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‘We’re seeing a very noticeable negative trajectory,’ polls show trouble on horizon for Liberals over Morneau’s mess, says Nanos

•Controversies involving the finance minister have caused Liberal support to erode, says the pollster, though not all of his competitors agree.

•Prime Minister Justin Trudeau’s move to insert himself into the communications battle is a 'risky strategy,' says Nik Nanos.

Finance Minister Bill Morneau, pictured last week on the Hill. The Hill Times photograph by Andrew Meade

PUBLISHED :Monday, Oct. 23, 2017 12:00 AM

The pile up of controversies tied to Finance Minister Bill Morneau is starting to water down Liberal support, and Prime Minister Justin Trudeau’s move to insert himself into the communications battle is a “risky strategy,” says pollster Nik Nanos, though Liberal MPs publicly say otherwise.

The effect of last week’s headlines about Mr. Morneau’s (Toronto Centre, Ont.) decision not to put his private assets in a blind trust upon entering cabinet haven’t yet been captured by publicly released polls, but Mr. Nanos, the head of polling firm Nanos Research, said he is confident that Mr. Morneau’s troubles, stretching back to the summer’s tax reform proposals, have hurt the federal Liberal Party.

As the negative headlines and partisan attacks around Mr. Morneau and his government’s tax reform proposals have accumulated, “we’ve seen Liberal numbers week-by-week erode,” he said.

“We’re seeing a very noticeable negative trajectory, and I think it probably speaks to why the prime minister is trying to stop the decline,” said Mr. Nanos, referencing Justin Trudeau’s decision to take on questions from the media and opposition about some of the controversies tied to Mr. Morneau last week.

  

Nik Nanos is the chair of Nanos Research and the official pollster for CTV News. The Hill Times file photograph

The extensive news coverage of the tax reform and ethics controversies make it unlikely the decline could be attributed to anything else, said Mr. Nanos.

“Canadians judge governments by what’s in the news, and what the governments are talking about, and what governments are defending,” said Mr. Nanos.

Liberal backbenchers, however, are standing up for their finance minister, labelling opposition attacks on Mr. Morneau as “mudslinging,” members of the press as enamoured of conflict, and talking up the the benefits of the reconfigured government tax reforms that Mr. Morneau is rolling out.

Some Grits also called Mr. Morneau’s decision not to divest himself of his stake in his former company, or place it in a blind trust, until last week an “honest mistake,” and the ethics forms required for businesspeople entering Parliament complex and technical. One suggested it would be hard to win back the trust of the small business community, despite the merits of the newly-repackaged tax proposals.    

  

The Liberals said they did not expect the controversies tied to Mr. Morneau to negatively impact the Liberal brand or their re-election prospects.

Another pollster, Ipsos Public Affairs CEO Darrell Bricker, said he had not seen a notable decline so far in Liberal support. Approval for the party’s performance is close to where it was when the Liberals won a majority government in 2015, he said, and approval is a better indicator of support than voting intention this far from an election.

“Not the best week in terms of controlling the message for the government…but has this been a body blow? Not that we’ve seen yet. But keep an eye on the next round of polls,” he said.

 

  

Under fire for weeks

Mr. Morneau has been at the centre of several controversies in the past few months. He was tasked with leading a consultation on reforms to Canada’s tax system that blew up into a nationwide debate towards the end of the summer and intensified when Parliament returned, with the opposition Conservatives and several advocacy groups from the business community pushing back hard on proposals to curtail tax benefits for self-employed individuals who incorporate to lower their tax bill. The blowback put pressure on the Liberal caucus, leading to public pushback from some MPs, and Liberal MP Wayne Long (Saint John-Rothesay, N.B.) to vote with the opposition for extended consultation on the tax reforms. Mr. Morneau responded last week by announcing changes to the tax reform plan, dropping the prospect of restricting the conversion of income into capital gains in a private corporation, and establishing a $50,000 threshold for income on passive investments through private corporations. The government also promised to lower the tax rate for small businesses from 10.5 to nine per cent.

