Thomas Mulcair’s NDP

Seven Months, 131,000 members, 69,000 votes, 4 ballots, Thomas Mulcair: 57%. This past weekend in Toronto, the federal New Democrats elected the next leader of their party and Her Majesty’s Leader of the Loyal Opposition. Riding the so-called Orange Wave to an unprecedented 103 seats in the 41st General Election, NDP spirits were buoyed at convention despite the purpose of their task, to replace the much-beloved Jack Layton, who passed away last year.

For all of the hype and hope, the convention was marred by low voter turnout. Out of 131,000+ members, only 69,000 of them voted and many of those votes were aggravated over the course of the day of voting as voting systems jammed. For comparison’s sake, in 2004, 67,000 votes were cast for Stephen Harper’s leadership among Conservatives on the first ballot. As press gallery reporters look to flat-tires on campaign buses as metaphors for electoral viability, the voting issues did not help Canadians see confidence in the NDP.

In the end, NDP members chose Thomas Mulcair, however, today the party is divided. Mulcair’s chief rival, Brian Topp, was the pick of many Layton loyalists, organized labour and the old-guard of the party. Indeed, Ed Broadbent’s characterization of Mulcair during the leadership race has caused division among the ranks.

Thomas Mulcair was seen as a darkhorse candidate from Quebec. His bio describes him as a former provincial Liberal cabinet minister, and reports have linked his interests to Conservative Party candidacy, Mulcair can be described as a political chameleon. Many will doubt his sincerity as a leader of social democrats. Maclean’s magazine recently opined that he is more accurately described as a Liberal that would rather defend the status quo than agitate for social change. His supporters weren’t the dyed-in-the-wool NDP partisans, but more so they were those attracted to the spectacle of politics.

Will Thomas Mulcair lead the NDP to greater electoral fortunes? In 2003, the conservative family was split between two major parties: the Progressive Conservatives under Peter MacKay and the Canadian Alliance under Stephen Harper. Mulcair may see a path to victory by building a formal coalition of sorts between the Liberal Party and the NDP. With mergers and cooperation, Stephen Harper was the ideologue, while the PC party the centrists. If polarization of the electorate is to serve the NDP, the formula may not be correct as Mulcair is leading as a non-ideological centrist perhaps looking to broker an arrangement with a weaker centrist party.

Politically who benefits and loses from a Mulcair victory?

Mulcair’s appeal to a certain part of the NDP’s traditional base may be shaky. Mulcair is seen more of a patrician than a man-of-the-people. Critics have called him cold and arrogant. To connect with blue-collar (Joe and Jane Lunch-bucket) types, the French-cuff-shirted image Mulcair carries may benefit the Conservatives. Mulcair risks losing touch with the type of middle-class clock-punching Sun-reading populists.

Geographically, the Mulcair NDP will be very competitive in Quebec further retrenching the traditional positions of the Liberal Party and the Bloc. The last bastions of strong Liberal support are Montreal and Toronto. Mulcair’s riding is in downtown Montreal. Westerners will perceive an urban elitist Quebecker lecturing their region on energy policy and the oilsands. Mulcair was a former resource minister in Charest’s cabinet who allegedly resigned on environmental principles. Pipeline politics is not only a major factor in the American Presidential election cycle, but here too in Canada. The Northern Gateway pipeline is a major sticking point in BC and Alberta. Mulcair’s leadership will fix the geographic and issue focal point too far East and too far disconnected for Western sentiment. Where the NDP is competitive therefore, is not where the Conservatives are competitive. Under Mulcair’s leadership, the NDP is competitive where they find the Liberals as their chief rival.

The NDP and the Conservatives see common goal in the elimination of the Liberal Party. Mulcair can help achieve this by showing impressive opposition to Stephen Harper’s government in a majority leaving the over-covered Liberal Party with less airtime. He can also start appealing to common left-leaning principles to make them the brand of the NDP. Viable electability for the NDP will not just come through recasting the Conservative scandal-of-the-week to the Ottawa press (a strategy that failed Ignatieff) but voters will be attracted to specific hallmark policies that the NDP now must craft for more than 25% of the electorate (and haphazard Quebec voters). Mulcair must avoid the elitist label and speak on pocketbook issues in order to protect NDP gains.

Winning with only 57% of the vote on the final ballot and with a bellicose Topp holding on to the bitter end just to oppose a Mulcair leadership, the victor has fences to mend in his party. Though a new party leader has the prerogative of filling his office with his own loyalists, he’ll have to handle the inevitable departure of senior figures with as much grace as possible. Mulcair also faces the possibility of losing the labour segment of the NDP base. Though CUPE eventually endorsed the new NDP leader, most of the other unions supported Topp (some were for Nash then Topp). The Liberal strategy moving forward should be to capture disgruntled union stakeholders and bring them into Liberal decision making processes. The CAW famously left Layton for Martin during the 2004 election and a former socialist premier of Ontario might be the one to bring them back into the smaller red tent.

The Conservative strategy on Mulcair will be to encourage those that dislike Harper to fall into Mulcair’s camp at the expense of the Liberals because the Harper Tories still see the Liberals as their chief rivals. As for the votes the Conservatives can get, their main message will be jobs and the economy and tht theirs is the only party that is focusing on the same while the other parties focus on special interests and themselves.

