In Canada, the PM is balancing the books – but Justin Trudeau’s advisors are not.

We’ve been hearing a lot lately about the folly of the Trudeau government’s economic “initiatives.” They are riddled with structural reforms but only bring a slight improvement to the life of Canadians. Yet, this is the message that roars through Prime Minister Justin Trudeau’s hometown of Ottawa.

Canadians are now listening again to Ottawa—not.

I was having dinner last week with an American journalist and the conversation turned to the Trudeau government’s (mostly carbon tax/discriminatory temporary foreign worker programs) not really helping anyone and not improving anyone’s lives. A veiled swipe on my part with the journalist: These reforms are very ideological.

She immediately replied that “Ottawa has been working hard on this over the past three years.”

I glared at her, “How on earth can one tell with certainty that three years of Ottawa is helping anyone?

I was puzzled by her optimistic take on the state of Canadian society.

In 2014, I returned to Canada and found the economy was clearly in decline. I was stunned by what I found. Back then, jobs were leaving for lower-cost jurisdictions like Mexico and China. And when I went to Ottawa, I found almost no jobs for Canadians. I met Canadians who had sold off their homes to finance their student loans and newer Canadians who couldn’t afford to rent an apartment in their own city. And to buy a home.

“You have to get over the visceral anxiety from all this bad news,” said David MacNaughton, Canada’s ambassador to the United States, to me last week.

“The Prime Minister decided to stick to his vision of the Canadian ideal,” said MacNaughton.

MacNaughton, who has worked with many of Prime Minister Trudeau’s cabinet, has a bigger picture of our politics that I don’t. And he is appalled by the renewed federal austerity seen under Stephen Harper. He is appalled by the federal government’s hyper-taxation and cuts to programs that benefit the middle class, poor, women and minorities.

Chantal Hébert says that Justin Trudeau and his government will find it difficult to get a grip on Canada’s economy given their ideological stance. FOX Business Network

In Canada, this is what the wealthy have not been doing: pay taxes like people, because they will not benefit from the taxes. The prime minister wants to double the flat income tax to 33 percent while raising the GST (and excise) tax to 12 percent. He also plans to tax corporate dividends.

In 1988, while working as a reporter in Toronto, I knew Bill Graham, who had run a business empire that stretched from breweries to hotels and pension funds.

Graham would often drop in and lend a sympathetic ear to outsiders who were having problems with the city. But he never opened up the financial ledger of his company, the Graham Group, because he feared blowback from his fellow business leaders.

At the end of his career, Graham—who, unlike the prime minister, was not an avowed leftist—claimed that his company’s revenues had stagnated and his debts skyrocketed. At the time, he told my Toronto Sun co-workers that he was frozen out by industry executives, who did not want to share profits with him.

These days, Graham is founder of Graham Holdings, a diversified media company. A significant holding is its stake in The Washington Post Co. for which it recently raised $847 million from its IPO. But Graham is cutting back on his old newspapers in Canada. He’s doing the same thing he did when he had to become a newspaper carrier and found that corporate taxes were crippling the print media business.

Is that why Prime Minister Trudeau wants to raise the GST?

New York University’s Chantal Hébert has written for the Financial Times, the Economist, and others. She is the author of The Passionate Prime Minister: Trudeau and His Struggle to Overcome Canadian Misery.

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