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  • Ontario's middle and working class families are losing ground August 15, 2017
    Ontario is becoming more polarized as middle and working class families see their share of the income pie shrinking while upper middle and rich families take home even more. New research from CCPA-Ontario Senior Economist Sheila Block reveals a staggering divide between two labour markets in the province: the top half of families continue to pile […]
    Canadian Centre for Policy Alternatives
  • Join us in October for the CCPA-BC fundraising gala, featuring Senator Murray Sinclair August 14, 2017
    We are incredibly honoured to announce that Senator Murray Sinclair will address our 2017 Annual Gala as keynote speaker, on Thursday, October 19 in Vancouver. Tickets are now on sale. Will you join us? Senator Sinclair has served as chair of the Truth and Reconciliation Commission (TRC), was the first Indigenous judge appointed in Manitoba, […]
    Canadian Centre for Policy Alternatives
  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
  • What’s next for BC? July 4, 2017
    Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]
    Canadian Centre for Policy Alternatives
  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
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Housing Affordability and Inequality: Low-Income Renters in Ontario

In this first of a series of housing-related posts I analyze rental housing expenditures for low-income households in Ontario. Rent is the single largest expenditure element for renters in the first and second household income quintiles and is therefore an important indicator of housing affordability and expenditure inequality. This is a relatively under-studied component of the overall housing market; most policy analysis in Ontario has focussed on ownership affordability. Rent-related data is comparatively less comprehensive and detailed than ownership-related data and hence an important aspect of this first post consists of data compilation, projections and analysis. In subsequent posts I discuss policy initiatives from the perspective of affordability and inequality for low-income renter households.

Read more »

The Ontario Chamber’s economic impact analysis of Bill 148 still doesn’t make sense

On Monday, the Keep Ontario Working coalition spearheaded by the Ontario Chamber of Commerce released an analysis of the impacts of Bill 148 in Ontario, which will introduce a $15 minimum wage by 2019 and a host of other employment standards improvements. The analysis raised many red flags: it focused only on costs, predicting very large negative impacts out of line with decades of research in economics and appeared to include a significant math error. What’s more, the analysis was incomplete: just a few summary slides and no description of how results were derived, the study a black box.

Zohra Jamasi, an economist at the CCPA and I, summarized these concerns in a post at the CCPA’s Behind the Numbers blog. I also outlined the math error, which incorrectly claimed that a 0.7% increase in prices would amount to $1300 of new spending on average per household per year, on Twitter: Read more »

Ease up on shareholder payouts, pay your workers more instead

With Alberta and Ontario raising their minimum wage to $15 per hour, and BC possibly following suit soon, the usual suspects have begun their predictable howling about how this is a bad time, or it’s happening too fast, or how it will simply hurt those we are trying to help. It is true that increasing the minimum wage may result in slightly fewer jobs for teenagers, and slightly fewer hours for other workers – but the evidence shows that overall the effect is positive, especially for low income households.

Thank goodness progressive economists have been on the case, with this great analysis of corporate fear mongering from Zohra Jamasi and Michal Rozworski, and Shelia Block’s article explaining how a higher minimum wage will reduce inequality in Ontario.

Cole Eisen has added another dimension to this analysis for Canada – specifically linking short term corporate strategies such as share buybacks to decreased investment in wages & training, which has a negative effect on worker’s share of income as well as long term economic growth. In the UK, Corbyn has made a similar argument (subscribers only), that there should be a link between dividends and fair pay.

I appeared on the Business News Network to make the case that Cole and I outline below. It first appeared in the Hamilton Spectator, titled: Yes Mr. Weston, You Can Afford to Pay Your Employees a Living Wage

Loblaw Companies Ltd. chairman and CEO Galen G. Weston recently joined the chorus of business leaders to come out against the Liberal’s proposal to increase Ontario’s minimum wage to $15 per hour by 2019. Weston – whose family’s sprawling business empire includes Loblaw stores, No Frills, Shoppers Drug Mart and high-end fashion retailer Holt Renfrew – fretted about the proposal’s effect on his bottom line in a call with analysts last week.

This comes on the heels of Queen’s Park’s plan to increase the minimum wage to $14 per hour on January 1, 2018, and then to $15 the following January. A similar policy in Alberta will see the minimum wage raised to $13.60 this October, and increase to $15 in October 2018. Approximately 1 in 5 Albertan workers and 30% of Ontario workers currently earn less than $15 per hour.

Referring to the reforms as “a significant set of financial headwinds,” Weston said “the organization is mobilizing all of its resources to see whether or not it can close that gap,” warning, “at this point, we don’t know the answer.”

He went on to outline possible steps the company would take to mitigate the $190 million dollar increase in labour costs he forecasted would arise from the new minimum wage laws and Quebec’s recent efforts to reduce the price of prescription drugs. These steps included efforts to automate tasks currently done by employees, presumably to make paid workers redundant.

Even if Weston’s $190 million estimate is correct, his suggestion that a company like Loblaw lacks the resources to comply with the policy is misguided.

Canadian research shows that increasing the minimum wage is not just good for workers, but also for individual businesses and the wider economy.

First, and most importantly, it’s pretty tough to get by on minimum wage wherever you live in Canada. So when minimum wage workers get a raise, they usually spend it in their local economy. Economists call this “a higher marginal propensity to consume.” The good news is that with more income, workers can better meet their basic needs, and local businesses benefit from having customers with more money to spend.

But higher minimum wages are also a good strategy for transforming precarious work into decent work. Raising the minimum wage encourages employers to abandon low-wage, high turnover strategies. Instead, employers are more likely to invest in their current workforce, lowering turnover and increasing productivity.

UBC economist David Green suggests that increasing the minimum wage is one of the few mechanisms that encourages employers to abandon an inefficient low-wage, high turnover strategy. This is an important long term impact of increasing wages.

Weston’s claims are also in conflict with Loblaw’s financial statements which clearly show the company can absorb the impact of a policy that will help more than 1.6 million workers in Ontario make ends meet. Last year alone, the company paid shareholders over $1.1 billion dollars with $708 million delivered through share buybacks. Ostensibly finding no productive use for these resources within the firm, Loblaw executives elected to hand this money over those holding company stock – a significant portion of which belongs to Weston and his family.

These numbers are up from a combined total payout of $695 million in 2015 and $675 million in 2014. For a company with 2016 net earnings of $990 million, disbursing that kind of money to shareholders either indicates a lot of excess cash or a broken incentive structure.

