It was a moment of stark and awkward contrast in the daily news cycle.
First thing on Monday morning, federal Conservative Leader Pierre Poilievre, Canada’s presumptive first minister-in-waiting, broadcast an email to news organizations across the country gleefully promising to eliminate the GST on new home purchases up to $1 million, which could produce a maximum tax break of $50,000.
Poilievre said his plan would spark more construction and make homes more affordable because he is confident builders would pass the savings onto buyers.
It would have been a great story for the Tories, except that on the same morning there was a startling report from Food Banks Canada showing that in March, for the first time ever, more than two million Canadians relied on food banks to help them make ends meet.
Poilievre could not have known the food bank story was going to land around the same time as his axe-the-GST pledge. And yet, having the two stories side by side on the same news cycle revealed a lot about how little political leaders understand the so-called “affordability crisis.”
For two years now, we’ve listened to Canadians complain about the high cost of living and politicians respond with lip service about how they feel our pain. But when it comes time to do something about affordability, politicians such as Poilievre can’t seem to deliver a pledge that impacts the people who most need help.
The biggest and most frequently repeated lie — used by politicians of all political stripes — is that tax cuts will help make life more affordable.
Tax cuts disproportionately benefit people who earn higher incomes, while providing little or no benefit to those who make less.
You can see this economic non sequitur in the Tory GST pledge.
Although a million dollars doesn’t buy as much house today as it did even a few years ago, it is safe to say that anyone shopping for a house in the mid-to-high six figures is not suffering a true affordability crisis or using a food bank to feed their families.
That means this tax cut, like most other tax cuts, is not affordability relief. It is a financial windfall for Canadians lucky enough to have had incomes rise in lock-step with inflation.
The larger issue here — and one that most politicians know but will not acknowledge — is that high inflation impacts Canadians much differently depending on how much money they earn. As a result, the mechanisms government can employ to mitigate inflation need to be very focused and deliberate.
In other words, government needs to prioritize, and use its resources to help to those people with the greatest need. Unfortunately, as we can see with the Tory axe-the-GST pledge, political leaders often offer to help the people who need it the least.
The good news is that if political leaders really want to address the constituencies of greatest need, there is data to guide their policies.
In a Free Press commentary published recently, University of Manitoba economist Wayne Simpson referenced a new report from the Parliamentary Budget Office that analyzed the purchasing power of Canadian households since 2019. The report found that even after accounting for inflation, our purchasing power went up about six per cent over the last four years.
However, Simpson noted that not all Canadians shared in this positive trend.
“Until our elected officials stop ignoring the needs of those living in poverty, we will continue to see more folks turn to us for food.”– Meghan Nicholls, the CEO of Food Banks Mississauga
“Market income, essentially wages and investment income, grew by more than 10 per cent over inflation from the end of 2019 for the top 60 per cent of households, but fell behind inflation by more than five per cent for the bottom 40 per cent of households,” Simpson wrote.
If you want to know why food bank use is going up, that equation explains it pretty well.
That PBO report provides a pretty clear blueprint for any political leader to start introducing policies that help the people who have fallen behind the rate of inflation. Yet, as demonstrated by the axe-the-GST pledge from Poilievre, and others from leaders who push things such as gas-tax holidays, the help never seems to go where it’s needed the most.
And therein lies the most maddening part of this whole equation: Poilievre knows full well that sales tax and income tax cuts aren’t going to help people who use food banks. He knows this because he’s visited food banks and was told, in stark terms, that people who can’t afford groceries need social and income support, not tax cuts.
In August, Poilievre visited a Mississauga, Ont., food bank currently struggling to provide more than six million meals on an annual basis. At the event, he chatted with Meghan Nicholls, the CEO of Food Banks Mississauga, who made it very clear what needs to happen to help address the problem.
Nichols said governments must “prioritize improvements to social services to support neighbours living precariously.”
“Until our elected officials stop ignoring the needs of those living in poverty, we will continue to see more folks turn to us for food,” she said.
Political leaders need to stop offering help to the people who weathered the inflation storm, and focus help on those who have suffered the most.
And for the record, we know who needs the most help.
dan.lett@winnipegfreepress.com
Dan Lett
Columnist
Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan.
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