The Fairy Tale Factory

 

As children, we very much enjoyed fairy tales. Stories filled with wolves and innocent damsels, children led astray by heartless witches, princes and plotters, giants and giant-slayers, all combined to fill us with both fear and ultimately hope, as good prevailed over evil and the world was once more set aright.

It occurs to me that the summer of 2021 sees us in the midst of a fairy tale, only this one is entitled the federal election of 2021.

The identities of the heroes and villains depend largely upon where you are on the political spectrum. If a Liberal and swayed by manipulated media, you will see Erin O'Toole as the big bad wolf huffing and puffing at the house built by public healthcare, to name but one of his 'targets'. And while that wolf promises a tax credit for child-care, the Liberals are signing deals to bring about $10-a-day daycare, within five years. Writ large: Justin as middle-class hero.

If you are a Conservative, Mr. Trudeau and his gang are wanton spendthrifts heedlessly saddling Canadians and their descendants with unsustainable debt that ultimately spells ruin for old age security and health care, to name but two. The hero of this narrative? Erin O'Toole, who promises to balance the budget over a 10-year period and not raise taxes. Indeed, all the pressing problems of today, ranging from the opioid crisis to the cost of housing, will be met with swift and decisive action.

If you veer to the left, Jagmeet Singh is your man as he battles the neoliberal forces within our midst. One of his promises entails ending all subsidies for fossil fuels. Other goodies include universal prescription drug coverage, dental care and up to $5000 for families to cover their rent. Clearly he is the hero of the tale if exploitative and extractive capitalism, inadequate or unaffordable housing and runaway climate change rattle and rankle you.

We all know that fairy tales are unreal, and those who treat campaign promises as anything other than thinly-disguised fiction are either being naïve or have their ideological blinders firmly in place. One needs to take but a quick look at one aspect of the campaign to see the fictions being perpetuated.

Taxation. We have gone through an extremely difficult time this past year-and-a-half that has required extraordinary expenditures. Few would argue that they were unnecessary. The deficit has grown tremendously, but that isn't a part of the parties' narratives, for the most part.

Mr. Trudeau promises to hike taxes on the big banks and insurance companies, raising by three percentage points (from 15% to 18%) on all bank and insurance earnings over $1 billion to "support middle-class Canadians in their goal of home ownership." He has also announced something called the Canada Recovery dividend which, combined with the other measure, is supposed to generate $2.5 billion per year for the next four years. In my view, this timid measure is mere camouflage of neoliberal truths.

The Conservatives, on the other hand, are offering tax breaks and tax credits:

To help ailing retailers, a government led by O'Toole would implement a "GST holiday" — a month-long break on federal sales tax — sometime this fall. All purchases at a retail store would be tax-free for a month.

The Conservative government would scrap the $30-billion Liberal child care program...and instead convert the existing child care expense deduction into a refundable tax credit to cover up to 75 per cent of the cost of child care for lower income families.

Nary a word from either party of a sustained, realistic approach to taxation that would address either new program spending or the bourgeoning debt, but O'Toole has promised balanced budgets within 10 years. The roadmap, however, is non-existent.

Jagmeet Singh's NDP is the only party that seems more forthright about taxation, at least acknowledging the need for more revenue through a number of measures, including a wealth tax of 1% for those worth more than $10 million, raising the marginal tax rate for those making over $210,000, and restoring corporate tax rates to $18 from the 15% it had been reduced to by the Harper government.

Some, of course, might argue that he is playing to his base, but that base is rather large, given that 90% favour a wealth tax. But even here, the tax is a timid, given that a 3% rate would raise much, much more.

To give an order of magnitude of the amount that could be raised, the Parliamentary Budget Office published a report in July, estimating that a one-time wealth tax of three per cent on net wealth of more than $10 million and five per cent on net wealth over $20 million, could raise between $44 billion and $61 billion.

Kim Campbell once famously said that an election is no time to discuss serious issues. Judging by the willing suspension of disbelief  embraced by so many, she may indeed have been right.