TAX NEWS - June 2010
Canada Tax: Government should have asked: What would Don Draper do?
So here's a question: What would Don Draper do?
The Madison Avenue executive central to the acclaimed TV series Mad Men is a kind of advertising mystic, serene in moments when he fixes clients with a steely stare and, as if channelling some otherworldly wisdom, calmly explains how to spin basic human needs into the foundation of a successful campaign.
In B.C., Finance Minister Colin Hansen's sell-the-HST plan seems, in part, to be banking on persuasion by pamphlets – so-called mailers. Mr. Hansen says he wishes he could have sent them out sooner. He was barred from doing so after Elections BC said such a measure would be an improper effort to influence the provincewide HST petition.
But few of Don Draper's real-world counterparts believe the Liberals can turn the tide of HST anger, expressed in a provincewide petition drive to repeal the 12-per-cent tax, which takes effect July 1.
Frank Palmer, the Vancouver-based CEO and president of advertising and communications agency DDB Canada, says the government failed to properly assess public opinion to create a successful plan for selling the tax.
Now he says it's probably too late. "Unfortunately, advertising isn't going to be able to correct the situation, I don't think, with the HST," he said.
Sometimes the public cannot be moved, he says. "At this point in time, it's very difficult to change a public perception if the public believes it's not in their best interest. Like BP, it's like that," he said of the company responsible for the disastrous Gulf of Mexico oil spill. "No matter what amount of money they spend on that, it's not going to work for them."
Veteran ad man Terry O'Reilly, host of the energetic CBC radio series The Age of Persuasion, a sweeping weekly look at the realm of advertising, voices agreement.
"Using tax dollars to fund an advertising campaign to sell a new tax is a little like putting out a fire with gasoline," Mr. O'Reilly said by e-mail.
Ideally, he said, an advertising campaign launched ahead of the implementation date could have framed the benefits of the HST – which merges the federal goods and services tax with the provincial sales tax – and the government's conviction that it was the right thing to do.
"Because the government chose not to begin the communication early enough, because they chose or defaulted to a delayed response, the result can only be damaging," he said. "The public feels the tax is being foisted on them, without the benefit of information, debate or time for rumination. The anti-tax side has the simpler argument, and that is always the ideal position.
"Every smart marketer knows the simpler the argument, the greater the impact. While the HST may be inevitable, the cost may be Campbell's Liberal government."
But some offer slim hope for the Liberals.
Darren Dahl, a marketing professor at the Sauder School of Business at the University of British Columbia, said "anything is possible, but wow, what an uphill battle you have to fight."
The government, he says, has to put a human face on why the tax is a good thing. "If that means it's a small business owner who is now not going to go bankrupt because he can now be more competitive, put a human face on this and make people question," he said.
"People have made up their mind that this is not a good thing. You need to make people doubt that by saying, 'Wait a second, maybe there are some benefits here.' "
After getting up to speed on the situation on this side of the Rockies, the chairman and CEO of the prominent Toronto-based Cundari Group ad agency, suggested Mr. Campbell really needs to sharpen his rhetoric on the HST's relevance.
Ontario is now grappling with HST politics, but Aldo Cundari notes that Dalton McGuinty's Liberals framed the issue before announcing the measure. "At least we had lots of dialogue ahead of time before they implemented it," he said. "People got to debate it, and it's kind of like that pressure valve."
Mr. McGuinty talked about a harmonized sales tax long before he actually made it official in the March, 2009, budget, and lined up high-powered surrogates, including TD Bank, to help him sell it. Revenue Minister John Wilkinson's near full-time job has been selling the HST – he has been on the road for months, delivering pro-HST speeches across the province. In the last week, cabinet ministers and members of the legislature have joined the effort.
"There is a way to sell anything," Mr. Cundari said, sounding Draper-esque. "You can't sell taxes. What you can sell is the benefit that taxes will bring or the dire straits the province will be in if you don't do this harmonization."
Mr. Campbell has vaguely talked about hitting the road this summer to talk about the virtues of the tax. Mr. Cundari proposes an election-style campaign that would include regional town halls, every talk show the Premier can get on, a social-media site as a forum for HST discussion and – most important – embracing the public fury over the tax. "He needs to get out and be part of the dialogue," Mr. Cundari said.
Asked about his record of HST speeches, Mr. Campbell's office said he has mentioned the subject in speeches to such groups as the Canadian Natural Gas Association, B.C. Chamber of Commerce and Lower Mainland Municipal Association.
However, Mr. Cundari and others are talking about a broader effort focused on the people who have been signing petitions against the tax.
"He hasn't explained it to the people that matter, which is the population where the angry opposition, let's call it, have done a good job of pounding home their message," he said.
Still, the eventual endgame of the Liberal effort is unclear. The petition against the tax seems poised to succeed, leaving the government to decide whether to let the legislature take up the matter or put it to a provincewide referendum. The larger issue for the Liberals is whether a more dynamic, Draper-style campaign might pay long-term benefits by detoxifying their political brand.
As the B.C. government prepares to send pamphlets explaining the HST to the public, here is a summary of communication costs related to the last key change in tax policy, the carbon tax. This included a $100, one-time payment that individuals could use to cut their carbon emissions, which required some explaining:
– Print and radio creative – $296, 465
– Advertising purchasing – $2,190, 523
–Printing – $103,421
TOTAL: $2,590,409
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