Media advisory: Broadbent Institute Executive Director Rick Smith available to comment on 2014 budget

OTTAWA—Broadbent Institute Executive Director Rick Smith will be available in Ottawa to react to the 2014 federal budget. The budget is widely expected to contain few measures that address growing inequality.

DATE: Tuesday, February 11, at 4 pm EST

LOCATION: Reaction Room (Room 253-D Centre Block, Parliament Hill)

WHO: Rick Smith, Broadbent Institute Executive Director (613-866-3606) The Broadbent Institute recently launched a campaign reduce inequality in Canada. Learn more:


For more information, please contact:

Mike Fancie, Broadbent Institute
613-866-3606 or

How a tax change would help voters that Conservatives want

Joe Friesen / Globe & Mail

When Jim Flaherty introduces his budget next week, he may trumpet a long-promised policy that would allow parents with children at home to split their income to reduce the amount of tax they pay.

Income splitting is a tax policy that would allow a higher-earning person to assign some of his or her income to a spouse, effectively lowering what tax bracket he or she is in. The policy brings the most benefit to a couple in which one spouse works while the other stays at home with the kids, and could cost the treasury a few billion dollars of lost tax revenue a year.

But the policy can also be seen as a tailored appeal to voters in the constituencies the Conservatives need to hold to keep their majority.

Family income splitting was first promised back in the 2011 election campaign, with the caveat that it wouldn’t be introduced until the budget was balanced. Three years later Mr. Flaherty is expected to announce that the government is on course to get out of the red by next year, just in time for an election-year budget.

The Broadbent Institute launched a campaign this week, calling the income-splitting proposal a $3-billion Mad Men giveaway. They describe it as a misguided policy that favours the wealthy and is based on an early 1960s concept of the traditional family. On the other side of the coin, University of Calgary economist Jack Mintz and lobby groups such as the REAL Women of Canada have long argued for such a measure, on the grounds that it would remove a tax penalty for those families that want to have a parent stay at home but struggle to make it work financially.

Kevin Milligan, an economist at the University of British Columbia, said the policy would benefit only a small subset of families. For one, single parent families are ruled out. They make up 16 per cent of all families. What’s more, nearly 14 per cent of the population aged 15 and over lives alone, a rate four times higher than it was in 1961. About one in five people did not live in a census family in Canada in 2011.

So having removed all those millions of people from eligibility, the policy would also be of little or no benefit to those families where each parent earns roughly the same amount, or even those cases where they’re in the same tax bracket. It would be of most benefit to those families with a very-high earning breadwinner and a spouse who stays at home and earns nothing. That’s a relatively small group.

“Imagine it was your goal to transfer resources to families that choose to have a stay-at-home spouse and are struggling with their finances, then this is an odd policy to hit those people,” Prof. Milligan said. “If I had a couple billion to spend on remedying the inequities in our society, spending it on lowering the taxes of a $200,000 and $0 [incomes] couple is not where I would spend it.”

So why pursue it? It represents a marriage of ideological and strategic goals. One clue comes from the accidentally leaked Conservative strategy document about the ethnic vote in the last campaign. It said of certain ethnic groups “they live where we need to win.” The same is true of families with children. The key seats that are vulnerable to a Liberal resurgence are those suburban ridings around big cities, primarily in the Greater Toronto Area. The Conservatives need to hold on to them and they are rich with families with young children.

Take, for example, Brampton West, a Conservative gain in 2011. Roughly 54 per cent of families in that riding have children at home, much higher than the Canadian average of 36 per cent. The same is true for many other similar ridings, such as Mississauga-Brampton-South, Ajax-Pickering and Pickering Scarborough-East, which have above-average numbers of families with children at home.

The Conservatives will still have to work hard to get them to the polls though. A StatsCan study of the 2011 election found that “the presence of children was negatively associated with 2011 voting in all family types.” Single parents with kids under five had the lowest turnout figures at 36 per cent. Couples with children under five voted at a 60 per cent rate, very close to average.

