Conrad Black to Bay Street: Justin can be trusted

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"Trudeau seems to be regaining enough of the old Liberal dexterity of being just far enough to the left of the Conservatives as not to seem like tweedle-dee and tweedle-dum to voters of the centre-left, and adequately to the right of the NDP not to frighten the cautious Canadian bourgeoisie." [italics added]

-- Conrad Black

National Post, October 2, 2015

In the end, it fell to Conrad Black to unpack one of the central mysteries of this election campaign.

For weeks, the Liberals have been managing to rebrand themselves as progressives on the grounds that Justin Trudeau would run deficits.

Trudeau's pledge in late August to run deficits -- a dramatic reversal of his fierce pledge six weeks earlier not to run deficits -- isn't really hard to figure out. Trailing in the polls, the Liberal leader took a well-used page out of the Liberal playbook: feign left during an election campaign in order to court the progressive vote.

(In fact, there's nothing inherently progressive about running deficits, but I'll come back to that later.)

The true mystery is how Trudeau's deficit pledge has escaped thundering denunciation from the business community and established media commentators -- the voices that have made balanced budgets a near obsession in the past few decades.

Apart from the Harper Conservatives, there's been barely a peep of protest over Trudeau's deficit heresy. Commentators who normally relish denouncing deficits declared Trudeau's pledge "bold."

Conrad Black unravels Liberal deficit mystery

But now along comes Conrad Black -- the very caricature of a business tycoon, even after his sojourn in a Florida jail -- to help us understand the mystery.

In his National Post column headlined "The NDP still isn't ready, but it turns out Trudeau may be," Black sheds light on why there's been so little protest from Bay Street over Trudeau's embrace of deficits.

As Black notes, Trudeau's Liberals are "adequately to the right of the NDP not to frighten the cautious Canadian bourgeoisie."

What this suggests is that Black understands Trudeau's deathbed promise to kick-start the economy with massive spending is just posturing; the Liberals under Justin Trudeau can be trusted to follow the dictates of Bay Street.

Black, like other members of the Canadian establishment, undoubtedly recalls the Liberals winning the 1993 federal election by posing as progressives -- promising huge new investments in housing and child care -- only to have Liberal finance minister Paul Martin do an about-face, tossing those commitments aside and embarking on a messianic, Bay Street-pleasing crusade of cutbacks to eliminate the deficit "come hell or high water."

How much easier even to imagine Justin Trudeau -- younger and more impressionable than Paul Martin -- falling into line with corporate Canada, after the votes are counted, of course.

Certainly, Trudeau has never established himself as an economic thinker in his own right, with clear stands on economic issues.

For that matter, there's nothing inherently progressive about running deficits. What is progressive is making serious investments in social programs and infrastructure. Both the Liberals and the NDP are promising to do so, on roughly the same scale. The difference is that the NDP is planning to pay for these investments by raising corporate taxes -- something the Liberals refuse to do.

This refusal to raise corporate taxes reflects the tightness of the Liberals with Bay Street, which has pushed for and won deep cuts to corporate taxes over the past 15 years.

And there's every indication that Trudeau, notwithstanding his progressive talk, would continue the longstanding Liberal tradition of letting Bay Street call the economic shots.

Economic policy under a Trudeau government

Indeed, the man widely touted to be finance minister in a Trudeau government, Bill Morneau, has been plucked right from Bay Street, where he's long been a heavy-hitter.

Morneau, executive chair of Morneau Shepell, a benefits and outsourcing firm, was hand-picked by Trudeau to run in Toronto Centre. (Full disclosure: I am the NDP candidate in Toronto Centre.)

Until entering politics last year, Morneau also served as chair of the C.D. Howe Institute, a think-tank funded by Canada's biggest corporations and financial firms, which has been enormously influential in shaping Canadian economic policy.

Morneau is clearly comfortable in conservative business circles. He appointed Jack Mintz, the prominent, right-wing, Calgary-based economist and tax expert, to the board of Morneau Shepell.

Morneau also teamed up with his company's actuary Fred Vettese to write The Real Retirement, a book providing financial planning advice to high- and middle-income investors.

And, although Toronto Centre includes some of the country's poorest neighbourhoods, Morneau's book has little advice to offer retirees without assets. In fact, it's fair to say that Morneau and Vettese demonstrate little interest in the plight of low-income seniors.

Early in the book, the authors divide the Canadian public into five quintiles, based on income. The following is pretty much all the book has to say about the lowest-earning quintile, whose average total income is $29,000 a year:

"We can … ignore Quintile 1 because the government takes care of them through various programs. They will have more after-tax income in retirement than they had while they were working."

So, just like that, they're done with the poorest seniors, including couples living on $29,000 a year.

While just about everyone knowledgeable about retirement issues is concerned about the plight of low-income seniors -- hundreds of thousands of whom live in poverty -- Morneau is satisfied that "government takes care of them," indeed, that government allows them to enjoy a lifestyle more comfortable than they had in their working years.

The NDP has committed to increasing government support for low-income seniors by adding $400 million a year to the Guaranteed Income Supplement (GIS). The Liberals too are promising to increase the GIS to help poor seniors.

But, if Morneau were finance minister, would the Liberals reconsider that promise on the grounds that the government is already taking care of them, providing them with more than they earned in their working years?

Serving wealthy interests

Strikingly, the website of Morneau's company advises wealthy clients how to exploit a loophole so that they too can collect GIS benefits, which are supposed to go exclusively to poor seniors.

"TFSA loophole: How the rich can tap into GIS" is the headline on the Morneau Shepell website.

It explains that the company's actuary, Vettese, has developed a strategy "that would allow wealthy Canadians to collect GIS benefits…all a couple needs to do is build up a joint TFSA worth $320,000 by age 67 to make the strategy work -- provided you won't be receiving any other income from capital gains, rents, employment or pensions between 67 and 70."

A couple using this strategy could collect a total of about $63,000 in GIS benefits, according to Vettese.

Morneau's advice for wealthy clients on how to scam a government program is just one indication that the Liberal party remains close to wealthy interests and Bay Street.

It also seems significant that Justin Trudeau didn't even bother to attend the big annual Labour Day parade in Toronto. NDP leader Tom Mulcair marched at the very front, arm in arm with national labour leaders, signalling his party's longstanding support for working people and the fight for greater equality.

So perhaps it's not surprising that Conrad Black, a class warrior on behalf of the business set, is uncomfortable about Mulcair.

But Trudeau is another matter.

That's why Black is signalling to his conservative National Post readers: Don't be fooled by the left-wing posturing. Justin can be trusted.

Conrad Black once said that Linda McQuaig should be "horsewhipped." McQuaig is the NDP candidate for Toronto Centre in the federal election.

Photo: Wikipedia

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