Finance Minister Bill Morneau has been in hot water lately, for policy and personal decisions. The Hill Times photograph by Andrew Meade

Mr. Morneau was caught up again when the CBC reported earlier this month that he and his wife used a private corporation to control a villa in southern France, but didn’t disclose the existence of the company to federal ethics commissioner Mary Dawson until the CBC started asking questions about it. Things got worse for the finance minister last week, after The Globe and Mail reported that he had not put all of his shares in his human resources consulting firm, Morneau Shepell, in a blind trust during his tenure as finance minister, after Ms. Dawson advised him that, by the letter of the law, he did not have to. The Globe later reported that Mr. Morneau had told officials at Morneau Shepell that he had planned to use a blind trust when he took public office.

Prime Minister Justin Trudeau (Papineau, Que.) stepped in to defend Mr. Morneau publicly last week, insisting reporters direct questions for the finance minister to him instead. Mr. Morneau stood for half an hour during Question Period on Thursday last week, fielding barbs from the opposition Conservatives and NDP on his handling of his shares in Morneau Shepell, as well as involvement in various Finance Department files that could have benefited the company.

The same day last week, Mr. Morneau announced that he would be putting his family assets in a blind trust, divesting himself of his shares in Morneau-Shepell, and working closely with the ethics commissioner going forward. 

Trudeau’s involvement a gamble

Polls show the Liberal brand may have been smarting even before Mr. Trudeau got involved to address the most recent controversies connected to Mr. Morneau.

Nanos polls showed the share of Canadians picking the Liberals as their top choice dropped from 42 per cent on Sept. 8, compared with 30 per cent for the Conservatives, to less than 35 per cent for the Liberals on Oct. 13, compared to 31 per cent for the Tories. The poll had a margin of error of plus or minus 3.1 percentage points, 19 times out of 20.

Another poll released the same day in October by the Angus Reid Institute had the Liberals and Conservatives tied at 35 per cent when respondents were asked which party they would most likely vote for if an election were held the next day. A true margin of error cannot be calculated for that study since it was conducted online, but a truly random poll with comparable parameters would be accurate to plus or minus 2.5 percentage points 19 times out of 20.

Those numbers reflect the controversy over the Liberal tax changes guided by Mr. Morneau, but not the recent reports about the ethics disclosures.

Apart from the NAFTA trade negotiations, as well as coverage of a Canada Revenue Agency Proposal to tax employee benefits—which would fall under the responsibility of Revenue Minister Diane Lebouthillier, who nixed the proposal—the Morneau stories have taken up the lion’s share of the media space and political debate in recent weeks, said Mr. Nanos.

Typically one controversy won’t much change public opinion of political parties, but three in a short span will make the numbers start to move, said Mr. Nanos, and there is now “negative momentum” for the Liberals.

“It speaks to why the prime minister is personally engaging. Now that’s a risky strategy, because you have to be very careful when you expend or put at risk the capital of the prime minister. As soon as the prime minister starts talking about an issue, even if it’s to fix it, in my experience, the prime minister wears it,” he said.

Shachi Kurl, the executive director of the Angus Reid Institute, told The Hill Times that there has been a hardening of Conservative support and softening of Liberal support recently, part of which could be attributed to Mr. Morneau and Mr. Trudeau, both relatively wealthy individuals, being used as the faces of what has been framed by the opposition as a tax clampdown on business owners.

An online poll by Toronto’s campaign research from Oct. 8 to Oct. 11 found that the number of Canadians indicating they would vote Liberal at that time had slipped four per cent from the previous month, but remained strong at 38 per cent to the Conservatives’ 30 per cent. The poll showed that 46 per cent of respondents approved of the job the Mr. Trudeau was doing as prime minister.

The poll also showed that 25 per cent of Canadians said they approved of the finance minister’s “recently announced changes to tax rules for small businesses,” while 28 per cent disapproved and 46 per cent said they didn’t know. However, when the three proposed changes to the tax system were briefly described in questions, more respondents than not said they approved of the changes.

