Liberals miscalculated target
On the eve of Parliament’s return, a quick drink with a prominent opponent of Justin Trudeau’s tax reforms brought consensus.
It would be one of those political meteors, we decided. Canadians are not paying attention, and the tax reforms controversy would burn out in a couple of days.
A week later, we both have to admit we were wrong.
Finance Minister Bill Morneau is now accusing his opponents of “scare tactics,’’ terms like “class warfare” are being tossed around and Morneau and the prime minister are under attack for sheltering their own business and personal holdings.
In this case, the Liberals not only fumbled their messaging but miscalculated their target.
They may be well-heeled, but that merely allows them to more forcefully kick back.
And we’re again learning that nothing is certain but death and opposition to tax increases.
These are Canadians who do not consider themselves wealthy, who worked hard to get where they are today and hold influence in their communities.
They were playing by the rules and — even though this move was signalled by the Liberals in their 2015 platform — feel blindsided.
So the Liberals at midterm are going to end “income sprinkling,” the practice of paying other members of the family to lower the tax bill, going after business owners who invest money in their company that is not being used for that business, and ending the practice of income being treated as capital gains to lower the tax bill.
This is not to argue against tax fairness. The Liberals are doing the right thing, but again they have been knocked off course almost immediately after the Commons returned.
Those affected can eloquently state their case.
And, in some cases, they can look beyond their own situation.
Ellen McGregor is the CEO of Mississauga’s Fielding Environmental, a clean-tech company specializing in the recycling of waste solvents, glycols and refrigerants.
The company says it “strives to save the planet one molecule at a time.”
The company was founded by her father in 1955, it’s now run by her and her brother, and the third generation of McGregors are now involved in the business.
The company employs about 85 people at its Mississauga plant and a smaller operation just outside Pittsburgh.
Her opposition isn’t rooted in her wish for a bigger house, although she will certainly feel the effects of these changes.
But, she says, the government has to take a larger view of the potential damage to the economy from these changes.
She sees this as a threat to the clean-tech industry in this country. She also sees it as a threat to the innovation economy. She believes it will chase investment money out of the country to south of the border.
The government is giving the impression that people like her ducked and hid and were doing something nefarious.
She believes the Liberals look at her as greedy, but she’s the type that digs into her own pocket to give to charity.
“All we did was structure by the rules,’’ she told me.
When Morneau speaks at the annual meeting of the Canadian Chamber of Commerce this weekend, he’ll be in the room with a bevy of opponents, including a couple of orchard owners named the country’s outstanding young farmers last year, a co-owner of an independent pharmacy who fears that women will suffer disproportionately under the reforms and a restaurant owner who rebuilt after fire destroyed his original eatery and works with a charity aiming to break the cycle of family violence.
He’ll be in the room with the CEO of a technology company who moved back to Canada to start her business and a fifth generation owner of a car dealership who now believes there will be no sixth generation.
They are not likely to win this battle.
Some of the opposition from doctors sounds a little overwrought. Other doctors have spoken in support of the moves.
The government is giving the impression that people ducked and hid and were doing something nefarious
The Canadian Labour Congress and some business groups, unlikely allies, back the move.
An Angus Reid Institute poll has Canadians split right down the middle on the issue, with half declaring the move will make the tax system fairer and half convinced it will hurt business investment. Even small business owners polled were not showing the outrage that is being channelled from the opposition benches this week.
The tax changes will go through. But this is sticking, and Morneau may yet have to offer something else to cushion the blow. Memories for some voters are long. Tim Harper writes on national affairs. tjharper77@gmail.com, Twitter: @nutgraf1