For someone who praised family firms’ ability to create value for all stakeholders when freed from the pressures of meeting quarterly targets in a book called Re-imagining Capitalism, Weston’s recent posturing reeks of the myopic outlook that has taken over the provinces’ boardrooms and helped solidify a slow growth equilibrium. Employees are a key piece of any retailer’s success and investment in them is an essential component of realizing long-term value creation.

Over the past several decades, a pivot in corporate strategy that privileges short-term value extraction over growth has seen inequality balloon and economic mobility stagnate.

These trends are by no means natural but are the direct result of policies that eroded both the position of workers within the economy and the conditions necessary for equitable and sustained economic growth. Egged on by tax loopholes, executives face powerful financial incentives to neglect important investment in workers and technology. Directing cash flow towards shareholder payouts, they can pump up share values and trigger large bonus payouts. This leaves little to invest in employees’ capacity.

Breaking this cycle requires more than tinkering with corporate governance requirements or the tax code. Policies that mandate firms recognize the contribution that employees make to their success are necessary to overturn a status quo that has produced a paltry 0.7% increase in real wages over the past 15 years.

Implementing the new policy will require some adjustment on the part of companies as they switch from a model of low wages and high turnover to one based on sustained productivity growth and investment in their employees. However, not only is raising the minimum wage the right thing to do, it also makes good economic sense.

Ten Things to Know About Social Assistance in Alberta

I’ve just written a blog post about social assistance in Alberta.

Points raised in the post include the following:

-It’s very difficult to quality for social assistance in Alberta (this is also the case in all other provinces and territories). Reasons why are discussed in this previous blog post of mine.

-In the 1990s, there were changes to the rules governing social assistance in Alberta. From that point on, it became even harder to qualify for social assistance in Alberta.

-In Alberta, persons experiencing homelessness are not eligible to receive some forms of social assistance.

The full blog post can be accessed here

Income transfers, means testing, and universality, oh, my!

Overall, the NDP leadership race has provided a lot for progressive economists to be excited about.

From progressive tax reform to fair wages and worker’s rights, poverty fighting income transfers to new universal social programs, the four leadership candidates have put substantive and laudable social democratic proposals on the table.

Unfortunately, the last debate waded into unhelpful – if not disingenuous – exchanges on income transfers, means testing and universality, particularly on the topic of Jagmeet Singh’s proposed senior’s guarantee. In the interest of supporting well-informed and honest debate, I want to take this opportunity to clarify what Singh has proposed, and elaborate on why I think targeted income transfers are useful and progressive tools in the fight for economic equality.

What is the Canada Seniors Guarantee?

Critiques of Singh’s income security policy have mainly focused on the Canada Seniors Guarantee, which proposes some changes to the current Old Age Security (OAS).

The guarantee combines a number of existing seniors’ benefits into a single income tested benefit, administered through the tax system. This includes OAS, and the Guaranteed Income Supplement (GIS), but also the regressive & non-refundable Age and Pension Income credits. By adding the Age Credit and the Pension Income Credit, Singh claims an additional $4 billion will be added to the core benefits provided by OAS / GIS. (According to federal tax expenditure data, in 2016 the Age Credit cost $3.3 billion and the Pension Income Credit cost $1.2 billion.)

(Update: this graph only shows the combined Age and Pension benefit available to a single individual, some higher income earners in a couple may have higher benefits from spousal amounts.)

Some of the confusion results from critics who suggest that the OAS is universal. As Andrew Jackson rightly pointed out, OAS begins to be clawed back for those with incomes around $75,000 and is fully phased out for those with taxable income of $120,000. But Guy Caron was correct in pointing out that OAS is near universal, since the vast majority of seniors have taxable income below $75,000. Among those over 65 with any income, fewer than 10% have total incomes over $75,000, and about 4% have total incomes over $100,000 (See CANSIM 111-0008).

I asked Singh’s campaign for more details, and they told me that his new benefit would fully phase out by the time a senior’s individual taxable income is $100,000. Along with the $4 billion from the reallocation of the age credit and the pension credit, this allows a significant increase in benefits for seniors with low and middle incomes by redistributing income that currently goes to the top 5%-10% of income earners over 65.

Not all means-testing is the same.

It is important to note that all four candidates are proposing income tested supports in some capacity – Caron’s basic income, Ashton’s expansion of the GIS and GST tax credits, and Angus’ call for an expansion of the Working Income Tax Benefit (WITB). As they should— income transfers are a key social policy tool in the fight against poverty.

While income-testing is a form of means-testing, some have conflated Singh’s proposed targeted income transfers with other degrading means tests — the endless forms and surveillance rightly reviled for the stigma, barriers and hardship they create for many who rely on provincial social assistance programs. This is clearly an incorrect characterization of his seniors guarantee.

There are also those that suggest that by supporting income tested transfers, one leaves the door open for attacks on universal public programs and services (“the rich can pay for their healthcare”). Social democrats agree that universal social programs serve a public good in and of themselves, that there are social and economic rights that every citizen is entitled to, regardless of means. The debate surrounding targeted poverty reduction methods should not be confused with an attack on these universal programs.  All of the leadership candidates, including Singh, are clearly on record supporting universal childcare, pharmacare, and homecare, as well as income tested supports.

Lost in the critiques of Singh’s proposed adjustments to OAS is the fact it is that he is increasing the progressiveness of benefits that are already delivered through the tax system, and that the vast majority of seniors would see an increase in their benefits.

Of course, as Jackson and Rozworski have argued, there is an important case to be made for solidaristic income security programs that are universal, to say nothing of universal social programs Singh clearly supports, and which can build support across social classes for economic security measures delivered as a right.

Difference is good.

While it is useful to clarify our thinking on which programs are best delivered as targeted income transfers, and which are better as delivered universal transfers or services, it is important to remember that the differences between the four candidates on this point are very small. All four candidates are putting forward exciting ideas that are clearly to the left of the debates we had in the last federal election, to say nothing of the current Liberal government.

It’s always good to remember that violent agreement does nothing to advance our thinking. Constructive and honest debate is necessary, healthy – and exciting for lefty policy wonks!

Now let’s have a debate that highlights the flaws in the federal government’s privatization / corporate welfare industrial policy.

Unwarranted Gloom and Doom: The IMF on Canada and NAFTA

To read the media today, one would think that NAFTA is a keystone of Canadian prosperity and that renegotiation could lead to a national economic disaster.

