Roundup: PBO confirmations on tax changes

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: Mid-term check-in

Over in Maclean’s, John Geddes put together a deep dive into the current government’s midterm woes, and it’s well worth the read – and it’s a pretty long read too. But once you’re done (seriously, this post isn’t going anywhere), I would want to push back on some of the things that he highlights.

For starters, I think that there is something to be said for a government that is willing to walk back on bad promises, and they made a few. Most notably is electoral reform, and the fact that they could actually take the step of smothering it the cradle is actually something that they should be congratulated for. We dodged a bullet with that one, and I wish that my fellow journalists would get that through their heads. Likewise, Bardish Chagger taking back her plans to “modernise” the way that the House of Commons operates is similarly another dodged bullet – most of her plans were terrible and would make things worse, not better. Casting them as failures does a disservice to the fact that they backed down from bad promises. When it comes to Bill Morneau and his troubles, I think it also bears mentioning that the vast majority of the attacks against his tax proposals (and his own personal ethics situation) are largely unfounded, based on disingenuous framing or outright lies designed to try and wound him. The attacks have largely not been about the policies themselves (even though there were actual problems that should have been asked about more), and I think that bears some mention.

I also think that Geddes doesn’t pay enough attention to some of the backroom process changes that the government has been spearheading, particularly on the Indigenous files – many of the problems mentioned need to have capacity issues addressed before funding is increased because we have seen numerous examples of places where money was shovelled out without that capacity-building being done, and it made situations worse. Is it frustrating that some of this is going slowly? Yes. But some of the ground-up work of reforming how the whole system works, and ensuring that once more money flows that it can be spent effectively is something that we should be talking more about, because process matters. We simply don’t like to talk about it because we labour under this belief that nobody reads process stories, so we ignore them, which is why I think some of the calls about “failures” are premature or outright wrong – things are changing that we can’t immediately see. That doesn’t mean that changes aren’t happening.

Finally, there is a list of major legislation coming down the pipe, and I think it bears reminding that the focus on consultation before making some of these changes is as much about inoculating the government against criticism that was levelled against their predecessors as it was about trying to get some of this complex legislation right. Do they get it right all the time? No. There is a demonstrated record of barrelling ahead on things with good intentions and not properly thinking through the consequences *cough*Access to Information*cough* and when it blows up in their faces, they’re not really sure how to respond because they think that their good intentions count for something. I’m not sure that simply focusing on the perceived inexperience of ministers helps when it comes to trying to meaningfully discuss these issues, but here we are.

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Roundup: Abandoning a fiscal anchor

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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Roundup: Not headed for a debt bomb

In light of the fall economic update, and the myriad of concerns about the level of the deficit and lack of a plan to get to balance in the near term, economist Kevin Milligan took us all to school over Twitter yesterday. The main message – that it’s not 1995, and we can’t keep talking about the deficit as though it were.

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Later on, Milligan took exception to the notion that the government has backtracked on their tax reform promises and made the situation worse. Not so, he tells us.

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So there you have it. Armchair punditry on deficits or tax changes (even from some economists) doesn’t necessarily stack up.

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Roundup: A surprise by-election win

In the two federal by-elections that took place last night, it was no surprise that the Conservatives won handily in Sturgeon River–Parkland riding that Rona Ambrose used to hold. Mind you, the newly elected MP there, Dane Lloyd, may prove to be uncomfortable given his past history of saying some fairly controversial things, but that’s now Andrew Scheer’s problem to manage. The real surprise, however, was that the Liberals won the Quebec riding of Lac Saint-Jean, the former riding of Denis Lebel. Why is it so surprising? Because for a Conservative riding where the NDP were a close second in the 2015 election, this time around it was a Liberal victory, with the Conservatives barely managing second place, the Bloc in a close third, and the NDP a distant fourth. And this was the Liberals’ weakest Quebec showing in 2015 and a riding that they haven’t held since 1980.

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So can we draw any conclusion from these results? Probably not yet – it’ll probably take a few days to suss out the data and get a sense of what happened on the ground, but it does bear mentioning that the of the three opposition parties, all of them had new leaders, and each of them spent a fair bit of time in the riding over the past couple of weeks, hoping to drum up support. That the Conservatives lost the riding may simply be indicative that the riding was more loyal to Lebel himself than the party he ran for (remember that he was a former mayor from the region), but it can’t be a ringing endorsement of Scheer either. And while the pollsters are all out in force talking about the Liberals’ fall from grace in their polling numbers lately, the fact that the Liberals still managed to win a seat that the Conservatives held, even amidst weeks of headlines about tax changes and Bill Morneau’s assets, in a region where they didn’t have any historic strength, probably still says something about the party’s appeal nationally. Maybe it’s about the collapse of the NDP vote in Quebec, which could possibly be a harbinger of things to come under Jagmeet Singh? Maybe it’s the appeal of sock diplomacy and selfies? Suffice to say, it’s going to be an interesting few days for all of the parties as they figure out what happened, and prepare for the next round of by-elections.

