Oct 16, 2019
Where political parties stand on tax breaks, incentives — other major parties
Wednesday, October 16, 2019 | The Lawyer's Daily
Canada’s political parties are lining up to make impressive promises to voters and the area of tax is front and centre.
In the previous article, I summarized announcements made to date by three of the major political parties: the Liberals, Conservatives and New Democrats. In part two, I cover announcements made by the other three major parties.
The Green Party’s platform, as one would expect, focuses considerably on the environment. Nevertheless, the party has proposed fairly extensive tax revisions.
With respect to corporate taxes, the Greens have proposed an increase in the general tax rate from 15 per cent to 21 per cent. It would also impose a five per cent surtax on the profits earned by banks, although credit unions, caisses populaires and co-ops would not be subject to the surtax.
The Green Party has also proposed a “robot tax,” where it would impose a tax on large corporations that would be equal to the income tax paid by employees who have been replaced by a machine. The party has also indicated that such revenue will be used to fund education and retraining for such workers.
The Green Party would impose a corporate tax on multinational e-commerce firms doing business in Canada by requiring such businesses to register, collect and remit taxes where the product or service is consumed.
Additional tax measures that have been proposed by the Greens:
- Eliminate the ability of businesses to deduct 50 per cent of the cost of meals and entertainment expenses;
- Eliminate the federal portion of GST/HST on the costs related to the construction of child care spaces;
- Creating tax credits in support of heritage properties; and
- Providing tax credits for the gift of real property to community land trusts in support of affordable housing and providing tax credits related to the building of purpose-built rental housing.
With respect to its environment-related tax policy, the Green Party would eliminate all subsidies related to fossil fuels, including payments to businesses and available deductions, including the Accelerated Capital Cost Allowance on liquefied natural gas and tax deductions for oil and gas wells. They would also introduce a tax on aviation and shipping fuels. Finally, the Greens would eliminate the federal portion of the GST/HST on the sale of new or used electric and zero-emissions vehicles.
On the personal tax side, the Green Party would also introduce a one per cent tax on taxpayers whose net worth exceeds $20 million. The party would additionally:
- Close tax loopholes with respect to stock options and capital gains;
- Impose a 10 per cent tax on sugary drinks;
- Eliminate the GST/HST on the sale of medicinal cannabis; and
- Increase the tax credit for volunteer firefighters and search and rescue volunteers.
The proposed tax policy of the PPC is generally straightforward and therefore relatively brief. On the personal side, the party has proposed moving to two marginal income tax rates. The first $15,000 of income would be tax-free. For income between $15,001 and $100,000, the federal income tax imposed would be at a rate of 15 per cent. For income above $100,000, the federal income tax rate would be 25 per cent.
The People’s Party would also gradually eliminate any tax on capital gains. It would additionally reduce the federal portion of corporate income tax from 15 per cent to a rate of 10 per cent.
On the corporate side, the PPC has proposed “ending corporate welfare,” while expanding the Accelerated Capital Cost Allowance program to all sectors.
Finally, with respect to the environment, the People’s Party would repeal the carbon tax and eliminate subsidies for green technology.
The Bloc’s proposed policies on federal income taxes are, not surprisingly, limited. The BQ has called for Revenu Québec to collect federal income taxes rather than the Canada Revenue Agency.
Like the Liberals, the Bloc has also called for the three per cent tax on income earned by large multinational tech corporations on their Canadian revenue and for the imposition of GST on online advertising.
The BQ has also proposed:
- Stronger enforcement against the use by large corporations of tax havens;
- Making the caregiver tax credit refundable; and
- The exemption of books from GST/HST.
This is part two of a two-part series. Part one: Promises, promises: Where political parties stand on tax breaks, incentives