Six months ago, Michael Ignatieff set the Liberal Party against another 1.5% reduction in federal corporate taxes. He and his caucus have decided to oppose the March budget unless the tax cut is reversed. Every day, their opposition escalates. Each statement becomes more extreme. It sounds like they not only want to force an election, but they also want to make a new corporate tax rate of 15% a ballot issue. Their growing confidence in their position, strangely, isn’t making their position clearer—only less so.
These corporations are “rich,” and more of their vast profits is needed by the more deserving. This is understandable, rhetorically. A “corporation” is a mere abstraction. To go shoulder-to-shoulder with the social democrats, Ignatieff will have to appeal to the little guy in flesh-and-blood terms. Yet, his finance critic Scott Brison’s attempt to explain the issue in writing both undermines its credibility and punch:
“In the face of this [mass unemployment, an historic deficit, unmet social needs, and an imminent decline in the workforce] Stephen Harper is reducing taxes for Canada's largest corporations by $6-billion. Canadian families would be justified in wondering why Canada's biggest businesses are getting a $6-billion tax cut when they are finding it difficult just to make ends meet.”
Later, Brison complains that the government has provided no similar break for small businesses that now pay 11% and can deduct the first $500,000 of annual income.
His decisive argument, however, is that the federal government simply can’t afford to lose another $6 billion. (After all, the Liberals voted for the scheduled tax cut in last year’s budget before the deficit became their concern.) Their continuing use of the adjectives “biggest” and “richest” corporations directly contradicts this. They can’t be serious about saving the $6 billion if their eyes are only on the profits of the biggest. They’ll need to stop the tax cut on all profitable corporations, not just the richest and biggest—by definition, not even most, only a portion of them.
Conceivably, they are testing out a refinement of the policy: keep saying they’ll save $6 billion but only go for the profits of the largest corporations, usually defined as those with more than 500 employees. If that’s the case, please drop the $6 billion or tell us what new taxes you have in mind.
Of course, the probable reason for howling about the “biggest” and the “richest” is to wink: Liberals are still real business’s true friend. That excess is the target, not corporate Canada. With the dollar above par and escalating international competition, they will have a difficult time explaining to smaller corporations that the profitability and investment intentions of their community’s largest employers, their largest customers, and clients is of little concern.