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Roundup: Trying to measure independence

As Senators have made their way back home for the summer, we’re having another round of them poking each other, like kids in the backseat of the car on a long trip, over just who are the “real independents” in the Senate. It’s getting a bit tiresome, especially with the Conservatives insisting that they’re the only ones because they vote against the government more often. The problem is that it’s a fairly flawed metric because they’re the Official Opposition and are supposed to vote against the government on a consistent basis. That doesn’t make them independent – it makes them the opposition.

The big problem with the metric about voting as a measure of independence ignores the broader procedural issues. If the government could really command the votes of its new independent appointees, then bills would be making it through the Senate a lot faster, and they’re not. The logistics of getting legislation through the chamber when you don’t have a whip who is organizing votes is one of the measures by which you can tell that these senators are more independent than the Conservatives in the Senate give them credit for. While the Conservatives, Senate Liberals and Independent Senators Group are getting better at organizing themselves in trying to come up with plans around who will be debating what bills when, the fact that the Government Leader in the Senate – err, “government representative,” Senator Peter Harder, refuses to negotiate with those groups to prioritize some bills over others, has been part of the reason why some bills went off the rails and took forever to pass. If he did negotiate, or could command votes to ensure that bills could be pushed through when needed, I would buy the argument that these senators aren’t really independent. The fact that there is this lack of coherence in moving legislation is one of the markers in the column of greater independence. This is also where the argument about the need for an Official Opposition kicks in.

While the dichotomy of strict Government/Opposition in the Senate has been upended with the new group of Independents, ending the duopoly of power dynamics that contributed to some of the institutional malaise around the rules, I will maintain that an Official Opposition remains important because it’s important to have some focus and coherence when it comes to holding the government to account. Simply relying on loose fish to offer piecemeal opinion on individual pieces of legislation or issues risks diluting the effectiveness of opposition, and it also means that there is less ideological scrutiny of a government’s agenda, which is also important. Partisanship is not necessarily a bad thing, and the Senate has traditionally been a less partisan place because there was no need for electioneering within its ranks. Trying to make it non-partisan will not make it better, but will make it less effective at what it does.

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Roundup: A northern populism

Every time I see someone writing about Canadian populist movements and the dismissive concerns that it could never happen here, I always shake my head because it does happen. To an extent, we are living through it right now. The Canadian Press has been doing some surveys to try and discover what the “northern populism” might look like, and while it’s not quite the same as the forces that brought Donald Trump into power, it nevertheless exists here.

Part of the difference we see is that in Canada, those populist forces are less white than they are in the States or in Europe, but the focus remains the same, which are the perceived ills of the liberal (big or small L, take your pick) “elites.” It’s not a secret that the way that Conservatives like Jason Kenney targeted ethno-cultural minority communities was by focusing on socially conservative issues, whether it was their reticence to embrace same-sex marriage, or things like marijuana, those were cues that helped them tap into those communities the ways that other populist movements haven’t, who are too busy dog-whistling to appeal to the more blatant racists. And while there are those undercurrents in Canadian populist movements, for which things like immigration remains a bugaboo, Canadian conservatives have managed to tap into a particular vein of “it’s not our immigrant community that’s the problem, it’s those other immigrants that are,” and that set up a kind of justification that “hey, we can’t be racists because these immigrants don’t approve of that immigration policy,” never mind that yes, immigrants can be intolerant of other racial or ethno-cultural minority groups that aren’t their own.

But populism is not a spent force in Canada. We saw how it operated with Rob Ford, and it’s alive and well in Alberta as they try to harness it into an anti-NDP political party. To an extent, the federal Conservatives and NDP have largely abandoned their own ideological underpinnings to be right or left-flavoured populists, and yes, there is a great deal of populist rhetoric underpinning the Liberal electoral platform, with appeals to this nebulous middle class that has no data to back up their claims (like stagnant wages for one spectacular example). Was Justin Trudeau able to harness it more effectively than his opponents? Yes. Does that mean that the scourge of populism that gave the Americans the Trumpocalypse is absent here? Not at all. That the composition is slightly different is an academic difference, but not reassuring in the least.

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Roundup: Demanding ATIP perfection may be the enemy of the good

I find myself torn about the government announcement on new legislation to amend the Access to Information Act because on the whole, they made most of the changes that they promised to, but they failed to uphold one promise, which was to make the Act apply to the PMO and minister’s offices. And yes, We The Media let them know how displeased we were about it.

Part of the problem here is that like so many of their other election promises, it may have been a stupid one – kind of like their promise around electoral reform. Why? Because it was always going to be problematic to promise access to cabinet documents, and there’s a very good reason for that, because much of that information should remain private because it will otherwise damage the ability for there to be unfettered advice to ministers or between cabinet colleagues, and they need to have space to make these kinds of deliberations, otherwise the whole machinery of government starts to fall apart.

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Like Philippe Lagassé says, the better discussion would have been to have specific proposals as to what falls under cabinet confidence. Currently the Information Commissioner has some determination around that, and with the changes in this bill, the onus will be reversed – the government will need to convince her (and if that fails, the courts) that information should remain secret, as opposed to her having to take the government to court to get that access. That’s significant.

