The grand flip-flop this week on taxing income trust distributions, a year after the Conservatives promised they'd never do it, has a long history in Canada going back to early last century.
Ottawa introduced the Income War Tax Act as a "temporary" measure in 1917 to pay for the burgeoning costs of fighting the First World War. Previous to this, most federal government funds came from indirect taxes such as customs duties and excise taxes.
There were many reasons to continue the temporary measure when the war ended, and nearly 90 years later Canadians still pay income tax. Ottawa actually ended the Income War Tax Act on Jan. 1, 1949, but replaced it with the Income Tax Act, which remains in effect today and provides some 60 per cent of federal budgetary revenues.
Governments must have flexibility and elbow room to respond to change and crises despite earnest promises in the rough and tumble of an election campaign, so Finance Minister Jim Flaherty announced that Ottawa will tax income trusts after all.
Flaherty's explanation for the flip-flop was that too many companies were converting to these income trusts, that some $70 billion worth of new trust conversions had been announced in 2006, and Ottawa faced "a growing trend to corporate tax avoidance."
Andrew Cohen, in an essay for CBC News Online in 2004, wondered why politicians break their promises so often.
Attempting to answer his own question, Cohen wrote: "It may be that the political promise, like the political resignation, has become devalued today, even passé, a quaint anachronism reminiscent of a time when politics was kinder, gentler and played by other rules."
Remember 1974, when Pierre Trudeau said he'd never impose wage and price controls? That's when Trudeau ridiculed Conservative leader Robert Stanfield, who supported wage and price controls, by saying, "Zap, you're frozen!"
Fifteen months later, Trudeau brought in wage and price controls, saying times had changed.
In 1984, Conservative leader Brian Mulroney was against free trade with the United States and against reopening constitutional negotiations between Quebec and the rest of Canada. When he became prime minister, Mulroney signed the Free Trade Agreement with the United States and the Meech Lake Accord with the provinces.
Mulroney also lambasted the Liberals under prime minister John Turner over federal patronage appointments. When Mulroney took over, he continued the practice of patronage appointments with even more vigour than the Liberals, in nine years doubling the number of patronage appointments the Liberals had made in 16 years.
And in 1993, Jean Chrétien's Liberals promised to abolish the Goods and Services Tax. One of his senior MPs, Sheila Copps, said she'd resign her seat if the government reneged on its promise. When Chrétien became prime minister he decided to keep the GST because it was bringing in a lot of money.
Copps actually did resign, won a byelection, and returned to Parliament.
As Cohen pointed out in his essay, however, sometimes keeping a promise can be ruinous. In 1993, Chrétien promised to scrap the contract the Tories had signed to replace the old fleet of Sea King helicopters. This time Chrétien kept his promise, which because of various penalty clauses and the cost of keeping the ancient Sea Kings in the air, ended up costing Canada $1 billion.
