Tag Archives: Budget 2017

QP: Return of the tax changes

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While the prime minister remained in China, Andrew Scheer was finally back in the Commons for QP for the first time this week. After a moment of silence for the anniversary of the École Polytechnique massacre, Scheer led off, mini-lectern on desk, and he read a statement about violence against women. In response, Maryam Monsef rose to give her own statement about the importance of the day and the remembrance of the victims. Scheer then turned to the “attack on small business” by new rules not being fully outlined until the budget. Dominic LeBlanc, who this morning revealed that he was diagnosed with chronic lymphocytic leukaemia, reminded him that small business taxes was being reduced and the new rules around private corporations were not about small businesses. Scheer trotted out the torqued 73 percent tax rate line (only applicable to those private corporations making over 100,000 under certain conditions in Ontario), and LeBlanc called him out for using a phoney example. Alain Rayes took over in French, offering the same concerns, and LeBlanc assured him that they listened to small business owners and they were acting on their concerns. Rayes tried again, but LeBlanc launched into a praise for small business tax cuts. Guy Caron was up next for the NDP, worrying that not taxing internet giants was hurting Canadian content creators — specifically community newspapers. Mélanie Joly said that they would work with stakeholders to strengthen local journalism. Caron tried again in English, and Joly listed investments made today and promised to help with transition to digital. Tracey Ramsey was up next, demanding transparency on the list of priorities with trade with China. Marie-Claude Bibeau, curiously, rose to read a statement on the importance of trade, but done under Canadian values. Ruth Ellen Brosseau asked the very same question again in French, and got much the same answer.

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Senate QP: Not the minister you’re looking for

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The time came once again for Senate QP, and this week the special guest star was Jean-Yves Duclos, minister for families, children and social development. Senator Larry Smith led off, asking about CMHC providing the government with a special dividend while raising insurance fees for young families trying to buy their first home. After the Speaker gave Duclos the option not to respond as it wasn’t really within his ministry’s responsibility, Duclos said that he would let the finance minister know and try to get him an answer.

Senator Maltais asked a double-header around the potential job losses at the Davie Shipyard, and also wondered about that Quebec City bridge in a dispute with CN. Duclos noted that these really weren’t questions for him, but that his counterparts were engaged in discussions on both files.

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QP: Anecdotes concerning clarity

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While Justin Trudeau remained in China on business, Andrew Scheer was in Surrey to help with the ongoing by-election there. That left Lisa Raitt to once again lead off, noted that it was a month away from implementation to the private corporation tax changes, and decried that there was too much uncertainty. Dominic LeBlanc was also leading for the government for a second day in a row, noting that they were clear in their promises, and that it was asking those very wealthy to pay a little more. Raitt raised the case of a couple who own a small business in her riding, and how they were uncertain about what the changes would mean. LeBlanc reminded her that the government can’t reveal budgetary measures in advance of a budget. Raitt tried a third time, getting warned for mentioning Morneau’s absence, but she nevertheless managed to demand his resignation. LeBlanc said that small business taxes were being lowered, and any further changes were still being considered as a result of the consultations they engaged in. Alain Rayes took over to ask the same question about the uncertainty in French, and LeBlanc dutifully repeated his points about lower taxes and forthcoming details. Rayes took some swipes at Morneau and demanded his resignation, and LeBlanc assured him that the minister was doing an extraordinary job, noting the decade-low unemployment numbers. Guy Caron was up next for the NDP, concern trolling over the confusion on trade talks with China, to which Patty Hajdu praised the government’s trade agenda. Caron wanted to know what human rights discussions were being had, to which Mélanie Joly stood up to assure him that they were having frank discussions that included human rights. Tracey Ramsey repeated Caron’s questions in English, some of the phrasing verbatim, which Hajdu reiterated her previous decision. Ramsey dug deeper, raising steel dumping, but Hajdu stuck to praise points.

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Senate QP: Chagger skirts some issues

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While the official apology to LGBT Canadians carried on in the House of Commons, the Senate moved onto its regularly scheduled ministerial Question Period, with special guest star Bardish Chagger in her role as minister of small business and tourism. That didn’t quite matter to the Conservative leader, Senator Smith, who led off on the ongoing issue of the process to name a new Ethics Commissioner, which Chagger is in charge of, and his concerns with news that four members of the PMO had recused themselves from the process because they were on the PM’s vacation to the Bahamas over Christmas. Chagger noted that she was supposed to be here in her role as minister of small business and tourism, but that being said, she responded that the was an open, transparent, merit-based process in place. When Smith pressed, noting that Chagger had defended the PM on his vacation while she was in charge of this process, Chagger reiterated that there was an open, transparent, merit-based process.

