Politics
‘Biden’s the most impressive president of my lifetime’: Mehdi Hasan on Fox News, tough questions and post-Trump politics – The Guardian
One evening this month on cable television, Mehdi Hasan interviewed Ilhan Omar, who had just been ousted from a House of Representatives panel by Republicans still worshipping at Donald Trump’s altar of intolerance.
The significance of the moment was not lost on Hasan.
“When I was growing up, I never imagined I’d see, on primetime, a Muslim host interviewing a Muslim politician. Tonight, I did the interview,” the 43-year-old tweeted afterwards. “I also never thought I’d see double standards on terrorism bluntly addressed on primetime, but tonight I got to address it. Thanks @MSNBC.”
For those who criticise the American news media as too white, too Christian, too complacent, too inward looking, too pompous (“democracy dies in darkness”), too prone to herd mentality and too deferential to authority, Hasan has come along in the nick of time.
He is a British-born Muslim of Indian descent, anti-establishment muckraker and unabashed lefty with a bias towards democracy. As a former columnist and podcaster at the Intercept, and ex-presenter on Al Jazeera English, he used to worry that MSNBC would find him too edgy, too iconoclastic. But he says the network has been entirely supportive: he hosts weekly shows on MSNBC and NBC’s streaming channel Peacock.
One explanation is that, unlike shock jocks, bomb throwers and social media stars on the right, his show undeniably does substance. During the US military withdrawal from Afghanistan, it featured the Afghan perspective at length. When the war in Ukraine erupted, Hasan offered a 10-minute monologue about the fascist philosopher who informs Vladimir Putin’s worldview. After the police killing of Tyre Nichols, an African American man in Memphis, he discussed critical race theory and policing with two leading academics.
Clearly, Hasan is not afraid to be an outlier. For one thing, he is personally opposed to abortion, though he condemned last year’s overturning of Roe v Wade and believes the law should uphold a woman’s right to choose. For another, he is still fastidious about taking precautions to avoid the coronavirus even as nearly everyone else seems to have thrown caution to the winds.
“My wife and I and our kids, we feel like Will Smith in I Am Legend: we’re the last people still masking in our friends’ circles,” he explains to the Guardian through a face mask in his glass-walled office on Capitol Hill in Washington. “What Americans aren’t being told, sadly, is that most experts in the field don’t agree with the media, Congress, the White House on this. This is a disease that every study shows will increase your chance of a heart attack, dementia, a stroke, diabetes, not to mention long Covid itself, brain fog, all the other issues. Why would I want to get that?”
And unlike some on the left, he speaks about Joe Biden with the zeal of a convert. “I met someone recently who’s like, ‘Well, what’s he done? Joe Biden’s done nothing.’ There’s this fashionable view: completely untrue. Joe Biden has done a lot, more than any president since LBJ [Lyndon Baines Johnson], some might say since [Franklin] Roosevelt.”
During the 2020 Democratic primary election, Hasan, still at the Intercept, was more sympathetic to the progressive senators Bernie Sanders and Elizabeth Warren. “I was a big critic of Biden. I didn’t think he would be a transformative president. I didn’t think he would change things substantively and yet he did surprise me. He was much more open to the Bernie Sanders agenda. A lot of what he did was what the left wanted him to do.”
Biden’s go-big legislative victories have included coronavirus relief, a bipartisan infrastructure law and tax and spending measures that help to address the climate crisis. Hasan is critical of his handling of the pandemic but believes that he was right to end America’s longest war in Afghanistan and has struck the right balance on Ukraine.
“I never imagined I would say this – I was born in 1979 – I think he’s the most impressive president of my lifetime. Now, you might say that’s a low bar compared to Ronald Reagan, George W Bush, Donald Trump, but even compared to the two Democrats who are semi-worshipped by some in their party, Bill Clinton and Barack Obama, I think Biden objectively – on paper a list of achievements – has done more.”
Hasan’s budding talent for argument was watered at the Oxford Union in the UK; a 2021 profile of him in the Columbia Journalism Review was headlined “The Debater”. When he told friends he was working on a book titled Win Every Argument, they assured him it was the one he was born to write. “I guess for good or bad, I’m identified with arguing and debating. I say in the book: I’ve been doing it all my life. I now get paid to do it, which is great.”
