Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Budget 2018: The Most Disappointing Budget Ever March 14, 2018
    Premier Pallister’s Trump-esque statement that budget 2018 was going to be the “best budget ever” has fallen a bit flat. Instead of a bold plan to deal with climate change, poverty and our crumbling infrastructure, we are presented with two alarmist scenarios to justify further tax cuts and a lack of decisive action: the recent […]
    Canadian Centre for Policy Alternatives
  • 2018 Federal Budget Analysis February 14, 2018
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis Some baby steps for dad and big steps forward for women, by Kate McInturff (CCPA) An ambition constrained budget, by David Macdonald (CCPA) Five things […]
    Canadian Centre for Policy Alternatives
  • CED in Manitoba - The Video January 29, 2018
    Community Economic Development in Manitoba - nudging capitalism out of the way?
    Canadian Centre for Policy Alternatives
  • With regional management BC’s iconic forest industry can benefit British Columbians rather than multinational corporations January 17, 2018
    Forests are one of the iconic symbols of British Columbia, and successive governments and companies operating here have largely focussed on the cheap, commodity lumber business that benefits industry. Former provincial forestry minister Bob Williams, who has been involved with the industry for five decades, proposes regional management of this valuable natural resource to benefit […]
    Canadian Centre for Policy Alternatives
  • Community Economic Development in Manitoba - a new film January 16, 2018
    Cinameteque, Jan 23.  7:00 pm - Free event Film Trailer CCEDNET-MB, CCPA-MB, The Manitoba Research Alliance and Rebel Sky Media presents: The Inclusive Economy:  Stories of Community Economic Development in Manitoba
    Canadian Centre for Policy Alternatives
Progressive Bloggers


Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

More Dead Money

The sector and financial-flow accounts released with today’s GDP figures indicate an expansion of the pool of dead money flagged by this blog and by Mark Carney.

The National Balance Sheet Accounts have not yet been released for the second quarter, so we cannot update the accumulated total of $526 billion.

However, the updated Financial Flow Accounts report that private non-financial corporations deposited a further $21 billion of Canadian currency and $2 billion worth of foreign currency in the second quarter. In other words, corporate Canada is adding to its cash stash rather than drawing it down to finance investment.

The GDP figures indicate a modest decline in corporate profits. However, the more detailed sector accounts reveal an increase in undistributed corporate profits to over $96 billion from under $95 billion. Despite slightly lower overall profits, Canadian corporations managed to hang onto more after-tax cash.

The ongoing trend of corporate cash hoarding upends the argument for corporate tax cuts. Surely, governments should retain more of this revenue and invest it directly in our economy rather than adding it to corporate coffers.

UPDATE (September 1): Quoted in today’s Globe and Mail (page B6) and Toronto Star (page IN1)

Enjoy and share:


Comment from Keith Newman
Time: August 31, 2012, 10:18 am

Hi Erin,
The federal government could indeed raise corporate income taxes under current circumstances to reduce money available for corporate bonuses, private jets, etc, and the nastiness extreme inequality entails, especially when the elite detaches completely from the rest of us.
Separately from that it, in the face of substantially underemployed labour and various resources, it can also spend all it needs to on investment in infrastructure, social programs and the environment.

Comment from Larry Kazdan
Time: August 31, 2012, 11:09 pm

Letter in The Vancouver Sun:

Re: Private sector is responsible for stimulating economy, Flaherty says, Aug. 27

Most businesses would consider that their responsibility is not “stimulating the economy,” but making adequate profits.

If there has been an abdication of responsibility, it is that of our finance minister who believes sermons can substitute for direct job creation and infrastructure projects that are necessary to put Canadians to work, and to build this country’s future.

Larry Kazdan, Vancouver

Comment from Bill Bell
Time: September 1, 2012, 9:38 am

Doesn’t this make for a quandary? Governments don’t really _invest_ money, they tend to fritter it away. Even those governments that have clear, solid plans to guide them tend to waste a lot—and we’ve seen very few of those—and the Conservatives would probably _invest_ the monies you have identified on things like weapons and war materiel, rather than on improving the fabric of Canadian society. Where are the plans other than the usual ‘shovel-ready’ projects that benefit sectors of industry that seem to dig themselves out on their own?

Comment from Paul Tulloch
Time: September 1, 2012, 11:08 am

Governments don’t really invest money??? Mr. Bell, can you explain to me how, hospitals, education, pensions, etc are frittering scarce resources away?

For all that fall into this belief, the shadows on the cave wall are not reality- the reality is, government spending on such public goods are the great leveling of income in society, public goods are the life blood of many, without them, inequity would reign supreme. The problem has been the private sector frittering away scarcity- into massive projects of inefficiency- aka 1000 kinds of lipstick, and 400 kinds of automobiles, and 1 brand of ketchup. From the subsidizing of oil infrastructure using private investment and denying climate change to unbounded levels of finacialization of the economy- it is indeed the private sector who has frittered away our economic surplus- all in the name of culturally determined – control over the means of production. So I dare say that instead of focusing on government, try looking past the window dressing of the private sector and see past the grand illusion.

Comment from Larry Kazdan
Time: September 5, 2012, 1:52 am

Letter in Toronto Star:–reviving-dead-money

Jim Flaherty and Mark Carney have given big businesses an environment of low interest rates and low taxes with the following results: high corporate profits, large hoards of corporate cash, the middle class suffering, and over a million Canadians still unemployed.

The responsibility for the welfare of Canadians should not be left to the vagaries of the private market. When there is insufficient spending in the economy because households are indebted and because corporations are saving, the government must step in with direct job creation and infrastructure development.

Since Canada has a free-floating, non-convertible currency, the government can create and spend whatever it takes to bring the economy up to full capacity. Just as federal money is always available to bail out banks, it can also be deployed to get people back to work.

Larry Kazdan, CGA, Vancouver

Comment from Bill Bell
Time: September 9, 2012, 4:15 pm

Oh, dear, I just read Mr Tulloch’s response. Been forgetting to return to this page.

Mr Tulloch: take your time when you read and give the rest of us some credit. Can you call what is offered as ‘education’ an ‘investment’ if it neither fits graduates to be exploited efficiently in the economy nor makes them properly aware that that is what will happen to them and prepared to co-operate to construct remedies in their own defence? Perhaps you would call the highway system a ‘public good’? That’s the one that frees people to spend an hour or three getting to work each day, and makes it possible to obtain tasteless fruit from Mexico in January. Tell me that some of the thousands of people in Ottawa and the provincial capitals on six-figure incomes are going to get all this right within the next few months.

Write a comment

Related articles