Tag Archives: Election 2015

Roundup: The dream of tax simplification

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With the big economic debate coming up tomorrow, it’s with no small bit of amusement that noted economist Jack Mintz dropped a bomb in the middle of the election, and blowing open the pledges of most of the parties. In particular, Mintz says that the corporate tax rate should be lowered so as to keep those companies from shifting the burden in the form or lower wages or higher prices; raising the small business tax rate because it’s largely used by the wealthy to pay lower taxes; and eliminate a suite of investment tax credits to make the whole system simpler and fairer. In other words, doing pretty much the opposite of what the NDP has promised, and to a degree what the Conservatives have promised with their small business tax rate promises and more boutique tax credits than anyone knows what to do with. In fact, you’d be hard pressed to find an economist who thinks that boutique tax credits are a good idea – particularly as Harper promised yet another bunch, this time for single and widowed seniors, and as Kevin Milligan explained, it’s pretty useless considering that a) it’s non-refundable and a lot of those seniors already don’t pay taxes, and b) we have a number of other income supports for seniors. (Also, I think this means that Harper is officially trolling singletons and childless couples, who are now the great pariahs of tax credits). The consensus would be that it’s better to eliminate the boutique tax credits and simply lower the overall tax rate – but how would parties be seen as rewarding “deserving” Canadians of those tax credits. (Again, it would seem that singletons and childless couples are not deserving.) Harper claimed that his boutique tax credits haven’t made tax forms too complicated. That sound you hear is every accountant in the country laughing, because it’s simply not true. We need major tax reform in this country, overhauling the system from top to bottom. (Same with the Criminal Code, incidentally). Too bad nobody is going to campaign on that.

https://twitter.com/kevinmilligan/status/643841869735006208

https://twitter.com/kevinmilligan/status/643842726228680704

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Roundup: No, Chong’s bill won’t give us Australian leadership spills

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News of the leadership spill in Australia, ousting Tony Abbott as prime minister and ending the greatest political bromance of the Commonwealth countries (Harper and Abbott were quite the mutual admiration society), we were suddenly inundated with Twitter musings about whether that could happen in Canada, thanks to Michael Chong’s Reform Act which passed this summer. While Kady O’Malley offers the “in theory” answer, the in practice answer is that no, it couldn’t happen here, because Canada has a terrible system of leadership selection that purports to “democratise” the system with grassroots involvement, but instead created an unaccountable and presidentialised system of an overly powerful leader that has little fear of their caucus turning on them, because caucus didn’t select them. When it comes to removal, selection matters. A lot. Chong’s bill, perversely, makes an Australian situation less likely by raising the bar for leadership challenges to happen in the first place, and would instead give us situations like what happened in Manitoba where a sitting leader was challenged, and when it went to a leadership process where he still participated and won based on the grassroots support when his caucus was no longer behind him, well, it’s ugly and it’s down right unparliamentary given that a leader needs to have the confidence of his or her caucus, and when they don’t but stay in based on grassroots votes, the system breaks down. Paul Wells cautions that reforming a system usually replaces real or perceive problems with different problems, while Andrew Coyne points out that being able to dump a bad leader quickly is the lesser evil of being stuck with them.

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Roundup: The grasping of straws

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While we may be past the halfway mark in this campaign, we’re also well into the territory when things start getting a bit…surreal. Or utterly nonsensical. Take your pick. All of it done in the breathless hyperbolizing that parties do in order to try and make their rivals look bad. If you take a look at any Conservative press release, the sections comparing “Justin and Mulcair” are full of ridiculous non sequiturs that have little or nothing to do with the topic at hand. The Liberals are trotting out Jean Chrétien to say that Stephen Harper has “shamed” Canada (never mind that the rest of the world really doesn’t care). And the NDP have been taking the cake for some of their criticisms, which are starting to sound more like grasping at straws. They held a news conference with Charlie Angus to decry Justin Trudeau for “smearing” small businesses when he pointed out that wealthy people self-incorporate to pay lower taxes. And then Angus admitted that it’s a problem and they need to “tweak” the system, but still tried to insist Trudeau was smearing. Their line of attack about not being able to trust the Liberals not to make cuts is predicated on the 1990s, never mind the fact that the country’s debt-to-GDP ratio is nowhere near what it was the. And now Thomas Mulcair is brushing off the concerns of the premiers for his plans, whether it’s Senate abolition (which most don’t support), or childcare (which the provinces are expected to pay 40 percent of), or even their balanced budget pledge, of which provincial transfers are an issue. But he’ll have a “mandate” he says. Never mind that he sounds like he’s already over-reading it when he hasn’t even been given one. Suffice to say, the talking points from all sides are getting ridiculous. And we still have a month to go.