You might object that we already have too much argument in America. In 2004, on the CNN talkshow Crossfire, the comedian Jon Stewart memorably upbraided the hosts, Paul Begala and Tucker Carlson, for “hurting America” by stoking divisiveness. But Hasan contends that you cannot have a healthy democracy without “good faith” debate, that a good argument is actually fun – and that anyone can do it.
He has advice for political interviewers, too. Don’t ask seven different questions about seven topics, which allow a politician to dodge; follow up instead. Prepare, research and “show your receipts”. Hasan’s Twitter homepage has a pinned tweet, a video clip from his Al Jazeera days in which he eviscerates Donald Trump’s campaign adviser Steven Rogers, and the words: “Hey US media folks, here, I would argue immodestly, is how you interview a Trump supporter on Trump’s lies.”
So what if he got to interview Trump himself? Hasan says: “Donald Trump has this art called ‘Gish Galloping’, this idea that you overwhelm your opponent with bullshit, nonsense, lies over and over again at such a rapid pace that your opponent doesn’t have the ability to stop and factcheck them in real time and gets overwhelmed. Whether Trump does this wittingly or unwittingly, who knows? But he does it. He’s a master of it.
“There are tactics that you can use. You break it down, you don’t budge. When someone is hitting you with non-stop nonsense, don’t be distracted. Don’t go with the way they want to go. Stay put. Make clear what’s going on. Call out the tactic. Say: ‘We know what you’re doing.’ Make everyone aware of what’s going on. I always talk about breaking the fourth wall. Make very clear this is a bullshit strategy: you’re trying to overwhelm me with bullshit.”
He adds: “Trump throws 100 lies at you. You can’t rebut 100 lies; you can’t rebut 99 lies. So what you do is just pick one lie and take that apart, and that becomes a symbol for all the other 99 lies, because Trump wants you to be distracted by 100 because he knows he can’t defend any of those 100 individually.”
In a chapter titled “Beware of the Gish Galloper”, Hasan writes admiringly about what he regards as Trump’s toughest interview to date. It was in 2020 with Jonathan Swan, then of Axios and also an outsider-insider: an Australian immigrant whose relentless questioning contrasted with many – though not all – American interviewers.
Hasan, who in Britain worked for ITN and the New Statesman magazine among others, comments: “I have often found it weird that the United States of America, which was created in revolution against British state power, against the idea of a ruling class and the idea of bowing your knee or head, is in some ways more deferential to people in power than the UK currently is.
“I’m a big critic of the British media, especially the rightwing tabloid press, but when it comes to interviews I wonder what the US reaction would be if Jeremy Paxman, John Humphrys, Andrew Neil, Jon Snow parachuted into US newsrooms and started conducting interviews. It’s no coincidence that one of the big takedowns of [White House press secretary] Sean Spicer during the Trump years came from Emily Maitlis on the BBC. He had to go abroad to get taken apart. It didn’t happen necessarily in the briefing room always.”
He continues: “I also think there’s a cultural thing and it doesn’t reflect well on us as Brits. We’re blunter, we’re ruder, weirdly we’re less stuck on etiquette. We’re the ones supposed to be the stiff upper lip; actually, no. There is an American political culture which is: that’s too rude, don’t go there, that’s seen as crossing a line. Some of those conventions need to be broken.
“The silver lining of Trump is he forced a lot of reporters and journalists to say, ‘Oh, crap, we can’t hide behind these conventions. It doesn’t matter that he’s the president of the United States. He’s also a serial liar and we need to say that.’ Towards the end of the Trump era, hats off to some in the US, we’re starting to use the l-word (liar), we’re starting to use the r-word (racist) and now in 2023 some people start to use the f-word (fascist). Three words I’ve been using for a long time.”
