CALGARY -- Hello, Canadians. Meet your new prime minister... Jack Layton.
"Say what?" you gasp. "That was supposed to be impossible."
Well, yes. That frightening, destabilizing, impoverishing scenario is one that more and more people are predicting as conceivable ever since Layton's rise in the polls has him ahead of Liberal Leader Michael Ignatieff for second place and beating the Bloc's Gilles Duceppe in Quebec.
Before you hyperventilate and move your RRSPs into an offshore bank account or under your mattress, there are still many reasons why this scenario is unlikely.
First, unlike the Liberals, whose support is concentrated largely in the Greater Toronto Area, the NDP's support is more diffuse, and therefore, less likely to translate into seats. But momentum being what it is, one never knows.
The biggest strategic mistake Ignatieff has made was declaring as far back as 2008, and then again more recently, that he is in favour of forming a coalition government (though he refuses to use the "C" word anymore) should the Conservatives win another minority government.
In past elections, voters who wanted to vote NDP often bought into the Liberal message that to stop the Conservatives, they had to vote Liberal, since it had the only realistic chance of forming government. Now, however, thanks to the spectre of a coalition, left-leaning voters can vote for Layton and still stop Harper. In other words, voters can have their cake (Layton) and eat it too (the potential of a left-wing government).
So, how likely is it that Layton might get the keys to Stornoway and eventually even to 24 Sussex Drive?
That depends on the voters, of course, who could rule it out entirely by giving the Conservatives a majority, but if that doesn't happen, it will rest on Ignatieff's questionable political smarts. If he backs up a coalition led by Layton, kiss the Liberals' dominance as Canada's natural governing party goodbye for a very long time, possibly forever.
It's unlikely the Liberal party machine would allow Ignatieff to do that, but it's feasible.
However, let's consider what might happen if Layton does become prime minister.
One of the first things Layton says he'd do is raise Canada's corporate tax rate by three points to 19.5 per cent. Socking it to those big, greedy multinationals might sound like a good idea, but what would it actually do to the country?
Currently, Canada's corporate tax rate is 16.5 per cent and it is slated to decrease to 15 per cent on Jan. 1, 2012 -- something that is already part of legislation passed several budgets ago with the help of Ignatieff and the Liberals.
According to Jack Mintz, one of North America's pre-eminent economists, Layton's tax hike plan would be devastating to Canada's fragile economic recovery.
Mintz, director of the Palmer Chair at the School of Public Policy at the University of Calgary, says raising corporate taxes to 19.5 per cent would cost Canada about $75 billion in lost capital expenditures and 300,000 jobs. But that's not all.
"By raising corporate tax rates, you're not only hurting capital investments and jobs, but you're also hurting technological advancement," in terms of investment into new machines, research and, therefore, productivity.
Layton, who clearly detests big business, says he'll cut small business taxes instead.
"Despite all the rhetoric," explains Mintz, "studies show that lowering the small business tax rate encourages a lot of new small businesses to be formed, partly because people are avoiding personal income tax, but actually, there's very little growth of the small firms."
Layton is claiming that by raising corporate tax rates, he will get an extra $6 billion in revenues (the Parliamentary Budget Officer says it's $4.6 billion), but that assumes no negative repercussions. Capital will move and much of those billions will evaporate, not overnight, but over time -- jobs will disappear and income tax revenues will plummet.
"I'm really sorry to see this 1960s kind of rhetoric come back. It's very dangerous," says Mintz, who adds that the federal Liberals and even some provincial NDP governments finally realized in the 1990s that they had to address the corporate tax burden to regain competitiveness, productivity, jobs and capital investments.
Layton wrongly believes raising corporate taxes will give him more revenue so he can spend, spend, spend on lots of big, new, shiny social programs. And, of course, to stay in power and woo all those Quebec voters, Layton has already promised the mayor of Quebec City some $25 billion in projects like a new professional hockey arena, a tramway and a high-speed rail line between Quebec City and Windsor, Ont. Ignatieff has promised the same.
The separatist blackmailing is just beginning and the coalition hasn't even been formed yet!
Layton has also vowed to impose a moratorium on oilsands growth and bring in a cap-and-trade system on greenhouse gas emissions, which will devastate Alberta, the engine of Canada's economy. Layton is a likable fella and he's run a good campaign, but that doesn't mean he should be leader of the opposition or, heaven forbid, prime minister. It's not likely he will gain the keys to the PM's official residence, but if he did, the speed at which he would destroy our economy would leave us all gasping.
Licia Corbella is the editorial
page editor of the Calgary Herald.
-- Postmedia News