NDP budget wishlist includes call to ditch income splitting plan

OTTAWA—As part of its budgetary wish list, the federal NDP wants the Conservative government to ditch its income splitting plan for families with children, lower the age of eligibility for Old Age Security back to 65 and bring in universal child care that would cost parents no more than $15 a day.

NDP finance critic Nathan Cullen wrote to Finance Minister Joe Oliver, outlining what his party would like to see in the next federal budget.

The budget, which has traditionally been released in February or March, has been delayed until at least April as the Conservatives evaluate the effect of falling oil prices.

In his letter, Cullen urged Oliver not to delay the budget “in the hopes oil prices might recover.”

In a telephone interview, Cullen said he was worried that Oliver may change his department’s approach to calculating future oil prices.

The calculations in the government’s fall economic update were based on a price of US$81 per barrel.

But now that prices have plunged to near six-year lows, the finance minister has said he will rely on private-sector forecasts—some of which expect oil prices to rebound later this year—when he prepares his next budget.

A budget based on higher oil prices would give the government considerably more latitude than one that bases its projections on current levels.

“I’m a bit worried they’re going to cook the books,” Cullen said.

“Oliver this week in Vancouver was suggesting that the way that they estimate oil prices, they’re now going to change and put on some rose-coloured glasses and get better numbers and justify their program spending … (and that’s a worrisome thing. If they produce what we in B.C. call a ‘fudge-it’ budget, then we’re in some very treacherous waters.”

A statement from Oliver’s office repeated previous Conservative criticisms of the New Democrats’ fiscal proposals, dismissing them as “reckless spending” that would raise taxes for middle class families.

Economists say the current climate gives the government very little wiggle room.

Balancing the budget would require the government to spend its entire $3-billion contingency reserve, leaving nothing for new measures, BMO Financial Group chief economist Douglas Porter wrote in a note to clients.

The Conservatives had already left themselves a razor-thin margin due to the decision to unveil a multi-billion-dollar suite of family tax-and-benefit measures in late October, after world oil prices had started to tumble.

The measures included income splitting, which allows someone in a higher tax bracket than their spouse to share some of their income with the lower earner, so the family pays less taxes overall.

The measures were promised during the 2011 election campaign, contingent on a balanced budget in 2015.

“They’ve painted themselves into a real corner,” Cullen said. “They spent the surplus before they had it. Now they’ve got a problem, because they’ve sliced everything so thin.”

As for what else the NDP would like to see in the budget, Cullen asked Oliver to spend less on government advertising and subsidies to oil companies; adopt the NDP’s universal child-care plan; and to bring back a federal minimum wage, which would be gradually raised to $15 an hour.

Cullen also says the government should reverse its plan to alter how it calculates payments to the provinces and territories, which Canada’s premiers and territorial leaders have said will cost them $36 billion in health transfers over a 10-year period.