Another day, and more moaning about the proposed small business tax changes, which have now been equated to “class warfare”! Yes, a pair of tax lawyers wrote in the Financial Post yesterday about how the ability for small business owners to split their income with stay-at-home spouses was great policy because it was first proposed back in 1966. I kid you not. Fortunately, economist Kevin Milligan is back after a few days offline, and can help sort some of this out.
These TOSI rules already exist. You can't set up 'Potemkin shareholders' with your <18 kids who you pretend are working for the company. 2/
Government is not a business. It cannot be run like one, no matter how many times people like to chant it as a slogan. It fundamentally does not operate in the same way, nor can it ever run in even approximately the same way. The absolute fundamental principles do not translate because government has no bottom line. The sooner people grasp this, the sooner we may have more rational discussions on how to better operate government in a sane and rational manner.
Meanwhile, Andrew Coyne is unconvinced by all of the caterwauling about the proposed changes, not seeing the moral advantage that small businesspeople are apparently owed, and suggests instead that the incentives to incorporate be reduced by bringing the topline personal income tax rate and the small business rate closer together.
We want to encourage entrepreneurs and investment. But there is no reason to funnel that activity thru a specific tax-favoured corp form.
Tongues were set wagging in the Nation’s Capital yesterday when The New Yorker claimed that Justin Trudeau’s principle secretary, Gerald Butts, had struck up a friendship with Donald Trump’s chief strategist Steve Bannon, of Breitbart fame. Apparently, Bannon sees Butts as the left-wing version of himself, or something, and Butts allegedly told him that there’s nothing more populist than a rich guy raising taxes on the wealthy. And while everyone clamoured for some kind of confirmation out of PMO, getting non-denials from official sources, and “it’s just business” from the less official sources, none of the Canadian stories that I read stopped at the part where the New Yorker piece claimed that Trudeau reversed a polling slump by pushing through these tax measures. While I will readily admit that most polling stories give me hives, especially two years out from an election, I can’t for the life of me recall this having happened – Trudeau’s poll numbers have remained stubbornly high, and only really dipped a little when Andrew Scheer won the Conservative leadership, because at that point there was an actual face that people could put to the poll questions (never mind that questions related to which leader one would vote for are illegitimate given our system of government). Trudeau putting forward these tax changes were the first piece of legislation that they tabled, and while it took a while to actually pass (during which time a budget had also been tabled and passed), it had no actual effect on his polling numbers. Where the New Yorker got this particular tidbit is mystifying to me, and why Canadian outlets didn’t call bullshit on this – and subsequently look side-eye at the other claims in the piece – is similarly baffling.
Did they talk to Butts? If not, how do you know they are friends? This story is almost certainly utter crap. https://t.co/DI359Wuxji
Of course, the story would not be complete without Thomas Mulcair coming out to theatrically demand that Butts disavow this “friendship” given all of the drama around racism and white nationalism in the States over the past few days. The problem of course is that a) Butts is not an elected official, and b) there are NAFTA talks underway, and it would be really bad form for our government to so blatantly thumb our noses at the Americans in this way. Keeping a working relationship going would seem to be the most prudent course of action – but that never seem to be the course that Mulcair advocates.
Second, it is not the job of political staffers to 'disavow' political staffers in other countries. Full stop. https://t.co/EppMlgBmbR
There’s been a great deal of concern trolling going on over the past few days when it comes to the planned changes to self-incorporation to close the tax loopholes found therein. Conservative leader Andrew Scheer tweeted out another of his disingenuous messages yesterday, talking about “hiking taxes” on doctors – who are leading the concern trolling charge against this closure of self-incorporation loopholes – which is not surprising, but nevertheless not exactly the truth about what is going on.
Keeping taxes low helps young people looking for their first job. Hiking taxes, especially on doctors, makes it harder on Canadian families. pic.twitter.com/QFra6WcSE1
One of the many challenges of Canadian democracy is our geography – especially the fact that we have so much of it. Rural and remote regions tend to have large riding boundaries, and that causes its own share of problems, particularly when you have a number or ridings larger than countries like France, and no, that’s not an exaggeration. Ontario has been in the process of redrawing their riding boundaries after the federal government did in advance of the last election – notable because Ontario largely follows the federal riding boundaries, but in the past, they split one of the giant Northern Ontario ridings into two for practical purposes. Under this new redistribution, it looks like they want to split it into four instead. Where this becomes problematic is not only the fact that it far exceeds the usual 25 percent variance in rep-by-pop weighting that the courts usually allow, but it’s being justified in giving votes to francophone and Indigenous communities in the area.
