Economy

Better Solutions for the Economy

The CHP would put Canada back to work with a nationwide infrastructure stimulus package that would fix our cities, our highways and our bridges.

Jobs stimulate the economy. The CHP would revive the plan that was successfully used in Canada to combat unemployment after the Second World War. The Bank of Canada was ordered to make virtually interest-free loans to provinces, municipalities and cities for infrastructure projects: roads, highways, bridges, rail lines, ports—today we could include hospitals, urban and inter-urban passenger rail lines, water and sewage treatment plants. These facilities improved access to resources and to markets, and the increased economic activity enabled the borrowing agencies to quickly repay the loans — which were then retired, so that the injection of capital was non inflationary.

That construction activity touched off the longest-lasting economic boom in Canadian history. And when the loans were repaid, the permanent infrastructure was still there. Today, it’s crumbling, and the only solution that the other Parties offer is taxing you to rebuild it. It’s time for a new infrastructure initiative—one that works and doesn’t rely on increasing your tax burden.

Eliminate the income tax and implement a ‘Fair Tax’ that would boost the economy and put Canadians in charge of the tax they pay.

What is the Fair Tax?

The Fair Tax is a comprehensive proposal that replaces all federal income taxes with a national retail sales tax, a prebate to ensure no Canadian pays federal taxes on spending up to the poverty level, and is a dollar-for-dollar federal revenue replacement. It is gaining wide support in the US and is widely recognized by economists to be the most equitable form of taxation. This legislation abolishes all federal personal and corporate income taxes, gift, estate, and capital gains, and replaces them with one simple, visible, federal retail sales tax – administered primarily by existing sales tax authorities. The Fair Tax taxes us only on what we choose to spend on new goods or services, not on what we earn. The Fair Tax is a fair and intelligent solution to the frustration and inequality of our current tax system — so complex that no one in the country, including the Finance Minister, understands it — and which subjects businesses to extraordinary burdens, just trying to file their returns.

It’s time for a Better Solution!

The Fair Tax will create jobs in Canada. Canada has a massive trade deficit with other nations. A Fair Tax will provide a major boost to the competitiveness of Canadian industry. Canadian businesses will be much less likely to locate their production and head offices in other countries, and foreign companies will have an incentive to locate in Canada. Canadians will be employed building these new plants, and be employed in them.

The CHP has a fresh approach to stimulating the economy and providing jobs for Canadians and helping them keep their hard-earned income. The CHP is committed to revitalizing the Canadian economy with a plan that is simple and transparent.

Overhaul the broken Canada Pension Plan with a new Personal Income Security Account.

A Personal Income Security Account would provide a portable investment portfolio, vested in the name of each worker, for health, employment and retirement income. This plan was proposed for Canada in 1980 by a Christian politician, Dr. Robert N. Thomson. It was rejected by Parliament, but a few years later it was adopted by Chile. Chilean workers at that time were given the option of continuing on the tax-funded pension plan , or going on the new investment plan. Those who chose the investment plan are now retiring wealthy — and Chile has become an economic powerhouse in Latin America because of the pools of investment created.

How will this plan work?

Beginning with an individual’s first job, they and their employer would contribute to the plan as a source deduction, just as we do now with CPP and EI, and in Ontario, the Health fund.

Beginning with one’s first job, 10% of an individual’s income would begin to accumulate in their account. Five percent contributed by the employee and 5% by the employer.

In the event of some unforeseen circumstance like unemployment or illness, the individual would be allowed to withdraw up to 15% per year of what had accrued in the account. After that, government assistance would meet the needs of any individual or family.

The account would never be completely depleted, but would continue to grow.

Welfare, disability and healthcare would continue to be government programs. We will always have what we may call “the deserving poor”, and we must care for them with the utmost compassion.

It is no secret that in Canada we also have serious abuse of our social systems. The undeserving poor, those who would choose to abuse the system and thereby the taxpayer, will be motivated—for example, in the case of unemployment—to find new employment quickly so as to use as little as possible of the allowable 15% of their account. As a party we believe very strongly in individual responsibility and accountability; but not disproportionately to compassion.

This policy would inculcate an ethic of individual responsibility in the majority of people, reduce payouts as a result, and therefore allow us to care of the truly unfortunate much better.

The experience in Chile has been an overwhelming success, and voters would do well to seriously consider the CHP’s better solution for the looming CPP crisis.

The CHP would eliminate the national debt which is approaching $600 billion and has grown by over $100 billion under the Harper Conservatives.

The Canadian Taxpayers Federation has produced a debt clock which shows the growth of the national debt:

The core of the problem of the National Debt is the failure of all parties—except the CHP—to recognize that deficit spending and government debt is a moral problem: it is the theft of money from our children and grandchildren, to buy votes today.

The Fraser Institute reports that, “Each Canadian taxpayer owes $150,211 in federal, provincial, and local liabilities….

“The study, Canadian Government Debt 2008, shows that federal, provincial, and local governments have accumulated $791.2 billion in direct debt and more than $2.4 trillion in total government liabilities. Total liabilities include direct debt and programs that the government has committed to provide such as Old Age Security and Medicare (Canada’s public health care system).”

The National Debt must be treated like a national “mortgage”. The efforts of the Conservatives under Stephen Harper are not aggressive enough to really tackle the issue. We must budget to pay it off at about $4 billion a month. That would make Canada debt-free in about 20-25 years (depending on interest rates). We are already spending about $3 billion a month on interest payments, so we only need to find another $12 billion a year to implement this CHP program — and we’ve seen how easily the former Liberal government, and now the Conservatives found more than three times that much to fund their campaign promises… continuing to bribe you with your own money and that of your children.

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    Debt, Deficit, and Stimulus

    A nationwide infrastructure stimulus package that would fix our cities, highways and bridges without putting your grandchildren in further debt.

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    The CHP has a fresh approach to stimulating the economy and providing jobs for Canadians and helping them keep their hard-earned income. The CHP is committed to revitalising the Canadian economy with a Fair Tax plan that is simple and transparent—the two most important aspects of any tax policy.

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