Policies of the Federal Parties in Personal Finance Perspective. Part 2.
This is the second of four blog posts I intend to write on the election platforms of the national parties that had seats in the House of Commons at dissolution. I exclude the Bloc Quebecois because they do not appoint candidates outside of Quebec. Last week, I wrote about the Green Party of Canada; this week it will be the New Democratic Party; next week, I plan to write about the Conservatives; and in the final week, I will review the Liberal Party platform.
The emphasis on these posts is to present the platforms and policies of the parties that will directly affect household income and wealth. While many policies have a broad impact on the economy which will ultimately affect our personal financial accounts, I want to focus on those policies that explicitly and directly affect “home economics,” one might say.
Part 2. The New Democratic Party
Health Care: Pharmacare
New Democrats are leading the fight to expand Medicare – to include quality prescription drug coverage for everyone, regardless of your job, where you live, your age, your health status, or how much money you make. We will begin working with the provinces right away to target a 2022 start date, with an annual federal investment of $10 billion.
Health Care: Dental Care
Work together with provincial partners, health professionals, and dentists to develop a roadmap to incorporate universal dental care into Canada’s public health care system.
Immediately deliver dental care coverage for people who don’t have any private insurance.
Health Care: Mental Health Care
Bring in mental health care for uninsured Canadians – ensuring that people with no coverage for mental health services could gain access to these supports without worrying about the cost.
Include a national perinatal mental health strategy to support growing families before and after birth.
Health Care: Eye Care, Hearing Care, Infertility Care
Everyone should be able to get eye care and hearing care. Canadians struggling with infertility should also have access to the procedures and care they need, no matter which province or territory they live in.
Comments
Health care is a perpetual issue for Canadians. We often look to our neighbours to the south with a sense of pride that it does not cost Canadians anything beyond the taxes we pay to see a doctor, be hospitalized, or undergo surgery. However, there are several gaps, which the NDP seeks to eliminate.
In addition to pharmacare, attention to mental health care may have a positive general economic impact in reducing homelessness and all the societal costs associated with this issue.
Safe and Affordable Homes
A New Democrat government will create at least 500,000 units of quality, affordable housing in the next ten years, with half of that done within five years.
Set up dedicated fast-start funds to streamline the application process and help communities get the expertise and assistance they need to get affordable housing projects off the ground.
Mobilize federal resources and lands for these projects, turning unused and under-used properties into vibrant new communities.
Waive the federal portion of the GST/HST on the construction of new affordable rental units.
Re-introduce 30-year terms to CMHC insured mortgages on entry-level homes for first-time homebuyers. This will allow for smaller monthly payments, freeing up funds to help make ends meet for young families.
Double the Home Buyers’ Tax Credit to $1,500.
Provide resources to facilitate co-housing, such as model co-ownership agreements and connections to local resources, and ease access to financing by offering CMHC-backed co-ownership mortgages.
Put in place a 20% Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents.
Create a public beneficial ownership registry to increase transparency about who owns properties and require reporting of suspicious transactions in order to help find and stop money laundering.
Comment
Complaints about unaffordable housing have only increased over time. If you are in the younger generation, looking to buy a home, it appears almost impossible. If you are part of the older generation, you may be pleased with the appreciation in the value of your property, but you lament the inability of your children to afford to buy something similar.
Economics is about, among other things, supply and demand. Making housing more affordable by increasing demand, is inherently contradictory and self-defeating. Nevertheless, it seems that politicians cannot help themselves. I would argue that the reintroduction of 30-year mortgage terms and doubling the Home Buyers’ Tax Credit are the wrong policies to advance. However, the other policies in their platform, if successfully executed, should contribute toward increasing supply.
Affordable Post-Secondary Education
Over the long term, this means working with the provinces and territories to cap and reduce tuition fees and building towards making post-secondary education part of our public education system so kids can go from kindergarten to a career without the barrier of cost.
Remove interest from federal student loans.
Introduce a targeted debt forgiveness program for graduates that will forgive up to $20,000 in student debt. In the first year alone, this will wipe out 20% of all student debt and help 350,000 borrowers save money every month.
Move away from loans and permanently double non-repayable Canada Student Grants.
Comment
Two things come to mind here, although no doubt more could be said. First, when young graduates find themselves in debt, they tend to delay household formation (marriage, children, purchase of a home, etc.). This handicaps the economic development of Canadian society. Second, parents often wish to save for their children’s post-secondary education, which can damage the parents’ ability to save for their retirement, leading to increased poverty in retirement, greater reliance on government benefits, and a reduced ability to contribute to the economy, including paying taxes to fund these programs.
