The Prosperity Agenda

 The Prosperity Agenda – Erin O’Toole’s Plan for the Economy

Canadians are struggling with the Liberal Jobs Crisis. Under Justin Trudeau, too many Canadians struggle to find jobs and far too many worry about losing the jobs they have.

We need an agenda of economic growth – to restore hope to those struggling with unemployment, provide a bright future to our young people, and because economic growth is the only way to ensure the sustainability of our federal government and the social programs it funds.

I have a plan to get our economy moving again, creating jobs for Canadians young and old, and ensuring that we have the tax base to sustain our social programs through the retirement of the Baby Boomers.

What I won’t do is tell you that it will all be easy. I won’t tell you that I can balance the budget immediately, while massively cutting your taxes and boosting spending on critical areas like veterans and defence. We’ve already had over a year of a Liberal government that promised everything to everyone and now can’t deliver. That’s not the Conservative way.

What I will do is take action, implementing my plan with discipline and resolve.

  • I’ll cut income taxes to put money back in your pocket and to get the economy booming again.
  • I’ll empower entrepreneurs and help small businesses grow and hire by cutting their taxes and by ensuring that they can compete fairly for more of the money that the government spends every year.
  • I’ll help young people pay off student loans and get off to a start in their careers through my Generation Kickstart plan.
  • I’ll balance the budget, because increased government spending is an inefficient way to boost the economy and unfairly burdens our children. I’ll do so responsibly, ensuring that the money we spend goes to things that only the federal government can and should be doing and that it is spent efficiently, ending policies like closed tendering that reward Liberal supporters while costing taxpayers more.
  • I’ll get the economy moving by cutting back the regulatory dead weight that has reduced our economic growth from historic norms of over 3% to little more than 1%.
  • I’ll boost free trade, including through a CANZUK deal, to create jobs and opportunity for Canadians.

To tackle the Liberal Jobs Crisis, an O’Toole government will:

  • Cut income taxes to stimulate economic growth, create jobs, and put money back in your pocket.

    • Unlike the Liberals, whose recent tax changes ignored the millions of hardworking Canadians making under $45,000 per year, Erin believes that all taxpayers deserve a break.

      • An O’Toole government will cut the lowest personal income tax rate to 13% from 15%.
    • Top marginal tax rates over 50% - which they now are in Ontario thanks to Justin Trudeau and Kathleen Wynne - create a disincentive for people to work hard, innovate, and create jobs in Canada. Unfortunately, the Trudeau Liberals don’t understand this. They have made this problem worse, driving investment away from Canada as businesses decide not to locate here, making it harder for Canadian companies to compete for global talent, and contributing to the Liberal Jobs Crisis.
      • An O’Toole government will cut the top rate to 31% from 33%.
    • The first 1 point cut in these rates will be delivered in an O’Toole government’s first budget with the other cut to come once the budget is balanced.
  • Launch Operation Entrepreneur: It’s time to empower entrepreneurs to grow the economy. An O’Toole Government will do this by:

    • Cut the small business tax rate to 9%, fixing Trudeau’s broken promise.
    • Small businesses don’t have teams of accountants to help them deal with it. So give them an ombudsman’s office and access to advance tax rulings.
    • Use defence procurement to help small business through increased Industrial and Regional Benefits (IRB) credits for small businesses working on defence, security, IT or environmental issues and extra IRB credits for those working with First Nations.
    • Improve access to capital for start-ups through Innovation Flow Through Shares so that they can grow and succeed here in Canada, avoiding the present-day dilemma of failure or fleeing to the U.S.
      • The development of the Flow Through Share over 50 years ago helped Canada emerge as the global mining and exploration finance hub. Billions of dollars of capital investment and tens of thousands of jobs have been the result of this innovative tax policy.
      • The Flow Through Share (FTS) allows a company to issue shares to investors for expenditures on qualifying expenses. The company flows through the expenses to the investor, who is able to deduct the expenses against their income. This reduces investment risk to the investor by 50%. The tax cost of the investor's flow-through shares is reduced to zero.
      • The policy rationale for the FTS was that the government would recoup the revenue loss through limiting the carrying forward of tax losses and by capturing capital gains from sales of the shares in the future. More importantly, the employment created in the resource industry and related capital markets made the policy very innovative and successful for Canada.
      • Traditional FTS flowed through exploration costs for junior mining or oil & gas companies who otherwise would have had a hard time accessing capital.
      • The Innovation FTS Pilot will extend the benefits of the FTS to start-up technology and life sciences companies. Parameters will be set based on the market capitalization, life cycle and employee base of the companies eligible for the FTS as well as a clear accounting of what expenses are eligible. The Pilot will be reviewed and adjusted on a 2-year cycle to ensure that it fulfills the goal of providing capital to start ups without being wasteful or gamed by established players in this sector.
  • Balance the budget: The Trudeau government misled Canadians. They are running large deficits two to three times larger than they promised and they claimed it was done because Canada was in recession. We are not in a recession but they are doing their best to change that. They are burdening our young people with more debt and less opportunity.

