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Q&A: Pierre Poilievre on parents, pensions and taxes

An interview with Harper’s polarizing point man on taxes and benefits


 
Canada's Minister of State for Democratic Reform Pierre Poilievre. (Chris Wattie/Reuters)

Canada’s Minister of State for Democratic Reform Pierre Poilievre. (Chris Wattie/Reuters)

Ottawa MP Pierre Poilievre has long been among Prime Minister Stephen Harper’s hardest-hitting partisans in the House. But, as minister of employment and social development, the senior cabinet post Harper appointed him to this past winter, Poilievre now ranks among the most prominent Conservative voices on economic policy, too. He spoke to Maclean’s this week in his Parliament Hill office about parental benefits, pensions and taxes.

Thanks for this interview; I know you’re very busy. Your government spends about $18 billion a year on a raft of benefits for parents, including your signature monthly payments, the Universal Child Care Benefit. The Liberals propose to merge all these programs into one, called the Canada Child Benefit, and pump another $4 billion into it. That extra money allows them to promise all parents, except those earning more than $150,000, more than they are getting now. As a taxpayer, I might ask, “Can Ottawa really afford that?” But, as a parent, why wouldn’t I just say, “More money for me; great!”

Well, I don’t accept the premise that it is more money. The Liberal plan starts by cancelling the Universal Child Care Benefit, the Child Tax Benefit, and other benefits that direct dollars to parents, and they claim they are going to replace it with something else. They start out by admitting that they have a $2-billion hole—that the costs of their plan are $2 billion more than they can see. Economists who have taken a more precise look at their overall plan say it is bigger than $2 billion. So, if you put it all together, and consider that their numbers don’t add up, parents have good reason to be generally suspicious. If [Liberal Leader] Justin Trudeau starts by cancelling all these benefits, and then his plan runs out of money, ultimately, somebody is going to lose something he’s not telling them about right now.

So your objection is that you don’t think it’s plausible, not that the outcome the Liberals are promising, if they could deliver it, is the wrong outcome. Is that fair?

There are some things that are very unfair about his proposal, such as cancelling income splitting. It’s a strange thing to single out salaried couples with kids for higher taxes when almost every other cohort of family has had income splitting for decades. Self-employed families have always had income splitting. Farming families have always had income splitting. Divorced couples have always had income splitting, because spousal support is taxed in the hands of the recipient, not in the hands of the payer. And, of course, pensioners have income splitting. So it’s hard to understand why the Liberals would reinsert an anomaly into the tax code, where salaried couples with kids are among the only people in the country who can’t split income for tax purposes. I think that is extremely unfair.

You’ve said in the House that both the NDP and Liberals have promised to eliminate pension income splitting, but, in fact, they’ve promised not to do that, right? Why would you say they are promising to do something they are explicitly saying they will not do?

The Liberals, when Stéphane Dion was leader, explicitly said they oppose pension splitting for seniors. They have now announced their intention to scrap income splitting for families. If you are ideologically opposed to income splitting for families, why wouldn’t you scrap it for seniors? What is the distinguishing principle between income splitting for people with kids and income splitting for people who are retired?

You make a case for suspecting they may not truly believe in it. But isn’t there a big leap between saying, “I don’t see that they’re really behind this policy,” and saying, “They have promised to get rid of it”? I don’t think you can point to a quote where someone in the NDP or Liberals has said, “I promise to get rid of pension income splitting.”

They have consistently said they would get rid of income splitting. Many times, they have said so without specifying that they are talking exclusively about people with kids. So, it is perfectly reasonable to assume they are talking about everybody. And why wouldn’t they be? What would be the public policy rationale?

I guess it would be that pensioners are in a particular situation. But there is a difference between saying you don’t see the consistency in their logic and saying they have promised to do something they haven’t promised to do.

They have promised to get rid of income splitting.

The Universal Child Care Benefit was substantially boosted in the last budget—$60 more a month for kids aged one to six and $60 in new money for kids six to 17. In July, those parents will receive lump-sum payments of those benefits, retroactive to the start of this year. Don’t you think voters would be justified in being suspicious of a big payment from the government landing in their bank accounts so soon before the fall election?

The payment on July 20 will be $520 for every child under six and $420 for children six through 17.

That’s a lot of money. That’s going to be a very welcome summer bonus.

I think so. Retailers start running their back-to-school ads at that time. It could be very good timing for families.

Right. And good timing for you, with the election coming up.

I hadn’t thought of that.

Really? Making sure people receive that money just before the campaign just seems cynical.

We indicated that, when we balanced the government’s budget, we could help families balance theirs. We are now in the balanced-budget era again, and we indicated that this benefit would take effect starting at the beginning of 2015. There are some logistical challenges in getting these increases up and running. That’s why the first six or seven months’ worth of payments all come at once. But you make a point. I think it will remind Canadians what is at stake in the election. The opposition has always opposed the Universal Child Care Benefit, from the time the Liberals said parents would just spend it on beer and popcorn.

Let me ask about a tax proposal I don’t think I’ve heard you or anybody in the government talk about. Justin Trudeau came out with some tax and benefits policies recently, and one element is a tax hike for Canadians making more than about $200,000. If the Democrats proposed something like this in the U.S., I think Republicans would protest that it’s a tax on those who invest and create jobs. But Canadian Conservatives haven’t made that argument. Are you okay with an increase in taxes on the richest Canadians, or do you just think it’s not advantageous to attack on this front?

My view is that Justin Trudeau will raise taxes on everyone.

He’s said he wouldn’t.

But, just last week, he embraced Ontario Premier Kathleen Wynne’s pension plan, which is a payroll tax on everyone.

That’s the new Ontario Retirement Pension Plan, which is still being worked out. But getting back to raising taxes on the wealthy. Do you think that’s a good thing, a bad thing, or are you neutral on it?

We believe in lowering taxes for everyone, and those tax reductions should be targeted at people with middle and modest incomes, and I don’t say that rhetorically. If you look at the Parliamentary Budget Officer’s (PBO) report from about a year ago, about our tax relief, he said three things. One, since we took office, our tax relief has totalled about $3 billion a year. Two, that works out to about $3,400 for a family of four. And, three, the benefits have disproportionately gone to middle- and lower-income people. We believe in a progressive tax system and that is what we’ve delivered.

That’s an important PBO report you’re mentioning. But, in another report, he has also said that your policy of doubling the room for people to save in Tax Free Savings Accounts (TFSA) would, over time, be regressive, tending to benefit more wealthy people and, specifically, seniors. So it’s not broad-based relief for everybody. Since you’re citing the PBO, I wonder if you agree with him on that point?

I disagree. Who could conceivably benefit from an increase in the TFSA contribution limit? Those who have maxed out. Right now, there is no evidence to suggest that people of higher income disproportionately benefit.

Let me go back for a minute to income splitting for parents. I’ve reported on numbers from the PBO that show income splitting helps middle income earners more than its critics assume. But what about a lone parent who can’t get this tax break that is available to a two-parent family? Say you’re canvassing door-to-door in your constituency and you run into a single parent who asks, “Why should a two-parent family get this significant tax break I can’t get?” How would you answer?

I think that’s why we’ve gone to such great lengths to ensure that our Family Tax Cut and benefits reach 100 per cent of households with kids. The increase in the Universal Child Care Benefit reaches single parents with additional resources. They also benefit from the Children’s Fitness Tax Credit, which is now substantially increased, and a plethora of others tax savings that are targeted at people who have children. My answer, if I were on the doorstep and asked that question, would be that we are helping every single family, regardless of their unique scenario, including single parents.


 

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