Roundup: More tax change caterwauling

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.

And then there’s this kind of silly thinking:

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.

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Roundup: Disingenuous tax concerns

If there’s one thing that the federal government’s announced changes to small business tax rules for the purposes of closing tax avoidance loopholes has done, it’s stirred up a hornet’s nest of comments from the “Tax Bad! Hulk Smash!” crowd, who have come up with all manner of misleading talking points and crocodile tears, while interested parties (such as doctors and farmers) who have been using these loopholes to avoid paying taxes are crying poverty in the media, where there has been very little pushback from credible economists to these sob stories. Particularly galling are those who insist that the ability to engage in income splitting is somehow more virtuous because they’re small business owners, as though there hasn’t been a whole cohort of people who would love income splitting to allow their spouse to be a stay-at-home parent (which is a whole entire other public policy discussion about the value of women in the workforce).

And lo and behold, Jason Kenney decided to try to get his kicks in despite the fact that it’s a federal issue and he’s currently running in the provincial sphere. The problem? That he’s offering a completely disingenuous position.

And that’s the rub – these changes aren’t affecting struggling small business owners. They’re not affecting their ability to keep the business liquid, or to save for retirement, because those haven’t been affected (as we recall, Kevin Milligan has explained this several times). And for the “Tax Bad! Hulk Smash!” crowd to try and cast these changes in such a manner is utterly ludicrous. It’s an attempt to paint the Liberals with a brush of being job killers and high taxers, which is not what these changes are about. It’s about ensuring that people don’t avoid paying taxes by virtue of these measures, so unless they’re keen to promote other forms of tax avoidance or evasion, trying to close loopholes shouldn’t be treated as an added burden to people who are doing well for themselves.

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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: Clarity is not an appeal

With another court case involving First Nations children, you’d expect there to be a bunch of hue and cry, and there certainly has been, but I wonder how much of it is actually misplaced. In this case, the government is seeking clarity from the court on a couple of aspects of the Canadian Human Rights Tribunal decision on applying Jordan’s Principle, which is not an appeal. I’ve seen all manner of people, from reporters to advocates on Twitter railing that the government is appealing the decision. Asking for clarity is not an appeal.

If you actually read the story, they have legitimate concerns about the restrictions around case conferencing and on timelines in the decision, both of which seem to be pretty fair concerns to have given that both ministers are medical doctors and have expertise in what these issues mean. And I fail to see how getting clarity is trying to find a loophole to get out of the decision – it doesn’t track with either the promises, the investments made, or the fact that the whole file is more complex than many of the advocates would let on. You can’t simply pour money into a system that doesn’t have the capacity to absorb it and distribute it effectively, and you can’t just wave a magic wand into a jurisdictional minefield like this particular decision addresses and expect that everything will always have the best outcome by sheer force of willpower, especially when there are areas that are unclear to players involved.

The fact that I’ve been a justice reporter for the past couple of years means that I’ve been exposed to a lot of the sensitivities involved in complex cases, and this certainly qualifies, despite what certain advocates and opposition MPs would have one believe. Outrage that the government is going to court isn’t necessarily warranted, and most of the time, it’s been pretty disingenuous, whether it’s on this case, or in assessing the damages in the Sixties Scoop class action, where again advocates, opposition MPs, and even reporters characterized it as an appeal when it wasn’t an appeal – it was the next stage in a process where they needed to determine damages on a case-by-case basis rather than simply mailing out cheques. Not every time the government goes to court is nefarious, and people need to calm down because there is a lot of crying wolf going on that’s helping nobody, most especially the people who these decisions are supposed to benefit.

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Roundup: One bill passed, one deferred

After very little drama, the budget implementation bill passed the Senate, their tempers cooled overnight. Not that it was ever going to be a real constitutional crisis – blame some garden variety torque for that one, but this wasn’t a meek climb down. The Senate did launch one final jab at the Commons, reminding them that while they are passing the budget bill this time, they nevertheless have the authority to amend or veto budget bills if they so choose – a pointed rebuke to the provocative boilerplate language of the Commons’ rejection of their amendments.