But that irreverence and scepticism should apply to the American media itself. Hasan reckons that Rupert Murdoch’s Fox News has been given too much of an easy ride considering its role in transforming the Republican party into a vessel of Trump’s crude populism and disdain for reality. Hosts such as Tucker Carlson and Sean Hannity trade in fear, rage, paranoia and culture wars.
He comments: “I won’t say Fox ‘News’ because why should I play along with this conceit? It is not a news channel. It is a propaganda arm of the Republican party. It is a booster of white supremacy and conspiracy. What it did in the pandemic is unforgivable. I, for one, will never forgive the people who ran Fox through the pandemic. I don’t know how many Fox viewers suffered because they believe the anti-vax ivermectin nonsense that they were fed night after night by primetime hosts. The Murdochs have a lot to answer for when it comes to the degradation of our democracy and our media.”
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He vehemently rejects the common notion that cable consists of MSNBC and Fox News as left-right mirrors of each other with CNN sitting somewhere in the middle. “This is a news organisation. We’re in the newsroom. There are people calling up sources. There is a standards team that goes through my scripts. There are rules on what I can and can’t say. Tucker Carlson on Fox this week used George Floyd’s death as a punchline. If I used the death of a conservative white man as a punchline, I would probably be pulled off air, and rightly so, but they don’t have those standards over at Fox because it’s not a news organisation. We’re going to have to rethink the way we approach this.”
You cannot understand Trump, Florida’s Governor Ron DeSantis or Covid denialism unless you understand Fox, Hasan contends. “All roads lead back to Fox when it comes to the modern right. You have to understand what they created, what they enabled, what they provided cover for. If you want to understand why American democracy is under threat, the Fox narrative is part of that story. You can’t turn your eyes away from it because they’re fellow media organisations. They’ve been coddled for far too long by the rest of the media.”
One popular subject on Fox News is cancel culture, the notion that leftwing extremists have taken over university campuses and other institutions and silenced anyone who disagrees with progressive orthodoxy. This has become a favourite theme of the “liberal” comedian Bill Maher, who has a weekly show on HBO, and who recently compared the “woke revolution” to Chairman Mao’s cultural takeover in China.
Hasan says: “Are there excesses? Yes. Do people sometimes get fired when they shouldn’t? Yes. Do people self-censor? Yes. But that’s been like that for years. I don’t buy this moral panic from the right and some in the centre that everyone’s living in fear of saying the wrong thing. The great irony is, if you are in fear of saying the wrong thing it’s the wrong thing that rightwingers don’t like, not leftwingers.
“The biggest cancel culture brigade in this country is the modern American right. They’re the ones banning books. They’re the ones preventing the teaching of history. They’re the ones purging the Republican party of any kind of moderates, as if a woman called Cheney is a moderate, but she’s out, too. What do they say about the modern GOP? Every accusation is a confession.
“I can’t believe you would look at America in 2023 where you have open racists running for office, you have members of Congress going to conferences of Holocaust deniers, and say, ‘Oh, this is the climate in which everyone’s censored.’ Are you kidding me? This is the most uncensored American political climate we’ve had for decades.”
Hasan was born in Swindon, Wiltshire, grew up in Harrow, an outer borough of London, and studied at Oxford University. He married a Texan – they have two children – and moved to the US in 2015, just as Trump’s comic turn was turning serious. He says he got more “skin in the game” when he became a US citizen in October 2020, a month before Trump lost to Biden in the presidential election.
“I am treated like an American, which is great. Despite all of the cons that we know about in terms of the demonisation of asylum seekers at the southern border and the behaviour of Ice, in terms of political media, public culture, civic life, I’m surprised at how little people have thrown, ‘Well, you’re a Brit’ [at me], especially because I’m following in the footsteps of the likes of Piers Morgan, and no one wants to be reminded of Piers Morgan.
“That was always my fear. Every time there’s a mass shooting, I have to think, how do I condemn this and point out this is an American aberration without sounding like a pompous Piers Morgan? Luckily, I haven’t been treated in that way.”
Hasan, who says the September 11 attacks played a key role in shaping his writing, has also observed a shift in perceptions of what it is to be Muslim in America. More than two decades later, al-Qaida and the Islamic State have faded from the headlines.