In the National Post, Chris Selley takes on this particular proposition, and makes a very good point in that we don’t have any particular basis in this country for awarding “superballots” to traditionally underserved communities as a means of reconciliation or redress. Add to that fact, that while the commission may talk a good game about better enfranchising these Indigenous communities, they traditionally have lower turnouts not only for lack of access by elections officials, but because in some of those communities, they resist taking part because they don’t see themselves as part of Canada, but as a sovereign nation within Canadian boundaries, and participating in Canadian elections would undermine that sovereignty. I’m not sure that “superballots” would change that particular consideration for them either, which could make the commission’s excuse for naught. Would that mean that in these newly created ridings that the non-Indigenous voters who do participate have their votes count that much more? Quite possibly. And while one does understand the frustration and challenges of an immense Northern riding, there are other ways to mitigate those issues, with greater allowances for offices, staff and travel considerations that the government should be ponying up for. I’m not sure that this new proposal is going to pass the Supreme Court of Canada’s smell test.
Yesterday being the UN International Day of the World’s Indigenous Peoples, The Walrus had Robert Jago write a polemic about the sense of betrayal that some Canadian Indigenous people are feeling about the current Liberal government, which promised much but appears to have delivered little. While one could easily argue that much of the litany of complaints are cherry-picking examples and casting some of them in an uncharitable light – many of the promised changes haven’t happened yet because they are complex and systemic, which coupled with a slow-moving bureaucracy that resists change by its very nature, and that means that things take time, not to mention that consultations per Section 35 of the Constitution add time to the process, especially when the government is committing to rebuild many of them from the ground-up. While it’s all well and good to complain that they haven’t poured more money into the system, there are just as many valid reasons for pointing out that pouring money into a broken system is just as likely to exacerbate problems than it will to have any meaningful impact, and we have seen numerous instances of just that – adding money where there is no capacity to effectively spend it has added to burdens being faced by some of these communities.
This, however, wasn’t what bothered me about Jago’s piece, but rather, his recounting of his dipping his toe into the political process and then walking away from it. Buoyed by the soaring Trudeau rhetoric, Jago took out a party membership, tried to get involved, found the party too remote and unresponsive and quickly walked away from the convention he was supposed to attend. What irks me about this is that while I do understand that the disappointment-based disengagement is a Thing, and there is a whole Samara Canada study on the topic, is that this kind of narrative is self-justifying, and Jago goes on a tangent about resistance by refusing participation. Why I find it a problem is that change is difficult, and it generally requires a lot more organisation and agitation within the system than he seems to have offered.
The civics lessons that we’re not taught in this country should include the lesson that if you want to make change, you need to be involved in the process, which means taking out party memberships and organise, organise, organise. Because we’re not taught this, it’s allowed central party leadership, in every party, to amass a great deal of power that leaches power away from the grassroots, and a grassroots that doesn’t know any better doesn’t jealously guard that power. It’s why the Liberals voted overwhelmingly for a new party constitution that absolutely kneecapped the rights of the grassroots in that same convention that Jago refused to attend – because they no longer know their rights, and a slick leader managed to convince them to turn over that power to “modernise” things. And that’s why the party needs active and organised grassroots members to push back and reclaim that power. Walking away at the first sign of resistance just allows the central leadership to hold onto that ill-gotten power. It’s going to take time and a hell of a lot of organisation on the part of grassroots members if we want to start rebalancing the power in this country, but if everyone walks away at the first bit of disappointment, then the party leaders have already won.
With more video evidence that purports to show Canadian-made LAVs being used in Saudi Arabia against their minority Shia population, Foreign Affairs minister Chrystia Freeland has ordered an “urgent investigation” of the claims. At the same time, we’re getting some pretty usual reaction from the various opposition parties and their supporters, that portray the Liberals as being wide-eyed naïfs who had no idea that these vehicles could ever be used for such purposes.
"Wow we had no idea that war machines would be used to kill civilians" – Canada's Liberal MPs.
While it’s easy for the woke supporters of opposition parties to try and paint the Liberals as cynics on the issue, this ignores the very real fact that every party in the election was gung-ho about living up to this contract with the Saudis, and insisting that it would go ahead no matter what, because they wanted those jobs – particularly at the General Dynamics plant in London, ON. The fact that the opposition parties, while doing their jobs of holding government to account, are nevertheless speaking out of both sides of their mouths on this issue. It’s also easy to give facile talking points about how terrible Saudi Arabia’s human rights record is without going into the genuine strategic reasons why they’re an ally in the region, and why that complicates and adds a truckload of nuance into the relationship. And as we’ve discussed before, there is no “nice countries only” option when it comes to having an arms industry, and if you think that we can preserve those jobs without getting our hands dirty in the process, well, real life doesn’t work like that. There are trade-offs to be made, and we should be trying to have an honest discussion about it and what those trade-offs are. This chirping, like from our woke tweeter, is not an adult conversation, and does nothing to reflect the reality of the situation in any way.
