Trouble in paradise: Justin Trudeau's rich friends keep making things awkward
The prime minister's proximity to wealth is once again an issue
Predictably, the opposition was full of concern Monday for the prime minister's association with a rich person who has been linked to an offshore account in the Cayman Islands.
Rather, the opposition was concerned with Stephen Bronfman, a member of one of Canada's richest families, a friend of Trudeau's and the chief revenue officer for the Liberal Party of Canada.
Bronfman once loaned $5 million to an offshore trust, and his investment company and the Bronfman family advised and did business with the trust, according to reporting on the Paradise Papers, a leak of millions of records from two offshore services firms and 19 tax havens.
- CRA promises 'appropriate action' on tax haven use after Paradise Papers leak
- Huge offshore data leak reveals financial secrets of global elite
"Stephen Bronfman is the prime minister's top money man. The prime minister vacations with him, and even broke with protocol to bring him to a state dinner with President [Barack ] Obama. Now we know that he used a $60-million tax haven scheme to avoid paying his fair share here in Canada," Pierre Poilievre, the Conservative finance critic, recounted in the House of Commons on Monday afternoon.
Bronfman has strongly denied doing anything inappropriate.
"If the prime minister wants to restore any credibility on the issue of tax fairness, will he immediately order the Liberal party to give back all the money that Stephen Bronfman raised for the Liberals?" Poilievre wondered.
This was an ambitious ask and the national revenue minister pretended not to hear it.
But suffice it to say, Justin Trudeau's rich friends keep making things awkward for him.
The PM's proximity to wealth
There was the Christmas vacation at the Aga Khan's private island. There were the so-called "cash-for-access" fundraisers. There was grumbling about the prime minister's courting of foreign investors (he was also once accused of "swanning" around Davos, Switzerland). And then his finance minister, Bill Morneau, stumbled into a controversy about a villa in France and was found to still hold millions of dollars worth of shares in his family's pension and benefits company.
But that might not actually amount to much in terms of broken rules.
Morneau did fail to disclose the ownership structure of that property in France (and was made to pay the statutory fine of $200 as a result). And the prime minister might have taken an inappropriate helicopter ride to get to that island.
For that matter, while Bill Morneau's pension legislation might be irreparably tainted, no one has yet definitively made the case that any of this money was pivotal in any government decision or policy.
But none of that quite disperses the smell of money that once again threatens to cling to this government.
A charge of hypocrisy
The Liberals are susceptible to a charge of hypocrisy after months spent trying to rewrite the tax rules for incorporated individuals.
"What will he do now that close Liberal advisers have been named in the Paradise Papers and that they are the ones who allegedly used tax loopholes to shelter their fortunes?" Conservative Leader Andrew Scheer asked Monday
Trudeau came prepared with numbers for how much new funding the government has invested in pursuing tax avoidance ($444 million over five years) and the results it has achieved.
But the larger issue is one of framing, and it goes to questions of fairness, perspective, class and the potential for resentment.
Framing the Trudeau government
Trudeau's campaign in 2015 was premised on fairness, with an explicit promise to raise taxes on the richest and to do more for those who are not rich (or at least not as rich). And the prime minister emphasized as much in the House on Monday: a new tax rate for those earning more than $200,000, a child benefit tilted toward lower incomes and no more benefit cheques for millionaires.
The Liberal government has also eliminated a half-dozen tax measures that disproportionately benefited higher income families, including income splitting and the children's fitness tax credit.
But Conservatives are now touting some math that suggests the elimination of those credits has resulted in middle-income families paying more in federal taxes.
That math is debatable. But that sort of attack might hurt more if it seems like Trudeau and his associates are living it up, let alone taking advantage.
That's a frame Conservatives would be only too happy to employ at every opportunity: any time a federal policy seems to add a new burden (a carbon tax, for instance) or flatter the rich (with, say, a government loan) and every time the Liberal government seems at all oblivious or inattentive to the everyday, hard-working Canadian's concerns.
Trudeau should know how potent those attacks could be. He's spent the past two years telling the world that if prosperity is not shared broadly, the public will turn to populist, anti-establishment appeals.
Of course, the Liberals could also counter any such resentment with policies that benefit those who lack access to accounts in the Cayman Islands. (If this summer's trouble led to a tax cut for small businesses, perhaps the Liberals are now gradually stumbling into a general income-tax cut.)
Judging a man by his pocketbook
Trudeau sought to deal with his own affluence early, publicly detailing his wealth in 2013. But this summer's tax policy controversy has also revived Conservative interest in his "family fortune," as he called it.
In an interview with the CBC in 1972, his father was asked about his image as a "dilettante" and presented with a suggestion that perhaps a man of wealth couldn't be counted on to be serious.
"I don't judge a man's idea or his performance by the size of his pocketbook. I look at what he does, what he produces," Pierre Trudeau responded. "And I ask that we judge our political leaders by that."
Justin Trudeau would surely ask for the same: judge him not by his own pocketbook or the pocketbooks of those in his vicinity.
But now he need worry that wealth and privilege are ideas that could be used to frame everything his government does.