This article was originally published in Maclean's Magazine on April 4, 2011
Targeting the Middle Class
Jack LAYTON wasted no time getting to the point. Striding into the foyer of the House to declare that his NDP MPs would be voting against this week's federal budget - all but ensuring the CONSERVATIVE minority would fall within days - Layton quickly accused Stephen HARPER of failing the "middle class." He proceeded to work into his denunciation of the budget a few more rapid-fire references to the most sought-after voter demographic group in the coming election. "Mr. Harper had an opportunity to address the needs of hard-working middle-class Canadians and families, and he missed that opportunity," Layton said, adding seconds later that the budget didn't "give middle-class families a break."
Brace yourself to hear plenty about the hard-working, everyday, over-stressed Canadian middle class in the next few weeks. Layton is joining the Prime Minister and LIBERAL Leader Michael IGNATIEFF in trying to position himself as the champion of the most admirably unexceptional sort of family. The Harper government's proudest boast, for instance, is that they've saved the average two-earner family $3,000 by cutting taxes. For his part, Ignatieff recently travelled the country on what he dubbed a "Working Families Tour."
The tripartisan preoccupation with voting moms and dads nesting in nice suburbs might sound like politics as usual, but the uniform emphasis - almost to the point of obsession - is new. In the past, Harper's strategists were often fixated on other sorts of demographic aims, like orchestrating a Quebec breakthrough. Under Paul MARTIN and Stéphane DION, Liberals tried grand-vision platforms, like competing globally and taxing carbon, rather than targeted policies aimed explicitly at middle-class taxpayers. Taking over the NDP leadership eight years ago, after the party's decline in the 1990s, Layton had to first rebuild its base - largely young and single, often less affluent - and has only recently made broadening into comfortable suburbs a prime electoral objective.
But if all three national parties are now vying for the same sort of voters, they're putting very different platforms in the window to appeal to what they perceive as the middle-class sensibility. Harper's niche approach is the most familiar. A typical example is the tax credit he introduced in 2007 that's worth up to $75 to parents who enroll their kids in sports and other fitness activities. This week's budget introduced a similar credit for arts activities like piano lessons or drama classes. In another middle-class-friendly move, Finance Minister Jim Flaherty promised to bring back a program that subsidizes renovations to make homes more energy efficient - an idea Layton had enthusiastically embraced.
Even when the rival parties zero in on precisely the same middle-class family concerns, though, their policy solutions can be radically different. Take the issue of family caregivers. Flaherty's budget unveiled a modest tax credit for those who take care of dependent spouses, children, parents or other family members who are sick or infirm. It would be worth up to $300 a year to, say, a wife caring for her husband. The whole program was expected to cost $160 million next year. But Ignatieff proposes a $1-billion caregiver plan, unveiled last fall as a major plank in the next Liberal platform. His much more ambitious program would pay six months of EI benefits to about 30,000 Canadians who take time off work to care for a sick family member, and up to $1,350 a year to about 600,000 other family caregivers.
Flaherty drew a sharp distinction between what he portrayed as overly costly new social programs called for by the opposition, and his own more pragmatic, less pricey alternatives. This is shaping up as a defining campaign-trail contrast. Harper is banking on a stolid, middle-class skepticism about Big Government. After the market meltdown of 2008, the global recession of 2009, and the massive federal deficits that followed, Flaherty injected a large dose of caution into his budget rhetoric. "Fundamentally, we stay the course, we stay on track, we make sure we get back to a balanced budget, to protect the country and Canadians going forward," he said. "We want to be in good shape when the next crisis comes, just as we were in good shape when the last crisis came."