“For all the wrong reasons, Muslims are no longer in the news as terrorists and the reason for that is because a lot of white Christians have become the No 1 terrorist threat in this country. That’s not necessarily a good thing. As a Muslim, of course, great not to always be demonised as a terrorist and for Americans to finally realise that terrorists are not conflated with brown men with big beards; terrorists can be people carrying Confederate flags in the capitol of our country.”
But like so much else in the Republican party’s id, Trump brought its Islamophobia to the surface, saying the quiet parts through a bullhorn, for example by proposing a “Muslim ban”. His acolytes have pushed the “great replacement” theory, warned of an “Islamic invasion” and demanded that Muslim members of Congress swear on a Bible rather than a Koran when taking their oaths.
With Trump running for president again, the danger is far from passed. Hasan says: “Literally 48 hours ago, I was on a WhatsApp group where people were joking about ‘See you in the camps’. That joke still does the rounds – a very dark black humour amongst Muslim communities – especially because Trump hasn’t gone away, especially because the Republican party has become more Trumpy.
“You might say, oh, that’s paranoia, but if Donald Trump is re-elected as president and in January 2025 is sworn in, all bets are off what will happen to minorities, and in particular to my community, because whatever guardrails and adults in the room and limits on Trump’s behaviour you thought there were in the first term, they’re all gone. Absolutely nonexistent – anyone who thinks they exist is dreaming.”
Trump remains an existential threat to democracy and fabric of American society, Hasan argues. “We have kids in high schools shouting abuse at Latino and Black players from the crowd because they’ve got permission from the former president of the United States.
“What he’s done to an entire generation of young conservatives who are much more vicious, crass, boorish, misogynistic, racist – countless books will be written going forward on the damage that he’s done to our public culture. And don’t even get me started on supreme court. Donald Trump could be hit by a bus tomorrow, he already left his mark on the judiciary. That’s going to be with us for decades to come.”
Hasan has kept his mask on throughout our interview of nearly two hours but also followed his own book’s advice of maintaining eye contact from beneath his thick brows. He is about to take the book on tour, which he admits could prove the ultimate test of his Covid defences. With the 2024 election under way, he intends to keep warning against short memories and the danger of normalising Trump or other extremist Republicans. That he has the platform to do so is something he regards as a privilege, like when your dad hands you the keys to his expensive car.
“I feel like, ‘Wow, they gave me the keys to go out and drive and I’ve got to be really careful with the car, but I’m also got to enjoy it and do what I want to do and make the most of it.’ That’s constantly what I’m thinking. Otherwise I wouldn’t do what I do, I would go and do something else. There would be no point if I wasn’t constantly thinking about how it’s being received and what I’m trying to achieve. I’m trying to win an argument every night. I’m trying to say: this is what I believe. You don’t have to agree with me, but let me make the case.”
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Win Every Argument by Mehdi Hasan is published by Henry Holt in the US and Pan Macmillan in the UK. To support The Guardian and Observer, order your copy at guardianbookshop.com. Delivery charges may apply.
Politics
Budget Politics: Why the federal budget matters so much to Liberal electorate fortunes. – Abacus Data
By On Tuesday, Finance Minister Chrystia Freeland will table the federal government’s budget, and the stakes could not be higher for the government.
Public assessments of the government’s performance and how they feel about the Prime Minister haven’t been much lower than they are today. Despite this, the Liberals and Conservatives are statistically tied in our latest measure of vote intention.
In our most recent national omnibus survey conducted from March 17 to 21, I asked 1,963 adults a few questions to gauge their economic outlook and how they feel about the government’s performance on a series of economic, fiscal, and pocketbook issues. The results suggest a very challenging opinion environment – one that I think the government and the Prime Minister desperately need to shift.
Here’s what I’m seeing:
The overall economic outlook isn’t that bad right now, but it’s not great either. When we ask Canadians to estimate whether the economy will improve, get worse, or stay about the same over the next 12 months, almost half think it is going to get worse but only 15% say it will get a lot worse. About 1 in 4 are optimistic things will improve over that time period.
Government Strengths and Weaknesses?
