The Progressive Economics Forum

Statistics Canada revealed today that, in the fourth quarter of 2007, we ran a current account deficit for the first time since 1999.
It is difficult to get a handle on what pushed us into deficit because the raw and seasonally-adjusted numbers paint quite different pictures of quarterly changes. The raw numbers indicate that, from the third [...]

I’ve posted below some interesting comments from Richard Shillington, a senior associate at Informetrica Ltd - who among many other accomplishments has drawn attention to very high effective tax rates on low income Canadians, and the failure of many programs to reflect the realities of life in low income.  I think Richard advances a good [...]

Several articles in today’s Globe and Mail assume that the US Democratic Party’s desire to renegotiate NAFTA threatens Canada. On the contrary, Canadians should welcome this initiative.
Senators Clinton and Obama have called for limits on the ability of foreign investors to directly challenge public policy under NAFTA’s notorious Chapter 11. Canada has been the victim [...]

If anyone had any doubt…

I want to piggy-back very briefly on Marc’s post from Tuesday (and update yesterday) which suggested that the proposed Tax-Free Savings Account won’t “promote investment” like the government says it will (see page 76 of Budget). The empirical literature I’ve seen certainly supports his argument — most corporate investment is financed from retained earnings, which [...]

The federal Budget kicked in a rather hefty $240 Million subsidy to a proposed new SaskPower coal-fired power plant that will demonstrate CCS technology. Perhaps this is a good thing which should be welcomed - climate change activists sound vaguely impressed - but I wonder if  we should be so heavily subsidizing CCS, as opposed [...]

Usually when expectations are lowered it is so that they can subsequently be exceeded. So budget watchers were all wondering in the past few days what the surprise in this budget would be. Alas, the surprise is that there is no surprise. As expected we got a do-nothing budget, albeit one with a glossy cover [...]

Finance Minister Jim Flaherty set very low expectations for the Harper government’s third budget – and managed to deliver even less.     
There is nothing in this budget for public health care, childcare, poverty or homelessness, very little for the environment or for Aboriginal Canadians, nothing for working Canadians, nothing for women, nothing to improve public pensions, [...]

The government has announced in the Budget that it is creating a new, independent Crown Corporation, the Canada Employment Insurance Financing Board (CEIFB) to manage a separate EI bank account, and to set premiums from 2009 on. This responds to employer concerns re paying EI premiums which are “too high” as opposed to worker concerns [...]

Thanks Adrew, Erin, Marc for the nice budget analysis.
Far from my mind to take people’s attention from it but while I was listening live to its delivery on CBC, I remembered an article I had read a couple of weeks ago on Cyberpresse (sorry, in French, am looking for the English counterpart). It stated [...]

Excellent analysis by Marc and Andrew leaves me with relatively little to add. The Steelworkers and NDP made many of the same points.
Budget 2008’s minor new investments in public programs will amount to only one-sixth the value of recent corporate tax cuts during the next fiscal year. Budget 2008 (Table 1.1, page 10) proposes $1.4 [...]

http://canadianlabour.ca/index.php/budget_analysis/1339

I’ll post a fuller analysis later, but here are my notes from the lock-up:
What We Got - An Overview of Conservative Priorities
The centrepiece of the Budget is a new tax exempt savings vehicle which begins small, but will ramp up over time to eventually remove a high and rising proportion of investment income from income [...]

Jeffrey Simpson really loves Gordon Campbell. Having done a series of columns on BC’s carbon tax, its clever political packaging and the leader behind it – all in all, not a bad set of columns – Simpson completely loses touch on the health care side of the provincial budget. He buys hook, line and sinker [...]

http://www03.cmhc-schl.gc.ca/b2c/catalog/z_getpdf.jsp?pdfkey=2913653764704560038976021471679303982482875120909016402/65901.pdf
CMHC have published a joint study with StatsCan on the dynamics of housing affordability, 2002 to 2004. Affordable housing is defined as paying more than 30% of household pre tax income on shelter costs. Annually published cross sectional estimates show that about 20% of Canadians were paying too much for housing in any given year [...]

