An NDP government would force private-sector executives to pay taxes on all of their stock option benefits, and use the subsequent cash influx to try and put an end to child poverty.
NDP Leader Thomas Mulcair made the announcement in a speech at the Broadbent Institute Progress Summit, saying it was a way to achieve the goal set out by his predecessor in 1989 to eliminate child poverty in Canada.
The NDP said the move would add between $600-million and $1-billion a year into an enhanced Working Income Tax Benefit and an enhanced National Child Benefit Supplement.
The forgone revenue from the tax measure varies from year to year, depending on fluctuations in the stock market. Last year, according to Finance Canada, the employee stock option deduction cost the government $750-million, as taxpayers claimed a deduction worth half of their stock option benefits.
“Today I am pleased to announce that a New Democratic government will commit to reducing income inequality and renew Canada’s commitment to the elimination of child poverty,” Mr. Mulcair said. “To assist in achieving these goals, we will close the tax loophole currently enjoyed by CEOs [and other executives] on stock options.”
Mr. Mulcair said the move will be a “dollar-for-dollar transfer in benefits from those who need it the least to those who need it the most.”
Mr. Mulcair said the goal is to live up to the motion, presented by former NDP leader Ed Broadbent, that was unanimously adopted in the House of Commons to eliminate child poverty by 2000.
“Despite Liberals and Conservatives voting for Ed’s motion, when they formed subsequent governments, they failed to take the necessary action to get the job done,” Mr. Mulcair said.
Closing the “loophole” on stock options, the NDP Leader said, will provide “a major step forward to take millions of Canadians, particularly children, out of poverty and into the middle class.”
The NDP said the announcement is part of a package to “help strengthen the middle class and set Canada on a path to greater economic prosperity,” which includes:
- lowering Old Age Security eligibility from 67 to 65;
- introducing a $15-an-hour federal minimum wage;
- starting to offer $15 a-day childcare;
- and revoking the income splitting scheme for families with children.