Federal NDP leader Thomas Mulcair stopped in Burnaby Wednesday to hype his plan to bolster the economy for middle class families.
Surrounded by a gaggle of supporters holding orange NDP signs, Mulcair scrummed with reporters on the Hastings Street sidewalk in front of Valley Bakery and re-announced his strategy to help small businesses, specifically by reducing the federal small business tax from 11 to nine per cent.
"That will help create new jobs, which is a good thing, because there are still 300,000 more unemployed today than there were at the time when the (economic) crisis hit in 2008," Mulcair said, flanked by Burnaby-Douglas MP Kennedy Stewart and Carol Baird Ellan, NDP candidate for the new riding of Burnaby North Seymour.
Mulcair also referenced two other facets of his plan: an accelerated capital cost allowance (also known as accelerated depreciation) and an innovation tax credit for manufacturers investing in machinery, property and equipment. Mulcair announced all three proposals in a January speech at the Economic Club of Canada. The NDP's rationale is these steps would create more jobs and give middle class families a break.
Jon Kesselman, an economist and professor in SFU's school of public policy, characterized Mulcair's measures as somewhat conventional, particularly during recessions and slow economic times, but not necessarily the best way to stimulate the economy.
"Generally, economists who specialize in this area, of taxation and government revenues, are not favourable to having a big gap between the small-business rate and the general corporate rate," Kesselman said. "The feeling and the analysis suggest that this is an unwarranted distortion between different types of businesses."
Many small businesses choose to incorporate and are therefore considered corporations, he explained. Kesselman said B.C. would benefit from the innovation tax credit less than Ontario and Quebec, where manufacturing is more concentrated.
"Usually corporate tax cuts, whether they are for a large corporation or a small corporation, are advocated by more right-of-centre parties, rather than a left-of-centre party, so I don't know what analysis he's relying on in this proposal," he said.
Kesselman suggested a variety of methods to stimulate a sluggish economy, including support for public education and disadvantaged, rural and First Nations youth and fewer regulations (except in cases of health and safety) for businesses.