The thing that had everyone’s tongue wagging yesterday was the release of those Trump Transcripts™ detailing calls to Australian PM Malcolm Turnbull and Mexican President Enrique Peña Nieto, and the inevitable Canada angle in which Trump says that there’s no problem with Canada, that they don’t even think about us. Some friend and neighbour.
All joking aside, this piece by Andrew MacDougall explaining how readouts of calls with foreign leaders work is crucial reading to understanding why it’s important for diplomacy that world leaders be allowed to have open and frank conversations without these kinds of details leaking out. While yes, these Trump leaks are more about the damage to his domestic agenda, they’re not revealing much about him that we don’t know already, but it remains an issue that it sets a very bad precedent, and that could have bigger and worse repercussions down the road, not only for the ability of politicians to speak freely to one another, but also for the likelihood of there being note takers in the room with Trump in the future, and neither is a good thing.
I can't remember seeing a full PCO transcript of a PM call. I'm sure the audio exists but can't think of who could have leaked this in US. https://t.co/53ufVbeMBp
In the wake of news that Saudi Arabia has, rather unsurprisingly, used Canadian-built LAVs against its own civilians, former Liberal cabinet minister Irwin Cotler is calling on the government to end arms sales to that country. Part of the problem here is that it means a lot of lost jobs in economically vulnerable areas of the country (where these jobs are really the only thing that is keeping that region from being devastated), and the fact that there seems to be this notion that we can only sell arms to nice countries. That notion came up in last night’s NDP leadership debate in Victoria, where the three participants all gave variations of “we should only sell to nice countries,” which is unrealistic. Stephanie Carvin made this point over Twitter a couple of days ago, and it deserves a second look.
Canada has an arms industry. There are good reasons to keep it. But must stop fiction that our weapons won't be used to kill. #cdnfphttps://t.co/CmpNP9op4r
And that last point is the most salient – nobody wants to make hard choices, especially when it means lost jobs and economically devastating a region that each party covets (and make no mistake – all parties supported these jobs during the election, which makes it hard for them to be suddenly concerned about these sales to Saudi Arabia now, when they were all rooting for them when votes were on the line).
As the new United Conservative Party in Alberta starts to take shape, some familiar populist tropes have been tossed around, which the leadership candidates – Brian Jean especially – don’t seem to actually think through before proposing it. Colby Cosh, on the other hand, did think through some of those proposals and the problems that they would cause, particularly when it comes to thinks like local referendums on photo radar (which I will remind you is ridiculous – if you don’t want to get a ticket, then don’t speed. It’s your own damn fault if you get one), but the big one is promised recall legislation. People keep bringing this particular idea up time and again, enamoured with American examples thereof, without actually thinking through the consequences of how it would work in our particular system, especially when there are more than two parties on the ballot, making thresholds an important consideration. In BC, the one province where recall legislation exists, it’s set at 40 percent of eligible voters, making it high enough to never actually be used, but the Wildrose had previously proposed a twenty percent threshold, which would set up a constant flow of recall initiatives, at which point it becomes comical. Suffice to say, populism is not democracy, and people who treat them as interchangeable are asking for trouble.
Meanwhile, as could be expected, old Wildrose holdouts are looking to revive their now moribund party in one form or another, likely with a new name but the same policies and party constitution, given that they resolutely remain opposed to uniting. At the same time, former PC operatives and the provinces’ hipster centrists, the Alberta Party, are holding “Alberta Together” meetings, to apparently try and solidify the centrist vote in the province, for what it’s worth.
A story out of Brockville yesterday is a bit disconcerting, where local Conservative MP Gord Brown held a town hall in the community about the Omar Khadr settlement, saying that he wanted to get people’s views because everywhere he went, it was all people would ask about. He also claimed that it “wasn’t a partisan issue,” but I would be willing to bet actual money that the way in which Brown presented the case was through a deeply partisan lens, regurgitating the party’s disingenuous talking points and legal prevarications that distort the crux of the matter. And what disturbs me the most is that listening to the reactions in the write-up of the event, it starts sounding an awful lot like a Two Mintues Hate than anything, where people recited the completely wrong tropes about Khadr’s situation and situation as it regards the rule of law. It was at least heartening that a local lawyer turned up at the event, brandishing a copy of the Charter of Rights and Freedoms and laying down the law about why there was a settlement, and it’s quite the photo that ran with the piece – but I doubt that it would change very many minds, considering the distortions that are continually spread by the partisans (on all sides, to be completely fair, given that many a Liberal partisan conveniently forgets the roles that Jean Chrétien and Paul Martin played in this). Nevertheless, the fact remains that holding a town hall on this issue is deeply creepy.