About Us Government Relations Public Policy Resources Publications Media


Print this pageSubscribeSend this page


The Liberal and Conservative Party Platforms – New (and Surprisingly Similar) Priorities & Implications for Business

By Michael Teeter & Scott Proudfoot

June 18, 2004

Both Liberal & Conservative Platforms have many similar priorities. Differences arise from the Conservatve's higher cost tax reductions plans.

Traditionally, the bits and pieces of election platforms were revealed in the text of select speeches delivered by party leaders over the course of a campaign.  The election of 1993 changed that with the publication of the Liberal Red Book 1. Since then, every provincial and federal election platform has been released in advance in some form of policy document or booklet.

Despite what pundits and disgruntled voters say about election promises, since 1993, the record of delivering on platform promises has been remarkably good. It is not unusual to find 70%-80% of all promises implemented.  As a result, these policy documents have been excellent guideposts for businesses and associations to plan their activities and policy focus post-election (note that a minority government would likely complicate matters on specific measures).

The 2004 Platforms: Many Common Elements

Liberal and Conservative platforms call for increased spending on health care, child benefits and caregiver support, infrastructure and security (including Defence).  Reforming political institutions is also part of both platforms. Conservatives call for middle income and business tax cuts, to be offset by the elimination of some business subsidies. The Conservatives focus on dedicated tax cuts to achieve targeted benefits, as opposed to new programs.

The total commitments in the Liberal platform amount to approximately $27 billion over 5 years, while the Conservative promises total nearly $58 billion over the same period. The key question is: where will the money come from?  The Liberals call for program review to capture $3 billion per year, combined with an expected 5-year surplus of $28 billion. The Conservatives project higher surplus allocations and are silent on the program review component of their program.

Under either a Conservative or Liberal government there will have to be significant non-core program spending cuts in order to achieve new spending commitments. "Value for Money" based decision-making will be central to the planning process in either administration.

Liberal Platform: A Continuation of Pre-Election Policies and Priorities

While largely unheralded, since swearing in on December 12, 2003 the Martin administration has been reform oriented.  There has been and continues to be a concerted effort to re-align the governments priorities to key areas such as health care, municipal infrastructure, social policy benefits and defence.  Consistent with this effort has been an internal program review designed to identify resources for re-allocation along the new priorities.  Hillwatch has extensively detailed the Liberal Agenda in previous briefs (please see Mr. Martin's Approach: Primer For Business, 11/03, New Structural Changes to the Government of Canada, 1/04, & Budget & Expenditure Review Commitments: Implications for Business & Association Communities, 3/04).

The priority areas identified earlier in the Martin administration have been incorporated in the Liberal election platform. The $3 Billion annual program review process will be institutionalized in order to pay for previously announced or partially announced priorities.  A quick overview of these priorities and their costs (where available) is provided in Table I below:

Table I: Liberal priorities and identified spending commitments (5 year span)

Priority

Commitments

Cost ($billions)

Health Care

Additional transfer funds to reduce waiting lists, support home care and fund a catastrophic drug program

$9.0

Municipal infrastructure

New dedicated funding and a partial transfer of gas taxes to municipalities

$4.5

Children

Caregiver support program, enhancement to GIS, new Early Learning and Child care programs

$7.5

Economic development

Additional funding to support research and commercialization, regional and rural economic develop and a few auto sector initiatives

$2.3

Defence & Foreign Aid

Increase spending above current commitments

$3.0

 

Total

$26.3

For full Liberal Platform, click here.

The Conservative Platform: Similar priorities, more money, lower taxes and devolution to the provinces

Despite the agreement on key priorities, the Conservative platform does not emphasize new program spending. It expects to achieve the same policy ends with tax cuts or by supporting existing programs at the provincial level. There is no specific mention of increased provincial powers but an acknowledgement of the importance of provincial rights. This is reflected in part in the commitment to renegotiate the Agreement on Internal Trade. Table II lists the other key spending and tax commitments (and their associated costs if available).

Table II: Conservative priorities and identified spending commitments (5 year span)

Priority

Commitment

Cost

($ billions)

Defence

The big winner with an immediate $1.2 billion up-front infusion and a goal to raise the forces strength to 80,000 over ten years.  Funds to be targeted towards land forces, new tanks, helicopters, tactical and heavy lift aircraft and CF-18 upgrades

$7.0

Security

New civilian coast guard agency with Unmanned Air Vehicles (UAVs) for maritime surveillance

 

 

Elimination of the gun registry and apply savings to law enforcement activities

 

Infrastructure

Airports, ports and national highways priority areas.  Selective tax cuts and transfer of gas tax to support community and infrastructure programs.  Phase-out of strategic infrastructure programs but maintenance of border projects.

$9.6

Economic development

Phase-out of business subsidies to yield $10 billion in savings accompanied by a $6 billion reduction in business taxes, specifically reduction in capital gains tax, the capital tax and elimination of the airport security tax

$4.0

 

Continued support for farmers, fishers and forestry workers

 

Health

Support for the Health Accord, implementation of a catastrophic drug program and new health transfers to provinces

$10.2

 

Food style approvals for natural health products

 

 

Direct 1% of health funding towards fitness and amateur sport

 

Human Resources

Speedier recognition of foreign credentials and prior experience

 

Immigration

Clear out the backlog of outstanding deportation orders

 

Environment

Pursuit of numerous air quality initiatives including tougher smog legislation, increased fines for ocean dumping/spills, funding and tax breaks to encourage brown-fields clean-up

 

 

Shelving of the Kyoto Treaty

 

 

Maintain Liberal commitment to clean up the Sydney Tar ponds

 

Tax regime

Raising tax brackets and reducing the middle income tax rate by more than 22% for earnings between $35K - $70K (slight increase in other brackets)

$21.9

 

New $2000 per child deduction

$9.3

 

New Registered Lifetime Saving Plan with contributions of up to $5K/year

 

 

Eliminate annual $1 billion surplus in the EI account (lowering EI rates for employees/employers)

 

 

Double caregivers credit to $7K

 

 

 

Tinkering with the GST: Increase the size of GST tax credit by 25%, remove GST from federal excise tax on gasoline and eliminate GST on gas prices above 0.85 cents/litre

 

 

Addressing the "Democratic Deficit"

  • End corporate and union donations and forced taxpayer subsidization of political parties
  • Federal elections on fixed four-year 
  • Set some formal ground rules (i.e. legislation) for party nomination and leadership races
  • Fill Senate vacancies by Senate elections (this alone will significantly change the dynamics of Parliament).
  • More free votes and scrutiny of appointments by MPs and more scrutiny of departmental spending by Parliamentary Committees.
  • Auditor General starts auditing crown corporations and agencies.

For full Conservative Platform, click here.





Hillwatch Inc., 45 O’Connor St. Suite 1150, Ottawa ON K1P 1A4 tel: (613) 238-8700 fax: (866) 310-4955