Justin Trudeau has to do something dramatic to let Canadians know that he really is listening and the capital gains reversal could be it. 

By Sheila Copps
First published in The Hill Times on July 1, 2024.

OTTAWA—Justin Trudeau should pull a Doug Ford.

Apologize and say his government got it wrong when it announced a hike in the capital gains inclusion rate from 50 per cent to 66.7 per cent for annual gains over $250,000.

Premier Ford reversed his controversial position on selling off greenbelt land by simply apologizing and changing his mind. The political fallout from that reversal was nil.

A flip on the capital gains hike could signal that Trudeau is willing to admit when he is wrong.

The budget announcement was one reason Liberals lost a key byelection in Toronto-St. Paul’s last week. According to a demographic analysis of the riding by Environics, the average household income there is $190,945.30.

That is more than double the average before taxes income of $92,764 for the rest of the country.

An apology would reinforce comments made by the prime minister the day after the shocking loss of a riding that had been held by the Liberals for three decades.

Commenting on the outcome, the prime minister said “I hear people’s concerns. And frustrations.”

Simply repeating that he is working to ameliorate the situation will not be enough.

Inside the caucus, members are quietly grumbling about their leader’s unpopularity, predicting a general election could be disastrous if the party’s numbers are not shored up.

Trudeau has to do something dramatic to let Canadians know that he really is listening and the capital gains reversal could be it.

The issue would not matter in most ridings as ordinary Canadians cannot hope to have an annual capital gain in excess of $250,000.

But for those who do, it was the straw that broke the camel’s back in last week’s vote.

That, and the prime minister’s personal unpopularity, were certainly factors in the surprising defeat. They both coupled with the government’s position on the Israel-Hamas war to create a perfect storm.

The war in the Middle East even had the mayor of a Montreal suburb calling on Toronto voters to repudiate Trudeau. Mayor Jeremy Levi of Hampstead used X (Twitter) to literally “implore” voters in Toronto to vote for Don Stewart and Pierre Poilievre.

The mayor accused Trudeau of lying to all Jewish Canadians about his promise to do something to combat antisemitism. “This is no longer about Jews, but a leader who consistently failed.”

Deputy Conservative leader Melissa Lantsman penned a similar message to constituents in the riding, asking them to send Trudeau “a message about his betrayal of our Jewish community” because of his silence on rise of “Jew hatred” since the beginning of the war.

According to the most recent census, approximately 15 per cent of the riding population is Jewish, but Lantsman refused to say whether the letter was sent selectively to Jewish households.

Couple that with the reality that the Liberal candidate, Leslie Church, well-known in political circles as chief of staff to Chrystia Freeland, was largely unknown in the constituency.

According to some Liberal sources, there were other, popular local candidates who were willing to step up when Carolyn Bennett vacated the seat, she had held for a quarter century.

But they were bypassed for Church, largely at the insistence of deputy prime minister Freeland.

Freeland holds an adjacent riding to that of Toronto-St. Paul’s. In University-Rosedale, the demographics are very similar, and with the shocking loss last week, Freeland must also be wondering about the vulnerability of her own seat.

She campaigned hard for Church, suggesting at a press conference on the day of the vote that the election was about “two visions of Canada, two sets of values.” Freeland said the alternative vision to the Liberal one was “cold, cruel and small” that would lead to cuts.

Freeland’s pitch did not appear to resonate with the local voters.

After the polls closed, Conservative organizer Jenni Byrne made an unusual appearance on CBC to say her candidate had lost the election, when a few hours later it turned out the opposite was true.

At 4:30 a.m., the final ballot put Conservative candidate Don Stewart ahead by almost 600 votes. Church had led the polls through most of the evening, but the numbers in the advance voting prompted the flip.

Liberal insiders knew it would be a tough fight, but they thought the tide was turning in their favour in the last few days.

Caucus successors to Trudeau are already quietly organizing, although most pledge public support for the beleaguered leader.

Something dramatic needs to happen to turn this ship around.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.