Photo: bcgovphotos. Used under a Creative Commons BY-NC-ND licence.

Broadbent Institute launches campaign against costly, unfair income splitting plan

OTTAWA—As the Conservative government prepares to introduce a Mad Men-style tax giveaway after the federal budget is balanced, the Broadbent Institute today launched an information campaign against the proposed $3 billion handout for Canada’s wealthiest families.

"It’s absurd that the Conservatives plan to take a $3 billion surplus and spend it on a tax giveaway to high-income families — it’s as though the government is trying to recreate a society straight out of an episode of Mad Men," said Executive Director Rick Smith. "Today we are taking the first step in speaking out against the proposed Conservative family income splitting plan that will exacerbate inequality in Canada."

Under the Conservative plan, a two-parent family with children under 18 will be allowed to split up to $50,000 of their income for tax purposes.

"An analysis of the plan shows 86% of Canadians, including single mothers and low-income parents in the lowest tax bracket, will receive no benefit whatsoever from the scheme," added Smith. "And the top 5% of families would see more benefit than the bottom 60% of families."

As part of the campaign, the Broadbent Institute is launching a contest asking Canadians how they would invest the money lost to income splitting. "The Broadbent Institute will be making it a priority over the months ahead to draw attention to income inequality and the terrible ways income splitting threatens to make this problem much worse," said Smith.

Learn more about the Broadbent Institute's income splitting campaign at

National recognition keeps fight alive for Nunavut food activist

David Murphy / Nunatsiaq News

Leesee Papatsie doesn’t think of herself as a political citizen — not even an activist.

“I’m just a mom that doesn’t want kids hungry,” Papatsie said.

A year-and-a-half ago, Papatsie created the wildly popular Facebook group to demonstrate the high cost of food in the North, Feeding My Family.


Read more

Income splitting a tax gift for the affluent

Click here to visit the Mad Men tax giveaway campaign page.

From deepening income inequality to rising unemployment, Canada faces a wide range of pressing economic challenges that ought to be addressed in next week’s federal budget. Yet little is expected in the way of, for instance, sorely needed measures to address our jobs crisis. Instead, the Conservative government is focused on balancing the budget so it can deliver on its highly political and expensive promise of a pre-election tax break.

According to the C.D. Howe Institute and the Canadian Centre for Policy Alternatives, the Conservative plan to introduce family income splitting will mean some $3 billion per year in lost federal revenues, and some $5 billion per year if the provinces follow suit.

What services and programs will be cut to finance this?

The ongoing slashing in Ottawa holds unsettling clues. Federal cuts to science and our social safety net, as well as the squeeze on transfers to the provinces that support programs like health care, are bound only to get worse. And all this in order to balance the budget for what amounts to a tax gift for the affluent.

Family income splitting would benefit only a small minority of families, giving a big tax break to high-income traditional families with one earner and a stay-at-home spouse, while delivering little or nothing to other families.

The move would allow couples with children under 18 to share up to $50,000 for tax purposes. That translates into a tax cut of more than $6,000 per year for a couple with one person in the top tax bracket. In the case of someone earning more than about $185,000 per year, income-splitting would allow the full amount of $50,000 to be shifted from the top to the bottom tax bracket, thus cutting the tax rate on that money nearly in half.

Single-parent families, already more vulnerable, account for more than one in four children, yet would receive nothing from the tax break. Nor would there be a benefit for working couples with children in which neither parent earns more than about $45,000. That is because both earners are already in the lowest tax bracket.

The math of income-splitting is such that there would be only small savings, if any, where both parents earn between about $45,000 and $135,000. In fact, according to the Canadian Centre for Policy Alternatives, the top 5 per cent of all families would see more benefit than the bottom 60 per cent — and 86 per cent of families would see no benefit at all.

This tax measure will be sold as a way to support families who choose to have one parent (usually the mother) stay at home to care for children.

If the Harper government really wanted to expand choices for families with young children in a fair way, it could improve maternity and parental benefits under employment insurance. This program allows for up to one year’s paid leave from work, but benefits are so small — on average, just over $400 per week — that many families have to cut the leave short.