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Roundup: May’s magical thinking

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It was Elizabeth May’s turn to go before Peter Mansbridge last night, and as with all other leaders, she too got the basics of government formation wrong – but unlike the others, May just got it wrong in a different way. She insisted that if Harper got a minority government, the opposition parties should be able to call the Governor General to insist that they get a chance to form government before Harper. Nope, that’s not how it works, because the incumbent remains the Prime Minister until he or she resigns. That’s because the position can never be vacant. Ever. Her Majesty must always have a government in place, and it’s the GG’s job to ensure that happens. So really, no matter the result on election night, the leader whose party wins the most seats isn’t invited to form government – the incumbent is still the government until they choose to resign, which may or may not involve testing the confidence of the Chamber first. May also revealed that she has the GG’s number and will make that call herself, as though he is obligated to take it. Remember of course that May has also previously written the Queen about issues, and treated form letter responses as vindication. It’s part of her particular problem of over-reading her mandate – she’s hugely conflated her role as an MP with that of being in government in the past, and it’s a problem with how she interacts with the system. It’s also part of her curious insistence that somehow, a handful of Green MPs sitting in opposition and not in a coalition cabinet would magically make a minority parliament a less fractious place. How, exactly? Did none of the proponents of more minority governments learn any lessons from the three minority parliaments prior to 2011? Apparently not, because the magical thinking prevails.

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Roundup: Uncomfortable tax truths

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It’s one of those funny things that happen during campaigns, when one leader tells an uncomfortable truth about an issue, and the other leaders rush to condemn him or her about it. In this particular incidence, it was Justin Trudeau telling Peter Manbridge that he was less keen on a blanket reduction in small business taxes than he was in tweaking the system, because a “large percentage” of those small businesses are wealthy Canadians using those businesses to pay less tax. And he’s absolutely right about it – particularly after changes were made to the system a few years ago that basically turned it into an income-splitting mechanism for some particularly wealthy Canadians. The Conservatives and NDP, however, are outraged, as they are promising small business tax cuts, the NDP going so far as to demand that Trudeau apologise for “smearing” small businesses – except that they don’t have the facts on their side. The Canadian Press’ Baloney Meter™ checked out Trudeau’s statement, and found it to be true, with minor quibbles about the meaning of “large percentage.” (Trudeau seems to be relying on the studies that say that up to 60 percent of small business filers are problematic). There is also the added contention that another good percentage of these filers aren’t actually job creators, like the Conservatives and NDP keep saying – mom and pop shops aren’t, for example. Economist Kevin Milligan delves further into the issue, and notes that Quebec has been making changes to their small business tax laws to ensure that companies have at least three full-time employees to be eligible – thus ensuring that it’s a “ job creator” and not a couple splitting income or a mom-and-pop shop that has no intention of hiring someone else. It is a problem that needs fixing and not platitudes, and it’s good that at least one leader sees fit to recognise that fact, and has so far stood up for it despite the heat he’s taking.

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Roundup: The Conservatives’ anti-refugee inertia

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With opinion galvanizing around the Syrian refugee crisis, there are calls for the government to do more – even if the opposition parties’ targets remain a little on the weak side in the overall picture. Cities and provinces – in particular Quebec – are pledging to do more, but they are bound by the pace that the federal government sets. And above all, that is the real problem with Canada’s response. Chris Alexander has been subtly blaming the UNHCR for their slow and onerous process while trying to cast his government in a positive light for trying to change that, except they’re the ones who’ve made the system far more onerous in the first place. I’ve covered the refugee file for a number of years, most especially when I was writing for Xtra, and a consistent theme emerged was that every time the Conservatives changed the rules, they were making it harder for refugees to make it into the country. In a particular bid to try to keep out refugee groups that they didn’t want to deal with – Mexicans and Roma are two that immediately come to mind – they continually tinkered with the rules, going so far as to create a “designated country of origin” list to make it easier to reject and deport those groups, no matter that a high volume of them had legitimate claims. They shortened processing times on arrival to prejudice the system against them, particularly when it’s difficult to get documentation, and denied them avenues of appeal. And overseas, they’ve understaffed embassies and missions in areas with high refugee populations and outsourced refugee determination to the UNHCR, which doesn’t have the resources and capacity to do that. Here in Canada, they’ve shifted their focus to private sponsorship away from government sponsorship, and even when they try to assist private groups, they don’t give them the assistance that they really required, such as capacity building. And then there was the whole issue of cutting off healthcare for refugee claimants, which was also used as a means of disincentivising people from coming over. Add to this a focus on risk assessment and then prioritizing minority populations in places like Syria and Iraq, and suddenly it’s no wonder that they’re moving at a glacial pace when it comes to getting more refugees resettled in Canada. The lack of political will to tackle this refugee crisis has been long-standing and a long time in the making. There are plenty of things that they could do, as Joe Clark explained, such as putting people on the ground in the region, doing security checks there, relieving the UNCHR of all of the work of refugee status determination, and arranging transportation rather than offering them loans for it (because if there’s one thing that refugees need it’s to be nickel-and-dimed by the Canadian government). They have the capacity, but they’ve spent so long trying to choke off the flow of refugees that the law of inertia has taken hold, and they can’t turn the ship around. I don’t think enough people are calling them out on this fact.