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There is a lot of good in these changes, but I fear that it will be lost amidst the grumbling that it didn’t go far enough. And let’s face it – sometimes We The Media are our own worst enemies when we use Access requests for cheap outrage stories rather than meaningful accountability, and then wonder why the government suddenly clamps down and turns to message control, and worst of all, nobody wants to talk about that problem. That may wind up making things worse for everyone in the end.

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Roundup: A swiftly-moving “stalled” bill

An odd narrative has been developing over the past few days about the budget implementation bill being “stuck” in the Senate, and that senators there are “holding it up” as the sitting days in the Commons tick down. And I’m really not sure where this impression comes from because the bill has only been there since Tuesday.

Quite literally, the bill was passed in the Commons on Monday, read in at First Reading in the Senate on Tuesday, passed Second Reading on Wednesday, and had the minister appear at committee on Thursday, and it was later that day that the motion to split the bill was voted on. (The Senate didn’t sit on Friday, for the record). If anyone can please explain how this is “holding it up” or “stuck,” I’m frightfully curious as to how exactly it works.

Justin Trudeau, meanwhile, went on The West Block yesterday and reiterated his praise for the Senate’s work and saying that he expected that this particular attempt to “alter” the budget bill is just “growing pains.” Err, except by altering, they are simply trying to split one section out so that it gets further study, so that the rest of the budgetary elements can get passed, while the section that does need further study gets it. That’s not exactly a major alteration, and they’re not looking to kill that section of it either – just ensure that it’s going to work like it’s supposed to. But then Trudeau insisted that it’s a well-established practice that the Senate always defer to the Commons on money bills.

The hell it is. Constitutionally, the Senate can’t initiate money bills, but that doesn’t mean they simply defer on all of them. Hell, the very first bill they passed in the current parliament were the Supplementary Estimates (which is a money bill), and lo, they had to send it back to the Commons because they forgot to attach a crucial financial schedule to it. Should they have deferred to that flaw? Yes, the Commons is the confidence chamber, and the chamber of “democratic legitimacy,” but Trudeau is conflating a number of different things here, and it’s a bit disappointing because he should know better.

And I will remind everyone that this current Senate, no matter how many bills it sending back with amendments, is still nowhere near as “activist” as the Senate was in the Mulroney days, where they forced him to an election over the free trade agreement and to use the constitutional emergency powers to appoint an additional eight senators in order for him to get the GST passed. The current iteration of the chamber, while they are sending more bills back with amendments, will inevitably defer. That the government is accepting many of those amendments shows that perhaps *gasp!* it was flawed legislation to begin with (not that the Harper government using its illegitimate whip over their senators to pass bills made them any better, because their court record shows they weren’t).

But if we could have fewer terribly media headlines putting forward a patently false narrative about what’s going on in the Senate right now, that would be grand.

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Roundup: Trudeau laying in the Senate bed he made

There is a renewed round of wailing and gnashing of teeth about the Senate feeling it oats and flexing its muscles, and yesterday it was the Prime Minister doing it. Apparently deliberating and amending bills is fine unless it’s a budget bill, in which case it’s a no go. The problem with that is that of course is that a) there is no constitutional basis for that position, and b) if the whole point of Parliament is to hold the government to account by means of controlling supply (meaning the public purse), then telling one of the chambers that it actually can’t do that is pretty much an existential betrayal. So there’s that.

But part of this is not so much about the actual issue of splitting out the Infrastructure Bank from the budget bill – which Senator Pratte, who is leading this charge, actually supports. Part of the problem is the principle that the Senate isn’t about to let the Commons push it around and tell them what they can and can’t do – that’s not the Commons’ job either. As Kady O’Malley delves into here, the principle has driven the vote (as has the Conservatives doing their level best to oppose, full stop). But some very good points were raised about the principle of money bills in the Senate, and while they can’t initiate them, that’s their only restriction, and they want to defend that principle so that there’s no precent of them backing down on that, and that’s actually important in a parliamentary context.

As for this problem of Trudeau now ruing the independent Senate that he created, well, he gets to lie in the bed that he made. That said, even as much as certain commenters are clutching their pearls about how terrible it is that the Senate is doing their constitutional duties of amending legislation and sending it back, it’s their job. They haven’t substituted their judgment for those of MPs and killed any government bills outright and have pretty much always backed down when the Commons has rejected any of their amendments, and that matters. But it’s also not the most activist that the Senate has ever been, and someone may want to look to the Eighties for when they were really flexing their muscles, enough so that Mulroney had to use the emergency constitutional powers to add an extra eight senators to the Chamber in order to pass the GST – which was a money bill. So perhaps those pearl-clutchers should actually grab a bit of perspective and go lie down on their fainting couch for a while.

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On the subject of the Senate, it’s being blamed for why the government hasn’t passed as many bills in its first 18 months as the Harper government had. Apart from the fact that the analysis doesn’t actually look at the kinds of bills that were passed (because that matters), the reason why things tend to be slow in the Senate is because the Government Leader – err, “representative” – Senator Peter Harder isn’t doing his job and negotiating with the other caucuses and groups to have an agenda and move things through. That’s a pretty big deal that nobody wants to talk about.

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