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Archive for 'federalism'

Flaherty’s Legacy: Ideological, reckless and just plain lucky

This piece was originally published at the Globe and Mail’s online Report on Business feature, EconomyLab.   There are two reasons why it is difficult to comment on the legacy of a finance minister. 1) It is a tremendously challenging job, anywhere, any time. Stewarding one of the largest economies in the world through a […]

Housing Policy Under Harper

Today I gave a presentation on Canadian housing policy at the annual conference of the European Network for Housing Research.  Points raised in the presentation include the following: -Fiscal context, more so than which party has been in government, appears to have shaped federal housing policy in Canada over the past two decades.  Program expenses […]

A progressive paradox for Québec and Canada

The mood in the progressive milieu here in Québec seems rather grim this morning. In Québec history we call the twenty year period when anti-union, right wing populist Duplessis ruled, the “Era of the Great Darkness”, and many by email or on social media have spontaneously referred to the upcoming period in an analogous way. […]

Taxing Multinational Corporations

Earlier this month, I attended a very interesting conference on the taxation of multinational corporations. It included a case study of how SABMiller avoids paying tax in Africa. While many of the points presented are undoubtedly familiar to this blog’s readers, the conference put it all together with a clarity that I attempt to reproduce […]

The New ABC: Abitibi Bowater Conservatives

As sometimes happens, I started writing a comment on Jim’s excellent post and then realized that there was enough material for a new post. I agree with Jim that Ottawa’s $130-million settlement with AbitibiBowater deserves more attention, but I have been waist-deep in potash. I think that my initial take on Abitibi’s NAFTA challenge still holds up […]

Do Tuition Rates Matter?

Alex Usher is a frequent commentator on post-secondary education in Canada.  He regularly blogs for the Globe and Mail at globecampus.ca.  Yesterday, he wrote an open letter to leaders of Canada’s three major political parties in which he offered advice on post-secondary education policy. I found the following passage to be particularly provocative: First, scratch […]

Fiscal Federalism: Hints of a Greek Tragedy to Come?

The Greek crisis has prompted numerous commentators to remark on the dangers of a monetary union which has no common fiscal policy. From the perspective of euro members, the external value of the euro is threatened by large deficits and growing public debt in the so-called PIIG countries, notably Greece and Portugal.  There is no […]

Ontario Budget: Federal-Provincial Relations

My post on the night after Ontario’s budget hit the key features. However, the budget had a couple of other interesting aspects from a federal-provincial perspective. Childcare Funding Some progressive voices trumpeted the provincial budget’s allocation of $63.5 million annually to replace discontinued federal funding for childcare spaces. While the Ontario government finally made the […]

Will the Feds Cut Provincial Transfers to Balance the Books (Again)?

As everybody who reads this blog knows,  then Finance Minister Paul Martin brought the federal budget back into balance in the mid 1990s by, in significant part,  slashing federal transfers to the provinces and eliminating automatic escalators in the new transfers he created. That cannot and will not be allowed to ever happen again, says […]

Buy American Negotiations

It remains unclear whether or when Canada-US negotiations on “Buy American” policies might produce a deal. While such a bilateral agreement could serve both countries well, Canadians should resist pressure to have our provincial and municipal governments sign onto the World Trade Organization’s Agreement on Government Procurement. A Canadian exemption from Buy American requirements makes […]

Harmonization’s False Premise

Advocates of harmonizing provincial sales taxes with the federal GST almost always argue from the premise that, whereas the GST only covers consumer purchases, provincial sales taxes apply to all business inputs. Harmonization is then presented as a means of removing the sales tax from business purchases of machinery and equipment to promote new investment. […]

How Low Can Canadian Business Taxes Go?

Canada has the third-lowest business taxes of ten countries examined in a study released as part of KPMG’s 2008 Competitive Alternatives report. The spin from KPMG has been that “If the provinces follow the federal lead and reduce their rates as well, Canada’s advantage will be enhanced.” Canadians should be asking a different question. If we […]

Premiers on Labour Mobility and Internal Trade

Regarding the Premiers’ announcement in Quebec City last week, I would reiterate what I wrote a year ago about a very similar federal proclamation by then-Minister of Industry, Maxime Bernier. The main piece of real news is that Premiers have attached financial penalties to the existing Agreement on Internal Trade (AIT): Premiers announced an enhanced […]

Internal trade hypocrisy

If you have visited this blog before you probably know that Erin Weir and I have it in for bogus arguments about alleged but unproven interprovincial trade barriers. Give us some examples, we say, but the rhetoric of trade barriers always seems to trump any actual evidence. And I’m not even talking about empirical evidence […]

