Great conversations were had in the Hub Forum this week with the issues of housing, COVID-19, and the ongoing Israel-Hamas war prominent in readers’ minds.

The goal of Hub Forum is to bring the impressive knowledge and experience of The Hub community to the fore and to foster open dialogue and the competition of differing ideas in a respectful and productive manner. Here are some of the most interesting comments from this past week.

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Sorry, NIMBYs, but luxury ‘condos for the rich’ are part of the solution

Monday, November 6, 2023

“A big part of the affordable housing puzzle in many Canadian cities is the ‘missing middle’ phenomenon. Small multiplex units in mainly single-home areas. City councils would not zone this type of development for years because of wealthy, conservative NIMBYs not wanting their property values adversely affected by this type of housing.”

— Michael F.

The government violated Canadians’ rights during the COVID-19 pandemic. Now the courts are giving them a pass

Tuesday, November 7, 2023

“There came a point where our governments went too far and kept rules in place that should have been abandoned. They also thought nothing of our rights under the Charter. Our schools should have been opened earlier, people should not have lost their jobs, and governments should not have pitted citizen against citizen. I can only hope that we have learned and are not doomed to repeat our errors because we cannot recognize and accept our mistakes.”

— Susan

“One Unmentioned Big Problem: Radicalized citizens with unfounded certainty that government and intuition elites are plotting against us, while society is collapsing around us, thus requiring unhinged rhetoric and, for some, drastic (likely undemocratic) intervention. Great premise for a post-apocalyptical video game but not the posture a responsible citizen in a prosperous democracy should take.”

— Rob Tyrrell

“Restrictions were lifted as soon as possible. I am glad the government did this. I was angered at those who defied them. it was a scary time and I didn’t want unvaxed, unmasked people anywhere near me. I live alone and it was tough but not the end of the world. This is what we want governments to do: take important measures to protect us.”

— Deborah

The Israel-Hamas war is uniting conservatives even as it fractures the Left

Wednesday, November 8, 2023

“There are no winners in war. The Israel-Palestinian war has been going on since the division of Abraham’s family. Palestinians are no less important than Israelis. They must learn to live together or both will become extinct.”

— Bob Peacock

“Regardless of context, the Oct 7 attack warrants a response that punishes and neutralizes the immediate threat, while returning as many hostages as possible (effectiveness and morality of the current approach is debatable).”

— Rob Tyrrell

We must not remain indifferent to the suffering of our Jewish neighbours

Thursday, November 9, 2023

“Hate all around me for my faith, for my adherence to the book, for my studies, for my feminism, for my desire to not be persecuted, makes me wonder how we can progress in humankind. I go back to my Jewish roots, both in prayer and in service, and I ask for help from an entity much larger than myself.”

— Joan Tucker

A week of important anniversaries highlights a pivotal truth: We shape history, we are not bound by it

Friday, November 10, 2023

“History is a great teacher but sadly many do not learn from history. We repeat the same mistakes over and over. The present conflict in the Middle East proves that the same old way of doing things cannot work. In Canada, there has to be a fresh way of doing politics.”

— A. Chezzi

Last week saw another one of Canada’s largest banks, National Bank, commit to lowering its headcount. National Bank marks itself as the fourth Canadian bank to announce significant layoffs in the past year alone. Bank of Montreal, Royal Bank, and Scotiabank have already announced plans to cut employees. The total number of job losses is expected to be more than 6,000, with analysts predicting that more within the banking sector is on the horizon.

It prompts the question: what gives? 

Declining profitability is one of the main factors. Another is increasingly punitive federal policies including a wave of increased taxes over the past two years projected to cost Canadian banks approximately $10 billion over the next five years. They come in three forms:

1. The 2022 budget announced a one-time 15 percent tax on taxable income over $1 billion for large banks and insurers for the years of 2020 and 2021; 
2. The same budget announced a permanent 1.5-point increase in the tax rate (from 15 to 16.5 percent) on taxable profits over $100 million for financial corporations; and 
3. In the 2023 budget, the government amended a clause in the Income Tax Act that shifted dividends paid to financial institutions on Canadian shares from untaxable income to taxable income. 

The policy rationale for these taxes—what amount to a targeted attack on a single sector—is insubstantial at best, and outright discriminatory at worst. 

The government’s purported reasoning can be traced to some statements made by Finance Minister Chrystia Freeland during a parliamentary committee hearing in late 2022. She argued then that for any new tax, “there [should] be an intellectual justification and a fact-based justification.” As she outlined, the case for these tax increases was that “paying your fair share” is a key priority for the government and the sector disproportionately benefited from its COVID-19 emergency response. 

This reasoning is faulty and raises several questions. The most obvious problem is the singling out of the financial sector. It’s hard to argue that it disproportionately benefited from COVID-era policies—especially since it played a key role in helping the government implement its emergency response. Similarly, as a matter of general tax policy principle, there’s nothing self-evidently fair about targeting a particular sector with punitive taxes. It fails the basic tax principle of neutrality. 

As for the implicit argument that banks are greedy or not “paying their fair share”, it reflects a failure to reckon with the second-order consequences. Corporations don’t pay taxes; they collect taxes. It’s Canadians therefore who will end up paying for them. 

This is apparent in the recent run of job layoffs cited earlier. It will similarly manifest itself in increased fees or premiums for everyday consumers and ultimately in stock prices which will hurt retirees and others invested in the sector. 

Not only will these taxes hurt consumers directly, but they will also have impacts on the wider economy. As Canadian GDP continues to stall, the banks’ ability to provide credit and essential banking services will be pivotal for reigniting growth. A strong and dynamic banking sector is a key prerequisite to higher rates of growth. The government’s policy here is handicapping its growth-enabling capacity. 

It also raises complicated questions about the government’s relationship with the sector. One gets the sense that the government believes by virtue of its heavy regulation of banking (including foreign ownership restrictions) it has a right to expect something of a quid pro quo. Punitive taxes or COVID program delivery or Freeland’s recent demand that the banks lower their fees are expressions of a relationship that’s rooted as much in federal policy imperatives as it is in market forces. This is an unhealthy way to think about the relationship between markets and the state. 

If Ottawa believes that corporations should be subject to more formal regulation or pay higher taxes, then it should make its case and go about enacting such policy changes neutrally and transparently. It shouldn’t rely on threats or sector-specific policies to cajole particular companies to do its political bidding. 

This of course doesn’t mean that consumers may not have issues or problems with their banks. There may indeed be a case that the government should be liberalizing the market for greater competition in the name of lowering fees or improving customer experience. But the solution is a change to the federal government’s overall policy framework rather than threats or implementation of punitive policies. 

Finance Minister Freeland claims the government’s series of anti-growth and punitive bank taxes are rooted in a strong intellectual and fact-based foundation. The opposite is true. They amount to the politicization of tax policy. The losers will be the employees and investors of the banks themselves and Canadians as a whole.