Maxime Bernier wants to eliminate capital gains taxes entirely and significantly lower the corporate tax rate. And he’ll pay for it all by slashing corporate handouts.

“Every time government takes an additional dollar out of someone’s pocket in taxes that’s another dollar that person won’t be able to invest,” the Conservative leadership candidate told a receptive luncheon audience at the Canadian Club of Toronto on Tuesday.

Bernier’s announcement was one more piece in the Conservative leadership candidate’s plan to sever the deep - and not always productive - ties between government and business. And it’s a big one.

If implemented it would reduce the size of the federal budget by around 5%. It’s the true fiscal conservative’s dream pitch. And yet Bernier’s also selling it in a way that it has appeal across the spectrum.

There’s something in it for everyone. And usually that’s an observation that gets made about plans for more government involvement, tax credits and handouts, when there’s pandering going on left, right and centre. It’s pretty rare you can say it about someone pledging for the government to do less.

Middle class Canadians with investments outside of TFSAs or RRSPs or who own more than one property will win from the capital gains elimination (although not as much as rich Canadians will).

Corporations will love it, obviously, because it brings down their taxes. The corporate tax was 22% until the Stephen Harper government brought it down to 15% in 2012. Bernier proposes a further drop down to 10%.

Average taxpayers and critics of crony capitalism from both the left and right will in turn approve of rolling back the billions in corporate “investments” the feds dole out every year to companies big and small.

There is, to be fair, one “tax credit by another name” wedged into the plan: expanding the Accelerated Capital Cost Allowance, a method for businesses to write off new equipment sooner. But it’ll likely have minimal impact.

As for the lost revenue, the capital gains tax brings in about $3 billion. And in the previous fiscal year corporate tax revenues rang in at $39.4 billion. So if these go down by a third that’s about $13 billion out of the coffers. However, Bernier believes, with good reason, that dropping the tax rates will increase business activity so the lost revenues won’t be that great.

He cites an estimated $16 billion spent on corporate welfare across multiple departments that he’ll cut to easily make up the shortfall. In other words, he’ll remove about 5% of the budget’s expenses and revenues all without upsetting special interest group activists.

It’s a smart plan. But is being smart and right enough? The Quebec MP has wisely tapped into what many economists and policy analysts have been saying for years.

Will this inspire rank-and-file party members to rally behind Bernier in the way, say, Kellie Leitch’s values test has taken her from being a rounding error in the polls to a frontrunner? Likely not.

He needs a different style of policy pitch up his sleeve that’ll get the silent majority stoked, something that taps into what the people are feeling viscerally in the here and now. That’s how he moves from a candidate with niche appeal to the top rung. This will be Bernier’s biggest challenge as the leadership campaign gets more serious in the months ahead.

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BERNIER’S PLAN