NDP plans on deficits, tax hikes

Also proposes expansion of Carbon Tax to cover oil and gas sector

The NDP’s fiscal plan calls for three years of deficits, tax hikes and an expansion of the Carbon Tax base to cover “venting” emission from the oil and gas sector, the party announced Thursday.
Of the three proposed tax increases, two have already been introduced by the governing Liberals, at slightly lower levels, as part of the 2013 budget.

Bruce Ralston, NDP finance critic and cochair of the platform committee, said an NDP government would increase the corporate tax rate to 12 per cent from 11 per cent, and personal tax rate on anyone earning above $150,000 per year to 19 per cent from 16.8 per cent.

The Liberals in their February budget introduced increases to the corporate tax rate to 11 per cent from 10 per cent, and a two-year, temporary increase on the personal tax rate of high-income earners, to 16.8 per cent from 14.7 per cent.
Ralston said the NDP would also reinstate the capital tax on financial institutions, which is expected to generate an estimated $150 million per year.

“Adrian Dix has consistently said that we will be clear about what an NDP government will do and how we will pay for it,” Ralston said in a statement. “Today, we are delivering on that promise.”
Expanding the Carbon Tax, which Ralston stressed isn’t an increase of the tax, is expected to generate $205 million over three years and would mean an estimated 75 per cent of all B.C. emissions will be covered.

The fiscal plan — based on the NDP’s claim they would be inheriting a sizable deficit from the Liberals — proposes to reallocate hundreds of millions of dollars in spending for several existing Liberal programs.

Carole James, co-chair of the committee, said funding for the Liberals’ B.C. training and education savings grant and also the early years strategy will be “repurposed” into a new childcare and early-education plan, meaning the Liberal programs will be replaced.
Money for the existing early childhood tax benefit will also be repurposed as part of a new poverty-reduction strategy, James said.

An estimated $250 million of discretionary spending will also be repurposed.
In total, the new revenue streams, in addition to the reallocation of funds, is expected to result in just over $2 billion over three years. Ralston said the NPD’s spending platform will not exceed this revenue, with a goal of balancing the budget in four years.

Liberal Finance Minister Mike de Jong said the NDP plan is a recipe for a credit downgrade for B.C. He called the Carbon Tax expansion “an attack” on the oil and gas industry, and said the capital tax and the increase in taxes for high-income earners will drive people and business from B.C.

“What’s clear from this document is that spending is going to go up under the NDP by between $4 and $5 billion. What isn’t at all clear is how large a deficit they are prepared to run,” said de Jong.
Emily Mlieczko, executive director of the Early Childhood Educators of B.C., said the Liberal strategy will not necessarily be missed.
“We didn’t feel that what was proposed really addressed the crisis in childcare in our province,” said Mlieczko.

The David Suzuki Foundation welcomed the promised Carbon Tax expansion, saying it closes a loophole for polluters.