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Archive for February, 2012

Provincial and State Corporate Taxes

The following commentary also appears on The Globe and Mail’s Global Exchange blog: What Obama’s Corporate Tax Proposal Means for Canada Last week, there was much consternation in Canada’s business press that some modest reversals of provincial corporate tax cuts and President Obama’s proposed corporate tax changes could erode our competitiveness. Canadians should maintain a […]

The Affordability of Post-Secondary Education

Carleton University’s Ted Jackson teaches a graduate seminar course on post-secondary education in Carleton’s School of Public Policy and Administration. Earlier this month, I was invited to give a guest presentation to Professor Jackson’s class. I focused the presentation on affordability challenges faced by students wanting to pursue post-secondary education. My slide presentation can be […]

Debunking Drummond

The Drummond report claims that Ontario is headed for a $30-billion deficit. This figure has been widely and uncritically reported. For example, The Globe and Mail printed four articles featuring this number in its February 18 edition. The Ontario government projected a balanced budget with a $1-billion contingency reserve by 2017-18. To instead project a […]

Globaloney

So recent is the word “globalization” that, if you consult the revised 1978 edition of The New Political Dictionary: The Definitive Guide to the New Language of Politics by the eminent neo-conservative writer William Safire, you will not find it. Instead you will find “Globaloney,” a term used in the early 1940s to riducule the […]

New Generation of Thinkers Link Inequality, Innovation and Prosperity

(This guest blog was written by Mike Marin and Anouk Dey. It originally appeared in the Toronto Star on February 24. The authors are part of a team that produced the report Prospering Together (in English http://bit.ly/z4GQx5  and in French http://bit.ly/yabiK2) What do the Occupy Movement and Canadian software giant OpenText have in common? Most […]

The Times they Are a Changing: The MMT Wave Begins

Take a look at the picture below. Take it in.  Now scan your eyes to the far right…there, in faded blue you’ll see the initials MMT.  Now zoom out.  Take it in again.  Notice: a few hundred people.  Spending their time learning about an economic theory called Modern Monetary Theory or MMT and its application […]

Why taxing food staples should not be considered a policy option in Canada

Here’s an excellent piece by Sam Boshra, about the recent proposal by Michael Smart and Jack Mintz to apply the GST to food, from Sam’s blog at Economic Justice: Low-income households can’t buy food today with a larger HST rebate they hope to get sometime in the future.  A key objective of the social safety net, […]

Fiscal Austerity and Growth

This may come as a bit of a shock to Andrew Coyne and Jim Flaherty, but even the IMF are warning in their most recent fiscal policy update that  austerity in the advanced economies is going too far, and will dampen growth. Indeed, they even suggest that too much austerity may spook the dreaded bond […]

Coyne on Krugman and Keynes

Krugman hardly needs me to leap to his defence against Canadian economic flat earthers like Andrew Coyne,  but here goes. Coyne’s latest column  argues  that there is a recovery underway in the US which owes nothing to Keynesian stimulus.  Accordingly, “we can add America post-2008 to the long list of failed experiments in Keynesian demand […]

Drummond Misdiagnoses Ontario’s Economy

The Harvard International Review has posted an interview with Don Drummond. I have posted the following response: It is good Drummond confesses that his free-market policy prescriptions failed to improve productivity, but old habits apparently die hard: “We have an Employment Insurance scheme that basically dissuades people from going where the jobs are. We still […]

McGuinty’s Business Tax Breaks

An interesting nugget in last week’s Drummond report is Table 11.1, an updated version of Table 2 from “Ontario’s Tax Plan for Jobs and Growth” (2009). It provides a sectoral breakdown of the McGuinty government’s recent business tax breaks: HST input tax credits, cutting the corporate income tax, and eliminating the corporate capital tax. The […]

Stapleton on Harper’s Proposed OAS/GIS Changes

John Stapleton has an opinion piece out on Prime Minister Harper’s proposed changes to Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). I find the following quote from Stapleton to be particularly troubling: By providing OAS and GIS at age 65, Canada has greatly reduced the incidence of poverty among seniors. By moving the […]

Trans-Pacific Partnership

The United Steelworkers’ union made the following submission to the Government of Canada earlier this week: The United Steelworkers union welcomes the opportunity to comment on Canada’s proposed entry into the Trans-Pacific Partnership (TPP) free trade negotiations. Our union represents 200,000 Canadian workers, employed in every sector of the economy. While our traditional membership base […]

Marc’s Conflict of Interest Disclosure

On January 5th, 2012, the American Economics Association adopted new guidelines for the disclosure of potential conflicts of interests by economists. Please find my disclosure information below (thanks to Andrew Leach for turning the AEA guidelines into a template, which I have used as the basis for my own). Employment: I have been employed with the Canadian […]

