Fairness and growth for the middle class

May 13, 2015

Earlier this week, I joined Justin Trudeau at the Canadian Club of Toronto, where he discussed the Liberal plan for fairness and growth for the middle class – a central plank of which is to cut the middle class tax rate by seven percent. Liberals will give a $3 billion tax break to those who need it most by asking the wealthiest Canadians – those who earn more than $200,000 annually – to pay a bit more.

While many politicians would have shied away, Mr. Trudeau took this message right to those who will be most affected by the increase, and laid out his argument for why a fairer tax system benefits everyone.

The fact is that nearly 9 out of 10 Canadians believe the cost of living is outpacing their household income. Our economy has more than doubled in size since 1980, but median incomes have flat lined. Household debt has ballooned to over 163 percent of disposable income. It’s been estimated that the average 35-year-old Canadian now puts aside less than half of what their parents did at the same age, and the income gap between older and younger Canadians is growing. I know from my vantage point as a business leader that financial stress is causing significant anxiety for Canadians.

As Liberals, we believe a strong economy is one that provides the largest number of good jobs to the largest number of Canadians. But by that measure, we are in trouble.

Canadians continue to work hard, but the majority of them are finding it tougher and tougher to get by.

At the same time, there is another group of Canadians: those in the top one percent of income earners. They are doing very well, have worked hard to achieve success, have accumulated assets, and are easily able to contribute to their children’s education. These advantages have been buttressed by repeated Conservative government action over the past decade. Most of the people in this group know that our fast-paced global economy has simultaneously provided them with opportunity and a requirement to work hard.

But why should the wealthiest Canadians care about those who are falling behind?

Contrary to what some may think, restoring fairness and reducing inequality is in the very best interest of all Canadians. The OECD found that higher inequality may actually lower economic growth, and that increasing inequality over time lowers GDP per capita growth. And I know that the wealthiest Canadians want to live in a society in which their fellow citizens have the opportunity to thrive. It’s a Canadian value.

By cutting taxes for the middle class, we will generate a more robust and healthy economy, which in turn benefits everyone, including those at the top. It is in everyone’s best interest for the middle class to grow.

The Liberal plan is founded on the fundamental premise that fairness for the middle class and those working hard to join it means stronger growth for all. It faces up to this central challenge. And our plan is aimed squarely at restoring that sense of fairness upon which this country was built, and upon which it has thrived.

The time has come to look beyond the boundaries of “what politics can do for me”. As Mr. Trudeau stated, it’s time to envision what we can help build for all Canadians. We can and should work, not in pursuit of narrow interests, but in everyone’s best interests. We can and should be dedicated to working for the public good. Because as we all know, Canada is stronger when our middle class thrives.

Bill Morneau
Liberal candidate for Toronto Centre

Bill is a business leader, community volunteer and proud father. He is running to be the Member of Parliament for Toronto Centre in the next federal election. He’s playing an important role on Justin Trudeau’s team for 2015 and is serving as a key member on his Economic Council of Advisors.

Bill’s community service runs deep in Toronto Centre. He has volunteered for twenty years, supporting the arts, helping street kids and improving access to health care and education. Bill was Chair of the Board of St. Michael’s Hospital, and of Covenant House. Internationally, Bill founded a special school for Somali and Sudanese youth in an African refugee camp.

In 1990, Bill took the lead at his father’s company in Don Mills and has grown it from 200 employees to over 3,600 employees. Morneau Shepell now provides meaningful, stable work for thousands of families. Bill believes that the single greatest asset Canada possesses is its hard-working people.

In 2012, he was appointed as Pension Investment Advisor to the Ontario Minister of Finance, providing counsel aimed at facilitating the pooling of public-sector pension fund assets. Earlier this year, Bill was appointed by Ontario’s Premier Kathleen Wynne to an expert panel led by former Prime Minister Paul Martin to recommend a made-in-Ontario pension supplement to the CPP.

Bill is on the boards of St. Michael’s Hospital Foundation, The Canadian Merit Scholarship Foundation, The Learning Partnership, the London School of Economics North American Advisory Committee, the Canadian INSEAD Foundation, and Greenwood College. He is past Chair of St. Michael’s Hospital, Covenant House in Toronto, and the C.D. Howe Institute. In 2002, Bill was named one of Canada’s Top 40 Under 40.

He has also co-authored a book, The Real Retirement, which provides a thorough analysis of the steps necessary for successful retirement in Canada, and has authored numerous articles on public policy issues.