Senator McIntyre asked about the PBO report on the proposed tax changes, and whether she knew in advance what it said. Chagger noted that she read the report at the same time as others, and that the intent of the changes was to close loopholes on places where they are used for high-earners evading taxes but not to punish small businesses, which are the backbone of the economy.

Senator Day asked a question in relation to Chagger’s role as House Leader, and raised the omnibus motion that Chagger moved in June that in part rejected Senate amendments to the budget bill. Day demanded to know what “rights and privileges” the amendments would have violated, and why they would have been passed without debate. Chagger said that they have the utmost respect for the Senate, but didn’t really defend her motion or her actions. Day pressed on the rights and privileges, given there was no debate that spelled out what they were, but Chagger merely said that she would ensure that the Senate’s views were heard.

Senator Cormier asked about the Business Development Bank of Canada, and the needs of the arts and culture sector. Chagger said that she has been working with BDC on several initiatives, and that a whole-of-government approach was being taken, but she was pushing for more recognition of the arts sector.

Senator Lankin asked about taxes on campgrounds and the lack of sufficient answers on the matter to date. Chagger said that CRA was dealing with those cases on a case-by-case basis, and she had asked to be kept informed on the progress.

Senator Batters asked about the lack of details on retroactive tax changes to passive investments (which is not actually right — passive income changes were to be grandfather existing investments). Chagger respectfully disagreed with Batters on her characterization, noted the 73 percent tax rate referred to was not common, and then quoted the PBO report that said that 97 percent of businesses would not be affected.

Senator Greene Raine asked about a programme for tourism packages, which was had their GST rebate application later than expected and less than expected. Chagger said that she would follow up with her on the issue.

Senator Omidvar talked about entrepreneurship among immigrants, and some of the difficulty that they have with navigating the system. Chagger highlighted the accelerated growth service that caters to the needs of entrepreneurs that provides help to get through the hurdles.

Senator McPhedran asked about a fund for women entrepreneurs in the tech sector, particularly for Indigenous women. Chagger agreed that were not doing enough in that sector and they were trying to do better, and they were seeing returns on that fund, and curiously, tied it into the apology to persecuted LGBT Canadians taking place in the Commons, and the loss of potential that took place then and that she doesn’t want to keep taking place now.

Senator Oh asked about Canada-China tourism, and the ability to quickly process visa applications. Chagger said that she was happy to see the numbers from China grow, and gave some praise for the tourism industry before getting around to the visas, and noted the seven new visa centres which were opened and are “working well.”

Overall, it was a fairly mixed bag. On the one hand, Chagger could absolutely give good answers to some questions, and without the same 35-second constraints in the Commons, was able to actually give reasonable answers instead of sound-bites. This having been said, she did have a tendency to dissemble at times, but not quite as much as some of her colleagues, and generally, she would return to the question being posed. But when pressed on one of the most fundamental issues, being Senator Day’s inquiry into just what happened in June with the amendments to the budget bill (during which, I will remind you, Senator Harder compromised his own position in his leading the response from the Senate), and the somewhat alarming manner in which Chagger made her response in the Commons at the time, she remained mute. While it wasn’t too surprising, it was certainly disappointing, especially as it points to the ways in which this government continues to handle the independent Senate that they have promoted.

Sartorially speaking, style citations go out to Senator Lillian Eva Dyck for a black leather jacket with embroidery, a white blouse with a lace collar and a black skirt with a Indigenous floral pattern, as well as to Senator René Cormier for a tailored dark grey suit with a white shirt and patterned tie. Style citations go out to Senator David Richards for a baggy black jacket, taupe slacks, white shirt and black striped tie, and to Senator Pierrette Ringuette for a tan long sweater over a black, white and red patterned dress, with red tights.