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Roundup: Refugee crisis derails the election

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News that the family of that Syrian boy who drowned off the coast of Turkey was trying to get to Canada and had been rejected touched off a political firestorm yesterday, and it wasn’t until hours later that some clarity was brought to the situation – that the sister of the boy’s father was in Canada and applying to sponsor her family, starting with her older brother, then the child’s father and his family (which included a wife and another son, all of whom were lost when their boat capsized). Chris Alexander made a show of “suspending his campaign” to come to Ottawa to meet with officials, but his campaign really wasn’t suspended – he just wasn’t door-knocking, and then he hid out from the media in the airport and ended up going out a back way in order to avoid them. Statements from the aunt in Vancouver and the government clarified some of the statements around the events with their refugee application, but much of the damage had already been done, and the government looks poorly for it – particularly because of the slow pace at which they are assisting refugees in the area, and padding their figures with those refugees from Iraq, and the fact that they appear to be cherry-picking those from religious and ethnic minorities. Harper hasn’t really helped, insisting that this is really about ISIS and saying that it’s more important that we carry on the fight against them – never mind that a) Assad and the Syrian government forces have killed more Syrians by far than ISIS or any other faction, and b) air strikes are not going to stop ISIS and the government knows it. He also insists that we’re one of the most generous countries in assisting refugees, but the numbers simply don’t show that. University of Ottawa professor Roland Paris shares some thoughts on the situation, while Scott Gilmore argues that we should take in twenty times the number of refugees being promised now, up to as many as 200,000, which we could pay for by cancelling a couple of boutique tax credits. Michael Petrou notes the real problem of the war in Syria.

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Roundup: Barton vs Alexander

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One of the great failings of our politics is the way that everything has devolved into talking points – and usually, they’re utterly moronic talking points that have little to do with the questions being posed to whichever MP is speaking, and sometimes those talking points are complete non sequiturs to the topic at hand. And it’s not just Conservative MPs who ape them either – the NDP are some of the worst at it, ever since the 2011 communications lockdown started, and there are fewer sights more painful than watching their young rookie MPs being sent into an interview armed only with two or three talking points and nothing more. And then there’s Chris Alexander – Oxford educated, former diplomat, and the most petulant communicator that the 41st parliament produced. With the topic of Syrian refugees top of mind, Alexander went on Power & Politics last night, and tried to spin, deflect, and otherwise obfuscate the topic at hand. And praise be, Rosemary Barton was having none of it, repeatedly calling Alexander on his evasions and when he tried to blame the show for not tackling the subject before then, well, she let him have it. And thank the gods, because it’s about time we see the hosts get tough with MPs rather than pussyfoot around them in the hopes that tough questions don’t offend them into boycotts. (BuzzFeed offers a recap here). I’ve argued before that Barton not only deserves to be the permanent host of the show once the election is over, but given her performance last night, I think she deserves a gods damned Canadian Screen Award.

The full segment:

I’ll also say that the whole affair reminded me of this (faux) Jeremy Paxman interview from The Thick of It, and it fills me with hope that Barton is becoming Canada’s Paxman.

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Roundup: A technical recession

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So there we have it – StatsCan says two quarters of negative growth, which means a “technical” or “statutory” recession. And in case you were wondering, manufacturing was also shrinking, so it’s not just confined to the energy sector (though a lot of Ontario’s manufacturing is now geared to the energy sector). Stephen Harper and Joe Oliver tried to keep the spin on the positive – growth in June, that surplus in the Fiscal Monitor (that may prove illusory). See! Things are on the rebound! Of course, things aren’t so simple, what with some increased consumer spending and employment, and there is a great deal of debate about what it all means (or even if it is a “real” recession, rather than one that meets the statutory definition, which always brings me back to Mike Moffatt’s term “pornographic recession” – knowing one when you see it). Regardless, it’s going to keep things interesting on the campaign trail as parties sharpen their messages over the data. BuzzFeed has a simple guide to what the recession means, while here is a roundup of what the leaders said about it on the campaign trail.

https://twitter.com/mikepmoffatt/status/638702391005589505

https://twitter.com/mikepmoffatt/status/638714053142179841

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Roundup: Defining recession

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While I fear this may becoming a quasi-economics blog over the course of the campaign, it’s numbers yet again in the national consciousness as we learn today whether or not we’re in a technical recession, though there’s a bunch of political dispute over what a recession means. Jason Kenney was on Power & Politics on Sunday trying to broaden the definition to say that it would need to be over a number of sectors rather than just the energy sector as we seem to be seeing in Canada, and while that may be a perfectly reasonable explanation if it was anyone else, it was however his own government who put the definition of two quarters of shrinking GDP into their “balanced budget” legislation just a couple of months ago. Oops. To that end, Rosemary Barton writes about deficit and recession politics on the campaign trail, while Mike Moffatt calculates the projected federal deficits for the next few years based on current economic indicators. And Stephen Gordon gives us some food for thought:

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