Canadian Election Party Platforms: Effects on Personal Finances

The current federal election campaign in Canada has more or less disappeared in the excitement of watching the possible collapse of the world financial system - a real-life "will an asteroid destroy the earth?" scenario. It doesn't help that Stephen Harper's Conservatives are solidly in the lead with little able to budge the numbers; the only question seems to be whether they will form a majority government (a bit less than a 40% chance according to the UBC election market).

However, election campaign there is, so here is a look at what the parties are offering from the viewpoint of an individual finances, i.e. leaving aside indirect future effects from the betterment of society or the environment.

Conservatives - platform, what platform? at last, it finally appeared tonight. Here is what I found:

1. Increase the Senior Age Tax Credit Amount (age 65+)by $1000, saving about $150 / year to those in the lowest tax bracket
2. Lower the inclusion rate for Canadian-resident recipients of US Social Security from 85% to 50%, reversing a nasty surprise implemented in 1996; benefits only about 35-40,000 people (same link as first item)
   
3. Tax Credit of 15% on up to $5000 of eligible closing costs for a first-time house buyer
4. Extend Maternity and Parental Benefits to Self-employed through voluntary opt-in to EI program; but EI premiums will be set to offset the cost ... so where is the advantage?
5. Create Childrens' Arts Tax Credit on up to $500 of eligible fees for music, drama or art classes of children under 16, saving about $210 in lower tax brackets
6. Allow families caring for other family members with disabilities to split income between spouses; if the 1 million people caring for others split the $80 million projected benefit, that would amount to $80 each!
7. Allow the proceeds of a deceased individual's Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) to be rolled over on a tax deferred basis to the Disability Savings Plan of a financially dependent infirm child or grandchild
8. Additional $2,000 completion bonus for apprentices who complete their training in an approved apprenticeship program
   
9. Index the $100/month per child Universal Child Care Benefit to inflation and make it tax free for sole-support single-income parents

Liberals - they have a platform! and in traditional Liberal style, there are little goodies for just about everyone.

1. Increase GIS payments to low-income Seniors by $600 per year and by $800 for couples
2. Replace the tax of 31.5% on income trusts, announced by the Harper government to start in 2011, with a 10% tax that is refundable to Canadian residents; this will increase taxes by $1 billion over four years - presumably it is non-Canadians who would pay; see this Edmonton Journal article where a couple of economists applaud the Liberal proposal.
   
3. Create 200,000 student bursaries of up to $3,500 per year over four years based on financial need and 100,000 bursaries of $4000 to favour higher education access by "under-represented" groups (like males?)
4. Extra $250 tax credit for students who work
5. Cut lowest tax rate from 15% to 13.5% and middle class rates from 22% to 21% ($38-76k taxable income bracket) and from 26% to 25% ($76-123k income); this is supposedly apart from and in addition to the wholesale cuts to income taxes to offset the massive green shift pollution tax increases
6. Add $350 per year to the existing $1,200 child-care allowance
7. Provide $10,000 per household in refundable tax benefits for energy-saving home retrofits.; cost is $600 million

NDP - they have a platform too; as usual for them, there is lots of verbiage directed at controlling nasty corporations, saving the environment and improving health care but a couple of child-related proposals would have a huge impact on family finances

1. Limit interest rates on credit cards to 5% over prime
2. Outlaw automated bank cash dispenser machine fees
3. Provide a $1,000 grant to all undergraduate or equivalent students who qualify for student loans (i.e. meet needs tests)
   
4. Establish an affordable (affordable for whom? the government - cost is estimated at $1.75 billion - or parents?) national child care program with 220,000 spaces
5. Phase in a new Child Benefit modelled on the existing Canada Child Tax Benefit; will expand in phases to $5,000 non-taxable a year per child, costing $4.4 billion annually; combined with the child care proposal, the government undertakes most of the cost of child rearing - wow!
   
6. Forgive the student loans of health professionals who commit to dedicate the first ten years of their careers to family medicine ... but isn't family medicine a specialty like others which doctors choose as a career path? ... which means the NDP would give something like $150,000 (a typical amount of loans accumulated by MDs at the end of their training I hear) to doctors for what they would be doing anyway?; NDP's estimated cost is $200 million
   
7. Establish a Canada-wide free prescription catastrophic drug program to cost $2 billion per year
8. Create a new national holiday in February (to be called Jack Layton Day, National Snow Shovelling Day, Winter Hibernation Day, Groundhog Day, Winter Blues Day? ... how about a national personal holiday on each person's birthday too?
   
9. End the use and circulation of the Canadian penny .. there, that proves it, I knew the platform made no cents ...
   

Green Party - the platform is here; as shown from the items below, most copied and pasted directly from the Green website, some of it seems vague; a definite focus on the poor

1. Return the GST to 6%
2. Exempt children's clothing and books from GST
3. Eliminate income tax for those earning $20,000 or less
4. Forgive half of student loans for students who complete their degree or certificate program
5. Increase taxes on tobacco and alcohol
6. Push government to adopt fair taxation rates on income trusts. Ensure foreign holders of trusts are taxed at a higher rate. In the interim, tax at 10 percent.
7. Enable income splitting, which offers tax benefits particularly to middle income couples where there is a significant differential in the level of income between partners
8. Conversion of the Disability Tax Credit (DTC) to a refundable credit
9. Increase funding for a needs-based Canadian National Student Loan and Bursary Program with low interest rates and reasonable repayment schedules
10. Increase the Guaranteed Income Supplement for seniors by 25%
11. Provide increased tax breaks for Canadians who donate to charitable societies
12. Use of a negative income tax, or Guaranteed Livable Income (GLI) by providing a regular annual payment to every Canadian without regard to a needs-test. The level of the payment will be regionally set at a level above poverty, but at a bare subsistence level to encourage additional income generation
13. Legalize marijuana and tax it like tobacco

Bottom line for personal finances:

• Conservatives and Liberals mostly make marginal adjustments
• NDP and Greens make some dramatic proposals

In my next post I will suggest what I would like the parties to address that is missing from all of the platforms.