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Conservative Party platform analysis

 | September 7, 2021

On August 16, the Conservative Party of Canada released its election platform for the September 20 federal election. Election platforms are a comprehensive list of policy ideas that each party promises to implement if elected, and they can be bewildering affairs. The Conservative party platform contains everything from its policies for tackling climate change to toughened regulations for lobbyists.  

To help make sense of this document, we have selected four of the platform’s most significant promises, and we will explain how the average Nova Scotian may (or may not) benefit. In general, the platform offers its largest benefit to lower and middle-income families who can take advantage of new tax credits. It would be less generous to families who would take advantage of the government’s already-announced $10-per-day daycare plan.

Canada Job Surge Plan

The Conservative platform contains many policies designed to help the economy recover from the COVID-19 pandemic, and the largest of these policies is the Canada Job Surge Plan. Under this plan, the government would pay businesses 25% to 50% of a new worker’s salary for up to six months following the end of the current Canada Emergency Wage Subsidy program. The amount paid will vary depending on how long the new worker has been unemployed, but the platform does not describe the calculation.

The government currently runs the similar Canada Recovery Hiring Program, but that program will begin phasing out in September, ending in November.

Who will benefit?

This program will pay businesses to hire new workers, directly benefiting business owners who expand their staff. If this program causes businesses to hire (or re-hire) workers when it would not otherwise do so, this will benefit those new workers.

Who will not benefit?

Since this benefit applies to new hiring only, this program will not benefit businesses with steady staff levels that do not hire new workers. Likewise, people who have had regular work throughout the pandemic are unlikely to see a benefit from this program.

Child Care Expense Deduction

The Conservative Party proposes an expansion of the child care expense deduction to address child care costs for families.  

Revenue Canada offers a ‘tax deduction’ for child care expenses, which allows families without a stay-at-home parent to reduce their federal income taxes by a portion of their child care costs. Since this tax deduction requires families to pay income tax in the first place, lower-income families cannot benefit.

The Conservatives plan to expand this program and transform it into a “refundable tax credit.” By making this credit “refundable,” Canada Revenue Agency will cut a cheque to families who file their taxes but may not have made enough money to benefit under the current program. The HST Credit and Canada Child Benefit work in this way, and the Conservatives would add the Child Care Expense Deduction to that list.

Controversially, this program will replace the government’s $10/day daycare accords signed between the federal government and many provinces. The federal government and Nova Scotia signed a deal on July 13 to phase in $10/day daycare in Nova Scotia by 2026, and this Conservative program would probably cancel that arrangement.

Who will benefit?

This Conservative program will benefit families who have documented child-care expenses and file their taxes yearly. The platform does not contain details on the calculation, but the Conservatives promise to cover “up to 75% of child care expenses” for lower-income families, to a limit of $6,000 per year. The child care tax credit is also available for a broader range of expenses than traditional daycare, such as summer sports camps.

Who will not benefit?

This program will cancel the current government’s $10/day child care program, so families looking forward to cheaper child care will not benefit. The $10/day child care program has not yet been implemented in Nova Scotia, but the federal and provincial governments signed an agreement to implement it by 2026. Since this Conservative plan would withdraw federal support, child care is likely to remain expensive.

Right now, child care in Halifax costs about $850/month per child, so the costs of keeping one child in daycare will go over the limits of this Conservative plan.

Since this program is implemented through the tax code, it will require families to file taxes yearly. Right now, the poorest Canadians often do not file taxes, and by not filing, they miss out on other government benefits such as the HST credit or this proposed tax credit.

Canada Workers Benefit

The government currently offers a “Canada Workers Benefit” tax credit to low-income individuals and families. Under this program, a single adult can receive about $1,400 per year, and a family (or a single adult with children) can receive about $2,400 per year. This benefit is gradually eliminated for single adults who make more than $14,000 per year and families who make more than $17,000 per year. 

The Conservatives promise to double this benefit to $2,800 per year for individuals and $5,000 per year for families. The Conservative platform also suggests that the benefits apply to individuals and families that make somewhat higher incomes, but the platform does not contain details.

The Conservatives call this a “$1 per hour raise,” but this is misleading. The benefit will still be paid through the tax system, spread out in payments every three months.

Who will benefit?

Workers who already receive the Canada Workers Benefit will receive more under this program. Some workers and families who make too much money to receive a benefit under the current program will receive a payment under this proposal, but the platform does not give enough detail to draw the line.

The platform says that a single person making $25,000 per year would still receive a significant Workers Benefit cheque; this benefit would apply to the poorest one-third of Nova Scotians.

Who will not benefit?

The current Workers Benefit phases out for middle-income individuals and families, and the Conservatives will not change this. Single adults making more than $45,000 per year will probably not see a benefit from this program, and families making more than about $65,000 per year will also likely not benefit.

This program also requires beneficiaries to have some employment income. People who are retired, unemployed all year, or disabled may not have enough employment income to qualify. Since Revenue Canada pays this program, beneficiaries must also file yearly tax returns, and the very poorest Canadians often do not do this.

Low Carbon Savings Account

Right now, the government has implemented a carbon tax “backstop.” In provinces that do not have emissions-reduction programs of their own, the federal government adds a tax to gasoline and other fuels, and it uses that money in part to provide a fixed payment per person. In Ontario, the carbon tax increases the price of gasoline by about $0.09 per litre. It results in a payment of $250 to single adults and a slightly larger amount to families.

The Conservative party has consistently opposed this carbon tax, and this platform proposes replacing it with a “low carbon savings account.” This program would still apply a surcharge to gasoline and other fuels, but it would rebate the exact amount collected to the purchaser in the form of rewards points to be spent on “environmentally friendly” purchases like bicycles, transit passes, or home heating refits.

While the Conservative party calls this a “savings account,” the term is misleading. As described, the plan would work more like an Air Miles or PC Points account. It would require people to use some sort of membership card every time they purchase gasoline. The Conservative platform suggests that a “consortium of companies” may manage this program.

Nova Scotia does not participate in the federal carbon tax because the federal government agrees that its cap-and-trade emissions system is just as strong as the federal measures. Nova Scotia’s program does not involve a payment to individuals or families, but it also results in a smaller increase in the price of gasoline. The Conservative platform says it wants to “work with the provinces” to implement the Low Carbon Savings Account, which means that Nova Scotia’s program may need to change to resemble the Conservative plan.

Who will benefit?

If the Conservatives accept Nova Scotia’s cap-and-trade plan under their proposal, the current situation would not change. Nobody in Nova Scotia will benefit from or be harmed by the Conservative proposal.

If the Conservatives do not accept Nova Scotia’s cap-and-trade plan and implement the Low Carbon Savings Account, then the price of gasoline will increase in the province. People who have long commutes or use a lot of home heating fuel may benefit from using the “rewards points” and having useful, qualifying purchases to spend them on.

Who will not benefit?

If the Conservatives require Nova Scotia to implement this plan, then people who already live a low-emissions lifestyle will not benefit because they will not use much gasoline. This includes people who have already adopted low-emissions vehicles as well as those who frequently take public transit.

For people who rent and have heating costs included, their landlord will likely be the one to make use of any rewards points on heating fuel. This may encourage landlords to upgrade their buildings with better insulation and more energy-efficient heating systems, or they may choose to largely ignore the rewards system and pass along the increased fuel costs.

The Conservative platform also proposes little change to the existing “industrial emissions” rules. These rules cover both large manufacturers and hydro generation, so the Conservative climate proposals will likely leave hydro prices unchanged, but that’s only 9 per cent of Nova Scotia’s power supply.