I decided not to post last week because, in shock and sadness, I was contemplating the results of the US election. On election day, I was watching CNN, which released its first exit poll results promptly at 5 p.m. When asked how they felt about the way things were going in the US, 43 percent of voters said they were dissatisfied and another 30 percent said they were angry. Then their opinion of President Biden: 40 percent approved of his performance; 60 percent disapproved. Chris Wallace’s response was that it would take a miracle for Kamala Harris to win. That observation accurately predicted how the evening would go.

The Feel-Bad Narrative

Donald Trump sold a feel-bad narrative about a nation overrun by violent illegal immigrants and an economy disrupted by rampant inflation to enough voters to win the election. How much that narrative reflects the reality of their lives and how much it reflects their perceptions of issues that are not part of their lived reality is a question for the quantitative political scientists who will be analyzing election data for many months to come.

The Feel-Good Narrative

Trump’s success at selling a feel-bad narrative brings to mind the efforts Doug Ford and his government are making to sell a feel-good narrative, especially as a prelude to an early election next year. One aspect of that is relentlessly flooding the media with government-funded (not party-funded) partisan advertising. I was watching the Buffalo Bills game on CTV on Sunday afternoon, with US commercials replaced with Canadian ones. The major advertiser was the Ontario Government, with its “It’s Happening Here” ads running at virtually every break. I assume the Government advertises during NFL games because they have a large audience of the PC Party base. The ads promote a narrative of economic development, particularly in the minerals and automobile sectors, and widespread prosperity for Ontarians. These ad campaigns cost tens of millions of dollars. The legitimacy of the ads is open to question, as discussed in Mike Crowley’s recent article on the CBC news.

Affordability or Vote-Buying?

A much bigger feel-good initiative, with a price tag of approximately three billion dollars, is the Ford Government’s recently announced $200 per person “taxpayer rebate.” I had a close look at the fall economic statement to try to understand the rationale for and design of this initiative. The Government had forecast a deficit of almost $10 billion this fiscal year, but $7 billion in higher revenues and $ 1 billion in lower borrowing costs meant it could have ended the year with a small deficit of $2 billion. Last June the Dominion Bond Rating Service upgraded the province’s credit rating a notch. In effect, the Ford Government had the fiscal room to spend some of its windfall. The Ford Government chose the one-time taxpayer rebate which it justified as “putting more money back into people’s pockets to make life more affordable” as a response to “inflation, high interest rates, and [of course] the federal carbon tax.”

An editorial in The Globe and Mail attacked this as “blatant vote-buying” and outlined both political left and political right options. The left options would involve spending on health and the green energy transition. The right would involve permanent cuts in personal and/or corporate income taxes or simply banking the revenue windfall to accelerate the achievement of a balanced budget.

The Devil in the Details

The $200 rebate will go to Ontario residents over the age of 18 who have filed their 2023 tax returns (due last April 30) by the end of the year. In addition, the $200 rebate will be paid to the parents of each child receiving the Canada Child Care Benefit, which is aimed at lower- and middle-income families. However, children of the wealthy will not be ignored because “the government would provide an opportunity [for their parents to apply for the rebate] through an alternative process.” Because the rebate will not be taxable, its pretax equivalent value will be highest to the wealthiest taxpayers. For example, if you are in the fifty-percent tax bracket, the $200 rebate is equivalent to $400 in pretax income.

The economic statement does not say how the rebate will be delivered. It could easily be built into the 2024 income tax return. I’m close to certain it won’t be done that way, but rather cheques will be sent in the mail, with Doug Ford’s signature, and a covering letter soliciting gratitude. I’ll report on it when our family receives ours. I’m planning to use mine for a donation to the Ontario Liberal Party, which I believe has the best chance of defeating Ford.

When the Ford Government was deciding to do the taxpayer’s rebate, it likely wasn’t thinking of the upcoming US election. The Trump Administration will be putting in place policies that will challenge Ontarian’s economic well-being, such as corporate income tax cuts and – Trump’s favorite word — tariffs. Had the Government retained this $3 billion, it would have been available to fund policy responses to the new economic environment. At least it could have funded another advertising campaign, this one on American media aimed at American viewers, intended to make them feel good about Ontario.