Proposed Small Business Tax Changes Severely Damage The Liberals

When the Liberals still considered themselves Canada's natural governing party there was an unofficial philosophy which fostered their success. That philosophy was to campaign from the left and govern from the right.

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Tax Changes Cripple Liberals

When the Liberals still considered themselves Canada’s natural governing party there was an unofficial philosophy which fostered their success. That philosophy was to campaign from the left and govern from the right. Jean Chretien’s term in office was the last time the Liberals understood that.

Justin Trudeau won a majority government in 2015 due to voter desire for change after a decade of competent, but mean-spirited, Conservative government. Gerald Butts, Justin Trudeau’s chief advisor, and the political brain doesn’t get the philosophy for enduring Liberal governance.  Due to inexperience in business, or politics at the federal level, he gives far too much credit for his success to his own ability as opposed to a combination of external forces that provided Justin Trudeau with a window they successfully exploited.

Butts believes that the Liberals somehow changed the game without understanding the bigger picture. In reality, Justin used a desire for change to his advantage but that desire for change won’t provide enduring success.

Elected from the Left Govern from the Right

The Liberal’s proposed changes to the small business tax regime in Canada is an attempt to govern from the left on economic issues. That is why the policy is creating such a huge backlash for the Liberals. There are many Canadians who classify themselves as social liberals, but fiscal conservatives. These are the voters who swing elections between the Liberals and the Conservatives. They temper the Conservative’s propensity to social conservatism and the Liberal’s propensity to waste taxpayer money. This group of persuadable centrist voters must be appeased for a federal government to hold power.

Bill Morneau’s proposal to change the way small businesses are taxed in Canada strikes at the very heart of the persuadable centre who the Liberals need to stay in power.

Entrepreneurs and professionals make up the core of the persuadable centre. These people are smart, driven and not particularly ideological. They work hard for their money and they want to hold onto it.

When small business owners take a risk and start a business they should be rewarded for being able to supply the market with a good or service that helps them support themselves and employ other Canadians. Liberal governments that govern from the right understand the necessity of entrepreneurship in our economy. They also understand the value of professionals operating small business practices. Lawyers, doctors, dentists, engineers and other professionals who operate small offices provide valuable services to Canadians.

Small Business Values

Gerald Butts and Justin Trudeau can’t appreciate the value of small businesses in Canadian society as neither has a real business experience. Neither was particularly involved with the federal Liberal party when it was in power through 2004. Justin had a relatively easy ride to the leadership of the Liberal Party of Canada in 2013. He was more personable than Tom Mulcair in the 2015 election that was dominated by a desire for change.

If Justin or Butts had worked in business or previous federal Liberal administrations they would understand the anger they are facing now. Unfortunately, they don’t have that experience. Their handpicked finance minister, Bill Morneau, doesn’t get the retail side of politics and has performed horribly in the cabinet.

The fortunes of the Liberal Party of Canada have changed largely because of the bungling of the small business tax fiasco. Unless Butts successfully counsels Justin to dump Morneau and essentially gut the reforms to the small business tax regime in Canada this will also mark the beginning of the end of Justin’s premiership.  


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Burt Schoeppe

Burt is a dedicated CPA based in Edmonton. When not at work assessing financial competencies he can be found cheering for the Oilers or the Redskins. In terms of the economy, he advocates for fiscal responsibility at all levels of government.

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