Trudeau is likely to climb down on Canada tax shifts

Significance

The Trudeau government is proposing to limit tax advantages for small businesses in Canada, a move that has ignited widespread concern and criticism from business owners, business and professional associations, provincial premiers, opposition parties and backbench members of parliament within Trudeau's own party. The administration is facing difficulties halfway into its electoral mandate as it tries to implement the activist policy agenda on which it ran in the last election.

Impacts

• Moving left on tax may win support from New Democratic Party voters, but Liberal climate policy remains a major hurdle for progressives.
• The provincial political landscape is likely to become less favourable to the Liberals before 2019.
• Trudeau’s personal popularity limits the space for the opposition to rise in the polls.