Canada’s existential election has very quickly become unserious

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I see that the new Age of Seriousness lasted for about five minutes.

You recall: in light of the existential threat posed by Donald Trump, Canadian politics had been transformed. There was no alternative. The country’s very survival was at stake. No longer could we afford to dawdle along as if the world owed us a living – or as if we had no natural predators.

It was a time for boldness, everybody agreed, for facing facts and solving problems. The crisis, unwelcome as it was, would be the spur to finally rouse ourselves to action, sweeping away decades of daydreaming and inertia, of regulatory overkill and interest-group gridlock, of politics as usual.

Now we would build pipelines from sea to sea. We’d abolish interprovincial trade barriers. We’d make radical policy shifts to attract investment and fix our terrible productivity performance. We’d diversify our trade. Above all, we would start to pull our weight in the defence of the democracies – a category that no longer necessarily implied the United States – and, more urgently, of our own territory.

What, then, is the first major policy announcement of the two major parties? A multibillion-dollar tax cut that will drain the treasury while making no contribution to improving productivity – or even to helping the worst off among us. A bipartisan bribe, in other words, driven by neither equity nor efficiency considerations, but the worst sort of politics as usual. Facing the most severe threat to our country’s sovereignty since Confederation, our political leaders have chosen to play a game of electoral Parcheesi.

The Liberal Leader, the erstwhile technocrat Mark Carney, was the first to drop the bomb on his own credibility: on the first day of the campaign, he announced he would cut the lowest marginal rate of income tax by a percentage point, from 15 per cent to 14 per cent. No doubt this was intended to upstage the Conservative Leader, Pierre Poilievre, who was expected to unveil tax-cut plans of his own. Sure enough, the next day, Mr. Poilievre announced that he would cut the lowest rate by more than two percentage points, to 12.75 per cent.

The first of these would cost a hefty $6-billion annually. The second would cost a staggering $14-billion. This, at a time when the deficit, after hitting $62-billion last year, is expected to come in at $50-billion this year. And when recession looms, in the shadow of war – the hot kind, in Europe; the trade kind, if we are lucky, in North America, though no one knows quite where Mr. Trump’s annexation fantasy will lead.

Well, you might say: at least someone’s doing something for the less well-off. Except much of the benefit of this tax cut will go to the best-off: they get the same tax cut as everyone else, on the first $57,375 of their income. As for the poorest-off, they will get no benefit whatever. They don’t earn enough to pay taxes.

That $6- to $14-billion annually, all of it borrowed – for neither party has offered any credible plan for offsetting reductions in spending, beyond the usual “foreign aid” and “reduced waste” flimflammery (Mr. Carney’s pretense that more government use of AI would pay for it at least has the virtue of novelty) – is money that is not available to rebuild our shattered military, to defend our nation. It is money that will not be spent on infrastructure, or improved social supports, or a hundred other things.

For that matter, it’s money that’s not available for tax cuts – the kind of tax cuts that actually do some good, improving incentives to work, save and invest. A cut in the bottom rate does none of these things. Certainly it has no impact on the behaviour of those in the higher tax brackets. Tax cuts, like everything else in economics, matter at the margin. But the Carney-Poilievre tax cut does not apply to the next dollar these taxpayers invest, save or earn, but to money already pocketed. It’s just a windfall gain.

Neither is it likely to have much impact on those in the lowest tax bracket. They don’t have much money to save or invest, for starters. As for work effort, that’s an issue at very high marginal-tax rates – including the very high implicit rates that low-income taxpayers face, in the form of income-tested benefits (when a dollar in extra earnings means the loss of a dollar in benefits, it is the equivalent to a marginal tax rate of 100 per cent). A cut from 15 per cent to 14 per cent, or even 12.75 per cent, is unlikely to alter work effort much.

An incentive-based tax cut, especially a tax cut that was funded, either through cuts in spending or the elimination of special tax breaks, would be something to celebrate. Even an unfunded tax cut of this kind might be defended as an “investment” in higher productivity, one with greater prospects of paying dividends than the public spending programs that are usually advanced in that name. But this pseudo-Keynesian, proto-political “money in your pockets” wheeze is pure pandering.

I suppose it’s more disappointing coming from Mr. Carney. The book on him was supposed to be that he was the principled egghead, the guy with the central banking pedigree and the PhD in economics who’d arrived, with impeccable timing, just as the crisis did, as if the moment had been made for him, when his dull decency and lack of political savvy would prove advantages rather than drawbacks.