Roundup: PBO confirmations on tax changes

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The Parliamentary Budget Officer came out with a report yesterday on the proposed tax changes around passive income, and all of the headlines screamed that they could net the federal government $6 billion. “Oh, but it’s not a cash grab,” opposition MPs said sarcastically in return, including during QP yesterday. The problem, of course, is that if they read, that $6 billion would be over two decades, and more importantly, that the PBO confirmed that three percent of personal corporation holders generate some 90 percent of passive income, which confirms that the point of the measures is to target those who incorporate for the sole purpose of investing and taking advantage of the lower rates as a part of that.

To help walk us through the report and its findings, here are Kevin Milligan and Lindsay Tedds:

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Roundup: Union concoctions and opportunism

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In the event that you’ve tuned out of the Bill Morneau/Bill C-27 conspiracy theory – and if you have, I don’t blame you – there was a big fuss a few days ago made of the fact that the postal employees’ union made a big deal about trying to get the Ethics Commissioner to investigate this weeks ago, and now that Nathan Cullen managed to get Mary Dawson to turn her attention to it, they’re crowing with a bit of victory, and still demanding that the bill be withdrawn. Given how ludicrous the whole story remains – remember that government bills are tabled on behalf of the cabinet as a whole, and that ministers don’t sponsor bills because they have a personal interest in them, but rather because they need to answer on behalf of their departments – I’ve largely just rolled my eyes at ongoing coverage, but it was flagged to me a couple of times yesterday that Terence Corcoran wrote a piece about how this little episode proves some of the underlying dynamics behind this ongoing campaign against Morneau and his integrity – that it’s less about any actual ethical issues than it has been about trying to get him to withdraw Bill C-27, because it’s antithetical to the interests of unions and their desires to ensure that everyone has a defined benefit pension plan (even though the economics of that demand aren’t there, and that the actuarial tables will show that they haven’t been sustainable because people stopped smoking two packs a day and are now living longer).

The problem with Corcoran’s piece is that it really only applies to the NDP’s interests. After all, the Conservatives were talking about targeted benefit pensions for years, and were making moves in that direction, which is why Morneau, in his previous life, was talking about their virtues – a cardinal sin in NDP eyes. But for the Conservatives, this is simply a matter of opportunism – they think that they can wound him, and if they have to play along with the NDP to do it, so be it they will. And thus, we are enduring day after day of attacks in QP that are showcased with mendacious framing devices and disingenuous questions, unrelated facts arranged in ways to look damning, never mind that they don’t line up with reality or with our parliamentary norms (such as this absurd demand that the Ethics Commissioner should have somehow vetted this before the bill was tabled. That’s now how our system works, and it would have been a violation of cabinet secrecy and parliamentary privilege). But even as opportunistic as this is, one has to wonder how much longer this will last.

One of the most veteran reporters sat with me in QP yesterday, and asked me this very question – how long can they hope to stretch this story? There’s little basis to it, and yet day after day, they carry on with these absurd demands for information that are already publicly disclosed, and outrage that is running on fumes. Meanwhile, actual, verifiable problems that should be addressed are going unsaid, day after day. It’s a little mystifying when you actually stop to think about it.

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Roundup: A modest peacekeeping package

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At long last, Justin Trudeau delivered what the government had long-promised when it came to how Canada was going to fulfil its pledge around peacekeepers for the UN. Err, well, sort of. You see, while Trudeau said that the 600 troops would all roll out eventually, for the time being, we’re doing more of the work of capacity building, training, and getting more women involved, plus a new rapid-response air deployment of heavy-lift capability and weaponized helicopters that will include some 200 personnel. And no, we’re not sending troops to Mali. More significantly, perhaps, was the initiative on ending the use of child soldiers, which helps to fulfil some of the long-time work of retired general and Senator Roméo Dallaire.

At this point, the peanut gallery erupted into how the government’s mandate tracker would rate this promise as not having really been kept, but I have to wonder if that’s being unfair given the situation. We’ve heard for two years, since the initial pledge was made, that traditional peacekeeping was dead, and we needed to do something else, and lo, the government listened, consulted, and came up with a package of items – and funds – that will help with the real work of building capacity where it doesn’t exist currently. And listening to Dallaire on Power & Politics, he made the notion that it’s not really about committing another battalion of troops, because they have those – it’s about ensuring that they have the capacity to deal with the situation on the ground, and if Canada can help with that, is that not the better use of our time, money, resources, and personnel? Or do we demand 600 troops + 150 police in x-country that is just the right level of dangerous in order to check off a box and say “promise kept”? I’m not sure. We’ll see how the international community reacts, but so far the word out of the UN has been fairly positive (though it sounds like France may be a bit ticked that we’re not going to Mali). But maybe I’m wrong and we should have just sent them to Mali. I do think that we need to be a bit more nuanced in our understanding, and as with many things, people underestimate the need for capacity building at home and abroad, and it does seem to be something that this government is trying to address in one form or another. (For another take, here’s Stephen Saideman and his lukewarm feelings toward the announcement).

