The Liberals are holding a ‘mandatory’ caucus meeting in Ottawa this morning. The subject of the meeting will be Finance Minister Bill Morneau explaining the next steps for his controversial changes to the small business tax regime in Canada. The meeting will be a chance for Liberal caucus members to convey the outrage they have heard from constituents to Morneau and Prime Minister Justin Trudeau.

Most Liberal caucus members are surely more receptive than Morneau as Morneau hasn’t had an event with constituents in his riding in over a year.

Morneau Doesn’t Get That Optics Matter

The timing of the meeting is really bad for Bill Morneau. Last week it was revealed that a company controlled by Morneau owns a villa in the south of France. Morneau did not disclose the existence of this villa to federal watchdogs for more than two years. The optics of this revelation cause further problems for Trudeau’s floundering government. The ownership of this villa is the type of tax avoidance the Liberals are trying to stop with the changes to small business taxes. It is really difficult for Morneau to credibly sell these changes when he is personally using the tax system in the same manner he is trying to sell as unfair and in need of reform.

The purpose of the special caucus meeting will be to explain the talking points in support of the tax changes and any tweaks being made to the proposal as a result of the brief public consultations. A key component of the proposals was to provide ‘fairness’ in passing wealth to family members. It is rumored the Liberals are trying to make the changes more palatable by lowering the tax rate on small businesses from 10.5% to 9%.

This will leave the progressives the Liberals were originally courting with these changes angry while doing little to oppose the small business people who were outraged by the original tax changes.

The Liberals Aren’t Credible Fighters For Middle-Class Canadians

The problems the Trudeau government is facing at the midway point shows a real disconnect between their actions and their rhetoric. Paul Wells discussed the problems the current Liberal leadership have in selling themselves as fighters for the middle class.

The Liberals actually spent a little over $212,000 for design work on the cover of the 2017 budget. That is completely outrageous and screams of a government that is totally out of touch with middle-class values.

Trudeau was always a questionable spokesman for the middle class. He was raised never wanting for anything as the son of a prime minister who was from a wealthy family himself. Justin floated through his 20s attempting a number of jobs and with middling academic success. He lived the life of the idle rich and continues to do so in many respects.

Middle-class Canadians will never get the opportunity to vacation on the Aga Khan’s private island in the Bahamas. It is evidence of how out of touch Justin is with the middle class that he felt such a vacation while serving as Prime Minister was appropriate. It is unimaginable to think of Stephen Harper ever indulging in a vacation of this kind.

It will be interesting to see the revisions to the small business tax regime that are announced after the Liberal caucus meeting this morning. Hopefully, the new small business proposals are more in tune with middle-class Canadian values. Under the leadership of Bill and Justin, there are no guarantees that the Liberals will ever advocate policies that resonate with middle-class Canadians.


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