NDP Leader Jagmeet Singh says a government led by him will issue “Victory Bonds” to raise the money needed to strengthen the Canadian economy through the trade war with the United States.
The plan would see the federal government offer five- and 10-year bonds that Canadians can buy through a payroll deduction.
The NDP is promising that none of the money raised through the plan will go into general revenue or program spending.
“Money from Victory Bonds will be dedicated entirely to getting Canadians to work building public infrastructure like: roads, rail, housing, waterworks, ports, that we will own for generations,” the party said in a statement.
“We are in a trade war, and just like other wars, we will use victory bonds to support the trade war effort.”
During both world wars, Canada sold Victory Bonds to individuals, companies and other organizations in order to raise the money needed to fight the conflicts. The NDP backgrounder explaining the program says its Victory Bonds would be targeted toward individuals.
The bonds sold during the world wars served as a loan to the federal government that could be cashed in after a fixed term of five, 10 or 20 years.
The Ontario Archives says that over the five years of the Second World War, the Victory Bond program raised $12 billion for the war effort. That amount is significant when compared against the federal government’s total tax revenue of $562 million in the first year of the war.
The NDP leader said he expects the program to work because Canadians want to join the fight against U.S. tariffs. That’s despite the Canada Savings Bonds program ending in 2017 over rising administrative costs and declining sales.
Singh said Canadians have already started to fight back by boycotting U.S. goods and cancelling their planned vacations south of the border.
“I want to commend Canadians for showing that resilience, that defiance,” he said during a campaign stop in Ottawa on Thursday. “And so I want to give Canadians another chance to do that, another chance to contribute.”
The party says its Victory Bonds program would pay an interest rate that is 0.25 per cent higher than an average five-year bank-issued guaranteed investment certificate (GIC).
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Singh proposes Victory Bonds to raise money for trade fight with U.S.
Bonds issued today would pay compounding interest of 3.5 per cent, the backgrounder from the party explains. The dividend from those bonds would be tax-free as long as they are held to maturity.
The party says $1 billion raised through the bond program would cost $10 million more than the same amount would cost if it was raised on the open market.
The estimated administrative costs of the program could be as high as $80 million.
