Panel 1 in the Table below provides cost estimates for most of the NDP election promises as of September 1.

In some cases it has not been possible to provide estimates since not enough detail was provided.  NDP promises include a two point cut in the small business tax rate (already implemented in the budget by the Conservatives); extension of the accelerated capital cost allowance for two years (also already implemented by the Conservatives); an innovation tax credit for machinery used in research and development; an additional one cent of gas tax for the provinces for infrastructure; a transit infrastructure fund; increased funding for social housing; a major child care initiative; increasing ODA funding to 0.7 per cent of Gross National Income (GNI); and restoring the 6% annual escalator to the Canada Health Transfer.

The last three proposals are by far the most expensive. According to the NDP, it would take eight years to reach their goal of a million childcare spaces, at an annual cost of $5 billion when fully implemented. No cost estimate or timetable has been provided as to when the target of 0.7 percent of GNI for ODA funding would be reached.

This is not surprising given that the federal government currently spends about $4.5 billion annually (0.24 % Of GNI) on international assistance.  Increasing this ratio to 0.7% of GNI implies a tripling of the current cost to about $13 billion and rising every year thereafter.

Increasing the CHT back to 6% per year would cost an incremental $600 million in 2018-19 rising to about $2 billion by 2019-20.

In recent days the NDP have made new announcements with respect to increased funding for police, joint disaster assistance and most significantly nan increase in income support for low income seniors ( the guaranteed income supplement).

The total cost of the NDP proposals could amount to around $850 million in 2015-16 rising to roughly $12 billion in 2019-20. These estimates assume child-care costs of $2.5 billion and incremental funding for ODA of $ 4.2 billion in 2019-20 (a gradual increase in funding over 10 years).

Panel 2 provides estimates of how the NDP plans to pay for their election promises lower.

To fund these promises, the NDP is proposing to increase the general corporate tax rate, but have not indicated by how much.  A one-point increase in the general CIT would yield about $1.8 billion annually. We have assumed a phased increase of two points in the CIT raising the rate from 15 per cent to 17 per cent. These seems consistent with recent statements by Mr. Mulcaire

Like the Liberals, the NDP would repeal income spitting and maintain the existing maximum annual contribution to the TFSA. Based on these assumptions total available funds from these three initiatives would be about $1.2 billion in 2015-16 rising to $6.2 billion in 2019-20.

Panel 3 provides an estimate of the net impact of the proposed spending and revenue increases on any future budget balance. The net impact of the NDP platform on the underlying budget is trivial. They would reduce any projected deficit in the first two years but gradually worsen it in the outer years. This results from the commitment of the NDPO to raise the CIT, which raises about $3.7 billion annually.

Mr. Mulcaire has stated that he is committed to producing a balanced budget in 2016-17. This would be a major challenge and probably require some “postponements” in his election promises. Any economic and fiscal update would have to take into account the worsening global economy, the decline in the price of oil (to below $40 a barrel) compared to the assumption in the budget, and the restoration of the contingency reserve to its normal level of $3 billion. There is a very high probability that any new government will be facing projected deficits.