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rachel notley on a podium speaking to the crowd
Todd Korol | The Canadian Press

Was A Tax Hike Notley’s Nail In The Coffin?

The NDP's plan to increase corporate income tax from 8% to 11% was met with criticism

Halfway thru the election period, the NDP announced a fiscal plan to increase corporate income tax from eight percent to 11 percent if elected. The party argued the payoff would be $6.2 billion in revenue over three years.

Announced just a few weeks before people went to the polls, did the NDP’s fiscal plan scare away potential voters?

The plan was presented by Lethbridge-West candidate Shannon Phillips in Calgary. 

rachel notley at an ndp rally in calgary with supporters holding up orange ndp signs in the background
NDP leader Rachel Notley at a rally in Calgary | Todd Korol | Reuters

According to Phillips, the rate would remain the lowest in Canada and help the province increase access to family doctors, accelerate the federal $10-a-day child care plan, and put more teachers in school, among other benefits. 

If this all sounds too good to be true, you might be right. Trevor Tombe, a University of Calgary professor of economics, suggests the NDP’s plan doesn’t consider the impacts of a tax hike

Some examples Tombe cites include a slight decrease in investments, tax-shifting activity for multi-jurisdictional companies, and accountants more aggressively avoiding taxes.

He also claims higher corporate tax rates would result in lower wages for workers, ultimately reducing labour income. 

Unsurprisingly, UCP Fort MacMurray-Lac La Biche candidate Brian Jean quickly criticized the fiscal plan, calling the tax increase an “investment killer.”

He claims the tax hike will eliminate jobs and hurt economic growth. 

“This is just like the NDP on all financial matters — ‘Let’s shoot now and talk about it and plan later’ — and that’s not the way to run a government,” said Jean.

The last time the NDP raised corporate income taxes was in 2015, when the party increased the rate from 10 percent to 12 percent. Many associate a loss of jobs and headquarters in Calgary with this tax hike. 

Tombe argues that this is incorrect and that many factors were at play, including the price of oil crashing just before the NDP came into power.

Duane Bratt, a political science professor at Mount Royal University, echoes this sentiment. 

“Economically, those were very poor times, and Notley was premier at that time — whether that was her fault, it doesn’t seem to matter…,” said Bratt. 

Whether she was responsible or not, some Calgarians associate Notley with one of the worst years for job losses. As a result, Calgary voters may have seen another corporate tax increase as a threat to the economy. 

Calgary was the critical battleground for the election. Did the NDP’s fiscal plan scare off potential voters in Calgary? Maybe. One thing is for sure; every vote mattered on Monday. 

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