Friday, November 03, 2006

Two little words

I'm sorry. Just those two little words from Stephen Harper would go a long way to diffusing the political fallout from his income trust flip-flop. Instead, Harper remains smugly unapologetic and we get his un-elected minister, Michael Fortier, telling investors that lost half their life savings overnight to "take a valium." How Conservatives can still talk of Liberal arrogance with a straight face I'll never know.

I actually think the decision on income trusts, policy-wise, was the right move. It was a tough decision to make politically, but I give the government credit for making the right call based on policy, not politics.

It was also going against a major campaign promise, which makes it doubly difficult politically, and even tougher to put that aside and make the right call. I wish more governments would have the courage to do so though, when they realize a change is necessary and would be the best policy decision for their jurisdiction.

For example, when the BC Liberals were in opposition and about to break into government, and reduce the NDP to a scant two seats, Gordon Campbell campaigned on a major, across the board tax cut. When he got into office and cracked-open the books, he saw things weren't as rosy as the NDP had claimed and we really couldn't afford the tax cut. Instead of making that case and canceling/delaying the cut, he pushed ahead. And to pay for it, he raised the sales tax, increased MSP premiums, and jacked-up user fees across the board. Most people ended up further behind, and the province's economic turnaround was delayed, but at least Gordo could say he kept his promise. That's one of the reasons I stopped supporting the Campbell "Liberals."

It's also a lesson the Liberals learned, or I'm sure Sheila Copps did, around the GST cut promise. I think making unrealistic promises is a nature of prolonged periods spent in opposition, as was the case with the Campbell Liberals in BC, the Harris Tories in Ontario (another ill-advised tax cut), the Chretien Liberals with the GST, the McGuinty Liberals in Ontario with health premiums, and now the Harper Conservatives with income trusts.

Opposition is black and white while governing is shades of gray and compromises, so that's why I give Harper credit for not taking the politically-expedient way out.

That said, he could be handling the political fall-out a helluva lot better. That he will take a political and electoral hit is undeniable, but he's making the hit bigger than it need be.


In the last election he made a clear and unequivocal promise that income trusts would not be cut. He saw a political opening with the Liberals "dithering" on the matter, and the Scott Brison Blackberry story. It was a chance to buy votes and many voters bought in, voting Conservative based on that promise.


With the assurance that a Conservative government wouldn't touch income trusts, investors, many of them seniors or people nearing retirement, went ahead and invested much of their life savings, their retirement funds, into income trusts. With a stroke of a pen, they lost much of their life savings. These aren't business moguls, these are average Canadians. Don't they at least deserve an apology?


While the Conservative campaign promise was naive, I don't think it was dishonest. They could well have felt they could have kept it. And I don’t deny they were forced to act with the continuing momentum toward income trusts, although to industry observers that trend has been clear for some time.


While he made the right call, Harper is digging himself a hole with his messaging. Any respect he might have gained by making a tough but right call is being negated by his arrogant response to the thousands of investors that took it up the you know where. We Canadians are a forgiving lot though.


I'm sorry. Those two little words would go a long way, Stephen.

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13 comments:

Olaf said...

Amen Jeff,

I made the exact same point at my site yesterday (*): that it wasn't the breaking of campaign promises that was so frustrating (I break promises I made during the campaign on a daily basis), but Harper's gutless reaction.

I also gave Lucienne Robillard credit for her question in QP:

"I think it's very dissapointing that our Prime Minister is not even able to say to Canadians, I am sorry, I made a promise, circumstances have changed, and therefore I broke my promise" (Garth TV, Nov. 2, go to 5:30 mark)

That is EXACTLY what Harper should of said: "We're sorry. We weren't aware the threat that income trusts posed to the economy (list threats here), and as such we had to reverse our position. We regret the incident and will do whatever we can to limit any negative effect it might have on individual Canadians (announce tax reductions/senior benefits a, b, and c)".

Can't you just see this in the Liberals next election video, with the video of Harper announcing the new taxes, then the video of Harper promising not to, and then the video of Harper saying he never promised any such thing but only guaranteed he'd look after the seniors.

Stop smiling Jeff...

Dylan said...

"Michael Fortier, telling investors that lost half their life savings overnight to "take a valium." How Conservatives can still talk of Liberal arrogance with a straight face I'll never know."

Liberal arrogance is right! Seems like Harper has been paying somewhat too close attention to the LPC all those years in Opposition because he's acting just like them now.

He campaigned on not touching Income Trusts and he did the exact opposite. The problem is that cutting IT would have happened eventually anyways, so the heat on Harper is considerably less than perhaps if the LPC was split on the issue and the legislation was even more controversial. But it seems that the LPC and NDP will support it. So it appears that the only damage done is to investors in Alberta.

I guess he thinks that Albertans would rather get the bad news from him than the Liberals.

Kudos Harper. You sick bastard.

WestmountLiberal said...

I think the worst hit income trust fund went down appeox 20%.
I understand that most of this money has now been transferred to the safer havens of bank and insurance stock.

To quote Madonna, "...Je suis désolée; Lo siento; Ik ben droevig; Sono spiacente; Perdóname"

Anonymous said...

