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Liberal Party platform analysis

 | September 7, 2021

On September 1, the Liberal Party of Canada released its election platform for the September 20 federal election. Election platforms contain a party’s comprehensive set of policy ideas, and if re-elected to government, the Liberals promise to implement these policies. The Liberal Party platform has policy ideas on everything from school meal programs to subsidized daycare.

To help make sense of this document, we have selected four of the platform’s largest promises, and we will explain how the average Nova Scotian may (or may not) benefit. In general, the Liberal platform offers its largest benefits to families with daycare needs and seniors who have incomes below $35,000 per year.

Housing

The cost of housing has been a leading issue this election, with each major party responding to the issue in their platforms. The Liberal Party’s response is to introduce a mix of policies designed to encourage savings for a new-home purchase, reduce some mortgage costs, and develop new housing supplies in cities.

The largest of the Liberal Party’s proposals in this area is the “First Home Savings Account,” which would allow people younger than 40 to make contributions to a separate, tax-advantaged account to be used for a home purpose.  These contributions would generate a tax credit as if they were RRSP contributions, effectively offering a rebate on home-purchase savings.  This would not directly reduce the cost of buying a home, but it would make it easier for a young family to save for one.

The Liberals also promise to reduce mortgage insurance premiums. Right now, families with less than 20 per cent down payment on their homes must purchase “mortgage insurance,” which ensures the bank is repaid if the homeowners fail to pay their mortgage.  The Liberals promise to reduce these insurance premiums, which would reduce the cost of an insured mortgage by $10 to $20 per month.

Finally, the Liberals hope to increase housing supply through a mix of supply-side measures. They intend to provide grants to cities that change their zoning laws to allow for more housing construction. More directly, the party pledges expanded funding for the “National Housing Co-Investment Fund” and dedicated funding to convert empty office spaces into residential units. The platform promises to ‘build, preserve, or revitalize’ 1.4 million homes over five years, but it does not provide specific targets per program.

Who will benefit?

People who are already saving for a house will benefit most from the Liberal plan. By allowing both a tax credit at the time of contribution and tax-free growth, using this account for a down payment would be more effective than using a Tax Free Savings Account or an RRSP.

This plan will also benefit families where parents can contribute to their children’s home purchases. The Home Savings Account would allow parents to make a cash contribution long before the eventual purchase, letting the investments grow tax-free.

Who will not benefit?

This plan will be much less beneficial to people far from buying a home, such as those struggling to save anything towards a down payment. The Liberal platform offers very little direct support for renters, and any improvements to rental affordability must come through an expanded housing supply.

The National Housing Co-Investment Fund is the program’s most direct effort to expand affordable housing. The current version of this program has been slow to deliver funds, particularly outside of Ontario. If this continues, the planned investment may not result in much new housing in Nova Scotia.

Daycare

The single largest policy in the Liberal Party platform is the party’s re-announcement of $10-per-day child care. This policy was first announced in the government’s Spring 2021 budget, and the Liberals promise to continue its implementation.

This program uses federal money with matching provincial funds to expand child care services and regulate fees. The program phases in over five years, but in the short term, it promises a 50% reduction in child care fees for 2022. The Liberal platform estimates that a typical family in Halifax would save about $8,500 per year on daycare once the plan is fully implemented.

Because the government already announced this policy, the other parties have taken it into account in their policy announcements. The New Democratic Party says that it would continue the program, but the Conservative Party would cancel it and partially replace it with a tax credit.

Who will benefit?

This plan will significantly benefit families that rely on traditional daytime arrangements for their young children. The province of Quebec has had a similar program for many years, and the province considers it to be a great success.  In Quebec, the program has helped women return to work sooner after having children because families can more easily afford child care for their young children.

Who will not benefit?

Families that do not rely on traditional child care services will probably not benefit from this program. This program is limited to regulated child care spaces, so there is no special funding for hiring a babysitter or having extended family look after children. Because traditional child care spaces tend to keep regular daytime hours and expect the same of parents, parents who work nights or other shift schedules may still have a hard time finding child care.

The Liberal Party platform promises that some of this funding will be used to open more child care spaces, but that may not be sufficient if this program encourages more families to use child care services. Quebec’s subsidized child care program currently has a waiting list of 50,000 children.

Health Care

The Liberal Platform does not announce any new comprehensive public health initiatives, but it promises to expand funding for family doctors and mental health care.  

The platform announces funding to hire “7,500 new family doctors, nurses, and nurse practitioners.” Canada currently has about 45,000 physicians specializing in family medicine. If physicians and nurses are hired at an equal ratio, this would expand the number of family doctors by about eight percent, enough to find family doctors for about half of the people currently waiting.

The platform also promises to introduce a separate transfer payment for mental health services, with funding increasing over a four-year term of government. The platform promises that the funding would help establish standards modelled after the Canada Health Act. Still, it does not explicitly promise to make mental healthcare free to the general public.

Who will benefit?

Nova Scotians without a family doctor are most likely to benefit from the additional funding in this platform. However, the amount promised appears insufficient to clear the whole backlog of families waiting for a regular physician.

Premier Tim Houston has already promised that Nova Scotia would implement public mental health coverage for people who do not have private insurance, so the additional funding in this platform would likely bolster this public coverage.

Who will not benefit?

Nova Scotians who already have a family doctor but struggle to pay for prescription drugs or receive specialty care are unlikely to benefit from this program. The platform does not promise new funding to expand public coverage of prescription drugs, and it offers only a one-time payment to reduce waiting lists caused in part by the pandemic.

Senior Support

Finally, the Liberal Party platform includes two significant benefits for seniors.

The first benefit is another expansion of the Guaranteed Income Supplement, a monthly payment that goes to seniors who have low individual or household incomes.  The maximum payment is currently $11,228 per year for a single senior or $13,518 per year for a couple. The Liberal Party promises to increase this amount by $500 for an individual or $750 for a household.

For seniors who are not yet retired or cannot afford to retire, the Liberal Party also plans to introduce a “Career Extension Tax Credit.” This tax credit would phase in as seniors earn more than $5,000 per year of income from their job, and at its maximum level, it would provide a benefit of $1,650 per year.

Who will benefit?

Low-income seniors will benefit from the Guaranteed Income Supplement. The overall pledged increase to this program is about 5%, but the program itself is limited to seniors who would have poverty-level incomes if not for the Income Supplement. Any increase to this benefit would be well-received.

Seniors who have continued their working careers will be the biggest beneficiaries of the Career Extension Tax Credit. This tax credit phases in as a senior’s yearly working income increases to $16,000, and it slowly phases out for incomes above $35,650.

Who will not benefit?

Seniors who have a comfortable retirement will not benefit from either of these programs. A senior with enough retirement income to be comfortable is unlikely to qualify for the Guaranteed Income Supplement, so the increased benefit will not apply.  

Seniors who have retired and are no longer earning income from work will not be eligible for the Career Extension Tax Credit. Seniors who have continued a well-paying career may earn too much money to qualify for this tax credit.