The Tory message that they are trustworthy and familiar, while the Liberals are impractical and unknown, extends beyond policy arguments to character assaults on Ignatieff. Harper presents himself as a sort of average Canadian guy, a hockey dad who likes classic rock. A lot like those parents whose votes he's seeking. He caricatures Ignatieff in attack ads as an exotic outsider, whose return after decades abroad as an author and professor was fuelled by ambition rather than love of country. The Tories even cast doubt recently on Ignatieff's version of his late father's struggles as a Russian immigrant to Canada. Conservative "talking points" suggested George Ignatieff, who rose to be a top Canadian diplomat, arrived rich. "My family lost everything in the Russian revolution," Ignatieff protested. "They started over again in Canada."
That very personal prelude set a bitter tone for the seemingly inevitable spring campaign. And the testy mood is exacerbated by the opposition parties' rising excitement over ethics issues that make the budget debate seem like a polite policy seminar. Indeed, even as the NDP lined up with the Liberals and BLOC against the budget, it remained possible they all might vote the Harper minority down in the House over some combination of scandals, such as International Co-operation Minister Bev Oda's apparent misleading of MPs over how an aid group's funding was rejected, and allegations a former top Harper adviser, Bruce Carson, broke rules to lobby the government on behalf of a water filtration company pursuing deals from which his fiancée, a former escort, stood to profit.
Still, no matter what triggers an election, and what issues emerge to dominate the campaign, the key battleground will be the doorstep of that mythical middle-class family. On budget day, Flaherty repeated a boast often heard from Tory ministers and MPs - that Conservative policies mean the average family pays $3,000 less in tax every year. To arrive at that figure, his department imagines a couple with two children. Before taxes, she makes $60,000, he makes $40,000. Income tax cuts since 2006, when the Harper government first took office, save them $1,963, they pay $960 less on purchases thanks to the Tories' two-point cut in the GST, and they pocket $76 in child benefits.
Why fix their attention on a couple earning $100,000? One reason is that STATISTICS CANADA confirms a two-earner couple with two kids earns about that much on average. But that family also stands to feature prominently on the leaders' most frequent campaign stops. Strategists from all parties agree that many of the most hotly contested ridings will be in suburban and small-city Ontario. One of the most closely watched, for instance, is bound to be Ajax-Pickering, east of Toronto. The incumbent is Liberal Mark Holland, one of his party's most aggressive MPs in the House. The Tory challenger is Chris Alexander, the glamorous former Canadian ambassador to Afghanistan, and arguably Harper's star new recruit. Average family income in Pickering-Ajax: $100,780.
Or look at Vaughan, the riding just north of Toronto, won by former Ontario Provincial Police chief Julian Fantino in a high-profile by-election last fall. The Liberals previously held Vaughan and are salivating to win it back. The Conservatives view Fantino as a standard-bearer for their key law-and-order thrust. Average family income in Vaughan is $111,473 - right in the sweet spot, once again, for that signature case study in Tory tax relief.
The story of how middle-income earners fared lately depends on the data you choose to examine. Federal taxes have been declining since the late days of Jean CHRÉTIEN's Liberal government. Statistics Canada reports that from 2000 to 2008, the richest fifth of the population went from paying 17.2 per cent of their income in federal tax to 14.8 per cent. In the same period, the middle 20 per cent's federal tax burden fell from 8.8 per cent to 6.7 per cent of their income. As for the poorest 20 per cent, their tax as a percentage of income, already slight, notched down to 1.6 per cent from 1.9 per cent.
The Finance Department provided Maclean's with figures on the four federal tax brackets during just the Harper years. Canadians in the lowest bracket, making up to $40,970, paid 11 per cent of all personal taxes Ottawa collected in 2010, down from 14 per cent in 2006. Those in the top bracket, $127,021 and above, paid 36 per cent of the overall tax load in 2010, up from 33 per cent in 2006. As for the middle two brackets, spanning $40,970 to $127,021, the share of the federal tax haul they paid remained roughly the same, around 53 per cent.
But that picture of the middle class merely treading water isn't much good to anyone in an election campaign. Harper will tout that average family's advances under this government. Ignatieff and Layton will say it's been sorely neglected. But for the duration of the coming campaign, at least, Canada's middle class won't be in any danger of feeling ignored.
Maclean's April 4, 2011