Obviously I’m torn over which fellow-creature of the Alberta boonies I would prefer to see become the Liberal Party of Canada’s next leader. Both Chrystia Freeland and Mark Carney seem determined to run for the Liberal leadership against the Liberals as we have known them. I give Freeland extra points for being the Liberal Brutus, which is also the reason she’s likely not to win the contest. But, for all that, her imminent volte-face against her own incremental increase to the federal capital-gains tax is … well, it’s A LOT to swallow.
When Finance Minister Freeland changed the parameters of the capital-gains tax, defenders observed that the change would affect very few earners; that the lifetime exemption from capital-gains tax was being increased at the same time and that there was a semi-solid economic justification for the change, insofar as there’s danger in letting the different marginal tax rates on wage income and investment grow too far apart.
If you’re determined not to like any tax increase ever, you weren’t going to like this one. If you thought some sort of tax hike was inevitable, given the fiscal abyss Freeland was being asked to bridge … maybe you could’ve talked yourself into it.
One way or another, it was at least a little strange how controversial the change immediately became, even though it could properly be described as both modest and technical. The direct effect on everyday working schlubs was next to nil. The effect on the plutocrat class could be described as “large but obviously bearable,” and plutocrats always have the option of bugging out of Canada completely.
But the policy obviously fell hard, as a psychological matter, upon affluent people who think of themselves as middle-class strugglers, many of them in Toronto proper. Retired Boomer investors, second-house rentiers, doctors and lawyers … a lot of these people have voted Liberal about a dozen times in a row, and they weren’t happy at all. Why, if they had wanted socialism, they would simply have voted for the NDP like some begrimed schoolteacher or autoworker.
I suppose everyone still remembers the defence strategy Freeland chose in her budget speech: she pretty much covered herself in blue woad and began screaming class-war slogans:
“Before they complain too bitterly, I would like Canada’s one per cent — Canada’s 0.1 per cent — to consider this: What kind of Canada do you want to live in?
“Do you want to live in a country where you can tell the size of someone’s paycheque by their smile?
“Do you want to live in a country where kids go to school hungry?
“Do you want to live in a country where a teenage girl gets pregnant because she doesn’t have the money to buy birth control?
“Do you want to live in a country where the only young Canadians who can buy their own homes are those with parents who can help with the down payment?
“Do you want to live in a country where we make the investments we need — in health care, in housing, in old age pensions — but we lack the political will to pay for them and choose instead to pass a ballooning debt onto our children?
“Do you want to live in a country where those at the very top live lives of luxury — but must do so in gated communities, behind ever higher fences, using private health care and airplanes, because the public sphere is so degraded and the wrath of the vast majority of their less privileged compatriots burns so hot?”
Chrystia Freeland in 2024 thought this a hill well worth dying on. But 2025 Chrystia Freeland is now preparing to become an opponent of the higher capital-gains tax, thus answering “Yes” to absolutely all of these questions. Pregnant teens, British smiles, ballooning deficits: bring them on! They are a price now worth paying, it turns out, because Donald Trump got re-elected and Canada has discovered overnight that it competes economically with the United States.
Or, to put it as Bloomberg News’s Brian Platt did, in language that has a flavour of careful dictation: “Freeland believes the tax hike no longer makes sense for Canada because of the risk that Trump’s nationalist policies — which also include tariffs and deregulation — draw investment away from its trading partners.”
Well, yes, or maybe you were just full of crap all along, Freeland. This isn’t really about her, of course: there are going to be lots of Liberal Copernicuses suddenly discovering the importance of economic competitiveness and productivity after a decade of peddling egalitarianism and eco-austerity. Many of my readers will respond by simply redoubling their prior determination to bury the whole Liberal party 1,000 feet deep below a salt-sown earth.
I hope others will insist on more from the Liberals than just “We’ll cancel that tax grab from the spring — you know, the one that wasn’t going to make much difference in the long term, but was going to make the 2025 Budget look a lot healthier.” They say religious converts are often more radical and bloody-minded than lifelong believers because they have to prove their good faith. And, boy oh boy, do these people need to prove it.
National Post