Alternatively, the government could increase child benefits for lower-income families so that families choosing to work fewer hours, and thus to earn less, get more support through higher child tax credits.

The $3 billion that income splitting will drain from federal coffers would be enough to increase federal spending on child tax credits by more than 25 per cent. Or to double current spending on maternity and parental leave benefits. Or to make a significant contribution toward enhanced access to quality child-care programs.

But none of those policies would achieve what the family income splitting proposal is designed achieve: to prop up the traditional family model by encouraging one parent to stay home. Call it Harper’s $3-billion Mad Men giveaway.

No wonder the policy has been actively promoted by social and religious conservative organizations such as REAL Women and Focus on the Family Canada, which have opposed public child care and are strong believers in the traditional single-earner family.

While income splitting will be advertised as a boon to the middle class, it is in fact a gift to the well-off and a surreptitious sop to the socially conservative. It will benefit almost no one else.

It is a sad statement that the No. 1 priority of the government’s upcoming budget is to lay the groundwork to introduce a tax measure that will further increase income inequality while failing to meet the needs of the vast majority of families with young children.

This article originally appeared in the Toronto Star.

Top Obama swing state strategist to speak in Saskatoon

Lasia Kretzel
January 31, 2014
This article originally appeared on CKOM Newstalk 650.

Barack Obama’s top swing state strategist is coming to Saskatoon to talk about how everyday people can bring about the social changes they want through grassroots action.

Mitch Stewart directed the American president’s successful 2012 campaign within 10 of the 11 swing states votes. He was also involved in Obama’s 2008 campaign and several organizations.

“To say (the campaign was) magical probably doesn’t do it justice,” Stewart said.

“The thing we really learned during the campaign is the nexus of using better data and analytics on one end and probably more important is this relationship or community based organizing.”

Saskatoon Change Makers is co-organized by left-wing think tank the Broadbent Institute and two-time provincial NDP candidate Ryan Meili’s UpStream.

“Mitch brings that real on the ground experience on how to win campaigns and we look forward to hearing what his advice is for folks in the local context,” Graham Mitchell, Broadbent Institute training and leadership director said.

Stewart will talk about the tactics he used in the 2012 campaign to usher in a second term for Obama including building social networks.

“Teaching how you can build those relationship structures and teams … making sure groups have that information, how powerful it can be and guide them through that process,” Stewart said.

Through his organization 270 Strategies, Stewart has also spoken at other Canadian venues including Ottawa and Vancouver. He was also brought in to stress the importance of grassroots movements and "progressive change."

“The important thing about grassroots movements are everybody has a role to play in making change. “

(The Broadbent Institute is) pushing for people to take seriously the opportunity to get involved in politics,” Mitchell said, adding what progressive means changes depending on the community.

“For different organizations and different communities it means different things, that’s partly why we’ve pulled together other local communities and working with UpStream to identify challenges that local communities face.”

Stewart will be joined by co-speakers Meili, University of Saskatchewan student union president Max FineDay and Idle No More co-founder Erica Lee, at the Roxy Theatre at 7 p.m Friday.

Former Australian PM Julia Gillard keynote speaker at Progress Summit

OTTAWA—The Broadbent Institute is delighted to welcome keynotes Julia Gillard and economist Mariana Mazzucato to its inaugural Progress Summit in March.

Canadian-born French National Assemblywoman Axelle Lemaire, Human Rights Campaign's Director of Marketing Anastasia Khoo, former Privy Council Clerk Alex Himelfarb, economist Don Drummond, and others will also take the summit stage to add their voices to debate fairer and more sustainable approaches to building a prosperous 21st century Canadian economy.

"Progressive legislators like Julia Gillard and Axelle Lemaire will offer unique perspectives on cutting-edge ideas," said Broadbent Institute Executive Director Rick Smith. "Mariana Mazzucato's highly-praised work reinforces the important and positive role of government in enabling innovation and growth."