That view has already been rebutted in a report by Scott Sinclair for the Canadian Centre for Policy Alternatives. He finds that a reversion to WTO tariffs and trade rules would have only a modest impact, albeit that some auto and agricultural exports would suffer. The key take-away is that we can afford to walk away from a bad deal if necessary.

The International Monetary Fund also do not see an economic disaster in the making in their latest country report on Canada.

In the first place, NAFTA has ultimately been quite disappointing in terms of the performance of the all important manufacturing export sector.

“Staff research has suggested that years of low labor productivity growth has eroded Canada’s external competitiveness in the manufacturing sector and caused a permanent loss of manufacturing capacity. The entry of China into the U.S. market following its accession to the WTO and the appreciation of the Canadian dollar during the oil boom in the mid-2000s made the problem worse. Canada’s early gains in NAFTA have been diminished. Today, Canada’s export share in the U.S. market for non-resource goods is about 11 percent, half of what it used to be in the mid-1990s.” P8.

Second, reversion to WTO tariffs would have only a modest short term impact and the economy as measured by GDP would soon recover.

“Scenario analysis of a tariff increase.

If the U.S. raises the average tariff on imports from Canada by 2.1 percentage points to the WTO most favored nation level, and there is no retaliation from Canada, simulations based on the IMF Global Integrated Monetary and Fiscal Model suggest a negative short-term impact on Canada real GDP of about 0.4 percent. The lower external demand weighs on exports, profits and disposable income, leading to permanently lower investment and private consumption. The Canadian dollar depreciates, softening the effect of the tariffs on exports, but increases the price of foreign goods. The trade balance deteriorates, then recovers as the exchange rate remains depreciated.”

One could add that the end of NAFTA would restore some significant policy space to Canadian governments. In short, we do not need to panic.

Book review: Understanding spatial media

I’ve just reviewed a new book about spatial media (and have written it from the vantage point of somebody working in Canada’s homelessness sector).

One point raised in the blog post is the fact that the language used when enumerating persons experiencing homelessness has an impact on policy discussions.

One point raised in the book itself is the fact that large subgroups of the world’s population have little if any Internet access—in Canada, this is particularly relevant to persons experiencing homelessness and to persons living in northern regions.

My full review can be accessed at this link.

Second Annual Canadian Homelessness Data Sharing Initiative

I’ve just blogged about the Second Annual Canadian Homelessness Data Sharing Initiative.

This is now an annual event that takes place in Calgary. It’s co-sponsored by the Calgary Homeless Foundation and the University of Calgary’s School of Public Policy.

A summary of the inaugural event (which took place in May 2016) can be found here, while the link to the just-published summary of the 2017 event is here.

Economists support $15 minimum wage in Ontario

We, the undersigned economists, support the decision to increase the minimum wage in Ontario to $15 an hour. Raising the wage floor makes good economic sense.

Today, Ontario’s minimum wage is $11.40 per hour. Adjusted for inflation, this is barely one dollar higher than its value in 1977. Yet over the same four decades, the average productivity of workers has increased by 40%. And the prevalence of minimum wage work is spreading. Around 1 in 10 Ontario workers make minimum wage today, with a large increase in this proportion over the last two decades.

Low wages are bad for workers as individuals. An individual working full-year, full-time on the minimum wage can still fall short of the poverty line. The situation for minimum wage workers trying to support families is no better—and evidence shows that this is increasingly what is asked of minimum-wage workers. The stereotype of the teenager living at home making minimum wage is out of date: over 60% of workers earning minimum wage in Ontario in 2015 were over the age of 20, as were over 80% of those making $15 or less.

But low wages are also bad for the economy. There are good economic reasons to raise the incomes of low-wage workers. Aggregate demand needs a boost. While Canada escaped the harshest impacts of the 2007-08 financial crisis, our country has also seen a slowdown in growth. We risk further stagnation without reinvigorated economic motors. As those with lower incomes spend more of what they earn than do those with higher incomes, raising the minimum wage could play a role in economic revival, improving macroeconomic conditions.

For years, we have heard that raising the minimum wage will kill jobs, raise prices and cause businesses to flee Ontario. This is fear-mongering that is out of line with the latest economic research. Using improved techniques that carefully isolate the effects of minimum wage increases from the remaining noise in economic data, the weight of evidence from the United States points to job loss effects that are statistically indistinguishable from zero. The few very recent studies from Canada that have used these new economic methods agree, finding job loss effects for teenagers smaller by half than those of earlier studies and no effect for workers over 25.

There are many possible reasons for minimum wage increases to lead to little or no job loss. Studies have found lower turnover, more on-the-job training, greater wage compression (smaller differences between higher- and lower-paid workers) and higher productivity after minimum wage increases. In short, raising the minimum wage makes for better, more productive workplaces.

The business lobby has also suggested that any minimum wage increases will simply be passed on as higher prices. First, the above-mentioned improvements will offset some part of the higher labour costs to business. Second, there is no instantaneous, automatic mechanism between higher labour costs and higher prices. Some of the costs not absorbed by increased efficiency may go to price increases, but these are likely to be small and, for low-wage workers, offset by higher incomes coming from rising wages. Furthermore, if we remember that over 1 in 4 workers in Ontario makes under $15 per hour, we should not treat slightly higher inflation as the main criterion of successful policy; instead we should focus on the substantial benefit to low-wage workers, their families and the economy as a whole.

Across North America, recent years have seen more minimum wages increases, some quite substantial. And so far, none of the doom-and-gloom predictions have come true. Seattle and the municipality of SeaTac, two of the first to institute minimum wage increases, continue to thrive even after increases. Of course, more rigorous studies will have to be conducted (as scientists we are excited by the prospect of new data to analyze) but so far the effects of minimum wage increases have been in line with the expectations of those of us who believe that raising the minimum wage is a positive step for workers and the economy.

Economics may be known as the “dismal science” but on the issue of the minimum wage many economists are ready to admit that the weight of evidence points to a strong case for raising the minimum wage. 600 of our colleagues in the United States, 7 Nobel Prize winners among them, signed a letter urging the United States government to raise the federal minimum wage to $10.10 an hour from the current $7.25—in percentage terms an even larger increase than that from $11.40 to $15 in Ontario. A further letter calling for a staged increase of the federal minimum wage to $15 was signed by 200 economists. There is no consensus against raising the minimum wage among our profession; indeed, the emerging understanding is quite the opposite.

