Credit worthy

Anytime the federal NDP can take a shot across the bow of free-market orthodoxy which provokes a reaction like John Ivison's, it's bound to be doing something right. But let's take a closer look at exactly what the NDP is proposing - and how it figures to affect the party's position going forward.

The first few policies which draw Ivison's ire aren't particularly new, nor should they seemingly be all that controversial. After all, none of the parties has suggested for a second that Canada should abandon its "net benefit" test for foreign acquisitions, and it only makes sense that the test should be applied so as to have some meaning. And while there's room for argument about the best means to encourage processing of Canadian natural resources within Canada, there can't be much doubt that the goal is a worthy one.

As for corporate tax cuts, the issue is obviously one where the federal parties have long since chosen their sides. But the NDP surely isn't about to be shy in pointing out that both the Libs and Cons seem to put corporate windfalls first - and its plan to direct the funding toward infrastructure and modernization instead looks like it should be able to win some industry support.

Again, all of this is fairly familiar territory. Next up comes the new announcement, being a promise to limit credit card costs for Canadians:

Layton and Nash outlined the following measures:

* Regulate credit card interest by insuring that credit card interest would be charged only on the amount owing and start only on the due date of the bill;
* Cap interest rates at 5% above prime – bringing maximum rates down to 10%.

Politically, the move looks to be an extremely sound one. While the Cons' focus on the GST and the Libs' on income taxes both serve to primarily put more in the pockets of those who already have the most, the NDP's plan would instead provide the greatest benefit instead to Canadians facing larger personal debt burdens.

What's more, it also can't hurt to have every credit card statement or commercial serve to build a connection to the NDP's plan - an effect which only figures to be bolstered as Layton unveils measures related to cell phone use today.

On the policy side, part of the issue looks to be a simple matter of legislating terms which some consumers might already assume apply to their credit cards - making it more a matter of basic consumer protection than a serious imposition on credit card issuers.

That said, there's always some question about how credit card providers would respond to the interest rate cap. It's entirely possible that some would either reduce the amount of credit available or put a tighter squeeze on repayment based on the lower returns, meaning that the ultimate effect on consumers wouldn't be quite as simple as the reduction in rates would suggest. And if those issues didn't materialize, then there's some room for a converse question as to whether a cap on credit-card interest would only encourage even more personal deficit spending.

Ultimately, though, the potential concerns with the proposed interest cap are both far less certain and far less obvious as outcomes than the promise of reduced interest costs for Canadians generally. Which means that the more the NDP can get its plan into the public eye, the more likely it is that Canadians will take a look at the benefits of putting the NDP in power.