"The summit is all about bringing together top-notch policy experts to provide an innovative and tangible contribution to the Canadian public policy debate," added Smith. "The participation of well-known Canadians like Alex Himelfarb and Don Drummond underscores the kind of solutions-oriented discussions we're going to be having at the Progress Summit."

The Progress Summit will take place from March 28-30 in Ottawa. The latest speakers list, including keynote speaker biographies and photos, is available online at

Obama campaign strategist to speak in Saskatoon

Joe Couture
January 28, 2014
This article originally appeared in the 
Saskatoon StarPhoenix.

Mitch Stewart, the political strategist who oversaw Barack Obama's victories in battleground states in 2012, will speak this week at an event in Saskatoon about progressive change.

Stewart has been involved over the years in numerous organizations and campaigns, including several that were important to the success of the U.S. president. He was Battleground States Director for Obama's 2012 campaign, and his strategy led to wins in nine of 10 battleground states.

"It was a life-changing experience," Stewart said about working with the president. "It's been a fantastic professional experience for me, but more importantly, from a personal perspective, it will go down as one of the greatest accomplishments of my life."

The tactics Stewart used during the campaign will be part of his discussion at Saskatoon Change Makers, which takes place at the Roxy Theatre at 7 p.m. Friday.

"We want to share those lessons, share those strategies, with other like-minded organizations that are trying to bring positive social change to their communities," Stewart said.

A model of building and organizing relationships has been important to his success, he said.

"This team structure that we know works, this very intentional relationship building, is probably the biggest lesson that we've learned," Stewart said, noting 10,000 neighbourhood teams across the U.S. performed various roles for Obama's 2012 campaign.

Building relationships is "the best vehicle that progressives can have to enacting change," he said.

Part of what he wants to do with Friday's speech is explain "the long arc" of facilitating social change, he said, noting that while change is never easy, it is important to have a clear and concise theory of change that can be easily explained and related to people's personal lives.

His efforts in Canada - he is speaking elsewhere in the country, too - will focus on advocacy work and not Canadian partisan politics, he said.

The event in Saskatoon is co-organized by two leftleaning organizations, the Broadbent Institute and Upstream. The director for the latter is Ryan Meili, a Saskatoon doctor and two-time former candidate for the provincial NDP leadership.

Graham Mitchell, director of training and leadership at the Broadbent Institute, said the organizations are bringing Stewart to Saskatchewan to share the message that grassroots efforts can lead to change.

"What the Obama campaign managed to do in terms of mobilizing regular people in support of a broad, progressive agenda is really remarkable and amazing and we're hoping that people hear that message that there is something that you can do," Mitchell said.

"There is hope, and there's a good reason to get involved, and one of the most highprofile examples comes from the American presidential election in electing Barack Obama, but it can be done in your local community on smaller scales."

Other speakers at the event will include Meili, as well as Max FineDay, president of the U of S Students' Union, and Erica Lee, one of the founders of the Idle No More movement.

Learn more about Saskatoon Change Makers:

Organizing to win: senior Obama campaign strategist to speak in Saskatoon

SASKATOON--Barack Obama's 2012 Battleground States Director, Mitch Stewart, is coming to town with the message that positive change is possible through people-centred grassroots action. Stewart will speak at Saskatoon Change Makers, an event co-organized by the Broadbent Institute and Upstream that will enhance local community organizing.

"Mitch Stewart has a proven track record as a cutting-edge campaign strategist," says Graham Mitchell, Director of Training and Leadership at the Broadbent Institute. "The Broadbent Institute is proud to support emerging leaders in Saskatoon, and across Canada, by learning from some of the best campaigners at home and abroad."

"We are delighted to be working together with the Broadbent Institute to bring positive change to Saskatoon," added Upstream Director Ryan Meili. "This evening is a great example of the kind of evidence-based, people-centred approach to change at the core of Upstream's work to build a healthy society."

Other speakers will include Ryan Meili of Upstream, Max FineDay, President of the University of Saskatchewan Student Union and Next Up alumnus, and Erica Lee of Idle No More.

