Intolerance, Bombardier and taxing the rich: how politics mattered this week

OTTAWA — After months spent fanning the embers of class warfare with their proposed tax reforms, this was the week when the brush fire blew back on the federal Liberals.

Even as the death of Canadian rock icon Gord Downie gripped the rest of the country, prompting many a federal politician to shed a tear or recall a magic moment, Downie’s early passing due to cancer provided Finance Minister Bill Morneau only a short reprieve from the heat.

Fresh accusations of questionable decisions around ethics and disclosure fuelled the opposition all week long, pushing Morneau to publicly declare himself “naive,” change the way he declares his wealth and commit to selling off all his shares in his family’s pension business.

At the same time, the government was busy dealing with intolerance in Quebec, finding private financing for aerospace giant Bombardier Inc. and walking back some of the controversial tax measures that led to the scrutiny of Morneau’s motives.

Here’s how politics affected the lives of Canadians this week:

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FISCAL POWER

As concerns about whether the finance minister has the integrity to do his job mounted with alacrity, the government fought back, in part, with policy.

First, it announced it would lower the overall tax rate for small business over the next couple of years.

Then, it started watering down and scaling back the package of private-corporation proposals that had so upset many interest groups and opposition politicians in recent months.

New rules for “income sprinkling” will be simpler than initially advertised. Only three per cent of top income earners will see their ability to use passive investments curtailed. And the government backed away from its crackdown on converting income to capital gains, in order to spare farmers and fishers.

Next week, Morneau will follow up with a good-news economic update that will aim to wow the public with strong growth, fatter-than-anticipated government revenues, and some new spending to boot.

Will it all be enough to nurse Morneau’s reputation back to health? Don’t expect the opposition to let up.

PLANES FOR THE FUTURE

Not since the 1950s has conversation about the Avro Arrow been so rampant on Parliament Hill.

The Canadian-designed aircraft that showed so much promise in 1958 was not just cancelled, but also physically destroyed in 1959 because no foreign buyer could be found.

With the ghost of the Arrow in mind, federal Liberals were almost triumphant this week when Bombardier announced it would hand over control of its glossy, high-tech C Series jet to Europe’s Airbus in order to sidestep the formidable 300-per-cent duties the United States seems intent on imposing on Bombardier’s planes.

The deal needs approval from federal regulators. But given the government’s trumpeting of Airbus’s commitments to maintain or increase employment levels in Canada, keep the headquarters in Montreal, pay back Ottawa for its C Series loans and engage Bombardier in its global supply chain, federal ministers hinted heavily that their blessing is essentially a given.

Not everyone was as effusive as the federal Liberals. Boeing, the U.S.-based archrival of Airbus that started the case for duties, will not back down. Some critics are concerned that most production of the C Series plane will shift to Alabama. And others say the whole deal proves Ottawa should not get involved in financially backing Canadian firms because you never know when they will no longer be Canadian.

VEILED RESPONSES

When is it OK to wear a face covering in Quebec?

Four years ago, when the Parti Quebecois proposed banning public servants from wearing obvious religious symbols in public, Justin Trudeau was adamant: a ban would be wrong and in contravention of Canadian charter rights.

This week, the provincial Liberal government in Quebec passed a law that bans people from covering their faces while providing or receiving public services. But the response from Trudeau is evolving.

On Thursday, while campaigning in a byelection campaign in the traditionally separatist Lac-St-Jean region, Trudeau said, “It’s not up to the federal government to challenge this,” and pointed to the need for further reflection.

On Friday, he committed to looking carefully at the implications of Bill 62 and assessing the government’s options.

The Ontario government, however, which has no stake in the Saguenay Lac-St-Jean byelection, has unequivocally condemned the new Quebec bill, as has the Canadian Human Rights Commission.

Heather Scoffield, Ottawa Bureau Chief, The Canadian Press