I may have missed it, but I didn’t see anything in the NDP platform about the encouragement of a career in the skilled trades, an employment sector that is generally experiencing high demand and requires relatively little in the way of post-secondary tuition.
Affordable Cell Phone Service; Access to High-Speed Internet
Until the industry becomes more competitive, put in place a price cap to make sure that Canadians aren’t paying more than the global average for their cell phone and internet bills.
Declare high-speed internet an essential service.
Make sure that every Canadian has access to affordable, reliable high-speed broadband within four years. This will include starting the process of creating a Crown corporation to ensure the delivery of quality, affordable telecom services to every community.
Make sure that providers offer a basic plan for wireless and broadband that is comparable with the affordable plans that are available in other countries.
Require companies to offer unlimited wireless data options at affordable rates, as exist elsewhere in the world, and abolish data caps for broadband internet.
Introduce a Telecom Consumers’ Bill of Rights and put an end to gouging.
Comment
Corporations have a long history of not wanting to provide services to rural areas, while governments have an equally long history of mandating those services. Rural telephony and rural electrification projects are part of that history. The provision of access to cellphone and internet service to rural communities will make allow more people to be included in Canada’s larger economy. I interact with my clients over the telephone or the internet. I have had at least one client for whom internet access was an iffy proposition. As urbanized as Canada is, not all of us can or should live in Toronto, Montreal, or Vancouver.
Affordable Child Care
Work with other levels of government, Indigenous communities, families, and childcare workers to ensure that care is inclusive and responsive to the needs of all Canadian children.
Introduce legislation that enshrines Canada’s commitment to high-quality, public childcare in law.
Take immediate action to save not-for-profit childcare centres that are at risk of closure with relief funds to re-open spaces that were lost during COVID-19.
Work with the provinces to build a universal, $10 a day child-care system that’s there for all parents, no matter where you live.
Create enough spaces so families don’t spend months on waitlists.
Ensure that childcare workers are paid a fair, living wage.
Comment
In working with younger couples on financial plans, anticipating the cost of childcare has been a major issue. Making childcare more affordable is essential for childrearing households.
Although this deviates somewhat from my intention to focus exclusively on the NDP, people interested in a cross-party comparison of current childcare policies may wish to read this article on the MoneySense website by Alexandra Macqueen, with input from Jason Watt and Aaron Hector, “Federal Election 2021: Understanding the parties’ proposals on childcare—what could they mean for your finances?”
Accessible Job Training and Lifelong Learning
Change EI rules to allow workers who quit their job to go to school to qualify for EI benefits.
Expand options for workers in designated sectors and regions to take EI funded training in advance of losing a job
Promote investment to ensure that regional economies are creating good jobs that support families and communities.
Require large employers to spend at least 1 percent of payroll on training for their employees annually.
Work closely with the provinces to establish national training priorities
Create a new Workers Development and Opportunities Fund to expand training options beyond people who qualify for EI. This fund will be provincially directed, with dedicated support for marginalized workers, those in transitioning sectors, and for efforts to improve literacy and essential skills.
Comment
I don’t think there is any doubt that more people would pursue different employment if they could afford to take the time off work to take the necessary education and training. This policy acknowledges the frustrated potential that many Canadians may feel.
A Fairer Deal for Workers
Work with the provinces to update federal standards and bring in a permanent safety net of paid sick leave across the country.
Legislate 10 paid sick days in the Canada Labour Code for federally regulated workplaces.
Put in place a living federal minimum wage starting at $15 an hour and rising to $20 an hour, indexed to the cost of living.
Put in place rules to require that part-time and contract workers be compensated equally to full-time workers.
Immediately ban unpaid internships outside of education programs.
Comment
I am not really in a position to interpret how employers might react to this situation, but from the point of view of workers, particularly those younger people who are just getting started in their careers, or those who are at the lower end of the employment income spectrum, these policies should help.
Supporting Small Businesses
Make sure that small businesses wage and rent subsidies continue until small businesses are able to fully reopen.
Put in place a long-term hiring bonus to pay the employer portion of EI and CPP for new or rehired staff.
Cap high credit card merchant fees at a maximum of 1%.
Universal pharmacare will also save businesses approximately $600 per employee with extended health benefits every year.
Make new investments in training Canadians and boost support to traditionally underemployed groups, ensuring that they can access good jobs that pay a fair wage.
Comment
While most Canadians tend to be employed, there are many self-employed small business owners for whom these policies will resonate.
Tax Fairness
Introduce a temporary COVID-19 excess profit tax that puts an additional 15% tax on large corporate windfall profits during the pandemic.
