We now know the Liberal campaign manual obviously has a crisis protocol: When in danger, break glass and press the cash button for the middle class.
So that’s why Justin Trudeau was in a backyard in Brampton, Ont., on Sunday promising both a broad tax cut and, more mysteriously, to slash your cellphone bills by 25 per cent.
Knocked into a spin by a blackface scandal that rocked his campaign last week, Mr. Trudeau decided to start the reboot with a straight-up populist promise to put more money in everyone’s pocket.
That’s not to say the proposals were cooked up from scratch in the past 72 hours – there had been broad hints for some time the Liberals were going to promise to lower cellphone bills. But Mr. Trudeau’s campaign plan was scrambled like an omelette last week, and he and his advisers had to make a big decision about what to present to Canadians to try to stabilize. They chose dollars.
In some ways, it’s a return to what worked in 2015: talking a lot about the struggles of the middle class. It wades into the nitty-gritty battle about affordability that all parties agree is an issue.
But it is hard to see how Mr. Trudeau fits the tax cut into a coherent fiscal policy in 2019. And it’s hard to have a lot of faith that the cellphone-bill promise is going to come true. Is it really that easy for the government to cut $1,000 off your bill? Why are we just hearing about this now?
The tax cut is simple. It raises the Basic Personal Amount under which no taxes are paid. That amount is $12,069 for 2019, but the Liberals now promise to raise it to $15,000 by 2023. That means it is a tax cut for everyone who pays taxes – $286 a person.
It is a political offer motivated by competition. The Conservatives were going to offer a tax cut, so the Liberals felt they had to have one, too. The Liberal tax cut is a little smaller, but it is targeted more to people with lower incomes.
Yet, it is hard to argue it fits into a coherent fiscal plan. In the 2015 campaign, the Liberals promised a tax cut, but also said (inaccurately) they would pay for it by raising taxes on the upper 1 per cent. Back then, the Liberals said they’d stimulate the economy for two years then get back to balanced budgets. Then, they argued for more spending. Now, another tax cut. What was the plan, again?
The cellphone promise, meanwhile, is simplistic. It suggests a Liberal government would cajole phone companies to lower bills and at the same time require them to lease wireless capacity to virtual networks to increase competition.
Will that do it? Will prices go down by 25 per cent? Well, if they don’t, the government might do other things. Maybe they would give the Canadian Radio-television and Telecommunications Commission more regulatory power to lower costs. Maybe.
You can see why the promise makes good politics. Cellphone costs are a big expense for many families and relatively high in Canada. The Liberals say their promised 25-per-cent reduction in cellphone bills will save a family of four $1,000. The average Canadian family is probably willing to see the government do anything to cellphone companies in order to make them offer cheaper plans, up to and possibly including cruel and unusual punishment.
But the Liberals’ efforts while in power haven’t been quite so aggressive. Telephone companies have argued that they spend on networks in rural Canada and litigated when regulators pressed. No government has wanted to go to war with the big wireless companies, or made the big threats, such as opening the wireless market to foreign competition. When Mr. Trudeau’s election promise is that he might regulate in two years, it’s no $1,000 guarantee.
There is, however, a bidding war. Jagmeet Singh’s NDP has its own plan to cap cellphone bills, promising to save families $250, and the Liberals say they will beat it. Andrew Scheer’s Conservatives unveiled their own $6-billion tax cut, so now the Liberals have one that is about the same size. And at the beginning of the second full week, it was probably the safest way to start a reboot. It is still not clear how much Mr. Trudeau’s personal brand has been devalued, so this week’s Liberal pitch is based on cash.
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