Trudeau’s tax re­form fi­asco

Lib­eral com­edy of er­rors might yet end on a po­lit­i­cal tragedy

The Hamilton Spectator - - COMMENT - CHAN­TAL HEBERT

OT­TAWA — As the crow flies — or in this in­stance a gov­ern­ment jet backed up by a string of chauf­feur­driven ve­hi­cles — it is doable to travel from Par­lia­ment Hill to the town of Stouf­fville, north­east of Toronto, in about 90 min­utes.

A per­son us­ing more con­ven­tional means of trans­porta­tion on the other hand would take at least dou­ble that time. In ei­ther case, the travel there and back will use up most of a nor­mal day’s work.

If that sounds like a long way for the prime min­is­ter and a gag­gle of min­is­ters to travel as they did Mon­day — and with Par­lia­ment sit­ting — just to use the back­drop of a fam­ily-run restau­rant to an­nounce a re­duc­tion in the small busi­ness tax rate, it’s be­cause it is.

A char­i­ta­ble ex­pla­na­tion would be that it may have been hard, in the midst of the small-busi­ness back­lash that has at­tended Fi­nance Min­is­ter Bill Morneau’s plans to change some of the rules that gov­ern pri­vate cor­po­ra­tions, to find a friendly venue for the an­nounce­ment.

A less char­i­ta­ble take would be that Stouf­fville has the not-in­signif­i­cant ad­van­tage — given the pum­melling the fi­nance min­is­ter had en­dured at the hands of the Con­ser­va­tive op­po­si­tion in the House — to be so lo­cated as to make it lo­gis­ti­cally dif­fi­cult to be back in time for ques­tion pe­riod.

Be that as it may, it is to Stouf­fville that Trudeau, Morneau, Small Busi­ness and Tourism Min­is­ter Bardish Chag­ger, who hap­pens to dou­ble up as the gov­ern­ment House leader, and her Indigenous Ser­vices col­league Jane Philpott, who hap­pens to be the MP for the area, re­paired Mon­day to eat some pasta and then some crow.

For, were it not for the head­wind that the gov­ern­ment has faced over its fis­cal re­form, chances are Canada’s small busi­nesses would not have re­ceived an un­ex­pected mid-man­date gift from the fed­eral gov­ern­ment.

Not­with­stand­ing some breath­tak­ingly brazen prime min­is­te­rial talk­ing points, Mon­day’s an­nounce­ment was first and fore­most tes­ti­mony to the force of that wind and to the com­mu­ni­ca­tion weak­nesses of the re­form’s chief sales­per­son, the min­is­ter of fi­nance.

That’s be­cause the fix Trudeau is re­ly­ing on to try to take back the ini­tia­tive in the fis­cal re­form de­bate is straight out of the ever-ex­pand­ing scrap­yard of bro­ken Lib­eral prom­ises.

In 2015, the Lib­er­als com­mit­ted to main­tain­ing the small busi­ness tax rate on the down­ward course the out­go­ing Con­ser­va­tives had set it on in their pre-elec­tion bud­get. Un­der the plan Morneau in­her­ited when the Lib­er­als took power, the rate was al­ready sched­uled to be down to 9 per cent by 2019.

But once in gov­ern­ment he cur­tailed the rate cut. It nei­ther reap­peared in last spring’s sec­ond in­stal­ment nor in any of the pro­jected spend­ing laid out at the time.

In­stead, the last bud­get sig­nalled the gov­ern­ment’s in­ten­tion to move on pri­vate cor­po­ra­tions, a plan Morneau has at­tempted to ex­e­cute since late July.

This is a gov­ern­ment that treats the busi­ness of well-cal­i­brated op­tics like an art form.

In the lead-up to its last bud­get, Trudeau’s of­fice even got in­volved in a dis­cus­sion over whether the model pos­ing as a boy on a bridge on the doc­u­ment’s cover should be wear­ing eye­glasses.

Had the gov­ern­ment been con­tem­plat­ing an im­mi­nent re­turn to the down­ward path charted out by the Con­ser­va­tives for the small-busi­ness tax rate, surely Morneau’s con­tro­ver­sial fis­cal changes to pri­vate cor­po­ra­tions would have been cou­pled with that an­nounce­ment.

What gov­ern­ment would not choose to sugar-coat its in­ten­tions to re­duce the tax ben­e­fits of some by of­fer­ing a break to many oth­ers?

Will Mon­day’s in­ter­ven­tion com­bined with a week­long climb­down from some of the more con­tentious as­pects of the planned changes to the pri­vate cor­po­ra­tions rules ap­pease the big­gest pub­lic re­la­tions storm this gov­ern­ment has en­dured to date? Pos­si­bly, but it re­mains to be seen whether Morneau him­self will find his way out of the hole he has dug him­self into.

If the goal of Mon­day’s Stouf­fville the­atrics was to re­in­force the min­is­ter’s cred­i­bil­ity, it missed the mark.

This is the kind of sec­to­rial an­nounce­ment that would nor­mally be part of a bud­get, a fis­cal up­date or a min­is­te­rial speech to a busi­ness venue. In any of those sce­nar­ios, the fi­nance min­is­ter would have the lead role.

But in Stouf­fville, Morneau was rel­e­gated to a cameo role. And even the small role was ap­par­ently not silent enough for the prime min­is­ter. As if he was do­ing the world, or pos­si­bly his gov­ern­ment, a favour, Trudeau twice in­sisted on an­swer­ing me­dia ques­tions di­rected at his min­is­ter be­fore be­grudg­ingly let­ting him come to the mi­cro­phone.

This com­edy of er­rors might yet end on a po­lit­i­cal tragedy for the gov­ern­ment.

Chan­tal Hebert is a na­tional af­fairs writer. Her work ap­pears in Torstar news­pa­pers.

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