We believe that raising Ontario’s minimum wage to $15 an hour is a good idea and one that is economically sound.

1. Abdella Abdou, Brandon University
2. Fletcher Baragar, University of Manitoba
3. Michael Bell, Manitoba Teachers’ Society
4. Sheila Block, Canadian Centre for Policy Alternatives – Ontario
5. Hassan Bougrine, Laurentian University
6. Michael Bradfield, Dalhousie University
7. Jordan Brennan, Unifor
8. Robert Chernomas, University of Manitoba
9. Robert W. Dimand, Brock University
10. Catherine Douglas, University of British Columbia
11. Lynne Fernandez, Canadian Centre for Policy Alternatives – Manitoba
12. Kelly Foley, University of Saskatchewan
13. Marc-André Gagnon, Carleton University
14. David Green, University of British Columbia
15. Marjorie Griffin-Cohen, Simon Fraser University
16. Pierre-Antoine Harvey, Centrale des syndicat du Québec
17. Rod Hill, University of New Brunswick
18. Ian Hudson, University of Manitoba
19. Mustapha Ibn Boamah, University of New Brunswick
20. Gustavo Indart, University of Toronto
21. Iglika Ivanova, Canadian Centre for Policy Alternatives – British Columbia
22. Andrew Jackson, Carleton University
23. Mohsen Javdani, UBC Okanagan
24. J. Rhys Kesselman, Simon Fraser University
25. Anna Klimina, University of Sasketchwan
26. Marc Lavoie, University of Ottawa
27. Marc Lee, Canadian Centre for Policy Alternatives – British Columbia
28. John Loxley, University of Manitoba
29. David Macdonald, Canadian Centre for Policy Alternatives
30. Angella MacEwen, Canadian Labour Congress
31. Hugh Mackenzie, Canadian Centre for Policy Alternatives
32. Brian MacLean, Laurentian University
33. Fiona MacPhail, University of Northern British Columbia
34. Joan McFarland, St. Thomas University
35. Anthony Myatt, University of New Brunswick
36. Lars Osberg, Dalhousie University (past President of the Canadian Economics Association)
37. Patricia E. Perkins, York University
38. Mathieu Perron-Dufour, Université du Québec en Outaouais
39. Craig Riddell, University of British Columbia (past President of the Canadian Economics Association)
40. David Robinson, Laurentian University
41. Louis-Philippe Rochon, Laurentian University
42. Michal Rozworski, Ontario Confederation of University Faculty Associations
43. Toby Sanger, Canadian Union of Public Employees
44. Mario Seccareccia, University of Ottawa
45. John Serieux, University of Manitoba
46. Garry Sran, Alberta Union of Public Employees
47. Jim Stanford, McMaster University
48. Kaylie Tiessen, Unifor
49. Peter Victor, York University
50. Jesse Vorst, University of Manitoba
51. Barry Watson, University of New Brunswick
52. Armine Yalnizyan, Public Economist
53. Vicki Zhang, University of Toronto

A PDF version of this letter is available here.

The NDP and Old Age Security

NDP leadership candidate Jagmeet Singh has proposed (with few details) to reform the current Old Age Security system by integrating Old Age Security (OAS) and the Guaranteed Income Supplement (GIS.)

“A Jagmeet Singh-led government will implement the Canada Seniors Guarantee to ensure that no Canadian senior has to live in poverty. The Canada Seniors Guarantee will combine a number of existing seniors’ benefits into a single, income-tested benefit. This includes Old Age Security (OAS), the Guaranteed Income Supplement (GIS), the Age Credit, and the Pension Income Credit. By adding the Age Credit and the Pension Income Credit, an additional $4 billion will be added to the core benefits provided by OAS-GIS.”

Here I offer a mildly critical analysis. Just to be clear, I think Singh is an excellent leadership candidate and he has put forward positions on other issues which I strongly support.

Currently, all Canadian seniors are (subject to a lifetime residence requirement) eligible to collect a monthly OAS benefit of $578. This is an individual benefit, and is only income-tested at high incomes. (OAS is phased out when individuals have an annual income above $74,000 and is lost completely at an annual income of $120,000 or more.)

The GIS is an income supplement for low income singles and couples. For couples it pays a maximum of $1140 per month, which is lost completely when the combined income of the couple exceeds $23,000 (not counting OAS income.) About one in three of all seniors qualify for some GIS.

While some progressives have been critical of creating a combined seniors benefit, it should not be rejected out of hand. The proposal is modelled on the current system of child benefits which was championed by anti poverty groups and is based on family income and slowly phased out to zero for high income families with children. As noted, OAS is already clawed back for very high income seniors. True universality (as used to be the case with family allowances for children and universal OAS) no longer exists. Some progressive social policy groups, notably the Caledon Institute, have favoured a seniors benefit as did, temporarily, the Chretien government. (They backed off under strong political pressure.)

Singh’s proposal to fold in the pension and age credit to OAS and GIS is progressive. And the impact of his proposal to integrate OAS and GIS would be more or less progressive depending upon the exact parameters. The intent is clearly to re-distribute fiscal resources from more to less affluent seniors and to counter the recent increase in seniors poverty, especially among single, very elderly women.

All that said, I favour retention of OAS.

We should bear in mind that the rationale for income transfer programs includes income stabilization and replacement for individuals, not just redistribution of family income. Traditionally, social democrats have favoured universal public pensions, paid for from taxes and premiums, and universal Unemployment Insurance coverage to cover individuals against the predictable risk of income loss due to old age, unemployment and disability (though CPP disability benefits are very meagre.) We have also generally accepted income-tested programs such as GIS and child tax credits which have an explicit anti poverty objective.

The current near universal payment of OAS (subject to income tax it should be noted) provides individuals with a predictable pension on top of CPP. CPP and OAS combined provide only a modest, predictable, inflation adjusted pension for life. If OAS were to be significantly rolled back for middle and higher income seniors, they would have to increase their reliance on costly and unpredictable RRSP savings. Individuals would also have to make savings decisions over their lifetimes in ignorance of what their incomes would be in retirement.

Further, there is an increasing trend for seniors over age 65 to combine public pension income with earnings from employment. The GIS claw back at modest income levels already punishes seniors who choose to work with high marginal tax rates. (Claw back rates should be reduced.) Integrating OAS and GIS would push the problem higher up the income scale.

