Prior to his disastrous decision to call an early election, Jim Prentice, Alberta's soon-to-be ex-premier, asked voters what they wanted him to do about the province's fiscal mess. More than 40,000 people took part in the prebudget consultation. Their responses explain, in part, why Alberta has just undergone its first change of government in 44 years. It also reveals something about how New Democrats and Liberals will try to win the next federal election.
Ever since the California tax revolt of the 1970s, it's been increasingly assumed that voters across North America share the conservative movement's aversion to any and all taxes. Left-leaning parties long ago learned to avoid the subject. The right seemed to have won the argument.
But the residents of Canada's supposedly most conservative province seem to have sent a different message. Those who answered the survey (which was voluntary, and thus not a scientific sample) were more worried about government services going down than taxes going up. And they were even willing to support a government that raised taxes, with one caveat: They wanted those higher taxes to be paid by somebody else.
The NDP's winning platform photocopied those findings.
In the court of public opinion, the conservative creed of lower taxes and smaller government has only half won the argument. No, voters don't want their taxes to go up. But if Alberta's survey, multiple opinion polls and various recent provincial elections are to be believed, voters aren't exactly clamouring for the state to wither away. They may even want government to do more, and spend more.
Which explains why the Liberals and the NDP, nationally and in several provinces, are offering an interesting proposition: More government services and benefits, but without higher taxes – or at least not on the middle class.
When the Alberta survey asked what should be done about the province's $7-billion budget gap, 62 per cent of respondents said that cutting "spending on programs and services, including health care and education" was "Not at all acceptable."
A majority backed higher taxes and fees – however, only 12 per cent wanted an across-the-board tax increase. Hardly anyone wanted their taxes to go up. But 69 per cent called for higher corporate taxes, and 58 per cent wanted higher taxes on "incomes over a certain level."
Rachel Notley won on a platform that promised the following: Higher taxes on the wealthy, higher oil royalties and corporate taxes – but lower middle-class taxes, and more spending on core services, especially health and education.
The PC platform, in contrast, sounded something like this: To deal with the budget shortfall, we will spend less on you and tax you more, while raising taxes on the rich only slightly, and not at all on corporations.
Amazingly, this was not a winner.
As for the Wildrose platform, it might as well have been: "We will never raise taxes, ever." But if government can't raise taxes, ever, then a severely unbalanced budget can only be balanced one way: through cuts. That's the classic-rock version of conservatism that Tim Hudak's Ontario PC party ran on last year. As Mr. Hudak discovered, a promise to gleefully slash 100,000 public-sector workers was not universally popular. Do voters want lower taxes? Sure. Fewer or lower quality services? Not so much.
The Ontario Liberals have figured this out, and they won the past election because of it. They promised to largely maintain existing government programs, plus roll out new spending in areas such as public transit – and pay for it without raising the average person's taxes.
To fill the gap, Kathleen Wynne's government last year introduced new taxes for incomes of more than $150,000. More importantly, Ontario is busily unlocking big, new, non-transparent, don't-call-it-a-tax revenue sources: from Hydro One privatization to Beer Store price manipulations to the coming cap-and-trade rules, the last of which could generate billions of dollars, without voters being able to figure out where the cash is coming from, or who is paying. None of the money will come from visibly dinging middle-class taxpayers.
At the federal level, both Liberals and New Democrats have been studying the playbook. Thomas Mulcair's NDP is calling for higher taxes – but only on corporations. And Justin Trudeau's platform has at its centre a plan for more government and lower taxes. The Liberals are promising to spend billions more on families with children, while also delivering a middle-class tax cut. If you're a middle-class parent, you'll get more and pay less. But if you earn more than $200,000, you'll be hit with a new, higher tax bracket. And if you earn less than $45,000, you'll get no income-tax cut. The bulk of the benefits are designed to go to the majority in the middle.
Leaving aside questions of whether the fiscal and economic math works, the electoral math is awfully appealing.
Tony Keller