Campbell Clark
When Stephen Harper summed up his approach to the economy last Friday, he talked about tax breaks, helping small business, free trade and balancing the books. Yesterday, NDP Leader Thomas Mulcair unveiled tax breaks for small business, and stressed support for free trade and balancing the books.
It's a funny thing: Mr. Harper and his cabinet ministers gleefully paint the NDP as tax-and-spenders who will, as Finance Minister Joe Oliver said this week, "bring us to ruin." But Mr. Mulcair's economic policies are actually, well, fairly conservative.
That's no accident. The NDP know they have a weakness, that plenty of voters see them as the kind of big taxers the Tories describe, and therefore don't trust them to govern. So they're going out of their way to dispel that image.
Mr. Mulcair delivered a speech to the Economic Club of Canada in Ottawa on Tuesday in which he proposed small-business tax incentives that would have fit nicely into one of the budgets of the late Finance Minister Jim Flaherty.
And when the NDP leader described his own middle-class upbringing in a family of 10 kids, he used nearly identical phrases to those Mr. Harper employed in his 2006 campaign speeches to appeal to ordinary-Joe Canadians: "We worked hard, played by the rules and lived within our means."
The speech was ostensibly about the middle class, but Mr. Mulcair was aiming for the middle of the road.
He proposed a two-year extension of the accelerated capital cost allowance that allows businesses to deduct the cost of equipment over fewer years – an effort to encourage business investment. It is an extension of a measure that exists under the current government.
He also proposed another measure to encourage business investment, called an innovation tax credit, that would give businesses a tax break when buying machinery used in research and development. That's a relatively small, niche measure that the NDP says would save businesses $40-million a year.
And he also promised to cut the small business tax rate to 9 per cent from 11 per cent – though just one percentage point at first.
All are measures to stimulate business, all are relatively modest and all are designed to send a message that the NDP is business friendly. All would fit in a Conservative budget. Some, like extending the accelerated capital cost allowance, already have – Mr. Flaherty extended it in 2013.
Thar's not to say that there's no differences at all between NDP economic policies and those of the Conservatives. Mr. Mulcair faces a squeeze between the desire to convince voters his party is not a group of wild, spending socialists, and a need to offer some nods to the NDP base.
He has proposed an increase in corporate taxes, insisting companies should pay their fair share – although yesterday's proposal to lower small-business tax rates indicates they've decided there are good guys and bad guys in the corporate world. Voters like small business, but feel less sympathy for big corporations.
And Mr. Mulcair also promises to unveil other economic policies, what he called a "full suite," between now and the October election.
But he's already boxed in his party pretty tightly in the bid to reassure voters. He doesn't appear to have much leeway left to offer dramatic new economic policies.
Raising corporate taxes would not raise much money. He's promised not to raise personal taxes, other than to repeal the Conservatives' $2.4-billion-a-year income-splitting promise. The NDP would put most of that money to a national daycare program. And the NDP also pledges it will not run a deficit. Mr. Mulcair's economic-policy measures, like those announced yesterday, seem destined to be modest.
That might be necessary for political positioning, and perhaps the NDP accepts the idea that budgets are tight, so measures to boost growth must be modest in scale. But it means Mr. Mulcair now has two messages that seem to clash. With the fall in oil prices and uncertainty in the economy, the NDP has redoubled attacks on the Conservatives' economic record. And yet their policies sound closer together than ever.
Campbell Clark