Jim Flaherty says he can understand the “legitimate frustration” of Occupy Wall Street protesters in light of persistently high youth unemployment.
While not quite as supportive of the movement as celebrities like Susan Sarandon, Kanye West and Michael Moore, the Finance Minister stressed that Canada’s situation is different than that in the United States because of its tighter financial regulation and more progressive income tax system.
“It really is a Wall Street proposal,” he told reporters prior to flying to France for key G20 meetings on the global economy. “In Canada we have a progressive income tax and it favours people with lower incomes who are vulnerable, quite frankly, in Canadian society. Our tax system is clearly progressive. Having said that I see a point that income distribution is important and that there is a concern that a very, very small group of people have very large incomes.”
Mr. Flaherty’s comments are as close as Canada has come to wading in to the highly divisive debate playing out in the United States over the so-called Buffett rule, a proposal advocated by President Barrack Obama that would see millionaires pay higher taxes.
The push was inspired by comments from billionaire investor Warren Buffett, who made headlines for noting that he pays a lower tax rate than his secretary because of various tax shelters permitted under U.S. tax code. Republicans have said they are solidly opposed to any tax increases and want spending cuts to form the backbone of America’s deficit-fighting plan.
The loosely-organized protest movement, which is generally focused on the growing divide between the rich and the poor, has spread to other American cities and is expected to include events in major Canadian cities this weekend.
Mr. Flaherty argued the issues are different in Canada because tighter regulation of the financial sector meant that, unlike on Wall Street, there was no need for the government to step in and bail out major financial firms during the recession.
“I think there’s a reflection of some concern there of a lack of opportunity, which isn’t terribly surprising when you see the size of the youth unemployment rate, particularly in the United States. I can understand some legitimate frustration arising out of that,” Mr. Flaherty said.
“Having said that, in terms of our Canadian financial institutions, we not only regulated them, we supervised them and we continue to do so and we do not have a situation in this country of financial institutions that are not acting in a prudent and responsible way, so that’s our job. Our job on behalf of the Canadian people in government is to make sure that there’s appropriate, not only regulation, but supervision – and we do”
NDP finance critic Peggy Nash, who represents a downtown Toronto riding, says the Opposition has not decided whether to actively support the “occupy protests,” which include plans for a demonstration Saturday in the Ontario capital.
“I think the goals of this whole Wall Street, Bay Street initiative, in terms of reducing the gap between rich and poor, not continuing with corporate tax cuts, investment in programs for people, these are very much goals we support, but I don’t know if I’ll drop by,” she said.
As for Mr. Flaherty’s comments, she said the minister appears insulated from the frustration of Canadians who are unemployed or concerned about job security.
“I think he’s misreading the real frustration and insecurity that so many people are feeling,” she said. “He’s basically taken a steady as she goes approach to the economy, but there are just too many people getting left behind.”