Aren't we still waiting for Ralph Goodale's "Sorry" for September 19, 2005 when Trust Funds suffered the same losses and seniors supposedly lost their life savings? All the same rhetoric used by the Conservatives on the Liberals is being used by the Liberals now. At least Harper's "sorry" has come in the form of pension splitting for seniors which will save them more money in the future than they lost.

Jason Hickman said...

Some politicos get a lot of mileage out of saying "sorry" - Ralph Klein comes to mind.

Others, like Chretien, wouldn't say the word at gunpoint. Harper obviously falls into the latter catagory.

I'm no fan of broken platform promises, including this one, even if it was done by "my team".

But if we assume for a minute that there were good policy reasons for doing so - and the Globe, Star, some Post colunists, and many other people ID'd as experts say there were - then I think the only thing to do is, do it, wear the consequences and move on, and hope you can persuade people that the totality of your record is worth another vote, even from folks who are ticked off at you..

The "I'm sorry" would have been welcomed by some, I suppose, but I doubt if Harper had made an act of contrition, it would have stopped the Libs from jumping all over this. And FWIW, Flaherty and others have said that they didn't necessarily want to do this, but felt compelled to once it became obvious that the phenomenon was about to spread.

I'm sorry (!) if this sounds cold, but for me, the apology means less than the explanation, and the steps taken to try and minimize the damage (pension income splitting, tax rate cuts, etc.) when it comes to overcoming the broken promise effect.

Bob The Red said...

Great post, Jeff (as usual).

I remember Bob Rae writing a story in the Sun (of all places) predicting exactly what would happen to Daulton McGuinty when he got in power -- that he'd crack open the books, realize the financial situation and have to break his promises, which he did (although he did say sorry).

I couldn't agree more, though, on Harper refusing to apologize. It's not the first time, either.
I told this story on my blog last week, but it speaks about his arrogance. I met a high school teacher of mine the other day at my physio appointment. We were talking about Harper and the therapist asked the teacher:
"You taught Stephen Harper?"
The teacher replied:
"No, nobody taught Stephen Harper. He knew it all already."

Olaf said...

Jason,

I'm sorry (!) if this sounds cold, but for me, the apology means less than the explanation, and the steps taken to try and minimize the damage (pension income splitting, tax rate cuts, etc.) when it comes to overcoming the broken promise effect.

The explanation is absolutely essential while the apology is not. Personally I'm not looking for the words 'I'm sorry', rather I just don't want to hear him say that he didn't say what he did say. I want him to admit that he had to reverse his position (euphamism for breaking a promise) based on changing circumstances and the best interests of Canadians.

Instead, he tried to say that he never promised what he promised, and that he only guaranteed he'd look after seniors.

This could have gone a lot better, in my opinion, if he just fessed up in a semi-nuanced way. The word sorry need not be used, but I think the admission of a mistake is important.

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Anonymous said...

I don't think you can compare the GST promise issue with the income trust issue. Chretien HAD NO choice as the country and pension were in crisis. As a baby boomer, I now appreciate what Chretien/Martin did - there is a pension now.

GST didn't hurt anyone's pension - you had choices about purchasing items. With the income trust it severely affected pensioners and the little tax breaks and income splitting don't come near fixing it.

With all their "financial" brains, they couldn't come up with a better way to deal with it? I realize it had to be done, but I question how it was done.

Harper has never, never apologized for anything and this speaks volumes. He could have simply said I made a promise and events have made it impossible for me to stick to the promise and I'm am truly sorry - how hard can that be.

He's a bully and bully's are actually very very weak people. His cabinet don't attend meetings if there's a possibility that they might be questioned - he now isn't attending the EU Summit because he might be questioned about Kyoto - what a weak, spineless man.

He's an embarrassment.

The Rat said...

Wow, I am shocked to see over-the-top rhetoric from the ever so trustworthy Liberals. What senior lost "half their savings"? Could that be a tad over-stated? And the damage to seniors? Let's see, their income won't change because the value of a stock is not related to the amount that stock pays from the trust, and the PAPER value of the stock will fluctuate up and down during the next 4 years. In the meantime, they get tax breaks and income splitting.

My parenys were (and still are) heavily invested in trusts as income vehicles. They lost 5% in the paper value of their stocks. That's it.

So, the biggest bitch NOW is that Harper hasn't apologized? What a bunch of femmy little whiners you guys are. Too bad most of the media is fixated on that "Bitch" comment.

Fraser said...

We have started a blog intended as a meeting place and information resource for like-minded former members of the Conservative Party of Canada who are disillusioned with Stephen Harper and Jim Flaherty over their Income Trust betrayal.

Please visit us at: http://dumpharper.typepad.com

Anonymous said...

I find the "the rats" comments absolutely hilarious. Whining??? Ah, our PM pouts, whines, chickens out of meetings and lets his cabinet chicken out of meetings - our PM is a chicken shit.

Scotian said...

One additional point to this I think needs making. The trend of ITs towards the increase of corporate conversion was something obvious last year when Harper made his promise. So he made a flat promise on this issue he should have known he could not keep it if he is competent and therefore made a promise he knew he would have to break, or he so poorly understood the issue he demonstrated his incompetence in understanding this issue from the outset. Either way he looks bad, and his inability to simply apologize for making a promise he could not keep to only aggravates his sin/offence IMHO.