Richard Ziegler has recently written and published a book called “Reclaiming The Canadian Left” which is worth a read. For details see http://www.richardziegler.ca/  He argues that the Canadian left has largely renounced economic equality as a goal. I’m broadly sympathetic to his argument that the left has indeed abandoned the radically egalitarian [...]

Everybody seems to think that next week’s federal budget will be a pretty boring, stay the course, “prudent” document because there is almost no room for fiscal manouevre. I wonder.
True, there is next to no surplus left for 2008-09 due to the big Conservative tax cuts made last Fall. But Flaherty is still sitting [...]

Yet another StatsCan study to confirm ever-increasing inequality over a period of falling unemployment  - this time measured in terms of changes in real hourly wages over the past decade, 1997-2007, based on Labour Force Survey data.
Earnings in the Last Decade by Rene Morissette. http://www.statcan.ca/english/freepub/75-001-XIE/2008102/pdf/10521-en.pdf 
Among the highlights:
Real Average hourly earnings (AHE) of private sector employees [...]

There has been so much discussion of income splitting on this blog that we already have two posts entitled “Income Splitting Redux.” Adding to the mix, the Institute for Research on Public Policy has released a major paper by Jon Kesselman on the subject. He cites my Ottawa Citizen op-ed among many other sources.
I have [...]

Patrick Brethour in the Globe and Mail writes:
Consumers will pay about one-third of the new carbon tax, but will receive close to two-thirds of tax rebates, totalling $338-million in the 2008-09 budget year. B.C. businesses, which will pay two-thirds of the new tax, will receive only about half of that money back from reduced corporate [...]

Since the provincial Liberals came to power in 2001 I have seen a lot of BC Budgets and not been too happy with any of them. Until now. Today’s 2008 model is a very interesting budget, and while I have a number of quibbles, I support the overall direction. And as in the recent past [...]

It looks like Jim has hit the pig again. The “Research Report” in the Tax Expenditures and Evaluations released by Finance Canada today cites one of his excellent pieces on corporate tax cuts.
Finance Canada overtly takes on the critique of corporate tax cuts put forward by this blog, the labour movement, and the NDP. Its [...]

The federal finance department just released its Tax Expenditures and Evaluations report for 2007. This annual report includes the estimates and projections of revenues that the federal government loses from different tax credits, deductions, exemptions and other tax expenditures. 
The number of these loopholes has proliferated in recent years as the Conservatives have used boutiquey tax [...]

EPI News
Focus on Manufacturing
With layoffs and cutbacks becoming routine, it is tempting to write off U.S. manufacturing as an anachronism. However, a new set of EPI reports shows that actually making things remains an essential part of the economy, and can continue to be a source of good jobs. [...]

With recession on everyone’s lips south of the border, how much longer can Canada hold out before we begin to feel the nasty effects in the Great White North? I am guessing that the Tories want to go to the polls now because they know the economy is slipping and they do not want to [...]

The latest from the Fraser Institute concludes that BC’s 2001 tax cuts spurred economic growth, investment and all other good things. To their credit, this is a far more sophisticated analysis than one usually sees from the Fraser. Rather than relying on the in-house talent, they farmed the work out to University of Alberta economist [...]

Today, Statistics Canada revealed that our December 2007 merchandise trade surplus was the lowest one since November 1998. This fact is yet more evidence that the rise in energy exports has been smaller than the decline in exports from manufacturing and other sectors.
The conventional story about high oil prices driving-up the loonie assumes that these [...]

With the US convulsed by massive defaults on household debt and a resulting banking crisis, the question of whether we are in anywhere near the same dismal state seems germane. The bank economists typically proclaim that all is well compared to the excesses south of the border, but that does seem a trifle self-serving given [...]

The Tyee ran a piece by yours truly that is an edited-down version of my UCC Blues blog posts from last fall. David Beers did an amazing editing job on my reworked article:
My Rich Kids Reunion

UCC circa 1915.
A tax-the-rich economist [...]

Jeffrey Simpson makes a remark in today’s column that you heard here first:
Mr. Flaherty has been bragging that the second GST cut was clairvoyant, because it added stimulus for an economy now slowing.
This observation is laughably bogus. The government did not see the slowdown coming. The second one-point cut was entirely political. To link it [...]