The one conclusion to be drawn from the latest – and longest – Throne Speech from Stephen Harper’s government is that the Conservatives have no idea how to actually grow middle-class incomes. So, they keep coming up with mini-measures designed to stretch stagnant paycheques.
These may help temporarily alleviate the “anxiety” Liberal Leader Justin Trudeau ascribes to Canada’s frustrated middle class, but they do not address the root causes of slow-growing salaries. That would require the kind of overarching vision from which the incrementalist Mr. Harper abstains.
Not that Mr. Trudeau has come up with any ideas himself. He seems more preoccupied with perfecting “feel your pain” politics than articulating policies to grow middle-class incomes. “We have to be really smart,” is all star candidate Chrystia Freeland (co-chair of Mr. Trudeau’s “council of economic advisers”) has offered in the way of solutions – which is to say the Liberals have none that could pass the real-world, non-academic sniff test.
Tom Mulcair’s cupboard is even emptier. The New Democratic Leader has had to repudiate his own star candidate’s proposals to raise taxes on the rich, lest his party again fall victim to its radical image. Forced to compensate for Linda McQuaig (who has advocated for a 70-per-cent top tax rate and is Ms. Freeland’s rival in Toronto Centre), Mr. Mulcair often sounds more conservative than the Conservatives these days.
The NDP Leader does vow to reverse Conservative reductions in the federal corporate tax rate, now 15 per cent, reminding us that the posted U.S. federal corporate tax rate is 35 per cent. But countless loopholes mean that effective U.S. rates – what companies actually pay – are typically lower than ours. And it’s hard to see how raising corporate taxes here would boost incomes.
All of this is to say that Canada’s main federal parties have identified middle-class angst as the pivotal issue of the next election. But none of them has a credible plan to address this angst’s real causes.
Despite the Throne Speech’s inspirational talk about this being “Canada’s moment,” there is no evidence the Conservatives know how to seize it in a way that positions the country to take on the 21st-century economic challenges that threaten the average Canadian’s standard of living.
Exploiting resources and cutting taxes remain the cornerstones of Conservative economic policy. The Tories have paid lip service to innovation policy, but have hardly made it an economic priority. Yet, as BlackBerry teeters, the innovation imperative only grows more urgent.
Alberta needs only so many welders. In most of the country, growing middle-class incomes will only be possible by replacing relatively low-skilled manufacturing and service jobs with high-skilled ones that leverage the latest technologies. Yet, the government’s economic nearsightedness results in handouts to keep Ford assembly jobs in Ontario – the kind of jobs that will increasingly pay less.
Hence, the Throne Speech’s focus on consumers. As the Tories see it, the real problem faced by middle-class Canadians is not how much they earn. Rather, it is how much cellphone companies and retailers charge them – and how much governments tax them.
There is nothing wrong with promising to crack down on wireless roaming charges or exorbitant credit-card commissions faced by small businesses. But these are half-measures that underscore the Conservatives’ unwillingness to undertake the economic reforms that would make Canada’s economy more competitive in the first place, such as lifting domestic ownership limits on telecom companies or allowing foreign air carriers to fly between points within this country.
But bold economic thinking would be out of character for a government that figures it can placate the middle class with tax breaks. This is, after all, a government that has already given us the Children’s Fitness Tax Credit, the Children’s Arts Tax Credit, the Family Caregiver Tax Credit, the Tradeperson’s Tool Deduction, the Textbook Tax Credit, the Public Transit Tax Credit, the Volunteer Firefighters Tax Credit and the First-Time Donor Super Credit, among others.
Now, it’s vowing to reduce our cellphone bills, crack down on retailers who overcharge us and let us subscribe to the National Geographic Channel without having to pay for Peachtree TV, too. Your kids may be working at Starbucks or headed for Alberta, but at least you’ll be able to pick just the channels you want.
As political strategies go, it might work, as long as the Liberals and NDP remain equally visionless. But it won’t ease what’s really eating away at the middle class.