Swenson brings much-needed reason to tax opposition frenzy

Maybe we shouldn’t be surprised that Saskatchewan Progressive Conservatives are injecting some common sense into the debate over proposed federal income tax changes.

The party’s last meaningful contribution to public tax policy was the Grant Devine government’s 1991 harmonization (broadening) of the provincial sales tax (PST) with the federal goods and services tax (GST).

It was a move Roy Romanow’s New Democrats reversed the night of the their own election win. (Within a year-and-a-half, the NDP had to hike the PST to nine per cent to make up for the lost revenue.)

As such, perhaps we haven’t always given the old PCs the credit for at least their expressed realization that fairness and social responsibility are the foundation of any good tax policy.

Also helpful is the reality that the PCs here are so far removed from ever forming government that this right-of-centre party is not caught up in the partisanship that’s really driving the federal Conservatives’ and Saskatchewan Party’s vehement opposition to Prime Minister Justin Trudeau’s tax changes.

Whatever the case, Saskatchewan PC Leader Rick Swenson has truly provided much-needed common sense to a debate that’s lacked reason. Essentially, Swenson and the PCs in a news release argued small businesses and farmers have nicely managed under current evolving tax rules and what’s really needed is further tweaking rather than the classwarfare overhaul the Trudeau government is promoting.

“If the prime minister and minister of finance (Bill Morneau) truly want fairness in our tax system, then they should have the courage to set their sights on those sectors and categories of people who may have an unfair advantage and not target our farmers and small businesses unfairly,” the Saskatchewan PC leader wrote.

However, Swenson also recognized that federal Conservative Leader Andrew Scheer, Premier Brad Wall and the various Saskatchewan Party candidates hoping to replace Wall are largely ignoring a few small business/ agriculture problems that also tend to evolve in a tax system.

“The reality is that there are those businesses which are driven to incorporate primarily on advice from their accountants and tax lawyers,” Swenson noted.

“I would suggest this is where the government’s one-size-fitsall approach to tax reform is badly thought out. For example, comparing doctors, dentists, lawyers and accountants where intergenerational transfer is usually not an issue, to farmers and small businesses is a wrongheaded approach in my view.”

It was a blunt observation of the real problem and it wasn’t Swenson’s only one. “Spell out who it is (that’s illegitimately avoiding taxes) and go after them,” Swenson said in an interview last week. “But the worst tax avoiders are lawyers and accountants that write (donation) cheques to the Conservatives.”

Swenson argues Trudeau and the federal Liberals are either setting up this class warfare for their own political purposes or don’t understand the realities of small businesses and farming.

Besides the issue of intergenerational land transfers, the federal Liberals are missing (or choosing to miss) that incorporation for farmers and businesses means opportunities for pension, dental and eye plans that salaried employees take for granted. This represents the fairness that has developed over decades.

But Swenson also acknowledged abuse of the principles is also happening ... including farmers who, on the advice of accountants, incorporate family members and companies to simply avoid taxes. “I have no problem with stomping down on that stuff,” Swenson said.

But it’s neither in Scheer’s nor Wall’s nor the Sask. Party leadership contenders’ interests to address real problems and provide policy-driven solutions. It’s far more politically beneficial to fan much of the sanctimony from the farming/business community into flames of anger. The added advantage for Sask. Party candidates is it allows them to avoid discussing more substantive provincial matters while giving potential party supporters exactly what they want to hear.

What this debate needs is a little more common sense like we heard from Swenson.