Economic update

Here are the main points of Flaherty’s economic update:

  • Eliminate the net debt by 2021
  • Reduce debt to 25% of GDP by 2012-13
  • inflation target at 2% until at least 2011
  • GST at 5% by 2011
  • Working Income Tax Benefit for low-middle income Canadians
  • Income tax reductions based on interest that would have been paid on the debt. Debt reduction will result directly in income tax cuts.
  • Establish lowest tax on business investment in G7.
  • Large investments in the knowledge and training economy

Here’s the executive summary of Advantage Canada.

Income splitting, but just for seniors. No GST cut yet.

VERDICT: Nothing too exciting. A good direction forward.

UPDATE: David Akin sends me a correction live from the finance committee! It’s NET debt that’ll be gone by 2021, not the debt.

UPDATE: NDP finance critic Judy Wasylycia-Leis is decrying the Conservative plan to put so many surplus dollars against the debt. A sound endorsement!

UPDATE: Liberal finance critic John MacCallum isn’t impressed and believes that this doesn’t change anything. Underlines the distinction of “net-debt” and calls it a gimmick. Net-debt is a valid OECD measure though.

UPDATE: reaction from stakeholders (the ones that do press releases!)…

The Canadian Real Estate Association
(CREA) and its more than 88,000 REALTOR(R) members across Canada welcomed the
federal government’s identification of tax, fiscal, and infrastructure issues
as key elements to improve the quality of life for all Canadians. The three
were among the five Canadian Advantages outlined in the Fall Economic
Statement delivered by Finance Minister Jim Flaherty today.

One of the proposals outlined by Minister Flaherty in the Advantage
Canada document was the reduction of taxes on savings, including capital
gains, to make Canada’s tax system more competitive. REALTORS(R) have been
calling on the federal government to implement a capital gains rollover
provision for small investors when the proceeds of the sale of real property
are reinvested in another real property investment within a set timeframe.

Certified Management Accountants:

CMA Canada is encouraged by the direction of
Federal Finance Minister Jim Flaherty’s economic and fiscal update and looks
forward to the government accepting its recommendations to achieve economic
objectives.

“We are pleased that the economic groundwork laid out by the Finance Minister today is aligned with our recommendations to the government,” said Michael Tinkler, CMA Canada’s public finance analyst. “However, the proof will be seen in the specific measures delivered in the next federal budget.”

Canada’s life and health insurers:

Canada’s life and health insurers strongly commended the government’s Advantage Canada economic plan. CLHIA President Greg Traversy said, “The combination of tax reduction, debt reduction and paper burden reduction will position Canadians to compete effectively and prosper over the years ahead. Life and health insurers particularly welcome the commitment to foster a dynamic and globally competitive financial services industry and look forward to continuing their own efforts towards that goal in the context of the improved business environment set out in Minister Flaherty’s plan.”

Greg Sobara, Minister of Finance of Ontario:

The federal government’s economic update
contains a few positive signals that Ottawa may be listening to Ontario’s call
for fairness in federal transfers, Finance Minister Greg Sorbara says. “What I don’t see – and this disappoints me – is any detail on anything except tax cuts and debt reduction,” Sorbara said. “There are no specifics on how they’re going to invest in infrastructure. There are no specifics on how they’re going to address the fiscal imbalance. There are no specifics on how they’re going to invest in post-secondary education.”

CUPE:

“Today’s Fiscal and Economic Update shows
that Stephen Harper’s government is trying to buy the votes of Canadians with
the promise of more tax cuts that could lead to deep spending cuts in the
future,” said Paul Moist, national president of Canada’s largest union – CUPE.

Certified General Accountants:

The Certified General Accountants
Association of Canada (CGA-Canada) is pleased with the federal government’s
plan to boost Canada’s productivity and global competitiveness. Of special interest to CGAs are the government’s policy commitments relating to: Program spending, the Canadian economic union [and] the business environment “We welcome the government’s policy commitments. The plan to reduce taxes, streamline the regulatory environment, reduce the paper burden and remove internal trade barriers will address Canada’s competitiveness”

Federation of Canadian Municipalities:

“We welcome the reaffirmation of the Government’s commitment to work
toward a comprehensive infrastructure plan that includes long-term and
predictable funding. The extension for two additional years of the federal gas tax transfer is an important first step as we transition toward a longer term effort to erase Canada’s municipal infrastructure deficit. This also signals the Government’s long-term commitment to vibrant and competitive cities and communities.

Canadian Taxpayers Federation:

“Since 1997, the Canadian Taxpayers Federation has called for Ottawa to implement a legislated debt relief schedule and eliminate the debt in a generation,” said CTF federal director John Williamson. “Today, Finance Minister Jim Flaherty announced the Government of Canada will do just that.”

Williamson continued, “We applaud Mr. Flaherty for embracing and adopting policy advanced by the taxpayers’ federation, but for this policy to be meaningful the Conservative government must table legislation to make it the law of the land. Otherwise it is an empty promise. With the national debt standing at $481.5-billion, lawmakers cannot afford to not take debt repayment seriously.”

“In the May budget, Minister Flaherty reported program spending would grow by 5.3 per cent this year yet today he reported the annual spending increase will instead be 7.1 per cent,” observed Williamson. “The government has already betrayed its commitment to keep program spending below the growth rate of the economy. Economic growth is estimated to be 2.8 per cent this year. It is disappointing the Conservative government’s spending is already way off target. And if spending targets are missed, meaningful tax relief in the next budget can’t happen and debt repayment just isn’t possible either.”