This having been said, what the Senate didn’t do was pass Bill S-3, which aims to remove certain types of discrimination from the Indian Act. The Senate amended the bill to remove all of the discrimination, while the Commons nixed said amendments, and the Senate was more willing to dig their heels in this one. By deferring debate and votes on this until September, it puts the government into a particular legal bind because they were under a court deadline of July 3rd to pass this bill in order to comply with a court order. This didn’t happen, and one suspects that it’s because the senators at the centre of this want to put more pressure on the government to accept their amendments and remove that discrimination.

Meanwhile, Dylan Robertson got a copy of the court decision that refused to extend the timeline for the government.

We shall see what the government’s next move is. I suspect it will be another court extension, but whether the summer to think over the amendments in light of the judge’s ruling may prompt a change of heart. Maybe. Time will tell.

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Roundup: Provocative boilerplate

The House of Commons has risen for the summer, but how long it stays risen could be the big question as the Senate has two bills on its plate that they could send back to the Commons. The first of those is the budget implementation bill, after the Commons rejected their amendment. What inflamed tensions however was the boilerplate language that it was rejected for infringing on the rights and privileges of the Commons.

The fact that this is boilerplate eluded many Senators (and yours truly), given that it seemed to be yet another provocation given some of the underlying tensions in the current dispute. Yes, the language comes from Section 80(1) of the Standing Orders, but given that the Senate is trying to assert its independence and authority, the words seemed particularly targeted in this instance, especially as the Prime Minister rather dubiously claimed that the Senate has no ability to amend or reject budget bills when their only actual limitation is that they can’t initiate them.

Having received this rejection, the Senate decided to leave it overnight to think it over, and with luck, tempers will cool and they’ll get the better sense that this is boilerplate straight from the appendix of Beauchesne’s Parliamentary Rules and Forms, 5th edition, that that it likely wasn’t meant as a slight or a provocation. (Probably. But given how ham-fisted and tone-deaf the House Leader has a tendency of being, this isn’t a guarantee). It’s possible that cooler heads will prevail and they will defer rather than letting it ping-pong.

The more contentious bill may in fact be Bill S-3, which amends the Indian Act to remove gender-based discrimination, but the Commons rejected the Senate amendments that would eliminate other forms of discrimination. This particular bill may wind up being more problematic because it’s not a money bill and there is a bigger point of principle about discrimination and rights which a lot of senators get very exercised about (rightfully), and Indigenous senators in this case are particularly sensitive to. There have been suggestions that some are proposing a conference between the chambers to resolve the potential impasse, but we are not there yet.

Part of the calculation is that because the Commons has risen, a game of chicken is now being declared, where they are essentially daring senators not to recall them to deal with these amendments, and like Peter Harder has been doing, there will be all kinds of voices going on about the expense of such a recall. I think it’s overblown, but it wouldn’t be the first time that the Commons has used such a tactic to try and force the Senate’s hand into backing down on passing bills at the end of the sitting.

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QP: Final accusations of the spring

One what was almost certainly the final sitting day (for real!), and after a number of statements for National Aboriginal Day (to be renamed next year), QP was on. Andrew Scheer led off, worrying that the changes to national security laws will make things too difficult for CSIS to do their jobs, per the fears of a former director. Justin Trudeau assured him that they we getting the balance right of safety and protecting rights. Scheer worried that security was being watered down, and Trudeau reiterated that they were getting the balance right. Scheer then changed to the issue of taxes and demanded he listened to the Liberal senators and stop the escalator taxes on beer and wine, and Trudeau reminded him that they lowered taxes on the middle class. Scheer railed about how they were hiking taxes on ordinary people (and no, cancelling a bunch of tax credits does not equal raising taxes), and Trudeau reiterated his response. For his final question, Scheer spun up a hyperbolic rant about all of the awful things the government has done, and Trudeau responded with a list of accomplishments and promises kept. Thomas Mulcair was up next, accusing the government betraying their promises to Indigenous people, and Trudeau assured him that they were committed to reconciliation and the relationship. Mulcair accused the government of breaking their promises on Access to Information, and Trudeau hit back that the NDP were completely absent on the transparency file. Mulcair worried about the Infrastructure Bank and the spectre of user fees, and Trudeau reminded him that they were looking for new ways to invest in the things Canadians need. For his final question, Mulcair railed about fundraisers, and Trudeau said that they were raising the bar and were exhorting the opposition to do the same.

