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October 15, 2017 | Toast

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Is Bill Morneau toast?

Fresh news our playboy finance minister owns a villa in southern France through a private corporation he forgot to disclose to the Ethics Commish didn’t help much. Nor does the fact his family firm (inherited), Morneau Shepell, specializes in tax-avoiding gilded parachutes for wealthy corporate executives, at the same time he’s been hammering hairdressers, chiropractors, vets and IT guys about their retirement savings.

Worst, because he’s a political rookie, Bill let the communications dudes at Finance and the PMO spend the summer telling us two million incorporated people who host half the jobs are tax cheats. They’re not. Rules are rules. Almost everybody plays by them. Abruptly changing the playbook, then accusing taxpayers of being loopholers and criminals, was a massive blunder. Morneau will not survive it.

Monday morning Lib MPs will attend a mandatory caucus to hear the finance minister go into reverse – sort of. The first backlash against the T2 government was something Justin never expected. By labeling the self-employed as bad, devious people he thought his voting base would embrace the ‘fairness’ theme, believing they could get a benefit from tearing others down. Some swallowed the propaganda. Millions have not. The roster of professional groups the Liberals have pissed off is now heroic in size, from unions to law societies.

(T2 and Morneau will formally announce their ‘retreat’ Monday at noon at the Pastaggio Italian Eatery, in Stouffville. Hold the anchovies.)

During the debate leader hypocrisy was ferreted out. Trudeau is a millionaire thanks to a familial trust fund established by his grandfather who owned a string of gas stations. Yep, a small business dude. Morneau lives in a $5 million house just off Bayview Avenue in Toronto and has $30 million in personal assets, thanks to his dad, Frank, who started a human relations company in 1966. Yes, an entrepreneur. Now that their wealth is assured, critics say, the noose tightens on others who would walk the same path.

Being rich is not a bad thing, of course. In the US where a billionaire rules, it’s celebrated.

But employees rarely become truly wealthy. The rich generally get that way through risk and enterprise, or a trust fund. As the news above has spread – the French villa, the inherited wealth, the establishment marriage (McCain), the tax-avoiding corporate offerings, the lavish lifestyle, the $1 million salary, the failure to disclose assets to the ethics cops – Morneau’s message of everyone else being a cheat has rung hollow. It was crass, manipulative messaging intended to instill jealousy, anger and outrage among those who struggle to do things top leaders never consider – like paying the mortgage. Ottawa used base emotion for political gain. It failed. Plus it handed a gift to the hapless Cons.

Now Bill’s in damage control.

Monday’s meeting is expected to modify some of the proposals, especially on the tax treatment of money small business people retain to weather lean years or for retirement. Ottawa had proposed changes resulting in a 73% tax rate on withdrawals, which is enough to make a Norwegian blush.

Sexist proposals will also be addressed. By ending the ability of a husband and wife to split income from a business they co-founded and co-own, even when all the risk was familial, women were road kill unless they worked as employees, not in the home. Now it’s rumored female entrepreneurs will be allowed to retain money in a corporation for a potential mat leave, opening the door to a dangerous, gender-based system. (Sorry, gay guys, you can adopt a child on weekends and stat holidays.)

How much the feds backpedal is unknown since so much political capital was put into this destructive and divisive plan. The lack of understanding of why small business people are willing to take risks and create jobs and economic activity, how doctors are fairly compensated through corporations and provincial agreement, or the unfair tax benefit enjoyed by public servants is evident now. This can of worms should never have been opened. It was not about fairness. Just politics.

Word has it Nav Bains may be the next finance minister. He’s an experienced MP. Smart guy. Young. And he’s cute. Take that, Jag.

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October 15th, 2017

Posted In: The Greater Fool

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