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Of thugs, CEOs and tax increases

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Hardly a week goes by without some other unnerving revelation about the character, or rather the lack of same, of the Prime Minister. There is now no room in politics at the federal level for any debate. Anyone who disagrees with the exalted (God-given?) view of one man -- Stephen Harper -- is not just to be disagreed with, but vilified, slandered, bullied and ridiculed until they shut up. The list is a long one from the heads of watchdog agencies like the Military Police Complaints Commission or witnesses like diplomat Richard Colvin, to opposition leaders (remember Taliban Jack) or premiers like Danny Williams.

This is the politics of the back streets where you get to rule if you are tough enough to beat everyone else up.

The latest victim is about as counter-intuitive as it gets: the PMO is going after Ed Clark, the CEO of TD Bank. He had the nerve to suggest that Canada cannot get out of its debt and deficit situation without raising taxes.

What is most interesting about the latest attack is that it is directed right at Bay Street and its leadership -- demonstrating that corporate Canada did not realize just what kind of fire it was playing with when it quietly promoted Harper as prime minister. They evidently mistook Mr Harper as someone who was rational or could at least be persuaded to be rational (read: controlled). Because Harper is a free-market champion, Bay Street and its most powerful voice, the Canadian Council of Chief Executives (CCCE), had assumed that Harper would, like every prime minister since the early 1980s, listen to their wise capitalist counsel. Until Harper, not a single federal budget was presented in parliament before being vetted by the CCCE or its predecessor, the BCNI. And Harper has been completely on-side when it comes to the deep integration agenda of the CCCE.

But Harper actually listens to no one. And his hatred of government is visceral, not rational, no matter that public investment is actually critical to the corporate sector. Just because the CCCE and the head of the TD Bank also believe in deregulated capitalism doesn't mean Harper will show them any respect. If they cross him, they are legitimate targets.

And that's what Ed Clark did. Messing with Harper's long term plan to starve the federal government into irrelevance by creating a structural deficit (one that won't go away even with economic growth) Clark said at a meeting in Florida that Mr Harper was not listening to the voices on Bay Street that were telling him the best way to get rid of a large deficit is through tax increases.

Just calling for tax increases would have been a no-no. But openly criticizing the PM unleashed a ferocious assault -- sweeping up Michael Ignatieff in the net, accusing the Liberal leader of a secretly planning tax increases if he becomes prime minister.

According to the G&M report, the PMO fired off an email to Conservative MPs and supporters entitled "Millionaire Ignatieff Economic Czar Calls for Higher Taxes."

Just because Clark was among a group of "senior economic thinkers" whom Ignatieff met with last fall, Harper proclaimed: "We can be pretty sure that in the coming months he will use the statements from his well-heeled economic advisers to justify his plans for massive new tax hikes on working- and middle-class Canadians," stated the e-mail, adding that Mr. Clark earned $11-million in 2009. "He can afford higher taxes. Can you?"

Ignatieff has actually toyed with the idea of tax increases and Harper wants to make sure he never does again.

The revelations of Harper's latest junk-yard dog imitation are interesting not just for the PM's attack Bay Street (almost unprecedented for a prime minister) but the fact that Bay Street is actually talking about raising taxes as necessary to deal with the deficit. Under the former leadership of Tom d'Aquino, the CCCE was like a one-trick pony -- taxes could never be cut enough. It seemed to be in synch with Harper who stated last year "Actually there is no tax I like."

So what's up with Bay Street? Is it possible that because the CCCE is now led by a former Liberal finance minister, John Manley, that the CEOs recognize being competitive with the rest of the world involves more than just low corporate taxes? Or are they worried about another economic meltdown which will require more bailouts -- or perhaps a bursting housing bubble which could require Ottawa to pony up $50 billion to bail out CMHC?

The Globe story actually quoted TD's Ed Clark as telling the Florida conference "...that almost every person at a recent meeting of the Canadian Council of Chief Executives said "raise my taxes" to erase [the deficit]."

The TD bank is well known for having the boldest CEOs amongst the big five banks -- though it's an easy title to grab. A former CEO, Charles Baillie, was the only senior corporate figure in Canada to ever praise Medicare and call for its careful preservation -- on the basis that it provided a huge competitive advantage for large Canadian corporations competing with the US. Last year the TD faced the wrath of the Harper government for funding a study which said major new regulations were necessary to control Canada's carbon output.

But here's the thing. If the TD Bank (and the majority of the 150 CEO of the CCCE) can call for tax increases on high income individuals (Clark did not seem to be targeting his own sector), why are the labour movement, the NDP and civil society groups so reluctant to do so?

The biggest need in the country right now (well, right after we get rid of Harper and his wrecking crew) is to form a Fair Tax Coalition to put out there a detailed, coherent and reasonable plan for fair tax reform. A campaign to Tax the Rich has the potential for huge success. Signs are that Harper will leave key spending programs alone in the March 3rd budget. That gives us time to organize. Now we just need the political will and commitment to do it -- and some champion to take the lead.


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