When we ask Canadians to evaluate the performance of the federal government and the Prime Minister in several areas, the government gets fairly good grades for its handling of Russia’s invasion of Ukraine, for representing the country internationally, and for working with the provinces. In each of those, half or more feel the government’s performance is at least acceptable.
It gets what I feel are middling grades for running an ethical government, managing the economy, and responding to the crisis in healthcare. On these, about 4 in 10 feel the government is doing at least an acceptable job.
But on two items in particular, the government is seen as severely underperforming – addressing the rising cost of living and making housing more affordable and accessible. On both, about 1 in 4 think the government is doing ok or better while two-thirds think it’s doing a poor or terrible job.
Even among 2021 Liberal voters, the cost of living and housing are challenging issues for the government. 4 in 10 past Liberal voters say the government isn’t doing even acceptably on those issues.
Part of the problem facing the government right now is its lack of narrative – especially an economic one. Case in point, when we ask Canadians whether they agree or disagree that “the federal government has a clear economic plan to grow the economy” only 23% agree, including 4% who strongly agree. In contrast, 42% disagree, 22% neither agree nor disagree and 13% are unsure.
I wish I had comparable data from previous years or previous governments, but these numbers feel low. If I was advising the Finance Minister, having only 1 in 4 people inclined to think you have a clear plan to grow the economy is a problem, and a serious liability, especially when people are feeling anxious and uncertain about the economy right now.
But the crosstabs provide even more concern. For example, those in vote-rich Ontario and Quebec are no more likely to think the government has a clear plan than those in other regions. And only 51% of Liberal supporters, those who say they would vote Liberal today, think the government has a clear economic plan.
But it gets worse for the Liberals…
When we ask all Canadians which party they feel will do best on several issues, the Liberals only have a slight advantage on one – dealing with climate change and the environment. Even when it comes to “making childcare affordable” – an issue that dominated the 2021 federal budget – the Liberals are basically tied with the NDP and only 7-points ahead of the Conservatives.
On EVERY economic and pocketbook issue, the Conservatives have a clear advantage over the Liberals. And a reminder, this is the same poll that found the Liberals only 2 points behind the Conservatives in voting intention.
The Conservatives are ahead of the Liberals by:
- 13 on managing the economy.
- 19 on keeping taxes low
- 15 on keeping interest rates as low as possible
- 11 on addressing the rising cost of living
- 7 on creating good-paying jobs
- 6 on protecting pensions and retirement security
The Upshot
These results underscore both the weakness of the Liberal government’s brand on economic issues and the opportunity it has in this budget to start to move these numbers.
One budget alone won’t fix the problem, but if the government uses it as an opportunity to start talking about pocketbook issues and the economy more, they may be able to reverse some of these numbers.
I think the problem is one of empathy and clarity. The federal government and its senior leaders aren’t connecting with people and empathizing with their day-to-day struggles. And there hasn’t been a clear economic narrative that people recall. With only 23% of Canadians believing the government has a clear economic plan, the budget presents an opportunity for the Liberal government to articulate its vision for economic growth and stability. Demonstrating a coherent strategy to address Canadians’ economic anxieties could help regain public trust.
Yes, the Conservatives have a natural advantage on economic issues. But it hasn’t always been that way. Tomorrow’s budget will either demonstrate a shift in strategy and approach, or it will reinforce what people already think.
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METHODOLOGY
The survey was conducted with 1,963 Canadian adults from March 17 to 21, 2023. A random sample of panelists were invited to complete the survey from a set of partner panels based on the Lucid exchange platform. These partners are typically double opt-in survey panels, blended to manage out potential skews in the data from a single source.
The margin of error for a comparable probability-based random sample of the same size is +/- 2.3%, 19 times out of 20.
The data were weighted according to census data to ensure that the sample matched Canada’s population according to age, gender, educational attainment, and region. Totals may not add up to 100 due to rounding.
This survey was paid for by Abacus Data Inc.
