Liberals come off as middle-class phoneys
AS THEY BACKPEDAL ON SMALL-BIZ TAXES, TRUDEAU, MORNEAU DO LITTLE TO DISPEL THEIR IMAGE AS GLOSSY PHONIES
Naturally, they were both in shirtsleeves, rolled to the elbows: just a couple of regular guys in spread collars talking about their love for the middle class in a completely natural, unforced setting hundreds of miles from the nearest Parliament.
Only the act isn’t working quite as well any more, is it? Delivering his remarks, the prime minister looked strangely ill at ease, his smile a little tighter than I recall. For his part, the finance minister — Bill Morneau, for the record — was as rotely unpersuasive as ever. But it was when they took questions that the practised hokum of politics gave way to an excruciating awkwardness.
Perhaps they had thought the local media, summoned to a Stouffville, Ont., pizzeria to witness the reading of the talking points, would be less disruptive than their Parliament Hill counterparts of the Liberals’ preferred version of events: that the government had listened to the public and was now adjusting its proposed changes to small business taxes in line with what it heard — except for the cut in the small business tax rate to nine per cent, which was merely a totally coincidental decision to keep a promise the party had previously decided to break, and not at all a bit of rum hastily produced to rub on the gums of a squalling baby.
But damned if the rubes didn’t want to ask questions of Morneau: about the changes to the changes, about the private corporation he had failed to disclose — the one holding his villa in France — or the rest of his vast personal and family holdings, which he has failed either to divest or to place in a blind trust, as federal conflict of interest rules would seem to require. To which Justin Trudeau replied, even as Morneau was approaching the mic: “I’ll take them.” After all, as he reminded them more than once, it isn’t every day “you get a chance to talk to the prime minister.”
Eventually, when the ungrateful wretches continued to direct questions to the finance minister about a central issue in his portfolio, a major policy for which he was responsible, and his own ethical conduct, the prime minister briefly ungagged him.
But by then the point was made. So damaged is Morneau by the events of recent days and months that he cannot even be allowed to answer questions for himself. We have come to expect that in Question Period. But not in Stouffville!
Whether these latest revisions to the Liberals’ original proposals will succeed in calming the passions they have aroused is hard to say, in part because we do not yet know what they are: the government is determined to drag out the unveiling over the rest of the week.
The one big thing we know they are doing, the cut in the small business rate, is terrible policy, in as much as it will make worse the very problem the July proposals were supposed to address: the enormous gap between the small business rate and the top personal and corporate rates, and the incentives for incorporation and other tax planning to which it gives rise. As before, tax policy will continue to reward businesses for staying small, while punishing them for growing. Only now the penalty will be that much larger.
But it seems clear the harm to Liberal fortunes goes well beyond the particulars of the Finance proposals, or the tongue-tied plutocrat behind them. Rather, there is a hollowness at the heart of this government, a fundamental falseness, which the episode has exposed. The ritual, almost obsessive-compulsive invocations of the sorrows of the middle class were always made up, as made-up as the party’s pose as soak-the-rich populists, and with the same objective: to inoculate Trudeau, and latterly Morneau, against the charge of being entitled trust-fund millionaires, with no concept of the struggles of ordinary folk. Look at us, they seem to say, attacking our own!
The small business tax changes were supposed to be a part of that campaign. Instead, they may well have blown it up. It wasn’t just that so many of those who were targeted, or felt themselves targeted, were not among the rich, or did not feel themselves to be so. It was the obvious contradiction between Trudeau/ Morneau’s zeal to curb the use of tax shelters by others, less wealthy than themselves, and the equal zeal with which they have availed themselves of their own: not only the family trusts in which the fortunes of both are held, but the numbered corporations and other shelters to which the monied have access.
Understand: there is nothing wrong with such vehicles on their own. Neither is their existence relevant to the merits or otherwise of the government’s tax proposals, in substantive terms. But if the issue is not the proposals themselves, but the supposed virtues of the government that proposed them — and in politics, it always is — then this sort of hypocrisy can be lethal. If Trudeau and Morneau have been unable to give a good explanation of the contradiction, it is because there is no good explanation.
There is a time in the life of every government when a number of seemingly disparate issues start to coagulate into one big issue. The small business tax changes, Morneau’s disclosure problems, even the $212,000 spent on the cover page for the 2017 budget: add these to previous controversies over Trudeau’s fundraising dinners with Chinese billionaires and holidays with the Aga Khan, and the picture that emerges is of a government that values symbols over substance, talk over action, public relations over transparency — in all, a government of glossy, toothy, touchy-feely phonies.
Two years out from the next election, they will need to take care the impression does not get baked in.