Tories would be smart to ditch income-splitting
Is Jim Flaherty poised for the high jump, as we used to say in that bygone, sepia-toned era when ministers regularly were hurled from cabinet? Maybe. Given the finance minister’s health problems, his public dust-up with colleague Jason Kenney, and now his veering off message on income-splitting, it would be no surprise to see him step aside before the 2015 election, to ease into a comfortable retirement at the head of a think-tank or a university.
But it would be curious and ironic indeed if Flaherty were pushed to leave his job in any untimely fashion given that he has just, with his 2014 budget, handed the Conservatives their first (read “only”) unqualified political win in a couple of years, and possibly put them back within hailing distance of victory in 2015. Yes, that’s right: Tuesday’s budget, in all its drab, wan ordinariness, was politically devastating. For proof see the Opposition critiques of the budget thus far, which have ranged from forgettable to idiotic. There’s so very little in it for them to sink their teeth into, which clearly was Flaherty’s intent.
And, there’s this: Yes, income splitting was a signature Conservative promise of the 2011 election. So? A fleet of new F-35 Lightning II fighter-bombers was as well. Perhaps what seemed a surefire winner three years ago, is no longer.
In the budget lockup Tuesday, Flaherty did an odd thing, for a senior minister in a Reform-Party inflected government. He cited Bill Davis, the former Ontario premier, as a model. In Ontario, Davis, now 85, is widely respected as a leader who was as colourful as cardboard, but also solid and trustworthy. The Davis era, 1971 to 1985, was a relatively tranquil, prosperous time, which many older Ontarians recall with fondness, if not nostalgia.
See where this is headed? Two years ago, during the prelude to Budget 2012, the preparatory leaks were all about transformation. That was the Tories’ first real post-majority blueprint, (though a budget was presented in June of 2011), in which they were finally able to launch their Great Work — again, paraphrasing the spin — of remaking the Canadian economy along much more efficient lines. It was, in a word, radical.
Between then and Tuesday, much water under the bridge. The kitchen-sink bill in the spring of 2012, C-38, repealed, changed or introduced more than 70 laws, most of which hadn’t even been included in that year’s budget. It was government by blunderbuss and did not go down well, even within the Conservative caucus.
Then that winter, the longsimmering F-35 mess boiled over, with an auditor general’s report showing this signature fighter procurement project would cost billions more than projected. It was shelved. And finally came the kicker, last year: Sen. Mike Duffy, with his wrecking ball and blow torch, razing the PM’s reputation for managerial acumen virtually to the ground.
Meantime, something else had happened: Justin Trudeau took over the Liberal party and attached himself like a limpet to the middle class. And there’s the connection. Consider Jim Flaherty, as quoted in the Globe and Mail way back in 2010, in a profile by Kevin Carmichael: “I really don’t need to be worrying about most of the people and their personal lives. They will be OK, thanks. But I need to worry systematically — and then really about middle-class Canada.” That has been Flaherty’s lodestone from the beginning of his tenure at Finance: The middle class.
So this is the thematic impetus behind Budget 2014, the reason for its disjointed mix of consumerist measures, go-slow spending discipline, measured reductions in civil-service benefits, money for the Special Olympics, the handicapped, students, apprentices, books, anglers and the arts. From back to front, it’s pre-emption of Trudeau’s play for the middle class. It is, in that sense, as politically intelligent as it is mediocre, policy-wise. Indeed, its intelligence cannot be separated from its mediocrity.
All of which brings us back to income-splitting. Facing a likable Liberal leader with a populist bent, does it really make sense to trot out, as your signature policy, tax cuts for the wealthiest Canadians? For only those families that can afford to have one parent working in the home can truly benefit. In families in which both spouses earn a roughly equivalent salary, there’s no benefit. For divorced families — 40 per cent or more of marriages end in divorce — there’s no benefit. For single people, including single mothers, there’s no benefit. It’s a policy tailor-made for the Don and Betty Drapers of the world — and few others. It has the potential to give Trudeau precisely what he most needs: a wedge to put him onside with the vast majority of working Canadians, and the Conservatives offside.
So yes, the old warrior may have been a little wobbly on his feet lately. He nonetheless appears to know exactly what he’s doing with his file, and why. Can the ministers and MPs lining up robotically to defend their 2011 platform say the same? Hmm.