Let Them Eat Gâteau: Trudeau Knows His Tax Plan Is No Electoral Impediment

“A government that robs Peter to pay Paul can always depend on the support of Paul” —George Bernard Shaw

While no one would suggest that Justin Trudeau is a great consumer of Shavian literature— he’s a feelings kind of guy—he has digested at least one morsel of GBS political cynicism. 

As Trudeau’s latest taxation brain wave illustrates, there are miles to go before he can sleep in the bosom of a just-and-equal tax system. Desperate for more dollars to stoke his post-modern Canada, Trudeau has now targeted the low-hanging fruit ready to be to plucked in Canada’s entrepreneurial class. 

And he knows electoral math won’t be changed by shaking down “rich” people.

Shaw made his observation about taxation in 1944, as England was preparing to embrace a social democratic model of government after WW II. So Trudeau has launched a war on tax “cheats” (and gender-pay discrepancies). He knows he has plenty of allies in the attempt to paint the small-business class as tax dodgers.

Put simply, Rolling Stone’s favourite elected politician has suggested that many small businesses are playing loose with the tax code when it comes to “sprinkling” dividends and other income-sharing devices used by business people. So he’s taken aim at small firms, doctors, farms and other engines of the economy that employ 48.3 percent of the nation’s work force.

While he has never run such a business, Trudeau insists that compensating spouses, children and other family as a way to lower the main bread-winner’s tax burden is an affront to God. Or the CRA, which is often more unforgiving than God. 

“I will make no apologies for this approach,” he says. In his quest to shake the pillows of the economy for spare change he’s planning to crack down on businesses that can “pay a little more… People who make $50,000 a year should not pay higher taxes than people who make $250,000 a year … we are going to fix that problem.”

The scorn from new conservative leader Andrew Scheer for this “problem” was immediate. “We will not allow Justin Trudeau to keep spending billions wrecking our economy and then forcing local businesses — the very people who create jobs and opportunities in their communities — to pay the bill.”

The criticism from small business has likewise been unrelenting since Finance Minister Bill Morneau released the government’s proposals in mid-summer. Such was the blowback that Morneau needed conference calls to calm nervous Liberal backbenchers.

Those most affected by the tax changes have talked about the risks they take in starting businesses (over 50 percent reportedly fail within five years), often mortgaging homes to get capital to start up. Financial planners have suggested the moves will send capital offshore. 

Conservatives have contrasted this with the risk-free MP pensions of Trudeau and Morneau which are vested after just six years. Many longtime MPs will receive more than $100,000 a year for the rest of their lives. Indexed to inflation, the plan will guarantee millions of public dollars each to MPs should they live until age 90.

Businesses hit at the same time with the punishing tax and energy regimes of Ontario’s Liberals are now listening to lucrative offers from border U.S. states, which are attracting disaffected business owners with tax breaks, cheap real estate and others blandishments. 

But the silver-spoon prime minister is giving no ground. “We’re doing more for the people who need it, and less for the people who don’t. That’s the commitment we made to Canadians and will continue to make to Canadians,” he said. So eat gâteau. 

While the comments seem like more tin-eared Trudeau class warfare, the prime minister is engaged in savvy politics. He knows that the small -business class of Canada is never going to vote for him. At the same time, he knows that corporate Canada— busy cutting its social-image cloth to fit its progressive coat— is not making a stand on the issue. Where’s the downside for the PM?

If you’re Mr. Trudeau, you know that your growth is to the left, into NDP territory that is currently in play as the party tries to come up with a successor to Thomas Mulcair. Playing class politics— robbing Peter to pay Paul, in Shaw’s words— is a winner with his urban supporters and more than a few Greenies. 

A tax revolt may be nasty, but for the large swath of Canadians whose lot is a government cheque or paying few-to-no taxes, it’s not big enough to dislodge his formula to beat new Conservative leader Andrew Scheer in a head-to-head match— especially with a diminished NDP. 

Bruce Dowbiggin @dowbboy.is the host of The Full Count with Bruce Dowbiggin on anticanetwork.com. He’s also a regular contributor to Sirius XM Canada Talks Ch. 167. A two-time winner of the Gemini Award as Canada's top television sports broadcaster, he is also the best-selling author of seven books. His website is Not The Public Broadcaster (http://www.notthepublicbroadcaster.com)