Canada and Indian Affairs and Northern Development under the Conservatives and from Health Canada, Indian and Northern Affairs and Indigenous Services under the Liberals.

Indigenous and First Nations, along with Inuit and Metis received scattered funding through other programs as well.

With only three Liberal MPs in the province, the federal government nonetheless devoted more on economic development in Alberta in 2017-2018 than the previous Conservative government did in 2014-2015 – $47.8 million spent on Western Economic Diversification projects compared to $33.9 million under the Conservatives two years earlier.

August 26, 2019
Roberto Chavez

Prime Minister Justin Trudeau took a shot at Canadian conservative politicians at the G7 summit in Biarritz on Monday when asked at a press conference about reports of U.S. President Donald Trump skipping a discussion on climate change.

“The President has made his perspective on climate change very clear,” Trudeau said when quizzed about Trump’s absence from talks that included the issue of Amazon rainforest fires. (Trudeau committed in his remarks to providing $15 million to the cause.) “We believe that climate is a real and existential threat to our planet,” he continued, citing his government’s carbon tax, phase-outs of coal and plastics.

“You cannot have a plan for the future of the economy unless you also have a plan to fight climate change,” he said. “Now, the president — and even some conservative politicians at home — seem to disagree with us on that, but I’m very much looking forward to the election, in which we get to have this conversation with Canadians.”

Climate change is gearing up to be a hot-button issue in the coming election, with the carbon tax especially emerging as a key dividing point between Trudeau and conservative leader Andrew Scheer, who has repeatedly pledged to scrap the levy.

August 20, 2019
Roberto Chavez

Today, CPC Leader Andrew Scheer announced that a Conservative Government would make maternity benefits tax free. Mr. Scheer would remove federal income tax from Employment Insurance (EI) maternity and EI paternal benefits by providing a non-refundable tax credit of 15 percent for any income earned under these two programs. According to CPC figures, the benefit to a Canadian whose salary is $50,000 would be about $4,000. According to the announcement, all Canadian families would be eligible for the new benefit.

A new Conservative government will provide a tax credit of an equivalent amount for residents of Quebec who receive benefits under the Quebec Parental Insurance Plan (QPIP).

August 9, 2019
Roberto Chavez

Canadian wage growth from July- August hits fastest pace in the last decade, according to numbers released by Statistics Canada. The 4.5 per cent burst came in a month that also produced less-positive data: the unemployment rate moved up to 5.7 per cent as Canada shed 24,200 jobs.  The increase in wages — as measured by year-over-year average hourly wage growth for all employees — marked the indicator's strongest month since January 2009.

In terms of job creation, the economy saw its weakest three-month stretch since early 2018. Canada had been on a healthy run of monthly employment gains that began last summer. Even with the July decline, compared to a year earlier, the numbers show Canada added 353,000 new positions — almost all of which were full time — for an encouraging overall increase of 1.9 per cent.

A closer look at the numbers shows the economy lost 69,300 private-sector employee positions last month, while the public sector gained 17,500 jobs.

July 31, 2019
Hugues Théorêt

On July 30, Finance Minister Bill Morneau asked the head of the Office of the Superintendent of Financial Institutions to start an investigation into the Capital One Financial data breach, which affected about six million Canadians. Capital One revealed that personal information including names, addresses, phone numbers, postal codes, email addresses, birthdates and self-reported income, were compromised. Approximately one million social insurance numbers (SIN) were also compromised

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