NDP jobs plan fuelled by higher corporate taxes

NDP Leader Jack Layton is proposing to hike corporate taxes to pay for a series of breaks for small business to create 220,000 jobs.
NDP Leader Jack Layton announces a plan to help small business as he visits a woodworking plant during a campaign event in Oshawa, Ont., on Wednesday. (Andrew Vaughn/Canadian Press)

NDP Leader Jack Layton is proposing to hike taxes on Canada's corporations to pay for a series of measures he says will create 220,000 jobs.

Layton announced the latest policy plank in Oshawa, Ont., on Wednesday, saying the initiatives will cost $2.2 billion and generate 220,000 jobs each year.

"That is the kind of policy this country needs," Layton said at a morning news conference.

The plan will be paid for by returning the corporate tax rate to the 2008 level of 19.5 per cent compared to the current rate of 16.5 per cent. Under current legislation, the rate is set to drop to 15 per cent in 2012.

The corporate tax hike would add $5.9 billion to the federal government's coffers and help pay for some of the other elements of the NDP plan.

Liberal Leader Michael Ignatieff has already committed to lifting the corporate tax rate to 18 per cent, the rate before Jan. 1 of this year.

Layton was at an Ottawa factory to announce his plan to help create more jobs.

The NDP would drop the small business tax level to nine per cent from 11 per cent. Layton said at his news conference that small businesses are the incubators for Canadian jobs.

The party's plan to lower small business taxes was immediately criticized by the Conservatives.

Tory candidate Rob Moore, who was the minister of state for small business and tourism when the election was called, dismissed Layton's commitment to lowering taxes for small businesses.

"Odd how the NDP only want lower taxes when there's an election happening," Moore said in a Twitter message.

"If the NDP really wanted lower taxes for small businesses, they should have supported our budget."

Also in the NDP plan, Layton is proposing a job-creation tax credit for businesses that would give them $4,500 for each new employee hired.

The company would receive the funding in the form of a rebate of employer-side Canadian Pension Plan and Employment Insurance contributions for a year.

The NDP would also include a $1,000 tax credit if that employee is retained past 12 months.

The Conservatives' March 22 budget offered a temporary $1,000 EI break to small business, though the measure was not tied to the hiring of new workers.

Layton said the NDP would extend capital cost allowances for businesses to purchase machinery and equipment that would make their companies more competitive, a measure that was proposed in the March 22 budget.