Gains' Capital Opportunity

Liberal Budget Successes

Other than a gaffe, what was the Justin Trudeau “housing is not a primary federal responsibility” quote a sign of?

It was a gaffe, but more importantly it was a sign of anger. It was a sign of frustration as the government was unable to get a grip on the housing issue. Whatever the truth of the argument, it was an argument that nobody wanted to hear and nobody listened to as anything other than out of touch whining. Housing isn’t, or at least shouldn’t be, a primary federal responsibility. (Although, given that a sizable amount of the damage to our housing market was out of control increases to immigration levels without ensuring infrastructure was able to handle it, it was/is more of a federal responsibility than many want to admit.)

The Budget has created a similar group of people acting like Trudeau did on housing, and that’s the group of people complaining bitterly about how fair it is they have to pay some extra taxes. The Capital Gains increase is debatable policy – though I must confess I found myself nodding along to Trevor Tombe’s analysis  - but the politics of this for the Opposition are laughably dumb. And I don’t get why the right wing media apparatus are willingly engaging in this nonsense.

Pierre Poilievre is smartly staying very far away from anything that could even remotely be described as a quote against this capital gains tax rise. He’s claiming it’ll raise taxes on the middle class, but he’s actually avoided actually saying he’d repeal it. The hope, implicit in a lot of the coverage, is that Poilievre will get the credit for voting against the broader budget amongst those opposed to this change and get to say that he hasn’t made any decisions on reversing the hike amongst those who like it.

But the way the broader media apparatus is kicking into action has to be a concern for the Conservatives, because this is a way that the traditionally Tory coalition and the places Poilievre wants to win are going to disagree. And hell, indirectly, this could be a saviour to Jagmeet’s NDP, too.

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The problem for modern conservatism as an ideology is simple – fiscal conservatism as an ideology is dead. Boris, Sunak, and ScoMo all did some fiscally conservative things, namely lots of tax cuts, but none of them have actually been fiscal conservatives. All of them have been willing to throw economic orthodoxy out the window on some combination of trade, immigration, subsidy, or just reticence to actually cut spending in good economic times. Poilievre isn’t actually much better, because he’s so far refused to actually cut any of the things the Liberals have actually done.

Listen to him on Radio-Canada this week, and the actual complaints he has about the government’s spending could be coming from a Dipper. The dental program hasn’t actually cleaned any teeth yet is an argument against the dental benefit, but it’s an argument that could as easily come from Jagmeet as from Pierre. Poilievre has had a lot of time to call for the rolling back of the child care deals, but hasn’t ever actually done it.

He wants to walk a tightrope because he knows fiscal conservatism doesn’t poll well. Poilievre has always struck me as a student of both political history and of international politics, and he can see that Sunak and Dutton aren’t making any headway calling for tax cuts and spending decreases. I suspect he knows as well as me what the legion of US polls always show, which is that spending cuts are popular in the abstract but cutting basically every named spending area polls underwater. Everyone thinks there’s tens of billions we can cut from foreign aid and generalized nonsense, but the truth is that governments have mostly excised that specific brand of waste.

If Poilievre wants to “fix the budget”, his latest Verb The Noun airquotes “strategy” to solve the many crises we face, he will actually have to do quite a lot of things that his lack of political courage do not enable him to do. We have seen his cowardice in recent weeks, as he has categorically refused to call out Doug Ford and Danielle Smith for their utter depravity on the housing front, but that’s to be expected. We all know he’s an unserious hack who won’t do anything to solve our standing crises. But that my readers know this doesn’t mean that he won’t win.

This Cap Gains tax rise, though? It’s not bad at all for the left. They are finally doing what I have been begging them to do in these pages for nearly a year, which is to take back control of the fucking agenda with things that will make the lives of the political staff of the Opposition difficult. For months this government has been going where the opposition wanted them to and fighting on the opposition’s preferred terrain. Now, the political debate is on a tax rise on wealthy Canadians and corporations. It’s a political win that’s at least defensible economics. It’s a godsend to progressives because the Conservatives don’t know what to say.

Bill Morneau, who is both a trust fund kid and a husband of an heiress to the McCain fortune, hates this decision, which is frankly an endorsement to people like me. Defend the tax rise and a lot of people who are pinning their hopes on Poilievre will be mad. Oppose it, and your gains in Skeena and Comox and all the other regional cities and towns with NDP or Liberal MPs who love this move get to hang you with it.

Will this cap gains tax rise suddenly bring the Liberals up to 29%? No. I have no idea what we’re gonna see the government polling at in two weeks or a month, and I frankly don’t really care. The Liberals are setting up a situation where they are at least able to enter the argument in a way anyone will listen to, which wasn’t true six months ago. I’ve made my peace with the fact that I was wrong about Poilievre, but that doesn’t mean that everything is pre-ordained. We live in a time when electorally unprecedented things happen all the time. None of this is evidence Poilievre won’t win. But it is evidence that choices matter.

Donald Trump nearly won the Presidency in 2020 despite a never-ending avalanche of polls saying he was fucked in 2020. Boris Johnson won the election that almost nobody thought he could win in 2019. Scott Morrison won in 2019 against all odds and Democrats avoided a red wave that many thought was inevitable in 2022. We live in a time where memories are short and voters are willing to swing hard and fast. Hell, in April 2023 I was writing columns about how I was shocked the Liberals were still polling in the realm of government-winning status despite Coop and Chinese interference being the story of the spring.

The Liberals have finally started a week with a clear ambition and seemingly have managed to get to the end of it on message. How much of the furniture will it save? I won’t pretend to know. But the government is showing much-needed signs of successfully getting from an idea to completion. And after years of screaming about their inability to shoot straight, this is a win. And Poilievre’s inability to say he’d reverse it shows it.