    • I will balance the budget and get spending under control. I would like to balance the budget within the first two years of an O’Toole government, but without knowing the full extent of the Trudeau fiscal mess, it would not be responsible for me to make that promise.
    • Instead, you have my commitment to balance the budget within four years or earlier, while delivering meaningful and strategic tax relief for all Canadians that will stimulate our economy.
  • Pass a Truth in Budgeting Act

    • As the Canadian Taxpayers Federation points out, there is no publicly-available, consistent cost analysis for proposed legislation. Governments do not publish the projected cost of new legislation before it is passed. This makes it easier for them to let spending get out of control.
    • An O’Toole government will pass a Truth in Budgeting Act, requiring any government legislation to have a cost estimate compliant with government accounting standards.
  • Modernize the delivery of public services and make government more efficient. The use of technology and closer partnerships with other governments, non-profits and service organizations will allow government transfers to be more focused and efficient.

    • The Canada Job Grant was an example of making sure that large transfers for training were more focused to achieve better outcomes by partnering with employers and provinces.
    • An O’Toole government will empower a retired senior business or public sector official to serve as a Dollar-A-Year Person to direct this exercise in the first two years of an O'Toole government without further growing government.
    • This initiative will not be about cutting programs and services but truly about modern, nimble and more efficient government.
  • Conduct a major review of regulations imposed across government under the direct leadership of the Prime Minister.

    • The regulatory state that has grown up over the last 50 years acts as a dead weight on the economy. Canada’s economy once grew at over 3% a year, but we’re now lucky to see half that.
    • It’s time to get the regulators out of the way and stop tying the hands of our entrepreneurs and innovators.
  • Improve the efficiency of federal infrastructure investments in two key ways:

    • The Productivity Assessment: Federal infrastructure spending should be focused heavily towards projects that contribute to increasing the productivity of our economy. An O’Toole government will make this a criteria for every project considered.
    • Open Tendering: An O’Toole government will require Open Tendering for all federally-funded projects. This is a basic matter of fairness – all Canadians should be eligible to bid to work on projects funded by Canadian taxpayers. No company should have a monopoly because of the union their workers belong to. Open tendering also cuts the cost of projects significantly, so this respects taxpayers and ensures that we can afford more badly-needed infrastructure.
  • Reverse Trudeau’s recent mortgage changes. The Liberals made sweeping changes to mortgage rules for all Canadians based on acute market issues in Vancouver and Toronto. They acted despite the fact that the provinces were making changes to address unique issues like the influence of foreign buyers in in those markets. The government did not consult with industry before they moved dramatically to limit competition in this sector. Their moves have made home ownership more difficult for millennials and re-financing options more limited for all Canadians. I will restore choice for Canadians by:
    • Increasing housing affordability for first time homebuyers by allowing them to amortize insured mortgages over 30 years.
    • Exempting insured mortgages with principal amounts of $499,000 or less from the requirement to qualify borrowers at the Bank of Canada’s conventional five-year fixed posted rate. This will help preserve affordability, particularly in smaller markets.
    • Encouraging mortgages with longer terms (thereby increasing stability) by also exempting insured mortgages with terms longer than 7 years from this requirement.
    • Increasing competition among lenders and thereby reducing borrowing costs and improving housing affordability by rolling back the government’s new eligibility requirements for mortgages that lenders insure using portfolio insurance. These new requirements have drastically reduced competition for the big banks.
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