Canadians often like to imagine that their country, unlike the United States, is one characterized by progressive and efficient governance that is responsive to the needs of middle-class and working-class voters. But Canada’s parliament has consistently proven otherwise.
In truth, our country’s political system works very well for its wealthy citizens, but not for the vast majority of Canadians. When the chips are down, Canadian politicians prove to be just as much in thrall to big money as their US counterparts.
A clear example came on November 16 when the social democratic New Democratic Party (NDP) put forward a motion to enact an overwhelmingly popular tax on wealth and excess profits, only to have it blocked by the ruling Liberals, as well as the Conservatives and Bloc Québécois.
Polls over the past year have indicated massive support for a tax on Canada’s rich — not just from the Left, but from a majority of voters irrespective of their favorite party. Nevertheless, Canada’s parliament refuses to even contemplate such a move.
The Silent Majority For Redistribution
NDP leader Jagmeet Singh has long argued for a wealth tax, going back to his run for the party leadership and the 2019 election campaign. As Singh and others have noted, the Canadian tax system offers massive loopholes for the rich, wealthy, and well-connected, and explicitly privileges the money possessed by capitalists and other powerful people.
Canada only taxes half of capital gains earnings compared with the whole of income earnings, and does not have an inheritance tax. For a wealth tax to truly be effective, it must target income and wealth that only the very rich possess. This was already clear before COVID-19 and its related crises, but now — as the rich profit off the pandemic and frontline workers suffer — it is more striking than ever. Singh has rightly criticized the idea of getting back to what was previously “normal.” Those with great wealth must be first in line to finance the recovery.
It was in this spirit that the NDP proposed a wealth and excess-profits tax. This wasn’t some sort of vanguard effort from left activists, swimming against the tide of public opinion: it is already an overwhelmingly popular policy. Canadians from every single major party electorate and region support a wealth tax.
Subsequent polling has shown even greater support for taxing the rich and especially pandemic profiteers. Polling from Abacus Data suggests that a wealth tax of 1 percent on all individual assets over $20 million enjoys the support of nearly four-fifths of all Canadians, and almost two-thirds of Conservative Party voters. There’s a clear opportunity for the Canadian left to appeal to those people on a platform of basic fairness and justice.
Abacus asked Canadians if they support a temporary doubling of the current corporate tax rate on companies whose profits have risen during the pandemic. Here, too, there is decisive support, albeit somewhat lower than for the wealth tax: even 58 percent of Conservative voters want those who have profited from the crisis to pony up a bit extra.
You might expect a policy with rock-solid public backing to inspire a pan-partisan consensus among Canada’s MPs. But we saw nothing of the sort. While the NDP and the Green Party did vote in favor of the motion, these parties hold less than 10 percent of parliamentary seats, despite winning nearly a quarter of the popular vote, thanks to Canada’s first-past-the-post system.
The three largest caucuses all went against the motion, defying the wishes of their own electorates. Along with the Liberals and Conservatives, even the nominally social democratic Bloc Québécois voted down the policy. A policy supported by nearly 80 percent of Canadians cannot muster 10 percent of the vote in the national parliament.
Handouts For the Wealthy
Any party in Canada needs the votes of working-class people if it wants to wield power, but once they have those voters in their pocket, they immediately set their interests aside when they conflict with those of the wealthy. Liberal leader Justin Trudeau, who has made the “middle class” the centerpiece of his rhetoric, voted against the wealth tax. So did Conservative leader Erin O’Toole, who is trying to reframe his party as a friend of blue-collar, private sector workers.
More broadly, if we look at polling conducted right after the 2019 election — which gave rise to the current Liberal minority government — we can see broad support for the modest social democratic policies of Jagmeet Singh and the NDP, including a wealth tax, an income-based dental care program, a universal, single-payer pharmacare plan, and the rudimentary elements of a Green New Deal. If the larger parties wanted to deliver policies that are both possible and popular, they could do so immediately. They have chosen not to, to the detriment of the majority of Canadians.
The wealth tax isn’t the first time Canada’s largest parties have prioritized the haves over the have-nots this year. A so-called “middle-class tax cut” implemented by the Liberals earlier in 2020 chiefly benefited individuals earning six-figure salaries. Singh and the NDP suggested that the tax cut be capped so that it would only apply to those making less than $90,000, with the rest of the money used to fund a dental program for an estimated four million Canadians who lack a private insurance plan.
However, the same parties that rejected the wealth tax shot the proposal down. Although the NDP’s means-tested dental care program was fairly modest in itself, the reform was still too much for Canada’s dominant parties, despite enjoying support from 76 percent of Canadians.
Tax cuts for the wealthy are combined with various forms of corporate welfare, such as the 2019 giveaway by the Liberal government to the highly profitable Loblaw grocery chain, owned by one of Canada’s wealthiest families, which received $12 million to install new fridges.
In 2017, Loblaws was found to have engaged in the long-term fixing of bread prices, overcharging the very consumers whose tax dollars subsidize their handouts. More recently, the company has increased its shareholder dividends while clawing back a $2-an-hour pandemic pay raise previously extended to essential workers.
Challenging the Consensus
The Canadian media, which may be even more right-wing than its American counterpart, makes it a lot harder to organize public opinion against these elite-driven economic policies.
As Linda McQuaig, a rare left-wing columnist at a Canadian newspaper, noted last year, the idea of a wealth tax receives hardly any attention from mainstream media outlets despite all the evidence of sustained popular support: “Surely has nothing to do with the fact the media is largely owned by billionaires.” Apart from a few isolated screeds polemicizing against the tax, discussion has been confined to independent left-wing media platforms.
However, the NDP can’t be let entirely off the hook here. While Canada’s voting system and media make it harder to promote even a modest left-wing agenda, the party could still do more to improve its platform and messaging. Jagmeet Singh may have been more forceful than other recent NDP leaders in promoting expansion of public services and redistributive taxation, but his plans need to be bolder still.
As far as the wealth tax is concerned, the NDP’s proposal seems timid when compared to those of Elizabeth Warren and (especially) Bernie Sanders south of the border. The NDP’s 1 percent plan may start at $20 million, lower than either of the US ones, but it has no ramp up — not even on billionaires, whose wealth Sanders would have taxed by as much as 8 percent.
The NDP’s excess profits tax was also vaguely defined, in contrast with the specific detail offered by Sanders, Ed Markey, and Kirsten Gillibrand when they introduced a bill to tax 60 percent of the profit made by billionaire profiteers during this pandemic.
The timidity doesn’t end there: while the NDP’s membership unanimously supported free tertiary education in Canada at the 2018 party convention, the party has yet to include such a policy in its election platform, choosing instead to emphasize the elimination of student loan debt interest — not fees or principal.
Canada badly needs a bolder left-wing movement that can effectively challenge the subordination of its political class to wealthy donors and corporate behemoths. As the founding NDP leader Tommy Douglas noted long ago in his Mouseland fable, so long as the Canadian people — made of up mice — keep electing governments made up of cats, they’ll find their own interests shortchanged.