A sea change in Canadian federal politics?

Today's National Post has two, apparently unrelated columns that suggest we might - just might - be witnessing an important turning point in federal politics.

The first is that the Conservative Party of Canada is peering into the Void of Complete Irrelevance, and is getting out the springboard:

Andrew Coyne - Will the Tories jump the shark? (subscription req'd):

There is a Web site whose name, Jump The Shark, has entered the language. It defines the precise moment when a long-running TV show finally and irrevocably loses its way. A TV show "jumps the shark" (the reference is to an episode of Happy Days, in which Fonzie jumps over a shark tank on water skis) when, exhausted of whatever once made it fresh or original, it gives up any pretense of logic or dignity and simply throws up whatever it thinks the public wants.

The federal Conservatives are now hovering at the same brink of inanity, nerving themselves to make the equivalent leap in political terms. Nothing's definite -- it's all "could" and "may" and "understood to be considering" -- but that the party is even thinking about proposing deep cuts in the GST, as reported, is danger sign enough.

The party has made many mistakes over the years. It has abandoned any number of long-held positions, jettisoned fundamental principles, watered-down this and tossed aside that. But it has not previously advanced policies that would actually make things worse. Its sins have been of omission rather than commission. So this marks a decisive turning point: If the party adopts this cynical, opportunistic, thoroughly wrong-headed proposal as part of its platform, we will be able to say with certainty that this was the moment when the Conservatives jumped the shark.

So if the CPC is removing themselves as a credible, safe pair of hands for running the country, does that mean we're stuck with the Liberals - and their variable standard of ethics - until the End of Time? Maybe not. The NDP has recruited Paul Summerville, a former chief economist for  RBC Dominion Securities as a candidate for the Toronto riding of St Paul's. In an opinion piece in the same edition of the NP, he says:

Paul Summerville - The all-new pro-growth NDP (subscription req'd):

The idea that an investment banker might also be a social democrat and care about prosperity and social justice has clearly sent parts of the National Post into a collective tizzy.

Last week Terence Corcoran and William Watson were interested enough in my NDP candidacy that each critiqued a speech I made recently, "Prosperity and Justice: A New Canadian Democracy."

While we disagree about many things, we obviously agree that a tremendous change is potentially underfoot in Canadian federal politics, namely, that Canadians concerned about our economy can trust the NDP.

While I am flattered that Mr. Corcoran concluded that the NDP would run partly on the "Summerville pro-growth global-entrepreneur prosperity-is-power wealth-creating track," my influence is overstated.

I came to the conclusion some time ago that this "pro-growth" strategy is as much a part of Jack Layton's commitment as it is my conviction.

That last point is somewhat difficult to accept: in the last election, Jack Layton's NDP campaigned on a platform of reducing the GST and increasing corporate taxes. But if Mr Summerville knows what he's doing, and if he really does have a certain amount of influence in setting NDP economic policy, then there's the very real possibility that the NDP just might replace the CPC as the safe, responsible alternative to the federal Liberals.

Update: Mr Summerville dropped by to point me to this post on his blog, where he says:

I completely agree with Andrew [Coyne] when he argues that “[i]f there is a principle whose support among economists rivals that of free trade, it is that consumption taxes are to be preferred to income taxes … if any taxes are to be cut, better those on income than consumption.”

Critics of the GST tend to argue that the consumption tax is regressive and should be scrapped.

I do not agree.

If Mr Summerville is able to persuade the federal NDP to abandon do-it-yourself economics and to use the real thing when formulating policy, then things will get very interesting indeed. I wish him well.

Comments

[paul summerville]

well noted. please check today's blog 'two canadian columnists i like'.

economics is very exciting!

paulsummerville.ca

[David Lloyd-Jones]

A few years ago I looked up the total amount of income paid by Canadians by income decile, before and after Michael Wilson.

Briefly, before Wilson Canadians paid an effectively flat tax overall, with three small exceptions. The richest and poorest deciles paid a little bit more: the richest because they are slightly effected by the supposed progressivity of taxes, the poorest because the sin taxes become salient. (these are tuths over whole groups, and obviously there is a good deal of variance within each group.)

Third, the ninth decile of income earners pre-GST paid substantially less as a percentage of their income in taxes than did anyone else.

This latter effect disappeared after the GST came into effect.

My supposition is that this has two causes: first, the abolition of the 13% Manufacturers' Excise Tax had a progressive effect, because of the negative marginal propensity to consume goods as income increases; second, the ninth decile over-represents both producers and consumers of non-material goods. Think accountants and lawyers, farriers, nanny services, private schools (The Principal of UCC got $300,000 a year at the time, and fees were $16,000) and so on.

Surely it is ridiculous on its face to suggest that a tax on both the services of and the souce of income of accountants and lawyers is regressive!

Oh, yeah, I'm one of those Blue Democrats.

-dlj.