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The Progressive Economics Forum

Why Is Tom Mulcair Opposed to Tax Increases?

A recent online article suggests that Federal NDP Leader Thomas Mulcair is opposed to increasing federal tax rates. I find this quite surprising.

According to the August 8 article:

Mulcair seemed surprised when he was asked if taxes would go up under an NDP government.

“You’re the first person who’s ever asked me that,” he said, adding quickly that they most definitely won’t.

“I am categorical on that,” he said. “Several provinces are now at the 50 per cent rate. Beyond that, you’re not talking taxation; you’re talking confiscation. And that is never going to be part of my policies, going after more individual taxes. Period. Full stop.”

Mr. Mulcair appears to be under the impression that taxation across Canada has been increasing in recent years.

I have a different interpretation of recent tax trends. Consider the following:

-In the early 1980s, Canada’s top federal income tax rate was 43%. Today, it is 29%.

-In 2000, the federal government’s general corporate income tax rate was 29%. By 2012, it was 15%.

-In 2006, the marginal effective tax rate on new business investment across Canada was 33%. As of 2014, it will be 17% (the lowest of all G-7 countries).

-In 1999, total taxes as a percentage of Canada’s GDP (including all federal and provincial taxes) was 36%. By 2010, it was 31%.

It is no secret that the Liberal Party brought in substantial tax cuts while in office before Mr. Harper. Nor is it a secret that this trend has accelerated since Prime Minister Harper took office in 2006.

Mr. Mulcair and his officials might wish to consider articulating a more accurate depiction of tax trends in Canada. Doing so might allow voters to have a more informed debate about public policy.

UPDATE (Aug. 12, 2013): The present blog post has caught the attention of Aaron Wherry at MacLean’s.  He writes about it in a piece entitled Have Conservatives won the tax debate?

Enjoy and share:


Comment from Nick Falvo
Time: August 10, 2013, 11:03 am

Special thanks to fellow PEF Blogger Erin Weir for pointing out an error in a previous version of this blog post (re: the year that Canada’s general corporate income tax rate moved to 15%).

Comment from Erin Weir
Time: August 10, 2013, 12:13 pm

Thanks for the correction and acknowledgement, Nick. I would also note that Mulcair’s 50% comment is about combined federal-provincial top personal income tax rates.

He has consistently committed not to increase federal personal income tax rates. But this Maclean’s blog post on the same story notes his interest in (partially) reversing corporate tax cuts and introducing a financial transactions tax.

Comment from Purple Library Guy
Time: August 10, 2013, 3:05 pm

Which is something, but mighty thin gruel whether on a revenue basis or if you’re worried about inequality.

Comment from Erin Weir
Time: August 10, 2013, 8:47 pm

Even partially reversing corporate income tax cuts would collect more revenue than higher personal income tax at the top. For example, the 2013 Alternative Federal Budget estimates that a new 35% tax bracket for personal income over $250,000 would boost annual revenues by $3 billion. That’s worth just a couple points of federal corporate tax.

Comment from Rob G
Time: August 11, 2013, 9:27 pm

Nick, I can see how you can read Tom’s comments to speak to a trend, but I think it can also be read as an analysis of the tax environment at this point in time. Given the principle of chatter I think you should grant him the latter reading.

Comment from Espoir Manirambona
Time: August 12, 2013, 4:24 am

Of course we need to raise taxes on the wealthy and reduce the income gap. If Mulcair wants progressives to vote for him he has to start acting like one.

Comment from Francis Falvo
Time: August 12, 2013, 5:33 pm

Why? Very simple.
Our NDP leader learned a lesson from his British counterpart Tony Blair. Seeing how much voters had favoured Mrs Thatcher, once he took power he “emptied ” the Lbour platform of its socialist principles and became more conservative than Mrs Thatcher. And voters loved him. Three consecutive victories.
As the old saying has it: If the people don’t come to the Church, the Church should go to the people. Because if the people desert you, you will get nowhere. Machiavelli would agree.
Sad but true.

Comment from Purple Library Guy
Time: August 13, 2013, 5:03 am

I suppose it depends what you’re in politics for. If you’re in to become rich and powerful, then the Blair route makes sense.
If you’re in politics because you have, you know, political objectives, then going Blair is pointless or worse. Blair had three consecutive victories–and never enacted a single Labour policy in all that time.

. . . It wasn’t really so much that voters loved him for turning his coat, more that Rupert Murdoch did.

Comment from Bob Smith
Time: August 14, 2013, 7:11 pm


The NDP’s focus on corporate income tax is part of the same phenomenon. It’s afraid of presenting Canadians with the bill for its spending proposals [not all of which I agree with, but which are certainly fair proposals], so presents them with the (ludicrous) idea that they can get someone else (i.e., corporations) to pay for them, as if corporate taxes aren’t ultimately borne by real people (be they shareholders, workers or consumers).

It’s a disingenuous strategy and probably not one that’s likely to succeed (since I think Canadians intuitively understand that they’re going to foot the bill for corporate tax increases, even if they don’t understand how). It’s also bad tax policy, but you and I can disagree on that.

I think the better approach would be, rather than trying to hide the cost of NDP spending programs (i.e., taxes), try to emphasize value. Try saying, “look, we’re got all these great programs we want to introduce, and we can pay for them all by raising taxes by, on average, $1,200 for a family of four [i.e., roughly the $10 billion or so that the NDP, rather optimistically, thought it could get from a corporate tax increase]. For less than 4 dollars a day, you can get [child care, pharmacare, whatever]”. And if you can’t persuade Canadians that the value of your spending proposals make higher taxes on real Canadians (as opposed to legal fictions) worthwhile, well, the people have spoken.

The problem the NDP has is not that the Conservatives have won the tax debate, because someone offering to cut taxes is ALWAYS going to win the tax debate, but that the NDP hasn’t tried to turn it into a spending debate.

Comment from Larry Kazdan
Time: September 13, 2013, 4:53 am

Progressives need to understand this:

Taxpayers do not fund anything

“When there is no currency convertibility and exchange rates are flexible, then the central bank has total liberty to create financial assets (money) and the federal government is totally free from any financing constraints.”

“Taxpayers do not fund anything. They just lose or gain purchasing powere as the national government manipulates the policy parameters in search of public purpose.”

Comment from John Hollingsworth
Time: October 13, 2013, 7:49 am

It would seem that the IMF is to the left of “Today’s NDP”. httpp://

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