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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

February 11, 2019 | Farewell

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.

How could anyone forget that look?

As a crusading daily newspaper columnist decades ago I, of course, knew everything. To stem runaway deficits all the feds needed do was economize, prioritize and take tough choices. Let enterprise be free. Stand down. Govern lightly. How hard was that? And don’t tax consumption.

Daily I pounded Ottawa. House prices had just hit a record high. Interest rates were insane. Mortgages at 11.5%. The national debt exploding. The middle class struggling. Free trade and the proposed GST were ripping the nation apart. In my crosshairs was Ottawa’s money guy, whom I pilloried and demeaned from a safe distance.

One morning there was a buff envelope on my newsroom desk. It was from the paper’s publisher, saying the prime minister had contacted him with a request. I was to treat his Minister of Finance with more respect, and cease calling him “Mikey.”

Disgusted at the journalistic interference, that night I complained to Dorothy. “So,” she said sympathetically, “stop bitching and do something about it.”

I did. Over the next six months I won a Progressive Conservative party nomination, fought an election and gained a seat in the House of Commons. Shortly before Christmas, thirty-one years ago, I walked through sound-proofed doors in Centre Block to the national caucus room of a majority Conservative government. I turned and looked up, into the steely, hulking gray gaze of Michael Wilson.

 It took months. The understanding finally washed over me. The immensity of the problem. The Mulroney years started deep in the red, with a legacy of record spending from the Trudeau era. Under T1 the deficit had increased from 4.6% of the economy to almost 8%. Over a third of all taxes collected went solely to pay interest on the debt. Turning the ship around looked impossible without gutting program spending. Politically impossible. The way out, Wilson surmised, was a tax on spending. A Canadian version of the European value-added tax to replace a tangled web of federal excise levies. He called it the GST.

And he called on me.

For two years I assisted Mike Wilson in a project he knew would destroy him. The issues tackled included what would be taxed, and what would not. Every item or service exempted, he said, made the tax less fair and more arbitrary. In the end, the big exclusions were groceries and housing. We reviewed the implementation, plus how to guarantee GST revenues would  be targeted at reducing the deficit, then the debt, not pork-barrelled into more spending. I conducted hearings into wiping out the excise tax then adding to consumer costs and wrung commitments from major retailers that they’d reduce sticker prices. We decided to ensure stores made the tax visible. That way, Wilson said, future governments wouldn’t be able to jack it continuously, as they had the old tax – which sat at an unseen 13%.

Wilson and I knew what was coming. The GST went in. It created a torrent of revenue. The public and media went rabid. It had been so much easier paying a hidden tax than one which appeared on every sales slip as a constant reminder. The Liberals, under Jean Chretien, vowed to kill it if elected.

So in 1993 Wilson stepped aside, all used up after taking on the free trade file. I ran again, and was defeated. In fact, the PC party was wiped out in the greatest-ever electoral defeat between the vote-splitting Reformers and the GST-killing Libs.

But Chretien pivoted. The tax remained, helping his government eliminate the deficit and run a string of surpluses. I went off and got a real job. Wilson went back to Bay Street for a while, then served as Canada’s ambassador to the US. He later became chancellor of the University of Toronto. After his son, Cameron, committed suicide, he was a tireless warrior for mental health issues.

As we debated and carped about taxes here on Sunday, Michael died. Reflecting upon his passing I recalled the first bemused look, then how he brought an entitled, conceited, arrogant young man into the light.

Thank you, Mr. Wilson.

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February 11th, 2019

Posted In: The Greater Fool

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