Layton Says New Democrats Will Balance Canada Budget as Quickly as Harper
Canadian New Democratic Party leader Jack Layton, whose surging popularity may deny Prime Minister Stephen Harper a majority government in the May 2 election, said his economic plan will cut the deficit as quickly as Harper’s Conservatives and create more jobs.
The NDP will slow planned spending increases if government revenue falls short of projections, and a plan to end tax cuts for big companies and redirect part of the money to small businesses will boost employment faster, Layton, 60, said on his campaign jet over the Northwest Territories yesterday.
“The Harper government, they are the ones that have actually set the record for the deficit,” Layton said. “We are scheduling to eliminate it on the same schedule as the Conservatives.”
Layton, whose party has balanced budgets in Canadian provinces and never formed a national government, also signaled he would be tougher on companies in the Alberta oil sands and on foreign investors buying local businesses. Polls show the NDP leading the main opposition Liberals and nearing Harper’s level of support.
The NDP fiscal plan has been criticized by rivals as “science fiction” that will bring “a lot of destruction” to Canada’s economy. Canada’s dollar has fallen against all but two of 17 major currencies tracked by Bloomberg since April 20.
Layton encountered new attacks today after he told Bloomberg yesterday he wanted an “arms-length” relationship with the Bank of Canada, while Reuters reported him saying the bank should avoid raising its 1 percent benchmark interest rate.
Decision for the Bank
“The Bank of Canada dealing with monetary policy is arms- length from the government, that’s the way it should be,” Layton told reporters today in Kamloops, British Columbia. “There are a lot of Canadians, many people who feel that interest rates shouldn’t be increased, but this is a decision for the governor of the Bank of Canada.”
Deputy Liberal leader and former finance minister Ralph Goodale said by e-mail that “questioning the independence of the Bank of Canada and suggesting government interference in monetary policy is dangerously foolish,” adding “It damages the credibility of the Bank, and it would leave Governor Mark Carney -- whom the NDP have previously attacked personally -- in an absolutely untenable position.”
NDP lawmaker and finance spokesman Thomas Mulcair in October asked Finance Minister Jim Flaherty about the bank’s hiring of an adviser, Timothy Hodgson, from Goldman Sachs Group Inc. for an 18-month term. Flaherty said in response that the bank makes its own staffing decisions and that Hodgson has “severed” his ties to the private sector.
The rise of Layton’s party “makes great political theater, but from a markets perspective, while it could create some volatility, I can’t see a resurgent NDP being relevant,” said Ed Devlin of Pacific Investment Management Co., in a telephone interview two days ago. Pimco runs the world’s largest bond fund.
The Canadian dollar has appreciated 12 percent against the U.S. dollar since the end of June and touched 94.55 cents on April 21, the strongest level since November 2007. The currency’s gains have hurt exporters such as Catalyst Paper Corp. by making their products more expensive in the U.S., Canada’s best customer.
Layton in the interview said the strength in the Canadian dollar is “creating difficulties for the economy.” He also suggested he wouldn’t pressure Governor Carney to take action to curb its appreciation.
“We aren’t snap your fingers interventionists on interest- rate policy,” he said. “The Bank of Canada’s arms-length relationship is the way to go.”
Layton also declined to say whether the NDP would support another seven-year term for Carney if he wanted one, saying “these are hypotheticals that I’m not going to get into.”
Layton also said he’s wary of further foreign takeovers of the country’s major companies, a subject the government has been reviewing since Industry Minister Tony Clement last year rejected Melbourne-based BHP Billiton Ltd. (BHP)’s $40 billion hostile takeover offer for Potash Corp. of Saskatchewan Inc. The NDP has been critical of companies like Vale SA (VALE) and United States Steel Corp. (X), which the party has said purchased Canadian companies and failed to live up to employment commitments.
“We are letting too many of our economic jewels simply be gobbled up,” Layton said yesterday. He called for more “transparent” takeover rules.
Regarding development of the country’s oil sands deposits by companies such as Suncor Energy Inc. (SU), Layton said while his party has no plans to stop existing projects, “we do have concerns about unbridled continued approval of more and more projects without full plans,” citing the environmental impact and a reliance on temporary foreign workers.
Harper, 51 and Liberal leader Michael Ignatieff, 63 have questioned the party’s platform, saying it isn’t fiscally credible and would lead to higher taxes. Layton denied the NDP would be spendthrift, pointing to examples his party’s past and present provincial governments in Saskatchewan, Nova Scotia and Manitoba.
The NDP has “the best record of any political party in power provincially in balancing budgets,” he said. “We will be able to provide good, steady certainty for business.”
Layton’s effort to show himself as a clear alternative to Harper is part of the reason he’s gained in the campaign, led by his performance in national television debates, said David Laycock, a political science profession at Simon Fraser University.
“If you asked anyone who follows federal politics what the last week of the campaign would have been about, nobody would have said it would be two federal leaders attacking Jack Layton,” he said. “The NDP has sufficient momentum that a vote for them is an effective vote against the Harper regime.”
The NDP had 31 percent support among decided voters, according to the CTV/Globe/Nanos tracking poll published April 28. The Conservatives had 36 percent support, while the Liberals had 22 percent. The poll surveyed 1,200 eligible voters and has a margin of error of 2.8 percent.
The Conservatives won 143 of the 308 seats in the House of Commons in the last election in October 2008, with 38 percent of the vote. The Liberals won 77 seats with 26 percent of the vote and the New Democrats had 37 seats with 18 percent.
The pro-labor NDP’s platform contains C$68.9 billion ($72.4 billion) of campaign promises over four years, compared with the ruling Conservatives’ C$6.6 billion of promises over five years.
Ignatieff called the program “science fiction” at an April 25 event, while Harper said yesterday in Niagara Falls, Ontario, the NDP would bring “a lot of destruction” for the economy through higher taxes and prices.
Layton, surrounded during his speeches by rings of supporters, talked of being a “fighter” while seeking to reach the prime minister’s office. He drew cheers by waving his cane in defiance of concerns since the start of his campaign about hip surgery and treatment for colon cancer.
His supporters include Kahleigh Krochak, 22, who offered her friends high-fives and “chest bumps” at a rally earlier this week. She stood in the front row to hear Layton speak to about 400 people holding “Together” and “We Can Do This” signs. Yesterday Layton spoke to more than 2,000 people in Saskatoon, Saskatchewan, a province where the party currently holds no seats.
“Jack Layton did super” said Krochak, a student and first- time voter and a student at the University of Winnipeg. The momentum “is going to swing a lot of people.”
To contact the reporter on this story: Greg Quinn in Kamloops, British Columbia at firstname.lastname@example.org