Abacus Data follows the CRIC Public Opinion Research Standards and Disclosure Requirements that can be found here: https://canadianresearchinsightscouncil.ca/standards/
ABOUT ABACUS DATA
We are the only research and strategy firm that helps organizations respond to the disruptive risks and opportunities in a world where demographics and technology are changing more quickly than ever.
We are an innovative, fast-growing public opinion and marketing research consultancy. We use the latest technology, sound science, and deep experience to generate top-flight research-based advice to our clients. We offer global research capacity with a strong focus on customer service, attention to detail, and exceptional value.
We were one of the most accurate pollsters conducting research during the 2021 Canadian election following up on our outstanding record in 2019.
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Politics
Federal budget to announce $7-billion in savings on outsourcing and travel, source says – The Globe and Mail
Finance Minister Chrystia Freeland, right, tries on new shoes in Ottawa on Monday. Ms. Freeland has clearly signalled the federal budget’s main elements in recent remarks.Sean Kilpatrick/The Canadian Press
Finance Minister Chrystia Freeland’s 2023 budget will announce plans to save about $7-billion over five years through cuts to federal travel and reduced outsourcing, with a particular focus on using fewer management consultants, according to a senior government official.
The Globe is not identifying the official, because they were not authorized to be named when discussing the contents of the budget. The savings represent one side of what will be a challenging political balancing act for the government as it presents this year’s spending plan on Tuesday.
Ms. Freeland’s budget will aim to show that the government is focused on fiscal responsibility after posting massive deficits during the pandemic. At the same time, the plan will promote billions in increased spending in areas such as dental care, direct support for low-income Canadians, and a major package of new programs to boost the clean economy.
The government’s decision to cut back on outsourcing follows a series of reports by The Globe and Mail that highlighted how federal spending in this area – officially called professional and special services – has spiked under the Liberals, from $8.4-billion in 2015-16 to an estimated $21.4-billion this current fiscal year.
Parliamentary Budget Officer Yves Giroux recently reported that while federal spending on management consultants is only 5 per cent of that total, it is a category that has grown by 95 per cent under the Trudeau government.
Mr. Giroux has questioned why spending on outsourcing has increased while the size of the federal public service has jumped by 28 per cent since 2017.
The government operations committee is currently engaged in three separate studies of the growth in federal outsourcing, including one on management consulting firms such as McKinsey & Co. and another on the ArriveCan app, which is on pace to cost over $54-million and was built through extensive use of outside contractors.
2023 federal budget: What Canadians can expect from Freeland on Tuesday
The savings on outsourcing and travel will be worth about $7-billion over five years and $1.7-billion for each year after that, the official said. The plan is meant to show that Ottawa will exceed last year’s target of finding $6-billion in internal savings over five years.
Another item that will be in the budget, according to the official, is an announcement that the government will move ahead with reforms to the alternative minimum tax. The AMT, which is intended to prevent excessive use of deductions by providing an alternative way for wealthy taxpayers to calculate their obligations, has been in place since 1986. The 2021 Liberal campaign platform and 2022 fall economic statement both said it needs to be updated to ensure wealthy people can’t excessively lower their overall tax bills.
The budget will also announce a clean technology manufacturing tax credit worth more than $3-billion over five years.
Companies will be able to use the 30-per-cent tax credit to offset the cost of equipment for mining and processing critical minerals, which are in high demand as the global economy seeks to expand the use of renewable energy and electric vehicles.
The budget will also include an extension of the six-month increase to the GST rebate, which temporarily doubled the amount sent to recipients starting in the fall. The GST rebate is a payment targeted toward lower-income Canadians. It is meant to help offset the costs of paying sales taxes.
Campbell Clark: Chrystia Freeland’s industrial-sized budget question
The government plans to promote the extension as a “grocery rebate,” even though many grocery items are exempt from sales tax. There will be no obligation on recipients to spend the money on groceries.
NDP Leader Jagmeet Singh, who is seeking support for lower-income Canadians in Tuesday’s budget, responded to the grocery-themed rebate plan after it was reported Monday by CBC News.
“It looks like one of the things we’ve asked for is going to be there,” he told reporters on Parliament Hill. “We still want to see confirmation of the dental-care expansion to include seniors, people living with disabilities, and kids 18 and under. We really want this budget to save money for people.”