We should also be careful about going too far in terms of family income testing. Women still have significantly lower annual earnings than men, and family income testing OAS would result in a loss of benefits for women depending upon the retirement income of a spouse

In conclusion, proceed with caution.

Canada Lags in Job Quality

The 2017 OECD Employment Outlook provides an assessment of member country performance in terms of the quantity and quality of employment as judged by a new set of key indicators.

Overall, we do well in terms of job quantity. The employment rate (the proportion of the working age population with jobs) stands at 72.5% compared to an OECD average of 66.4%. However, the Scandinavian countries rank higher for this indicator (eg Sweden, 75.5%.)

It is interesting to note that the employment rate in the United States is, at 68.7%, just a bit above the OECD average. Poor job quality does not provide an obvious boost to jobs.

The gap between the employment rate of prime age men and disadvantaged groups (each of youth, older workers, young mothers, persons with disabilities) is slightly below average in Canada, but well below leading countries.

The annual gender earnings gap in Canada is slightly worse than the OECD average of 39.0% – women earn 39.7% less here than do men, compared to a gap of 24.4% in Sweden. And unlike most other countries, progress in closing the gender gap has stalled.

Where we fare especially badly is in terms of low income. The low income rate for the working age population (percentage with incomes below one half of median annual income) is 12.8% in Canada compared to an average of 10.6% for the OECD, and just 9.4% in Sweden and 6.7% in Denmark.

Canada could and should be doing much better.

http://www.oecd.org/els/oecd-employment-outlook-19991266.htm

The Wage Structure, Rents and Urban Inequality in Canada

Richard Florida’s new book, The New Urban Crisis (Basic Books, 2017) takes a careful look at rising inequality in big cities in the United States. He details the fact that many of the winners of today’s economy, the top 1% and top 10%, are located in a small number of “superstar” cities such as New York, Los Angeles, the Bay area, Washington and Boston where well paid jobs in higher education, finance, tech, higher education and entertainment are highly concentrated.

These cities are increasingly polarized between very rich and poor neighbourhoods as the affluent and young professionals return to the city while soaring rents and house prices force the middle-class and many of the poor out to the deteriorating older suburbs.

Similar but less extreme patterns have been found in Canada by David Hulchanski of the University of Toronto and other urban geographers who have documented increased income polarization and erosion of the middle-class and mixed income communities in Toronto in particular.

Statistics Canada recently released data from the Job Vacancy and Wage Survey which show hourly earnings of full-time workers by detailed occupation by city as well as for rural areas. (See CANSIM Table 285-0050.) These provide some insight into the question of whether earnings in Canadian cities are highly polarized.

WAGES BY CITY
Senior Managers Sales and Service Ratio
All $52.40 (100%) $18.85 (100%) 2.8
Halifax $44.10 (84.2%) $17.50 (92.8%) 2.5
Montreal $49.60 (94.7%) $20.90 (110.8%) 2.4
Toronto $63.70 (121.6%) $20.35 (108.0%) 3.1
Calgary $62.50 (119.3%) $19.30 (102.4%) 3.2
Vancouver $55.30 (105.5%) $19.10 (101.3%) 2.9
Hourly Wage of Full Time Workers. CANSIM 285-0050

 

The Table shows earnings of the highest and lowest paid broad occupational categories, senior managers, and sales and service workers, for Canada and for selected cities. As shown the ratio of the highest to the lowest paid group is 2.8 at the national level, meaning that senior managers earn on average 2.8 times as much as sales and service workers. But the ratio is significantly greater in Calgary (3.2) and Toronto (3.1)

Unsurprisingly, the most highly paid senior managers are to be found in Toronto and Calgary which are major financial centres and the home of many corporate head offices.

What is interesting is the relatively more uniform level of hourly earnings of sales and service workers. These are only very modestly above the national average in Toronto (108.0%), Calgary (102.4%) and Vancouver (101.3%.) And sales and service wages in these cities actually lag behind Montreal.

House prices in Vancouver and Toronto are, of course, far higher than the national average, as are rents. CMHC data show that the average monthly rent of a two bedroom apartment in Toronto is $1327 and $1450 in Vancouver (and $1258 in Calgary), compared to a national average of $962 per month and just $668 in Montreal.

Richard Florida highlights the low incomes of urban service workers in many big US cities after adjusting for inflated rents. This is clearly also a problem in some of Canada’s most successful big cities.

Fiscal situation of Canada’s ‘oil rich’ provinces

I’ve just written a blog post about the fiscal situation of Canada’s ‘oil rich’ provinces (i.e., Alberta, Saskatchewan and Newfoundland and Labrador). It consists of a summary of key points raised at a PEF-sponsored panel at this year’s Annual Conference of the Canadian Economics Association.

Points raised in the blog post include the following:

-The price of oil is impossible to accurately predict, and there’s no guarantee it will rise to past levels.

-Each of Canada’s ‘oil rich’ provinces should therefore find other ways of financing future spending.

The full blog post can be found here.

Monitoring Program Performance in Calgary’s Homeless-Serving System of Care

I’ve just written a blog post discussing how program performance is monitored in Calgary’s Homeless-Serving System of Care.

Points raised in the blog post include the following:

-The Calgary Homeless Foundation (CHF) is the System Planner for Calgary’s Homeless-Serving System of Care (full disclosure: I work as CHF’s Director of Research and Data). As System Planner, CHF disburses approximately $42 million annually to programs in Calgary that assist households experiencing homelessness (I’ve previously blogged about those various programs here).

-CHF also monitors performance of the programs it funds; it uses Key Performance Indicators (KPIs) as part of that effort.

-CHF has recently unveiled new KPIs (which are the subject of my new blog post).

The link to the new blog post is here.

A Post-Keynesian Summer School – TORONTO – June 23-25, 2017

The Review of Keynesian Economics and the Progressive Economic Forum are sponsoring a

“Post-Keynesian Summer School”, to be held on the campus of the University of Toronto, June 23-25, 2017, and featuring leading post-Keynesian scholars from Canada, the US, and Europe.

The summer school is aims at both undergraduate and graduate students, and registration is only $25 US per person, which includes all coffee breaks.  In addition, Edward Elgar Publishers has graciously donated a number of important post-Keynesian books that will be given away at the end of the school.

