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Sean Speer: The first job for finance should be boosting worker pay

Commentary

Over the coming days, The Hub will publish mandate letters for the incoming cabinet ministers that set out a series of bold policy prescriptions that would cumulatively tilt Canadian politics towards a different and better future.

The best antidote to anger and frustration is aspiration and purpose. The campaign has demonstrated how urgently Canada’s body politic needs such a remedy. There’s no time to waste. It’s time to get to work.

Dear Minister of Finance,

I am honoured that you have agreed to serve Canadians as the Minister of Finance.

As you know, our government must have a both a short- and long-term orientation. The immediate priority is to help the country through the COVID-19 pandemic and to catalyse a post-pandemic recovery. Getting Canadian businesses and families to the other end of this crisis is the key to restoring stability and optimism in our economy and society.

Beyond that, though, over the long term, we face many opportunities and challenges including geopolitical instability, aging demographics, climate change, reconciliation with Indigenous peoples, long-term fiscal challenges, low productivity, and slow growth.

Each of these issues could easily consume a government’s attention, focus, and resources. But we do not have the luxury of prioritizing one or some of them. They require similar levels of energy and ambition if we are to lay the foundation for a different and better future for Canadians.

An emphasis on the future is a much-needed antidote to the growing anxiety and pessimism in our country. Even before the pandemic, too many Canadians worried that their children will not have the same opportunities and living standards as them. The pandemic has exacerbated these concerns and cast a pall of uncertainty over our economy and society.

In this context, Canadians have grown skeptical of the ability of government to put aside partisan differences or short-term political advantage and make the hard yet necessary choices to mitigate our long-term challenges and accentuate our opportunities. It is incumbent on us to prove to Canadians that their skepticism and doubt is unwarranted. We must rebuild their trust through our actions and choices.

This principle extends to all aspects of governance. Our government must live up to the highest ethical standards, including openness, honesty, and accountability. I expect you to reflect these values in your work. It is critical that we honour Canadians’ trust in us and the history and dignity of the institutions and roles that we occupy.

Our immediate policy priorities flow from the best ideas and rooted in evidence. As the Minister of Finance, I would ask that you work with your colleagues to deliver on the following key priorities:

  • Expand the Canada Workers Benefit to increase the incentives for low-income workers to find and obtain employment by boosting their take-home pay.
  • Conduct a thematic review of the federal tax code (e.g., housing, education, retirement savings, etc.) to eliminate, consolidate, and streamline tax expenditures in the name of improving the tax system’s efficiency, equity, and simplicity.
  • As part of this exercise, consider shifting the unit of taxation from the individual to the household for the purpose of addressing horizontal inequities between households with the same level of income but different income distribution between household members.
  • Experiment with wage subsidies to help workers with weak labour force attachment — including long-tenured unemployed, Indigenous peoples or refugees — to obtain employment.
  • Consider reforms to the federal government’s system of fiscal federalism including its major transfer payments and possible tax swaps (e.g., eliminate the GST) with the provinces and territories that reflect the optimal incidence of different forms of taxation according to order of government.
  • Establish a new, regularized process for “zero-based budgeting” that evaluates the efficacy of program spending relative to the cost of raising revenues or public borrowing.
  • Control the rate of program spending growth to no faster than economic growth and population growth.
  • Make progress towards eliminating the federal deficit and start to reduce the federal debt-to-GDP ratio over the medium-term.
  • Enact Opportunity Zones to provide preferential capital gains tax policies for private investment in economically-distressed neighbourhoods and communities.
  • Establish a multi-year, long-term growth strategy — including measurable targets — to guide policymaking and enable Canadians to track progress and hold the government accountable.
  • Provide funding for a new common platform for standardizing interprovincial policy and regulatory divergences on an apples-to-apples basis (similar to the Canadian Institute for Health Information) in order to enable a process of harmonization and mutual recognition across provinces and territories.
  • Eliminate the preferential tax rate for small businesses and in turn lower the lower general corporate tax to incentivize growth and scale.

I know I can count on you to fulfill these responsibilities and help to deliver a different and better future rooted in prosperity and opportunity for all Canadians.

Sean Speer: Now it’s time to replace anger and frustration with aspiration and purpose

Commentary

And like that it’s over. Thirty-six days of the federal election campaign have come and gone. Canadians have heard from the various parties for more than five weeks and finally had their say. The anti-climatic finish seems fitting for a mostly anti-climatic campaign.