Increase the capital gains inclusion rate to 75 percent.
Boost the top marginal tax rate two points.
Put in place a luxury goods tax on things like yachts and private jets.
The very richest multi-millionaires to pay a wealth tax.
Ensure that internet giants like Facebook, Google, and Amazon pay their fair share of taxes.
Comment
For the average person, these tax measures may be relatively meaningless. Relatively few Canadians maximize their RRSP or TFSA contributions, so increasing the inclusion rate on capital gains from 50% to 75% will not matter to many. Likewise, the top marginal tax rate. Even further out of reach are yachts and private jets. Although not stated in the platform as far as I could tell, according to this article, the wealth tax would be 1% on wealth above $10 million. A worry might be that these policies will discourage capital investment and the development of new businesses that will hire more people.
Perhaps the one policy that may have a direct impact is if giants of tech services like Netflix and Amazon Prime Video, to which many Canadians subscribe, decide to raise prices to cover their taxes.
A Livable Income
Lift every senior and person living with a disability out of poverty and build from there until every Canadian can count on a basic livable income when they need it.
In time, work to expand all income security programs to ensure everyone in Canada has access to a guaranteed livable basic income.
Comments
What appeals to me about policies like this is the simplification of social welfare policies in Canada. The government administration could be reduced significantly and the people who need support could access it through a simpler process. It could even eliminate the need for Old Age Security and the Guaranteed Income Supplement.
Beyond that, the reduction in poverty that would result would decrease the cost of health care and policing, to name two potential benefits, as well as allow people with financial stability to engage in the broader economy. These are all good things.
Changing Transportation
Help provinces and municipalities build towards fare-free transit to ease commutes, help people make ends meet and lower emissions.
Develop a public inter-city bus system.
Support creating high-frequency rail along the Quebec-Windsor corridor, expand rail service options in other regions and work to restore the Ontario Northlander to support the crucial transportation link for communities and businesses alike in Northern Ontario.
Make it easier to get and use a zero-emissions vehicle (ZEV).
Extend federal incentives for ZEVs.
Waive the federal sales tax on ZEV purchases and grow these incentives up to $15,000 per family for made-in-Canada vehicles.
Build out Canada’s charging infrastructure and help people purchasing new or used ZEVs cover the cost of installing a plug-in charger.
Comments
These policies have a lot to do with addressing climate change. I think that many people may wish to buy zero-emissions vehicles (ZEVs) but are concerning about the higher purchase cost and the lack of adequate infrastructure for recharging. Building out public transit so that individual vehicle ownership is less needed is also beneficial in terms of reducing household costs.
Protecting Pensions
Make sure that pensioners are at the front of the line when a company goes bankrupt – making sure unfunded pension liabilities owed to workers, and employees’ severance pay, are the top priority for repayment.
Stop companies from paying out dividends and bonuses when pensions are under-funded.
Create a mandatory, industry-financed pension insurance program to make sure that no worker is deprived of the retirement benefits they’ve earned through no fault of their own.
Improve retirement security for all Canadians and provide a basic guaranteed livable income for seniors.
- Create a Pension Advisory Commission to develop a long-term plan to enhance Old Age Security.
- Boost the Guaranteed Income Supplement to lift all seniors out of poverty.
- Strengthen the Canada Pension Plan.
- Make automatic enrollment in OAS and GIS retroactive.
- Support efforts to make sure Canadians have good retirement financial literacy.
Comments
Periodically, one reads about pensions being badly impacted by company bankruptcies. Nortel comes to mind as does Sears. Not everyone has these kinds of pension benefits but protecting the average worker’s retirement savings is important. Also insightful is the idea of developing a pension insurance program. Banks have CDIC, credit unions have provincial deposit insurance, insurance companies have Assuris; it seems reasonable to include pension plans in a similar plan to protect against insolvency.
Tackle Poverty
See Safe and Affordable Homes; See Health Care; See A Livable Income; See Affordable Child Care.
Implement a national school nutrition program.
Comments
Much of what is presented in this section is already included in other segments of the NDP’s platform so I will only add that a national school nutrition program would be another method of addressing poverty and its effects.
You can find more about the NDP Platform here.
This is the 113th blog post for Russ Writes.
If you would like to discuss this or other posts, connect on Facebook, Twitter, or LinkedIn.
Click here to contact me for an appointment.
You may be interested in a half-hour no-cost, no-obligation financial planning conversation with me. Click here to sign up for a free session of FinPlan30.
Disclaimer: This blog post is intended for general information and discussion purposes only. It should not be relied upon for investment, insurance, tax, or legal decisions.