In public comments over the past few weeks, Ms. Freeland, who is also Deputy Prime Minister, has clearly signalled the budget’s main elements.
The government will “invest aggressively” in various clean-energy programs, partly to compete with massive new tax breaks and other incentives that were announced last year in the United States through the Inflation Reduction Act and other policies. The budget will also lay out a detailed spending plan for increased health transfers to the provinces and territories, which were announced in February.
A third category of spending will be under the heading of affordability measures, partly in response to cost-of-living pressures driven by inflation. This will include the extension of the GST credit increase and an expanded dental-care plan, as called for by the NDP, which is supporting the minority Liberal government in exchange for action on a list of policy priorities.
Lana Payne, president of Unifor, which represents thousands of Canadian autoworkers, met with Prime Minister Justin Trudeau last week just ahead of the budget. She said in an interview that U.S. policies to encourage the manufacturing and purchasing of electric vehicles and other emission-reducing measures are a “game changer” that require a strong Canadian response.
“We are in a very important moment in time, I think, economically speaking,” she said. “We can’t lose track of things right now. Because we’ve had a decade or two in which we haven’t been doing that well in terms of attracting new manufacturing investment to Canada.”
The Editorial Board: Budget 2023: Canada’s indefensible military spending
Canadian Chamber of Commerce president Perrin Beatty said he hopes to see a budget with one clear theme.
“The thing that we believe the government needs to focus on is growth. Everything flows from that,” he said. “How do we create the conditions for private-sector-led economic growth in Canada? And that doesn’t mean bringing in massive new spending programs.”
On the tax front, outside experts are not expecting major changes on Tuesday. The government has already signalled that Canadians can expect more detail on tax changes that had been previously announced, but had not yet been launched or fully explained.
These include a proposed 2-per-cent tax on share buybacks for public companies, and the updated alternative minimum tax for high-net-worth individuals.
Last year’s budget said the minimum tax change is aimed at an “unfair” situation in which thousands of wealthy Canadians pay little to no personal income tax each year because of tax credits and deductions.
Brian Ernewein, a former Finance Department assistant deputy minister for tax legislation who is now a senior adviser with KPMG, said he’ll be watching to see if the proposal indirectly limits access to the capital gains exemption for some people.
Currently in Canada, only 50 per cent of a capital gain – such as the profit on a stock sale or an investment property – is taxable. There has long been a policy debate over whether that inclusion rate should be increased. Mr. Ernewein said a minimum tax could have an impact.
“There’s at least some reason I would think for speculating that effectively, maybe not directly, but effectively, they might be changing the tax burden on capital gains through the minimum tax,” he said.
While governments frequently signal a budget’s contents in advance, tax changes are generally closely guarded, given their potential to move markets.
Bruce Ball, vice-president of taxation with the Chartered Professional Accountants of Canada, said he is not expecting major changes to personal or corporate tax rates.
He does, however, expect to see a fair number of smaller tax announcements.
“The government does have a lot of unfinished business, things that they’ve talked about before,” he said, pointing to a promised reform of business tax incentives for scientific research and experimental development as an example.
Finance Minister Chrystia Freeland is expected to deliver a budget Tuesday that will offer limited cost-of-living relief to the vulnerable and promote green investments as uncertainty continues to cloud the economic horizon.
“I don’t think people should get their hopes up too high at this being a sort of goodie bag budget,” Elliot Hughes, former deputy director of policy for former finance minister Bill Morneau, told CBC News.
“It certainly is not being spoken about in that way by both the prime minister and the finance minister and if anything, they’ve I think been … really leaning into the fiscal restraint piece for this budget.”
- Watch and listen to live coverage of the federal budget and what it means for you: CBC’s Chief Political Correspondent Rosemary Barton hosts special coverage starting Tuesday at 4 p.m. ET on CBC TV, CBC News Network, CBC Gem, CBCNews.ca, the CBC News App and YouTube, followed by a special edition of Power & Politics with David Cochrane on CBC News Network. On CBC Radio and the CBC Listen app, Tom Harrington and Catherine Cullen bring you live coverage and analysis at 4 p.m. ET.