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Roundup: Amendment and attempted intimidation

As the spring sitting of Parliament draws to a close, and the Commons is getting tired and cranky as MPs are restlessly looking to get back to their ridings, all eyes are on the Senate to see if they’ll pass the budget bill unamended so that MPs can leave, or if they’ll be forced to stick around to deal with delays. It looks like the latter is going to happen after the Senate voted to adopt changes made at the committee that would remove the automatic escalator on beer and wine taxes. (There is some debate around this – while on the one hand there is the argument that increases won’t be scrutinized in future years by Parliament, there is also a reminder that the indexation fight was settled years ago).

So while this means that the Commons wasn’t able to rise last night, and may have to stick around until Thursday, depending on whether or not they pass it at Third Reading tonight, and how fast it takes the Commons to turn around a vote on accepting or rejecting (almost certainly the latter) the amendment.

But that’s not the only curious part of this tale. Apparently when the vote was about to happen, all manner of Liberal MPs and ministers arrived in the Senate to watch the vote happen – but not in the gallery. No, they were instead on the floor of the Senate, behind the bar at the entrance.

While this attempt at intimidation is quite unseemly in and of itself, I’ve also been hearing complaints that Senator Peter Harder, the Leader of the Government in the Senate – err, “government representative,” is admonishing senators not to amend bills this late in the game because recalling the House of Commons to pass or reject those amendments “is expensive.”

I. Can’t. Even.

Telling Senators not to do their constitutional duties of reviewing and amending legislation because it might inconvenience a few MPs is gob-smacking in and of itself, but couching it in dollar terms is beyond the pale. Apparently, we can only have parliamentary democracy if it’s done on the cheap. Why have oversight or hold the government to account if it’s going to cost any additional dollars? I guess we might as well pack it all in and roll over for the government – costs too much otherwise. Sweet Rhea mother of Zeus…

Update: It seems there were some Conservatives there as well.

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QP: Tired jabs and deficit questions

Nearly all the desks were filled on what was possibly the final QP of the spring. Andrew Scheer led off, concerned about the “astronomical” debt the Liberals were leaving behind (which, in absolute terms, is one of the envies of the world because it’s quite low). Justin Trudeau reminded him that they won the election on promises to invest. Scheer tried again, giving a lame “budgets don’t balance themselves” quip, and Trudeau again reminded him that they needed to invest after the previous government didn’t and hey, lower taxes for the middle class and the Canada Child Benefit. Scheer railed about all of the new taxes being levied (most of which were not new taxes but cancelled tax credits that had little efficacy), and the PM reiterated that he lowered taxes. Scheer jabbed that Trudeau had never been part of the middle class, and Trudeau hit back that boutique tax credits and lower taxes on the wealthiest didn’t help those who needed it the most. Scheer then turned to the new national security bill, saying it removed needed tools for law enforcement agencies. Trudeau noted that they were balancing community safety with rights and freedoms, and that they welcomed recommendations for amendments. Thomas Mulcair was up next, grousing that the government broke their promise on allowing Access to Information requests to ministers offices and the PMO. Trudeau simply noted that they made the biggest reforms to the bills and increased proactive disclosure. Mulcair tried again with added mocking, but Trudeau didn’t budge, and Mulcair then railed that they kicked journalists out of a party fundraiser. Trudeau reminded him that they have raised the bar on transparency and that other parties weren’t doing. Mulcair tried again in French, but Trudeau’s answer didn’t change.

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