 

The programme

9h15: Welcome address
Louis-Philippe ROCHON (Laurentian University, Canada)

9h30 – 10h30: What is post-Keynesian economics?
Louis-Philippe ROCHON (Laurentian University, Canada)

10h30 – 11h00: Coffee Break

11h00 – 12h30: The role of fiscal policy and the state in post-Keynesian theory
Mario SECCARECCIA (University of Ottawa, Canada)

12h30 – 13h45: Lunch

14h00 – 15h30: The role of debt in post-Keynesian economics: Real and financial components
Joelle LECLAIRE (SUNY- Buffalo State, USA)

15h30 – 16h00 Coffee Break

16h00 – 17h30: The importance of interdisciplinary research in post-Keynesian economics
Guillaume VALLET (University of Grenoble – Alpes, France) and  Nicolas ZORN (University of Montréal, Canada)

 

SATURDAY, June 24, 2017

9h00 – 10h30: A history of endogenous money/monetary policy in post-Keynesian analysis
Louis-Philippe ROCHON (Laurentian University, Canada)

10h30-11h00: Coffee Break

11h00 – 12h30: Post-Keynesian theories of financial stability
Esteban Pérez CALDENTEY (ECLAC, Chile)

12h30-13h45: Lunch

14h00-15h30: A history of central banking
MatÍas VERNENGO (Bucknell University, USA)

15h30-16h00: Coffee Break

16h00 – 17h30: A post-Keynesian approach to development: The case of Africa
Salewa ’Yinka OLAWOYE (Ryerson University, Canada)

SUNDAY, June 25, 2017

9h00 – 10h30: Some theoretical roots of post-Keynesian economics
Robert DIMAND (Brock University, Canada)

10h30 – 11h00: Coffee Break

11h00 – 12h30: An introduction to mathematics for heterodox economists
Matheus GRASSELLI (McMaster University, Canada)

12h30 – 12h45: Saying Goodbye

Income Inequality Surged Under Harper

Just as Conservatives gathered to elect a new leader, Statistics Canada released income data for 2015. These allow us to look at trends under the full term of the Harper Government from 2006 to 2015.

Average after tax income of economic families rose over this period – from $68,200 to $76,900 in inflation-adjusted dollars. But the gains were very unfairly distributed.

The after tax income share of the top 10% of families and persons rose from 27.2% to 27.7% and that of the next 10% rose from 16.7% to 17.0%. Thus the share of income of the top 20% rose by almost one full percentage point from 43.9% to 44.7%. The share of the all income groups in the bottom 80% fell under Harper.

The poverty rate (low income measure after tax) under Harper rose from 13.4% to 14.2%, mainly because of a big jump in the low income rate for the elderly which rose from 10.2% to 14.3%.

Data from CANSIM 206-0041 and 206-0011.

Precarious work, Federal government edition

There was a recent article in the Hill Times about temporary workers in the federal public service, noting that this number is growing even under Trudeau’s sunny ways (that’s not entirely fair, the report only covered the first 5 months of the Liberal’s tenure).

The numbers come from the Privy Council clerk’s annual report, which shows that the number of temporary and contract workers in the federal public service increased by 2,800 between March 2015 and March 2016, to 35,000 workers, or about 13% of the total federal public service.

Because the recent Changing Workplaces Review from Ontario was on my mind, and the recent attention on the abuses of temporary employment agencies, I wondered if we even knew how many temporary agency workers there are in the federal public service, or the federally regulated sector.

From the Annual Survey of Service Industries: Employment Services, we do know the size of the Employment Services Industry – $13.3 billion in 2015, and we know that over half of that was temporary staffing. Government and non-profits make up about 10% of sales – but there would also be temporary agency workers placed in transportation and telecommunications, for example, and that breakdown wasn’t available here.

I had better luck with the Federal Jurisdiction Workplace Survey (FJWS). This survey covers industrial companies under the federal jurisdiction (not workers directly employed in the federal service). In 2015 the FJWS asked about the number of temporary workers paid through an employment or personnel agency over the course of 2015. Employers reported 60,000 workers paid through temporary agencies, most of these workers were employed with large workplaces. The breakdown by company size and industry is shown below.

Distribution of temporary workers paid through an employment agency, 2015

# of employees
Company size
1 to 5 employees 900
6 to 19 employees 800
20 to 99 employees 1,300
100 employees and more 57,100
Industry
Air transport 800
Rail transport x
Road transport 4,600
Maritime transport x
Postal & pipelines 39,700
Banks 8,100
Feed, flour, seed & grain 300
Telecomm & broadcasting 6,000
Miscellaneous industries 300
Total 60,000

Source: FJWS (2015)

Note: The “x” indicates that the data has been suppressed due to confidentiality concerns as required by the Statistics Act.

This all tells me two things. First, it is totally reasonable to look at ways to protect precarious workers in the federal public service and the federally regulated sector (remember all that noise about the NDP federal minimum wage promise not helping anyone?), and second – we need better data to do it.

 

Ontario’s Electricity Sector III: Legislative & Finance Update

My January and April posts on the Ontario electricity sector described how decisions by different Ontario governments gave rise to excess electricity generation with an inflated cost structure, leading to higher electricity prices. Here I discuss the latest development, the Liberal Government of Ontario’s proposed financial framework for its “Fair Hydro Plan” (FHP). In election mode, the Government tabled Bill 132 on May 11, introducing a mechanism to finance the FHP, creating a 17% price reduction in the short-term, but failing to acknowledge the significant price increases and massive debt that will result in the long-term. Although opposition parties have come out forcefully against Bill 132, the Liberal Government has a legislative majority and has time-allocated debate, so it will likely become law before the Legislature rises for summer. This post provides financial projections related to the FHP and shows that it is driven by craven electoral calculations rather than efficiency or equity considerations. I also review the financial and governance provisions in Bill 132, highlighting the risk that the type of “structured finance product” (SFP) being introduced in this legislation could be imposed elsewhere in Canada. Read more »

NAFTA and Labour Rights

I recently spoke at the Standing Committee on International Trade on their study “Priorities of Canadian Stakeholders having an interest in Bilateral and Trilateral trade in North America, between Canada, United States and Mexico”.  I share my notes with you here, although I did ad-lib a bit in the actual committee meeting.

**********************

The labour movement is keenly aware that trade is, and always has been, an important feature of the Canadian economy. Many of our jobs depend on trade. We understand that all governments have an interest in fostering open trade.