Online polls are not truly random, but a comparable random poll would have had a margin of error of plus or minus 2.2 per cent 19 times out of 20.

 

Small business trust will be hard to regain: Cuzner

Liberal MPs defended their finance minister when asked whether those controversies were hurting their party or re-election prospects, but a few suggested that the government and Mr. Morneau could have handled the tax reform proposals or the blind trust decision differently.

Mark Eyking (Sydney-Victoria, N.S.) said he didn’t think the controversies would hurt the Liberals. He said he believed Mr. Morneau had made an “honest mistake” by not putting his shares in Morneau-Shepell in a blind trust, and that the paperwork for businesspeople entering Parliament was complicated.

“Look, to me, there was a mistake made. So now, it seemed like he straightened it out with the ethics commissioner, so, I’m okay with that.”

Rodger Cuzner (Cape Breton-Canso, N.S.) said he believed the Liberals would be judged in the next election on broader achievements, such as benefits for childcare and seniors.

“Are those things having an impact? I think that that will certainly trump anything that is happening now with the finance minister,” he said.

He added, however, that the initial tax reform proposals made public in July “cast the net so wide, I think it scared the hell out of a lot of small business owners in the country.”

“I’d be less than honest to say that the fear that was stoked through the consultation process…I don’t know if that trust can be regained. Because it was real, and the concerns that were shared were real, but I’m proud of the job, the final product that the minister brought forward.”

Will Amos (Pontiac, Que.) said the government’s recent changes to the tax package and promise to lower the small business tax rate were great news for his constituents, and evidence that the government was listening to them. He called opposition attacks on Mr. Morneau “mudslinging,” and said media coverage was more focused on the conflict between the parties than the government’s economic policy.

Francis Drouin (Glengarry-Prescott-Russell, Ont.) said he didn’t think the Morneau controversies would hurt the party, adding, “if there was an ethics investigation from the [ethics] commissioner, that would be a different story.” He classified the opposition attacks as a tactic to force a minister to resign “on their own terms,” something they had not yet been able to achieve.

Nichola Di Iorio (Saint-Léonard—Saint-Michel, Que.) also mentioned that the ethics disclosure process was “quite technical,” and questioned why the opposition had waited so long to raise the issue of Mr. Morneau’s decision not to place his assets in a blind trust.

“It’s public information…you don’t have here somebody who is trying to hide anything,” he said.

“If they think it makes him unfit, why did they leave him in office for 18 months?”

peter@hilltimes.com

@PJMazereeuw

 

Liberal MPs respond: Are the recent controversies tied to Bill Morneau hurting the Liberal brand or re-election prospects?

“No, not at all.”—Liberal MP Mark Eyking, Sydney-Victoria, N.S.

“I don’t think so. If there was an ethics investigation from the [ethics] commissioner, that would be a different story.”—Liberal MP Francis Drouin, Glengarry-Prescott-Russell, Ont.

“I’m confident Minister Morneau is going to get the issue resolved.”—Liberal MP Judy Sgro, Humber River-Black Creek, Ont.

“I think the Liberal brand and what we do as a party will be judged coming into the next election, as to, what we’ve accomplished for Canadians.”—Liberal MP Rodger Cuzner, Cape Breton-Canso, N.S.

”I think the finance minister has done a great job at staying focused on what Canadians care about.”—Liberal MP Will Amos, Pontiac, Que.

“I think after this week, people are going to be pretty excited about what we’re offering. Small business, by and large, are going to gain, and corporations are going to gain from the changes that are being made, with the reduction in the [small business] tax.”—Liberal MP Larry Bagnell, Yukon

“Canadians saw that we made a commitment, a clear commitment in the election campaign, to support the middle class, to look at tax changes that would be fair, and to support small businesses, something that we’re doing this week, and we’ve done since we were elected.”—Fisheries Minister Dominic LeBlanc Beauséjour, N.B.