It’s official: the shine is coming off the pony. On Monday, Prime Minister Justin Trudeau announced that the Liberals will not be proceeding with some of the changes they have proposed to small business taxes.
After insisting defiantly in September that “we’re doing more for the people who need it and doing less for the people who don’t,” Trudeau on Monday made his mea culpa, saying that he wants to make sure “that everyone benefits in the right ways from the proposals and measures we put forward to encourage small businesses to grow.”
Those measures will be fully unveiled over the course of the coming week, but include some sort of climbdown on a pledge to eliminate income sprinkling — which allows small business owners to split income with family members who benefit from a lower tax rate, though they may not actually perform any work for the company.
The Liberals are also reversing their proposal to eliminate the lifetime capital gains exemption, a measure which helps shareholders plan for retirement and avoid negative tax consequences from the intergenerational transfer of family businesses. Trudeau also dusted off the government’s election promise to lower the small business tax rate from 11 to 9 per cent, which he promises to implement by 2019.
The venue for this announcement was a curious choice for this government: a news conference in Stouffville, Ont., a place most Parliament Hill reporters don’t even know exists. All that was missing was a Tim Hortons sign in the window and we could have been back in the days of the previous Conservative government, which routinely made announcements as far away from Ottawa as possible.
That was weird. This was weirder: Finance Minister Bill Morneau attended the announcement but stood silently at the back of the room while his boss did the talking. At one point, when a Global TV reporter sought to ask Morneau a question, Trudeau interjected: “I’ll take ‘em … because you have a chance to talk with the PM.”
We get it. You’re the prime minister, and so much more important. You’re also not the shareholder of a small business corporation that owns a villa in France. Unlike Morneau, you haven’t neglected to mention this fact to the ethics commissioner, whom the opposition is now asking to look into the matter. You aren’t also linked to a firm like Morneau Shepell, which could benefit from changes to overseas tax treaties. In other words, you aren’t rapidly becoming a high-flying albatross for a government that likes to paint itself as the champion of the middle class.
A word of caution, though, Mr. Trudeau: We’ve seen what happens to leaders who try to silence embarrassing colleagues before. In the 2014 Quebec election, PQ leader Pauline Marois literally shoved newly minted candidate Pierre Karl Peladeau out of the way so she could take a question.
Marois was clearly trying to avoid a repeat performance of Peladeau’s impromptu fist-pump in support of Quebec separatism, given at another press conference just days before. But her actions came across as imperious and condescending. The media went wild, christening the moment ‘le shove’. And we all know how the rest of that election campaign turned out.
Now, I’m not predicting that Trudeau will lose the 2019 vote and that Morneau will become party leader. But I am suggesting that the kind of arrogance displayed by the PM won’t play well with voters already wearying of his obsession with selfies and socks.
They also don’t stack up well against his new opponent: NDP leader Jagmeet Singh, who brings not only style but a lot more substance to the table. Singh’s sang-froid was on full display when confronted by a racist heckler, in a video that has since had over 35 million views and been christened his “Trudeau boxing moment.”
Progressive voters may well give Singh a chance, while centre-right voters appear to be taking a shine to the less-flashy Andrew Scheer. The latest Angus Reid poll has the Tories and Liberals dead even at 35 per cent nationally, and at 37 per cent in Ontario. Indeed, the only province the Liberals are leading in is Quebec, where Trudeau trumps the Tory leader 40 per cent to 20 per cent.
It’s politics — not policy — that explains the Liberals’ latest charm offensive. But if they want it to work, they’ll have to put more emphasis on charm, and less on the ‘offensive’.