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The Salon is ONW's weekly gathering place where three of Canada's brightest and most respected political strategists - John Capobianco, Marit Stiles and Bernie Farber - come together to analyze national issues affecting Ontario.

Justin Trudeau is promising to hike taxes for those making over $200,000 while lowering them for those whose incomes are between $44,000 and $90,000. Does he have the right balance, both for kick-starting Ontario's sluggish economy, and wooing the voters he needs for the scheduled October election? John Capobianco, Marit Stiles and Bernie Farber debate that in The ONW Salon.


Bernie Farber: 

Taxation, budgets. The two words alone make our heads spin. In all my years watching governments plan a financial future for its citizens I have rarely seen a tax plan that worked, with the possible exception of Paul Martin’s budget which today folks from all political groups hail.

This was a bold move by Justin Trudeau. It will make some people very happy and will annoy many more. Par for the course.

In a nutshell, Trudeau’s plan is to give more to the struggling middle class while proportionally raise the taxes of those who can most afford it. Folks in that mid-range (probably a huge chunk) making between $44,000 and $89,000 — give or take) stand to benefit the most.

There is a child benefit plan that will put more cash in the hands of families that most need it and it will cancel the ridiculous income splitting plan that even the late Jim Flaherty understood was nothing but a cash grab for the richer amongst us.

There has already been much caterwauling especially amongst the Tories whose ultra rich friends are undoubtedly complaining, and I suspect we will also hear from the NDP, whose mantra of raising corporate taxes is missing from the Trudeau plan. 


Marit Stiles: 

Here I am, Bernie, ready to complain about those darn corporate tax breaks that Liberal and Conservative government keep giving away. Pesky me. Well, we'll get back to that later. 

I'm actually going to caterwaul a little over the plan released by the Liberals ... the one that was released in the diner, aimed at convincing "regular' Canadians that the Liberals are the party that best represents them. 

Unfortunately, they somehow left out 18 million of those 'regular Canadians' from their plan. Oops.

That's right, folks, the Liberal plan does NOTHING for the bottom two-thirds of all those who file taxes. And — whaddya know? — the biggest benefits will go to the people near the top. Plus ca change....

Over two-thirds of all tax filers — that's nearly 18 million Canadians — have incomes below the cut-off for the Liberals' tax plan, according to the Canada Revenue Agency. That means they get nothing, nada, not a penny in tax savings from this Liberal plan that is supposed to benefit those very people. And as always, the maximum tax break goes to those who earn the most — between $89,401 and $200,000.

I get that Mr. Trudeau may see that demographic as 'the middle class'. But I think he's missing the point. There are 18 million Canadians who are struggling, who consider themselves to be 'regular' Canadians and who need a break. Where are they in this plan?

Don't get me started on the fact the Liberals are keeping the child benefit. How does that help anyone who is on a waiting list for childcare? We need a national childcare plan, and we need it now.


John Capobianco: 

I was expecting, as I'm sure many Canadians were, that the Liberals would finally realize that after constantly voting against Conservative tax-cut measures and complaining about our successive job-creating and economy-stimulating budgets, that they would finally respond with something bold and creative. Well, not the case. 

In fact, the double speak of this Liberal leader is rich — offering tax-cuts when they have consistently voted against tax-cuts is going to make Canadians more sceptical about this leader than they already are. The Liberals want Canadians to believe that they will actually come through with their promise of cutting taxes for the sake of cutting taxes, without a plan in the event the economy continues to be soft. 

This scheme would cost two billon dollars to implement, which Trudeau says he will cut from government advertising and scrapping the PM's Tax Free Savings Account.

This in fact will cause taxes to be raised on Canadians earning $60,000, since the majority of TFSA holders are middle-class income earners. As well, what about the other promises he says he will implement if he ever becomes PM, such as infrastructure, funding to the CBC and other provincial-related spends?

Canadians will not be fooled by this sleight of hand manoeuver for the sake of trying to finally catch up to the Conservatives.


Bernie Farber: 

Marit, you may be surprised to hear that I agree with you on the need for a National Child Care plan. I do hope (and I'm privy to nothing) that as more of the planks are rolled out we will not only see a vision on child-care but some more help for the working poor.

As it stands the present Liberal plan does reach out with a Canada Child Benefit starting at $6,400 per year untaxed. And that is for each child under six. It gives $5,400 of tax-free allowance for children 6-17 years old for families on low income. It ends such benefits for families making more than $190,000.

John, your understanding of tax policy is impressive but honestly, and forgive me, my eyes shaded over trying to understand your interpretation of what most pundits like John Ibbitson call "simple, powerful and politically effective."

To be sure there is more we need to know and I believe we will see the meat on the bones in the coming weeks and months. Most middle-income folks have seen their savings wither away and feel disempowered. From this first salvo from the Liberal leader we do see a keen acknowledgement that we need to do more for middle-income earners, who are the muscle of any country's economic system.

And I do also believe that the Child Benefit program, which puts more cash into the hands of those who most need it, is a huge start. I too though hope to see more. 


Marit Stiles:

Bernie, you make a good point that this is only the Liberal leader's first salvo and I do welcome the first sign of actual policy/platform that we are now finally seeing from the Liberals. It's important that Canadians have an opportunity to see 'the meat on the bones' and hopefully it won't be just the scraps for pickin'.

But seriously, it's time to have a real debate about the real issues and the real solutions to what ails the Canadian 'middle class'. I put that in quotes because I think most of us — the more well off, and the folks who are really struggling — like to think of ourselves as 'middle class'. That's why it works so well for politicians: they reach out and touch a lot of 'regular' folk when they talk 'middle class.'

Sadly, the kinds of policies that we've seen the Liberals promote, and particularly this policy, fail on so many fronts. Tax cuts solve everything in that world, and we know that simply is not the case. Whether on the corporate front or personal taxation, the solutions are more complex and require greater guts then this leader is willing to show.

I've gotta say it: they could do better. I'm glad to hear Bernie say that he supports Mr. Mulcair's call for a national childcare program. But the Liberals promised and promised and promised again that they would bring such a program in, and didn't do it until the eleventh hour when they knew it would fall with the election.

I would caterwaul (thank you Bernie, that is an excellent word) some more about the past and how the Liberals helped create the squeeze on the middle class, and the growing inequality gap, but my final note is going to be about the 'right now': Canadians expect progress on their priorities but it's going to take strong leadership and experience, along with a commitment to take the real steps to make life better and create good jobs and opportunities. 

That's the difference between what the NDP can offer and what the Liberals are willing to put out there. Just look to Alberta to see what it means to put forward a real, viable alternative to the Conservative agenda, and which party is capable of it. 


John Capobianco:

I have always believed that Canadians who are able to find jobs and are working hard to make a living should be treated with respect when it comes to how any government takes their money. While never pleasant when a good portion of your income is taken away, many Canadians understand and support the need to pay for services and for those unable to work or find work.

However, where Canadian taxpayers have a problem is with how governments spend their money. The reason Canadians have supported this government is because they have had a solid economic plan through some very challenging economic times.

As Marit suggests, we are all glad to see the Liberals finally come up with a plan so we can have discussions about tax cuts and the economy, but this will come down to who Canadian believe has the track record and the plan to ensure our country's finances are being looked after in good times and in challenging times.




About The Salon

John Capobianco is a former CPC candidate and long-time party activist in both the federal and Ontario Conservative parties; Marit Stiles is a federal and Ontario NDP strategist; Bernie Farber is a former Ontario Liberal candidate and one of Canada's leading human rights experts.
Posted date : May 06, 2015

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