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QP: Strange Paradise Papers storylines

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With the Paradise Papers dominating the headlines, and the 150th anniversary of Parliament setting the mood on the Hill, there was going to be a mixed tone. Four previous prime ministers, two former Speakers, and a handful of retired senators were in the Galleries to watch for the anniversary and the speeches that would follow QP.

Andrew Scheer led off, mini-lectern on desk, and he immediately launched into the revelation that Stephen Bronfman was named, then launched the weird non-sequitur about Bronfman going to the state dinner at the White Huose, but the minister of natural resources did not. Trudeau first read a statement about the mass shooting in Texas before noting that they were committed to fighting tax evasion and avoidance. Scheer made the connection between the proposed tax changes and these alleged tax avoiders, and Trudeau reiterated that they were committed to fighting tax evasion. Scheer switched to French to ask again, and Trudeau reiterated his same response. Scheer accused Bronfman of trying to influence the government in protecting offshore accounts. Trudeau said that he would let individuals answer for their own activities, before repeating that they had invested in the CRA and were on track to recoup some $25 billion. Scheer then listed all of the supposed way in which the government was touching the middle class to protect those hiding income offshore, to which Trudeau recited their list of accomplishments in helping the middle class. Guy Caron was up next, railing about Bronfman, the older KPMG investigations, and other avoidance schemes. Trudeau reminded him about the billon-dollar investment they made in the CRA, and fruits that it was yielding. Caron repeated the question, got the same response, and then Alexandre Boulerice took over for the same questions with additional bombast in French, and lo and behold, got much the same answer in French, before going one more round of the very same.

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QP: Deliberately obtuse demands

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On a rainy Thursday in the Nation’s Capital, the Prime Minister was away, but the rest of the leaders were present. Andrew Scheer led off, mini-lectern on desk, and raised the Ethics Commissioner’s statement that “less than five” ministers had indirectly-held assets. Bill Morneau rose, accused Scheer of having trouble with numbers, and assured him that they had engaged with the Commissioner. Scheer again demanded names, and Morneau noted that he is aware that the attacks aren’t personal but just a game, which the finances of the country are not. Scheer insisted that this wasn’t a game, but Morneau insisted that Scheer was wrong and knew he was wrong — before he listed how many children got benefits in Scheer’s riding. Scheer demanded to know how he was wrong, and listed disingenuous accusations, to which Morneau said that Scheer was wrong because he disclosed all of his assets. Scheer said that couldn’t be the case if Morneau was fined $200, and Morneau reiterated that Scheer was wrong, and the fine was related to an administrative error while he disclosed his assets. For the NDP, Guy Caron led off by raising the flaws in the Access to Information amendment bill that the Information Commissioner identified. Scott Brison took this one, accusing the NDP of opposing proactive disclosure. Nathan Cullen was up next to demand changes to the bill in his usual sanctimonious tone, and Brison said that he would support and amendment that would require departments to get clearance from the Information Commissioner before refusing any requests related to Indigenous peoples. Cullen got back up with a rambling screed about upholding ethics standards, to which Morneau stood up to reiterate that they work with the Ethics Commissioner. Caron got back up, and repeated the list of alleged ethical failings of the government in French, not that Morneau’s answer changed.

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Roundup: Abandoning a fiscal anchor

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In yesterday’s National Post, economist Stephen Gordon cast a critical eye on the fall economic update and the government’s excuse for running deficits, and the decision to abandon the fiscal anchor of balanced budgets in favour of a declining debt-to-GDP ratio. And rather than worrying about the non-existent debt-bomb, Gordon is mostly looking for answers why the policy shifted post-election. Fair enough. (He also does the math on how much more a government can spend by shifting the fiscal anchors like the government did here).

Enter fellow economist Kevin Milligan, who digs through and finds an answer. Enjoy.

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