Freeland has warned Canadians that while the budget will offer investments in green energy to address the U.S. Inflation Reduction Act, and targeted relief for those struggling with inflation and high interest rates, the cupboard is nearly bare.
“The truth is we can’t fully compensate every single Canadian for all of the effects of inflation or for elevated interest rates. To do so would only make inflation worse and force rates higher for longer,” she said last week.
Hughes said that while the Liberals want to use the budget to seize control of the political narrative for the coming year, that will be difficult with the economy uncertain and no federal election on the horizon.
“It is always tough to seize the narrative by saying we need to … be as boring as possible,” he said. “That said, there are going to be some good measures in here.”
Groceries and dental visits
Last year, under pressure from the NDP, the Liberal government doubled the GST tax credit for six months. Singles without children got up to $234 more from the credit, couples with children got up to $467 and seniors got an average boost of $225.
NDP Leader Jagmeet Singh has said he wants the budget to turn that one-time payment into at least a two-time payment. It looks like he’s going to get his wish.
CBC News reported Monday that while the program is being rebranded as a rebate on groceries, the Liberal government will be rolling it out again at a cost of $2 billion.
The move comes as the cost of food continues to rise year over year despite the fact that overall inflation has been easing for months now.
The budget also is expected to expand beyond children under age 12 the national dental care plan for low-income families and individuals.
The deal between the Liberals and the NDP that guarantees New Democrat support on confidence votes in the House of Commons requires that the Liberals expand the dental care program each year.
In 2023, the program is set to expand to cover Canadians under 18, seniors and those living with a disability. The program is to be fully implemented by 2025.
The government is planning also to crack down on so-called junk fees for consumers — hidden or unexpected consumer charges that are tacked on to the initial price of a product or service, inflating the total cost.
The Inflation Reduction Act response
The limit on what students can withdraw from their registered education savings plan (RESP) for post-secondary education will also be increased.
During the first 13 weeks of schooling, students can’t withdraw more than $5,000 of the education assistance payment (EAP) portion of the RESP. The federal government will increase that limit to $8,000 to reflect the rising cost of college and university.
There is no limit on post secondary education (PSE) withdrawals, which are contributions made by the subscriber.
The budget will contain measures to offset the impact of U.S. President Joe Biden’s Inflation Reduction Act, which Finance Canada officials have said amounts to “a gravitational black hole” that will draw green capital to the U.S. at the expense of Canada and other countries.
Washington’s multi-billion-dollar program earmarks government dollars for developing low-carbon energy in a way that boosts the American manufacturing sector while taking aim at China’s dominant position in the clean energy tech supply chain.
“I think we’re going to see some pretty deep investments in the green economy space,” Hughes said. “I think they’ve [got] a mix of tax credits and other sorts of ways to lure companies to Canada. Big focus on that.”
CBC News confirmed Monday that one of the bigger tax measures in the budget will be a tax credit for clean tech manufacturing worth 30 per cent of capital investment costs in manufacturing equipment.
The budget is also expected to offer more detail on two tax credits proposed in the fall economic statement — the Clean Hydrogen Tax Credit and the Clean Tech Investment Tax Credit.
Conservative Leader Pierre Poilievre has called on Prime Minister Justin Trudeau to pledge to halt any further tax rises, or the introduction of new taxes, and to put an end to deficit spending, which he says is driving inflation.
Hughes said getting spending back to balance is not likely in the short term.
The fall economic statement projected a balanced budget by 2028 — the first time the Liberal government had made such a prediction since 2015. It remains unclear whether the Liberals still look to set a date for achieving budgetary balance.
The cost of dealing with the pandemic, along with the additional cost-of-living supports, will make getting back to balance much more difficult than it would have been ten years ago, Hughes said. And any target date for returning to balanced budgets has to be plausible, he said.
“Whether or not people will sort of take the government at face value on that, on that outlook or on that projection, that’s a bit of a tougher one if you’re basing yourself on previous experience,” he said.
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