Why ‘Nathalie’ needs the NDP
Recent events in Ottawa have favoured the Conservatives: political staffers’ moving expenses mean little in the grand scheme of things, but these scandals are in the middle of the Conservatives’ wheelhouse. Inappropriate and indulgent spending is a juicy bone for them to chew on, and their indignation has got traction. More substantially, it also prepares the ground for years of questions about wasteful Liberal spending.
But what is the federal NDP to do? After almost a year in power, public opinion surveys suggest that support for the government of Prime Minister Justin Trudeau continues to float somewhere in the stratosphere and the Liberal strength continues to be reinforced by people who voted NDP in 2015. ( Conservative support remains close to its election result.) And unlike the Conservatives, the NDP has yet to find a file where it can credibly criticize the Liberals.
If there is a glimmer of hope, it can perhaps be discerned from this excerpt from the press release that accompanied the recent cabinet committee reorganization: “The Cabinet Committee on Inclusive Growth, Opportunities and Innovation has been renamed the Cabinet Committee on Growing the Middle Class to reflect the committee’s central role in advancing this key objective.”
The ornately on-message names of Trudeau cabinet committees were always a bit cringe-inducing, but these titles are presumably meant to reflect the government’s priorities. It’s unlikely that the decision to change its name was taken lightly. So why is “inclusive growth” now out of favour? To my mind, it had been one of the Liberals’ strongest talking- points: it’s hard to object to the idea of inclusive growth. In a democracy, a pro- growth policy agenda has a better chance of being adopted if its benefits are broadly distributed. “Inclusive growth” was the strongest element in Liberal messaging that indicated low- income Canadians — and not just those in the middle class — might be included among Liberal priorities. And now it’s gone, replaced by yet more verbiage about the middle class.
Trudeau first fleshed out his middle- class theme in his speech to the 2014 Liberal convention, in his reference to “Nathalie.” Nathalie was the name he gave to a typical representative of the middle class: a member of a household composed of a couple with children, where each parent earned the median i ncome. We were given to believe she felt anxious about her situation, but I never understood why that was a convincing narrative in 2014: Nathalie’s family’s after- tax income — that is to say, the median after- tax real income of a couple with children — had increased by 30 per cent over the past 15 years. The time to give a compelling speech on middle-class anxiety would have been in the late 1990s, after two decades in which after-tax median real incomes had stagnated.
You may wonder why we never heard about Nathalie in t he months leading up to the 2015 election, but the explanation is simple: the Liberals’ headline measure for the middle class does nothing for her. Notwithstanding her impeccable middle- class credentials, Nathalie doesn’t earn enough to benefit from their middle-class tax cut: the tax reductions only kick in for taxable incomes above $ 45,000 a year, somewhere around or just above the median. The people who do benefit are those in the top half of the income distribution, and the maximum benefit goes to those with taxable annual incomes between $ 90,000 and $200,000.
Even without an apparent shift from broad- based “inclusive growth” to an even tighter focus on the “middle class” — or, more precisely, “the class earning less than the top one per cent but still earning significantly more than the median” — there should have been enough exposed territory on the Liberals’ left flank for the NDP to mount some sort of campaign on behalf of low- income Canadians. Indeed, the NDP has already pointed out the Liberals’ middle- class tax cut mainly benefits those in the top half of the income distribution, but it doesn’t seem to be getting any traction on this file. Why not?
The answer, I think, lies in the traditions of NDP policy- making when it comes to income redistribution. While it doesn’t have any problem with the idea of taking from the rich, the NDP has serious issues with the idea of giving to the poor. The preferred NDP model usually takes the form of taking from the rich and using the proceeds to hire public servants to provide services that may or may not help the poor.
If the Liberals’ middle- class tax cut is a bit of a dog-and-pony show, the child care benefit is a strongly progressive measure, providing large cash transfers to low-income families — even Nathalie benefits from the CCB. The NDP’s preferred child- care option is still a public day- care service that would — for various reasons — disproportionately benefit well-off families. The NDP’s inability to make a stronger stand on the tax cut is almost certainly due to the Liberals’ introduction of the CCB.
Of course, neither the tax cut nor the CCB are any help to lowincome households without children. The NDP would do well to concentrate their efforts on these groups, perhaps elaborating on their 2015 proposal to strengthen the working income tax benefit.
I would be guilty of succumbing to the pundit’s fallacy if I suggested that electoral success would be assured if only the NDP championed the cause of giving more money to low- income households. But I think someone should — and why not the NDP?
THE LIBERALS ARE VULNERABLE ON THEIR MIDDLE-CLASS TAX CUT. WHY HASN’T ANYONE POUNCED?