Wednesday, March 30, 2011

Day 4: Tories & NDP

Conservatives: New Hire Credit
Liberals: No new policy
NDP: Credit Card rate limited to no more than 5% above prime.

Let's look at the Conservatives first.  The pledge for the day is to reintroduce the tax credit for businesses to hire new employees.  It works out to almost all of the employer's share of the EI premiums that would be payable on the new hire's salary.  For the second day in a row, the Conservatives are targeting a tax break in order to achieve certain goals - in this case to reduce unemployment by giving an incentive to hire a new employee. Cost: 165 Million

The Liberals spent the day fleshing out their previous pledge to give future university or college students an extra $1000 per year in cash.  This will be paid for by a direct cash injection as well as eliminating the tuition and books credit currently attached to the tuition slips.  The assumption would be that this will also cover trade schools.  One of the caveats of this is that you must have an RESP open for each child, and that they will receive $1000 per year from age 14 to 17 into their RESP.  This makes it much less beneficial for older current students.  Cost: Already counted yesterday

The NDP made their first policy announcement by pledging a cap on Credit Card rates to 5% above the prime rate.  As a person who owes money on credit cards, I at first was willing to give this one a chance.  Currently I'm in the process of paying down my credit card debt, and this cap would help me achieve that goal sooner, however there is one thing that Mr. Layton and the NDP don't realize.  By reducing the rates that credit card companies are able to charge, you will increase every individual's willingness to make that purchase today and pay for it later, and (2) you will decrease the willingness of credit card companies to issue a new card without a very high credit rating.  Many credit cards of people who have less than stellar credit ratings will be cancelled, and the remainder are ones that don't normally pay interest on their cards anyways.  Cost: Unspecified


  1. Isn't EI already overfunded? So ... does the Conservative tax break come out of general funds or does the company actually not pay EI for a certain amount of time?

  2. EI is paid out of General Revenue, and has been since Mr. Martin pulled the 50 Billion or so out of the EI fund. I believe that the company still has to pony up during the year for EI and then they will get a credit or a rebate back on their tax return when it's filed.

    If EI WAS overfunded, it certainly isn't now with the changes that were forced last year, considering the contribution rates have gone up the last couple years.