LILLEY: Trudeau’s plan to tax Canada into prosperity will fail

Article content material

If you would like a major instance of how economically illiterate the Trudeau Liberals are, look to their promise of hitting Canada’s banks and insurance coverage firms with a one-two punch in Thursday’s price range.

Article content material

The Liberals aren’t promising only one new tax for these firms however two.

Nothing like punishing success. Twice.

The Liberals haven’t solely promised to extend taxes on a few of Canada’s most profitable firms, they’re additionally promising one thing they’ve referred to as the Canada Restoration Dividend to be charged towards earnings from the nation’s banks and insurance coverage firms.

That is leftist populism at its worst. It’s a perception that if we simply tax the wealthy sufficient, then everybody could be completely happy. The issue is, Canada’s economic system doesn’t have sufficient wealthy folks or firms to fulfil the utopian goals of Justin Trudeau or his new Parliamentary associate Jagmeet Singh.

Within the final election, the Liberals campaigned on rising the company tax paid by Canada’s massive banks and insurance coverage firms with a 3% surtax. That will hike the company tax charge for these industries from 15% to 18%. On prime of that, they promised a obscure Canada Restoration Dividend “that these firms would pay in recognition of the actual fact they’ve recovered quicker and stronger than many different industries.”

Article content material

These measures, simply obscure guarantees within the final election, had been made a part of the coalition deal Trudeau and Singh struck to maintain the Liberal minority authorities in energy via 2025.

So too was a promise to punish Canada’s insurance coverage trade in one other method by taking away a part of their enterprise. The broad strokes of the plan to construct a nationwide pharmacare program don’t seem to incorporate the personal sector, in contrast to Quebec’s current plan, and can as a substitute construct a authorities paperwork to deal with prescription drug protection. That signifies that simply as the federal government is punishing the insurance coverage trade for being profitable by imposing further taxes and “dividends” on them, they will even try and legislate away a part of their enterprise.

Article content material

Such strikes inform the enterprise group throughout the nation, and on the worldwide scene, that Canada is a nasty place to do enterprise.

Brian Porter, CEO of Scotiabank, advised shareholders on Tuesday that this financial institution tax thought was “a knee-jerk response that sends the improper message to the worldwide funding group.”

He additionally rightly identified that it will harm shareholders, lots of whom are pensioners or folks saving for retirement with financial institution shares of their pension fund or RRSPs.

“It’s finally a tax on you, our shareholders – roughly 70% of whom are Canadian. It’s a tax on those that straight personal our shares or take part via pension plans or mutual funds, index funds or ETFs,” Porter stated.

It shouldn’t be surprising that the Liberals need to add further taxes on for profitable firms and can body it as asking these on the prime to pay their fair proportion, they’ve completed it earlier than.

Article content material

They ran on rising revenue taxes on the 1% in 2015 promising it will offset center class tax cuts, however they didn’t pull in sufficient cash with that tax. They’ve additionally campaigned on taxing profitable investments and imposing luxurious taxes on individuals who personal boats for instance.

For Trudeau’s Liberals, elevating taxes is the important thing to a greater financial future even when a long time of expertise present in another way.

“For a nation to attempt to tax itself into prosperity is sort of a man standing in a bucket and making an attempt to elevate himself up by the deal with,” Sir Winston Churchill famously stated.

Appears Trudeau noticed that quote as a problem moderately than a warning.

blilley@postmedia.com