The impact of Donald Trump on Canada has been, it’s fair to say, negative. Much of this has been overt: A few examples include a botched pandemic response that is lengthening an economically damaging border closure, never-ending trade retaliations against Canadian industry, and a dismantling of the United States’ refugee policy such that it now contravenes our Charter of Rights and Freedoms.
In addition to the collateral damage Trump has wrought directly through his terrible policies, another aspect of his corrosive impact has been the quiet way he has served as an excuse for bad ideas here in Canada. In fact, it’s fair to say that Donald Trump is the best thing to ever happen to Canadian leaders interested in stymieing progressive change.
Conservative politicians and big business alike have long used words like “competitiveness” to make their preferred agenda of tax cuts and deregulation sound like smart policy. Since Donald Trump took office in January, 2016 and began to implement just such an agenda, that rhetoric has gone into overdrive as corporate elites and right wing voices try to drag Canada’s policymakers into their desired race to the bottom. This has regrettably made key parts of an urgently-needed progressive agenda even harder than usual to pursue.
Nowhere has this been more evident than on the taxation front.
In 2017, courtesy of the Trump administration’s mammoth $1.5 trillion suite of tax cuts, a predictable chorus of voices from within the business lobby started agitating for Canada to move in the same direction.
Months before the cuts had even passed, the Business Council of Canada president (and former Liberal Cabinet Minister) John Manley sent a letter to the prime minister urging him to adopt what they called a “laser-like focus on competitiveness”. His prescription? Immediate cuts to both corporate and income taxes and a round of deregulation. The Canadian Chamber of Commerce soon joined in, seizing on the Trump tax cuts to demand that the federal government move immediately to “significantly cut the cost of doing business in Canada.”
The Canadian Manufacturers and Exporters association has offered up a similar menu of demands in order to piggyback on the Trump tax cuts. In 2018, it released a report recommending that the combined federal and provincial combined corporate tax rates be slashed to 20 percent and calling for a Royal Commission tasked with “modernizing and simplifying” the tax code.
Even the Globe and Mail editorial board has said much the same, arguing in January 2018:
“It’s all about competitiveness…Ottawa must also show it is willing to play ball when it comes to doling out economic carrots and sticks…To stay competitive in this tumultuous economic moment, Ottawa needs to demonstrate that it is open to all possibilities, including lower corporate tax rates and less regulation.”
This race-to-the-bottom logic hasn’t limited itself to taxation. Among the more ominous notes sounded in BCC president John Manley’s 2017 letter to the prime minister was a call for “caution” on climate policy that very much like a demand for the feds to moderate environmental initiatives in order to match the dismal course taken south of the border.
Unfortunately many of these calls seem to have had the desired effect. In 2018 the Trudeau government announced it was scaling back its carbon tax program and, though it has so far resisted calls for blanket corporate tax cuts, it nevertheless offered corporate Canada some $14 billion in tax breaks.
Though there are still about 100 days until the US election and it’s too early to predict an outcome, it’s fair to say that Joe Biden has improved the Democratic Party’s levels of support right across the country. Biden has already served notice that on key issues such as climate change, taxation, and immigration, he will strike out in a direction not only far more progressive than Donald Trump, but also with respect to the positions adopted by Hillary Clinton in 2016. Given the prominence accorded to progressive leaders on Biden’s various campaign committees (again, a real contrast to the approach taken by Clinton in 2016) this is not surprising.
A Democratic victory on November 3rd is not assured. But as we recover from the COVID-19 pandemic, Canadians can begin to dream again of the sort of country we want to build once we are freed from the Trump millstone around our collective neck.
Rick Smith is the Executive Director of the Broadbent Institute