When the Liberals first got elected to office, the favourite game amongst the disgruntled right-wing people was predicting just how long the honeymoon phase would last, and exactly what insane Liberal policy would be the tipping point. My personal guess was that it would involve oil and pipelines. I thought this mainly because of the views of Gerald Butts, Mr. Trudeau’s principal secretary, who in the past had a strident anti-oil, anti-pipeline stance. My second guess was that Canadians would quickly tire of the stream of vacuous statements coming from Prime Minister Trudeau.
As it turns out, the tipping point for the Liberals involves taxes. The Liberals have always been a tax-and-spend party, and Mr. Trudeau wasted no time in increasing government spending at alarmingly high rates. However, the manner in which they chose to go after the resulting “revenue problem” showed a great deal of economic and political naiveté. The Liberals have decided small business owners are not paying their “fair share.” This is a bit of an odd assertion as during the 2015 campaign Mr. Trudeau promised to reduce the small business tax from 11 per cent to nine per cent over four years. It is interesting that, once elected, the Liberals started to reduce this tax, but stopped at 10.5 per cent, breaking yet another election promise.
This proposed tax change has turned into a public relations nightmare. It appears the Liberals want to close what they call loopholes in the taxation of small business owners who operate under legal professional corporations. Certainly, we should all be in favour of fixing any wrongs that exist in the tax system. However, it is not clear the Liberals understand what they are actually attempting to accomplish. In a long line of mind-numbing inane statements, Mr. Trudeau said this tax change will help the middle class at the expense of the one percenters. It is not clear what this means, or how any change of this sort will help anyone. Further, there is no universal consensus on what portion of Canadians actually constitute the middle class in Canada, and whether they actually need government help.
What is clear is the Liberals did not expect the backlash that arose when announcing this proposed policy change, and they immediately went into full damage control. Politically, the Liberals did not seem to realize the group they are targeting are individuals who have been strong Liberal supporters for years. This is a turning point for the federal Liberals; a public relations problem they are bungling badly. Now is the time for the federal Conservatives to step in and somehow convince this portion of the electorate that Conservative policies are favourable to them. For Mr. Scheer, this situation represents a perfect opportunity to show leadership. He needs to step up to the plate and capitalize on this situation.
Frank Atkins is a senior fellow at the Frontier Centre for Public Policy.