Winnipeg Free Press - PRINT EDITION

Layton as PM would tank Canada's economy

  • Print

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

Republished from the Winnipeg Free Press print edition April 25, 2011 A11

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Key of Bart - The Floodway Connection

View more like this

Photo Store Gallery

  • JOE.BRYKSA@FREEPRESS.MB.CA Local-(  Standup photo)-    A butterfly looks for nector on a lily Tuesday afternoon in Wolseley-JOE BRYKSA/WINNIPEG FREE PRESS- June 22, 2010
  • PHIL.HOSSACK@FREEPRESS.MB.CA 090728 / WINNIPEG FREE PRESS White Pelicans belly up to the sushi bar Tuesday afternoon at Lockport. One of North America's largest birds is a common sight along the Red RIver and on Lake Winnipeg. Here the fight each other for fish near the base of Red RIver's control structure, giving human fisher's downstream a run for their money.

View More Gallery Photos

Poll

What's your take on a report that shows violent crime is decreasing in Winnipeg?

View Results

View Related Story

Ads by Google