Part of the problem we now face is that distributional impacts of trade and investment agreements have long been ignored. We are told that trade deals will have winners and losers, but not to worry – we can compensate the losers. In my opinion, the failure to compensate those who have been affected by negative trade shocks has led to growing inequality, and a nationalist sentiment in many developed nations.

More than 20 years after signing on to the North American Trade Agreement (NAFTA), the ways it has failed working Canadians are very clear. Canadians were told that NAFTA would create good jobs, shared prosperity, and a better future for working people. Instead, far from generating good jobs and prosperity, NAFTA has undermined secure, well-paid employment and devastated manufacturing and processing industries and the communities that depend on them. While there has been increased trade and economic growth, large corporations and investors have gained the most, leaving workers behind. NAFTA doesn’t just govern trade, but empowers foreign investors to sue Canadian governments, threatening public services and limiting the ability of governments to regulate in the public interest. This so-called free trade agreement has not fostered fair or balanced trade.

One of the critical gaps in NAFTA is labour rights. While NAFTA was one of the first trade agreements to incorporate a side agreement on labour and environmental rights, it was weak and non-enforceable. A stronger labour chapter, building on the recent labour chapters found in CETA and TPP, would be an improvement for labour rights in North America.

This alone will not be enough. The scope of national labour legislation has become inadequate to protect workers in an era of globalization, and we are facing significant governance gaps. A lack of transparency and asymmetrical relationships in supply chains, combined with competition from low income nations for foreign investment and jobs, actually undercuts the ability of free trade to be ‘fair’.

We see this in post-NAFTA Mexico. NAFTA was supposed to raise wages and working conditions in Mexico, lift workers out of poverty, and increase domestic demand. Instead, wages have stagnated, inequality has increased, and whole sectors have been wiped out.

Only about 1% of Mexican workers belong to a democratic union. Most workers are covered by ‘protection contracts’ – agreements between the company and company approved union. Workers don’t even have the right to see their collective agreement. If workers try to vote in a democratic union, the results are often ignored, or even worse, union organizers face harassment and threats.

What are some of the solutions? The federal government recently announced its intention to ratify ILO convention 98 on the Right to Organize and Collective Bargaining. Neither Mexico nor the United States has ratified this convention yet. We should encourage the United States and Mexico to ratify all eight core labour conventions.

None of the three North American nations have ratified the ILO governance convention 81 on Labour Inspections. This is a key convention that ensures that workers have access to the rights that we have all agreed to, and that employers who violate those rights face consequences.

Other responses include:

  • passing legislation on due diligence for Canadian companies operating abroad, similar to legislation that has recently been passed in France;
  • working on a framework for transnational bargaining;
  • working within the ILO, OECD Guidelines for Multinational Enterprises (MNEs), and strengthening Canada’s national contact point.

We are glad to hear the Canadian government state publicly that it is willing to walk away from a deal that is not in Canada’s best interest. It is time to take a new approach to trade that puts the interests of working people and the environment first.

Ten things to know about social assistance in Canada

I’ve just written a blog post about social assistance in Canada. Points raised in the blog post include the following:

-Social assistance has two contradictory objectives: 1) to give people enough money to live on; and 2) to not give people enough money to live on.

-Very few immigrants receive social assistance (relative to the general population).

-Several Canadian provinces have seen a rise in persons with disabilities receiving social assistance.

-The inadequacy in social assistance coverage and benefit levels puts a strain on other parts of Canada’s social welfare system (e.g., social housing).

-When a person applies to receive social assistance but is denied, no systematic effort is made to track what happens to that person.

-Recent research suggests that a modest increase in social assistance benefit levels would likely reduce demand for emergency shelter beds.

The full blog post is available at this link.

POST-KEYNESIAN SUMMER SCHOOL – Toronto – June 23-25, 2017

The Review of Keynesian Economics (ROKE) and the Progressive Economic Forum (PEF) are hosting a:

“Post-Keynesian Summer School”, on the campus of the University of Toronto, June 23-25, 2017.

Over 2 and a half days, the summer school will introduce students to post-Keynesian economics, both theory and policy, and will feature some of the biggest names in post-Keynesian economics.  Registration is only $50 US, and includes all coffee breaks and a reception.

Read more »

A tale book-ended by two Trudeaus: Canada’s foreign aid since 1970

Soon after the 2015 federal election, Prime Minister-designate Justin Trudeau affirmed that Canada was back as a “compassionate and constructive voice in the world” after a decade of Conservative governments. One of the most important means by which any industrialized country interacts with the developing world is via the amount, composition and effectiveness of its foreign aid, which can help boost human and economic development, mitigate humanitarian crises and reduce environmental degradation. There are many types of “foreign aid”, but the most widely-accepted and quantified is Official Development Assistance (ODA).

In this post I focus on the amount of Canada’s ODA from a historical, OECD and global (United Nations) perspective. As outlined below, based partly on former Canadian PM Lester Pearson’s global leadership, in 1970 the UN established an ODA target of 0.7% of GDP. As a number of other analysts have pointed out, Canada was an ODA leader in the 1970’s; however, since that time, Canada’s performance has slipped, and is now well below that of most comparator countries. I find that the majority of this decline is due to a decrease in ODA budget allocation, primarily a political (rather than fiscal) decision. Canada’s ODA will continue to decline and is forecast to hit historical lows by 2021. PM Justin Trudeau appears to want to enable most Canadians’ wish to see themselves as compassionate global citizens; the reality, however, is that the current Liberal Government has not reflected this desire in its ODA budgetary decisions. Canada can and should do better. Read more »

Program Evaluation

I’ve just blogged about program evaluation and the way it’s used where I work—namely, at the Calgary Homeless Foundation (CHF).

The blog post serves as a primer on program evaluation. It also discusses how CHF measures performance by programs that it funds (CHF disburses $42 million annually to programs in Calgary’s homeless-serving sector).

The blog post can be found at this link.

The introduction and evolution of child benefits in Canada

Allan Moscovitch and I have co-authored a blog post that looks at the history of child benefits in Canada.

Points made in the blog post include the following:

-Child benefits can reduce both poverty and homelessness.

-When child benefits began in Canada after World War II, one major motivating factor for the federal government was to avoid recession. Another was to fend off social unrest (i.e. Canada’s growing labour movement and the growing popularity of the CCF).

The full blog post can be read here.

Advocacy in Canada’s Affordable Housing and Homelessness Sectors

I’ve just written a blog post on advocacy in Canada’s affordable housing and homelessness sectors.