It feels like mere days ago that Prime Minister Justin Trudeau was standing at a podium at Rideau Hall talking about how we found ourselves at a “really important moment in Canada’s history.” Events subsequently conspired to broadly conform to his early election framing.

The ensuing days and weeks were indeed highly eventful including the rise of a fourth wave of the COVID-19 pandemic, Afghanistan’s collapse into chaos, recriminations over abortion, guns, and health care, an economic contraction and an inflation spike, and Canada’s exclusion from a new Anglosphere partnership on defence and security.

Yet, notwithstanding these major developments, one would be hard pressed to argue that the election campaign was defined by high-minded debate and strategic thinking on these fundamental issues. If the country actually finds itself in a “pivotal, consequential moment” as the prime minister described, Canadians could be forgiven for failing to understand the gravity of our circumstances or the competing ideas on offer to address them. Instead we got laundry lists of policy promises undergirded by a multi-partisan consensus in favour of rising government spending and long-run deficits and debt.

The Liberal campaign, in particular, was cynical and crass. Gone was the aspiration and energy of the extraordinary 2015 election. In its place was a campaign that stumbled from one wedge issue to another in search of any semblance of purpose. Notwithstanding the ultimate outcome, it’s hard to think that Prime Minister Trudeau feels good about his campaign’s highly-divisive tenor and tone. So-called “sunny ways” were replaced by an abject expression of desperation and negativity.

Although his “petulance and gloom” was undoubtedly about achieving partisan advantage, it inadvertently matched the mood of the country and became the campaign’s overall theme. This wasn’t a campaign about ideas, issues, or arguments. The 2021 federal election campaign was an exercise in anger and frustration.

As pollster Darrell Bricker tweeted in mid-August:

“The best word to describe Canadian voter opinion right now is brittle. It is a combination of anxiety, uncertainty and frustration. It has the potential to shatter. After many months of stability things are beginning to stir.”

He may have been slightly off on the actual election results, but Bricker’s read on the public’s “anxiety, uncertainty, and frustration” captured something happening below the surface of Canadian society. He recognized that Canadian governments’ (both federal and provincial) ongoing COVID-19 responses were the subject of a lot of pent-up skepticism and criticism within the general public.

A perceived loss of agency — a sense that we’ve effectively lost control of our lives — was at the backdrop of this attenuated campaign.

This anger and frustration spilled into the campaign in the form of regular protests following the Liberal Party leader’s campaign stops, the surprising and sustained support for the People’s Party, and the wedge politics practiced by the Liberals.

Journalists and pundits spent most of the campaign debating what had Canadians seemingly so angry. Was it the pandemic lockdowns? Or vaccine passports? Or something else altogether?

Recent polling for The Hub points to the practical and psychological effects of living with pandemic-induced uncertainty. The poll, conducted on our behalf by Public Square Research and Maru/Blue, asked Canadians whether they thought the worst of the COVID-19 pandemic was over or still yet to come. Nearly half of respondents (47 percent) said that they don’t know what the future holds.

This perceived loss of agency — a sense that we’ve effectively lost control of our lives — was at the backdrop of this attenuated campaign. It seems clear in hindsight that policymakers have underestimated how deeply the pandemic’s alienation and uncertainty have affected people.

Emergency programs such as the Canada Emergency Relief Benefit could mostly solve for people’s material needs. But no amount of government spending could substitute for lost child care, postponed weddings, delayed office re-openings, uncertain employment prospects, or ongoing distance from loved ones. The practical and psychological effects of these losses are both ongoing and immeasurable.

It’s almost as if some Canadians didn’t fully realize how much this alienation and uncertainty was affecting them until they were given an opportunity to express themselves in an election campaign. Then their feelings of anger and frustration suddenly came pouring out in a paroxysm of passion, protests, and populist politics.

Although the top policy priority of the incoming government will be to steer the country through the pandemic, its overarching goal must be to restore people’s sense of control over their own lives. This will require a rejection of petulance and gloom and a renewed commitment to a positive-sum, future-oriented vision for the country.

With the campaign now over, The Hub will return to its main goal of being a catalyst for ideas and debates for such a vision for Canada. Over the coming days, we will publish mandate letters for the incoming cabinet ministers that set out a series of bold policy prescriptions that would cumulatively tilt Canadian politics towards a different and better future.

The best antidote to anger and frustration is aspiration and purpose. The campaign has demonstrated how urgently Canada’s body politic needs such a remedy. There’s no time to waste. It’s time to get to work.