EI Shrank by 100,000 in 2011

Statistics Canada reported today that the number of Canadians receiving Employment Insurance rose by 4,230 in December, a month in which unemployment rose by 6,100. The proportion of unemployed workers receiving benefits remained below 39% (i.e. 544,720 beneficiaries out of 1.4 million unemployed). Although December saw relatively little change in these totals, it capped off […]

Inflation and Drummond

Statistics Canada reported today that consumer prices jumped in January (by 0.4% or 0.5% seasonally-adjusted), offsetting the drop in December. As a result, the annual inflation rate is now 2.5% and the Bank of Canada’s core inflation rate is 2.1%. Monetary Policy Both measures are well within the central bank’s target range, which should allow […]

Jobs, Jobs, Jobs

With unemployment high and rising, job creation should surely be on the agenda. The Government of Canada has a program called Job Creation Partnerships, funded under Employment Insurance. It supports projects which “provide insured participants with opportunities to gain work experience that will lead to ongoing employment. Activities of the project help develop the community […]

Statistics for Democracy

Statistics Canada is sometimes unfairly blamed for decisions made pursuant to budget cuts and to political direction, most notably in the decision to replace the long form Census with a much less reliable Household Survey. But the agency deserves tremendous credit for the decision, implemented just a couple of weeks ago, to provide universal free […]

Drummond: The Good, The Bad and The Ugly

The Drummond Commission reported today. The Good While the McGuinty government prevented the Commission from considering tax rates, it proposes some sensible measures to raise revenue. Chapter 18, “Revenue Integrity,” recommends combating corporate tax avoidance and cracking down on the underground economy. Businesses sometimes hire workers as “contractors” to avoid paying Ontario’s Employer Health Tax. […]

Could McGuinty’s cuts be worse than Harris?

The Ontario government’s long awaited and much discussed report of the Commission on the Reform of Ontario’s Public Services (aka, the Drummond report) was finally publicly released this afternoon. As was rumoured, the report says Ontario would need to increase program spending by no more than 0.8% per year for the government to reach balance […]

The Greek Tragedy

An excellent commentary from Andrew Watt.    

Evidence vs. Ivison

If the National Post’s John Ivison wanted to agitate this blog’s authors, he could not have done much better than last week’s commentary on the census numbers. It was printed on the front page under the headline “Jobs in the West, jobless in the East; EI impeding labour mobility.” To paint a picture of eastern […]

In the Wake of the Crisis: Bully Capitalism

A shorter version of this article appears today at Economy Lab, the Globe and Mail’s on-line business feature.  Capitalism has entered an ugly new era, one that may work well for the shareholders of world, but not for the rest of us. I couldn’t help but notice that, on the very same day Caterpillar shuttered […]

Who Wants “Closer” Ties With China?

The Prime Minister’s trip to China last week sparked a flurry of media coverage regarding prospects for “closer” economic ties between Canada and China.  Some even speculated that another free trade agreement is in the works (as soon as the Harper government inks its planned deals, of course, with the EU, India, Korea, and the […]

Globalization, Literally Speaking

What is this thing called “globalization?” To be absolutely precise, it’s the word that took over discourse about the global economy and pretty much everything else for what seemed like an eternity but, in fact, labelled a phenomenon that lasted only for a single decade, that of the 1990s, from the end of the Cold […]

Recalculating inflation: billions in savings for governments and employers paid for by workers and pensioners

The top story in the Globe and Mail today reports on something I warned about a year ago:  Statistics Canada is making changes to the way it calculates the Consumer Price Index. At that time I suspected changes to calculations of the CPI would be introduced as part of the renewal of the inflation target with […]

Ontario’s Not Digging Deep Enough

PricewaterhouseCoopers’ biennial guide to Canadian mining taxation, Digging Deeper, features a comparative summary of royalties, mining taxes and corporate taxes for a hypothetical gold mine. This approach differs from the table I posted yesterday, which displayed royalty and mining tax revenue as a share of the minerals actually extracted from different provinces and territories in 2010. However, […]

Empire and Trade

Empires vary: of conquest, of settlement, of trade; contiguous and maritime. Empires abound: a long list, longer even than many books on empire admit to. Wikipedia lists over 200 empires from the Akkadian Empire of Sargon the Great in the 24th century BCE to today’s American Empire. In terms of territory the largest are the […]

Caterpillar and the Investment Canada Act

There’s been some good public debate about the need for changes to the Investment Canada process in light of Caterpillar’s incredible actions in London.  They showed up uninvited in 2010, took over a long-standing productive profitable plant, demanded money (from workers and government alike), then left — leaving behind a shuttered plant and a shattered […]

Ontario’s Pitiful Mining Tax

This table displays the mining taxes and royalties paid for minerals – including coal, but excluding oil and gas – to Canada’s major mining jurisdictions in 2010. The ideal would be to compare these charges with economic rent, which varies by mine and is difficult to calculate. However, even a simple comparison to overall production values suggests […]