In the post, I define advocacy as “a collective effort to bring about changes to political priorities, funding levels, legislation, regulations or policies.” I also discuss seven approaches to advocacy in Canada’s affordable housing and homelessness sectors.

The full blog post can be found at this link.

A Response to the 2017 Saskatchewan Budget

I have an opinion piece on Saskatchewan’s recent budget in the Regina Leader-Post.

Points raised in the opinion piece include the following:

-Reductions in personal and corporate income taxes help the rich more than the poor (and this budget cut both personal and corporate income taxes).

-Increases in sales tax hurt the poor more than the rich (and this budget increased both the breadth and the rate of the provincial sales tax).

-A one-dollar increase in government spending on public services (e.g., on health, education or child care) creates more jobs than a one dollar reduction in any tax. This budget decreased program spending.

The full opinion piece can be accessed at this link.

Ontario’s Electricity Sector II: Political Economy Update

This is a third guest post by Edgardo Sepulveda, who is a Toronto-based expert in telecommunications and regulatory economics.  Twitter: @E_R_Sepulveda


 

By Edgardo Sepulveda

In my previous post of January 29 I described how decisions by different Ontario governments gave rise to excess electricity generation with an inflated cost structure, leading to higher electricity prices and increased inequality. Since then, the Ontario Minister of Energy delivered a “mea culpa” speech on February 24 (the “Minister’s Speech”) that was followed on March 2 by a Liberal Government announcement to reduce electricity prices starting June (the “Liberal Plan”). The Liberal Plan is currently in the form of a press release and hence the Government will be required to introduce proposed legislation to give it legal effect. On February 27 the opposition NDP also announced its own election-style plan, including a reduction in prices (the “NDP Plan”) The opposition Conservative Party (“PC”) has now announced that it will release its electricity proposals as part of its overall election platform before the June 2018 provincial election. This post provides updated analysis of the issues I discussed previously, taking into account these recent announcements, which are summarized in Table 1.

Read more »

Ten Things To Know About The 2017 Federal Budget

I’ve just written a blog post in which I review the recent federal budget.

Points raised in the blog post include the following:

-The federal government is projecting deficits in the $20B-$30B range for roughly the next five years.

-This was likely the most important federal budget for housing since 1993.

-The budget contains important new announcements for homelessness (my blog post provides a nice bar graph showing newly-announced homelessness funding, which was put together by my colleague Janice Chan).

The link to the full blog post is here.

Transit costs are too darn high

Public transit is a key piece of urban infrastructure, important for getting people where they want to go while limiting congestion and pollution. A central part of the federal government’s infrastructure plan involves expanding and improving public transit, through their newly established Public Transit Infrastructure Fund.

Note that Budget 2017 allocates some amount of the total public transit funding to the Canada Infrastructure Bank, the Smart Cities Challenge, and Superclusters (really?), so I have only included the amount committed to the Public Transit bilateral agreements here.

This falls short of what the Green Economy Network recommended – we estimated the need to be closer to $1.76B annually from the federal government (Table 2), which would lead to a reduction of between 11-20 Mt of GHGs annually, but we are talking about committing serious funding to transit, which is good.

The language around the investment in public transit focuses on reducing congestion, lowering GHGs, and shortening commute times, all issues that the Federation of Canadian Municipalities (FCM) identified in their transit campaign. What isn’t mentioned though, is affordability.

And the cost of a monthly transit pass is, frankly, too. darn. high.

Which is why commuters across Canada were not pleased when Budget 2017 eliminated the (non-refundable) tax credit which allowed users to claim monthly transit passes. While the tax credit wasn’t perfect, it did do something to defray the cost of transit for about 1.7 million transit users.

The justification given by the federal government for getting rid of the tax credit is that it mostly benefited higher income families, and had no measurable impact on increasing ridership. Since it is a non-refundable tax credit (you don’t get anything if you don’t have taxable income), it likely didn’t benefit low income families much. But it is for public transit, so one would guess it benefits the middle of the spectrum, rather than high income folks.

The tax credit could be shared between spouses and their children under 19, so the relevant unit of analysis here is a census family.

You can see that higher income families get a higher average return from the tax credit, and that about a third of families benefiting from the credit have household incomes over $100K. But interestingly, about half of the total tax expenditure is for families with a total annual income below $75,000, and half is for families with incomes above that amount. Median total income in 2014 was $78,870, so that’s a pretty fair distribution for a non-refundable tax credit.

On top of this, there were other tax credits with more skewed distributional benefits that were left untouched. No wonder Toronto and Vancouver transit users are crying foul.

How about a gender lens? According to CRA T1 Final Statistics for the 2014 tax year, women made up about half of the taxfilers claiming the public transit credit. What’s interesting is the age distribution – slightly more men in core working age groups claim the credit, but both older and younger women outnumber men in their age groups.

With all of that in mind, what kind of policies would a social democrat like myself suggest?

First, I would recommend that some amount of the infrastructure funding be tied to affordability. Some provinces and / or municipalities have subsidized passes, but the current system is failing many low income transit users, and getting out of range for even median income folks.

Secondly, if I were going to eliminate the tax credit entirely, I would at least wait until Phase 1 of the transit infrastructure plan was complete. Removing the subsidy from riders before the spending has had a chance to show improvements to the system could hurt ridership and revenues during this rebuilding phase.

If I wanted to keep the tax credit, I would modify it so that it is refundable, individual, and phased out at higher incomes (say, anything over the median income).

Finally, I would look at ways that we’ve prioritized cars in our cities. Policies such as congestion pricing could raise revenues to support public transit, and provide an added incentive for car users to switch to transit.

This is a great example of how policy design needs to keep distributional impacts in mind, so that we’re not further hurting low income families as we’re racing to meet our commitments on climate change.

A Review of the 2017 Alberta Budget

Over at the web site of the Calgary Homeless Foundation, I’ve written a review of the recent Alberta budget.

Points I make in the blog post include the following:

-Alberta remains the lowest-taxed province in Canada.

-Alberta’s net debt-to-GDP ratio remains the lowest in Canada.

-For the third consecutive year, the Rachel Notley government announced a tuition freeze for (domestic) post-secondary students.

-No major changes were announced to social assistance benefit levels. Thus, a “single employable” adult on social assistance in Alberta will continue to get approximately $8,000 a year to live on.

The link to my full review of the budget is here.