Saskatoon Change Makers will take place at the Roxy Theatre (320 20th Street W.) at 7pm on Friday, January 31st. Learn more:

Photo: caelie. Used under a Creative Commons BY 2.0 licence.

The wealth of Canadians: how much, in the hands of how few?

In the next few weeks (no firm date has yet been set), Statistics Canada will release the results of the 2012 Survey of Financial Security. This survey, which is unfortunately only conducted on an episodic basis, will provide a detailed look at the assets, debts and net wealth of Canadians. It will provide an important complement to the many sources of information we have on incomes and income inequality.

When we consider the economic resources of households, wealth – mainly consisting of housing, equity in businesses and financial assets – clearly matters a lot in terms of security and the ability to spend. National wealth is an important yardstick for comparing ourselves with other countries (it was why Adam Smith wrote about the Wealth of Nations), and we can only judge the real extent of economic inequality when we look at the distribution of wealth among households, and not just annual income flows.

University of Paris economist Thomas Piketty pioneered (with Emmanuel Saez) historical analysis of income inequality, and carefully documented the changing income share of the top 1 per cent in rich countries. Now he has done the same for wealth.

In a major article and a forthcoming English-language edition of his book, Capital in the Twenty-First Century, Mr. Piketty shows that the ratio of total household wealth to national income, or gross domestic product (GDP), in advanced industrial countries is not constant over time. In fact, the ratio was very high in the pre-industrial era and the early years of industrialization, but fell to a low of two to three times GDP between the First World War and 1970. Today, national wealth in the advanced economies is back to late-19th-century levels of four to six times GDP.

Generally speaking, wealth is higher relative to GDP in Europe than in North America. Here in Canada, wealth was at a low of 2.5 times GDP back in 1970, but is now about four times higher than GDP.

The reasons for the decline of wealth relative to GDP over much of the 20th century likely included the destruction of wealth in two world wars and the Great Depression, and an extended period in the middle of the century in which the financial sector was closely regulated and labour’s share of national income was high relative to the share of capital.

Mr. Piketty further shows that wealth was generally much more equally distributed by the mid-20th century than it had been in the pre-industrial era and the late 19th century. The share of all wealth held by the top 10 per cent in rich countries is typically very high, at 60 to 70 per cent, but this is still well below late-19th-century levels of 80 to 90 per cent.

Karl Marx famously argued that the stock of capital would inexorably rise and become concentrated in fewer and fewer hands due to the dynamics of capitalism. He was wrong. But Mr. Piketty fears that the rising ratio of wealth to GDP, combined with increasing inequality in the distribution of wealth since about 1970, may bring us back to the extreme economic inequality of the Victorian era and the so-called Gilded Age in the United States.

In the case of Canada, a very large share of net wealth (assets such as houses, pensions and financial assets, minus debts) is concentrated in relatively few hands, and that share has been slowly rising. In 2005, the top 10 per cent of households owned 58.2 per cent of all wealth, up from 51.8 per cent in 1989 (the earliest year for which we have data). The bottom 70 per cent of households owned just 14.5 per cent of all net wealth.

These numbers are generally acknowledged to significantly understate the real degree of wealth inequality, since surveys based on small samples will not include the few super-wealthy individuals who control much of Canada’s wealth. The 2013 Forbes magazine rankings show that 29 Canadian persons or families have more than $1-billion of assets, led by the Thomson family with assets of $20.3-billion.

It will be interesting to see, in the new Financial Security survey, if Canadian wealth inequality increased further from 2005 to 2012. This was a period in which housing prices increased significantly, while financial assets (which are much more concentrated in a few hands, with 80 per cent being owned by the top 10 per cent) did not do so well. However, household debt also rose sharply over this period.

The danger may lie more in the future than in the very recent past. If wealth, especially financial wealth, looms large as a share of GDP, and if rates of return on capital remain high in a relatively sluggish economy, wealth will become highly concentrated in the hands of the very few.

This article originally appeared in the Globe & Mail's Economy Lab.

Photo: rabbot. Used under a Creative Commons BY 2.0 licence.