But with each day and each cynical policy proposal, Mr. Carney shows he’s more than willing to play the political game, with the same all-consuming lust for power as any 20-years-in-the-game hack.

Speaking of 20-years-in-the-game hacks, Mr. Poilievre, too, has much to answer for. Calculating and obnoxious he may be, but the book on him was always that, underneath it all, he was a dyed-in-the-wool free-marketer, someone who, for better or worse, really would take a bracing Friedmanite approach to the economy based on prices, competition and incentives, rather than regulations, subsidies and free lunches.

Instead, what do we get from both party leaders? Scrapping the carbon tax, and unfunded tax giveaways. Truly this is an election for the ages, a historic choice between dull but unprincipled and nasty but opportunistic.

You can see what Mr. Carney is up to. He’s got a lead, and like a yachtsman on the windward leg, he’s covering his opponent’s tacks. He knows that Mr. Trump has upended the entire campaign, such that the only issue on voters’ minds at the moment is the defence of the country.

He knows that this has conveniently distracted attention from the Liberal record, especially on fiscal and economy policy, that had brought the party to such a low ebb until lately, but he also knows that Mr. Trump will only remain an advantage to the Liberals so long as the election remains focused on leadership, rather than policy: on who should take on Mr. Trump, rather than how. By minimizing his differences with Mr. Poilievre on policy, he maximizes his differences with him on personality, as the “adult in the room.”

It’s harder to understand Mr. Poilievre’s game. Sure, cynicism and expedience is the sort of thing you might expect from him. But that’s the point: it is what you’d expect. If ever there were a time for a politician to maybe run against type, I’d suggest it’s when he’s turned a 25-point lead into a five-point deficit.

But Mr. Poilievre seems incapable of adapting. He jumped out to that lead because he was the first political leader to grasp how salient the affordability and housing gaps had become for Canadians. He lost it because he has been so slow to grasp how the series of epochal changes we have witnessed in the past few months – Mr. Trump’s re-emergence, Justin Trudeau’s resignation, and the remaking of the Liberal Party in Mr. Carney’s image – have turned Canadian politics upside-down.

Part of that 30-point shift, it is true, is sheer relief that Mr. Trudeau is gone. Some of it is support for, or at least interest in, Mr. Carney. But a good chunk of it, I’d reckon, is based on distaste for Mr. Poilievre. And much of that is the perception, at the least, that Mr. Poilievre is a) way too much the political attack dog, and b) a little too Trumpy for people’s liking. Certainly that is the lesson you would draw from Liberal attack ads, and attack ads are usually rooted in some core truth.

Given that, wouldn’t you think you’d want to get far away from those “perceptions”? Wouldn’t you want to be not the late, reluctant, half-hearted opponent of Mr. Trump and his designs on Canada that Mr. Poilievre has seemed, but the most full-throated, Braveheartian defender of Canadian nationhood of them all? Wouldn’t you want to ditch the Trumpian lingo, and even more the Trumpian attitude?

There’s been some attempt at that: the Flag Day speech, those French-only ads of him leaning on a desk sounding relatively normal. But for every such effort there’s been an interview with Jordan Peterson here, a “globalist” reference there. The biggest missed opportunity: Danielle Smith’s antics, first threatening separation if her “nine demands” were not met (demand number six: bring back plastic straws), then boasting in an interview with Trump media how she had urged the President to interfere in the election on the Conservatives’ behalf (advising “administration officials” to “put things on pause” until after the election, as the tariff dispute “seems to be benefiting the Liberals”).

If ever there were a chance for what the Americans call “a Sister Souljah moment” (after Bill Clinton’s adroit disavowal of a radical Black activist), that was it. Talk about a slam dunk: all he had to do was stand up for the unity of the country, and its independence. Sure, you lose a few votes in Alberta – maybe you’d only win by 60-per-cent majorities, rather than 80-per-cent – but you’d gain everywhere else.

But he couldn’t do it. Ms. Smith’s demands were “reasonable,” he croaked. Her apparent attempts to collude with the Republicans? “People are free to make their own comments.” Perhaps he was afraid of demoralizing the base. Perhaps he was worried he would let the People’s Party up off the mat. Maybe he just really likes Ms. Smith. But he looked, as he has for much of the past few months, weak, uncertain, immobile.

I never thought I’d say this, but is the problem with Mr. Poilievre that he just isn’t ruthless enough?