Ontario’s Other $20-Billion Gap

Premier McGuinty and other commentators like to emphasize that federal revenues from Ontario exceed federal spending in Ontario by about $20 billion annually. Although this total partly reflects the overall federal surplus and federal spending outside Canada, it is usually presented as a transfer of expenditure from Ontario to other provinces. A standard story is […]

McGuinty on Equalization: A Reality Check

For a while, the Ontario Premier was looking quite reasonable in his dispute with the federal government. As Jim Flaherty charged that Ontario’s economic woes reflected a lack of provincial corporate tax cuts, Dalton McGuinty correctly responded that a lower rate of tax on profits would entail a large fiscal cost and provide little assistance […]

Aging, Health Care and Federalism

Last December I testified before the Senate Special Committee on Aging, making the point that public health care need not fear an aging population. Today, I was invited back again to comment on their draft interim report and in particular the issue of how to address the fact that some provinces have a larger share […]

Jim Prentice’s TILMA Testimony

Last week, Industry Minister Jim Prentice appeared before the  Senate Banking, Trade and Commerce Committee to make the case for TILMA as a means of overcoming those dreaded interprovincial trade barriers, examples of which, according to the Minister “are legion”. What examples does the Minister cite? Here is what I can find: For example, some […]

Alberta, we need to talk

Alberta’s economy looks ever more like a runaway train. Climate change raises the prospect of needing to slow this train down, something that would be advisable even if rising temperatures were not reaping havoc, because the boom has made labour scarce, housing even scarcer, and created a number of other social and environmental problems. With […]

Canada-US border delays

“It is often harder to move goods and services across provincial boundaries than across our international borders” October 2007 Speech from the Throne As if Erin Weir and I have not already beat this one into submission, another reminder from today’s Globe and Mail that is it NOT easier to trade across the Canada-US border. […]

Sinclair on Binding Enforcement

Last week, Scott Sinclair released an excellent briefing paper on efforts to attach $5-million penalties to the existing Agreement on Internal Trade (AIT). The debate about interprovincial barriers has become a four-ring circus: TILMA, the Ontario-Quebec negotiations, proposals to amend the AIT, and federal threats to invoke the trade and commerce power. In all of […]

Flaherty’s Made-Up Numbers

The following Canadian Press story is an hilariously accurate report of what happened on Wednesday when the Finance Minister appeared before a Senate committee to pontificate about supposed interprovincial barriers: Flaherty’s remarks came shortly before a senior Finance Department official told a Senate committee that interprovincial trade rules cost the country about one quarter of one […]

TILMA, Ontario and Quebec: The Price of Freedom is Eternal Vigilance

A significant challenge in the TILMA debate has been that journalists often uncritically accept the premise that alleged inter-provincial barriers are a serious problem. Murray Campbell bucked this trend in Saturday’s Globe and Mail, where he drew the link between TILMA and last week’s Ontario-Quebec initiative. Electronically, his column appears under the headline “Premiers try […]

The Ontario-Quebec Deal: TILMA 2.0 ?

Today, Premiers McGuinty and Charest kicked off “free trade” negotiations between their provinces. The key question is whether this process will be a sweeping “race to the bottom” like the BC-Alberta Trade, Investment and Labour Mobility Agreement (TILMA) or a focused effort to develop common standards in the few areas where problems may exist. As […]

Saskatchewan’s Incredible Shrinking Government

During the sixteen years that the NDP governed Saskatchewan, provincial expenditures fell from just over 30% to just over 20% of Gross Domestic Product (GDP). This accomplishment is dubious for a political party committed to using government as a vehicle to redistribute wealth and finance important public programs. Why did the proportion of Saskatchewan’s economy […]

Stopping TILMA in the Territories

It seems that, having failed to lure any other provinces into TILMA, the Premiers of Alberta and BC have turned their attention northward. Whereas the understanding was that Saskatchewan would need to sign the agreement before trying to negotiate any changes or exemptions, territorial officials have apparently been invited to begin such discussions without having […]

Harmonizing Sales Taxes: The Spending Power in Action

Three weeks ago, I wrote, “Budget 2007 used the federal spending power quite aggressively to pay provincial governments to eliminate their Corporate Capital Taxes. A similar use of the power will be needed if the Conservatives are serious about harmonizing provincial sales taxes with the GST.” The front page of Friday’s National Post reported, “The […]

First reaction on the Throne Speech

It is hard to imagine the federal government falling on the basis of this Throne Speech. We’ll have to see what kind of chest-thumping this generates among the Opposition parties, but I do not think any of them wants an election, and my first pass at the text says Harper blinked. Plus since Newfoundland and […]

Federal Spending Power: The Makings of a Phoney Debate

There have been suggestions that the Conservative government’s forthcoming Throne Speech will surrender the federal spending power. Through an op-ed in today’s Globe and Mail, Bob Rae tries to position himself, and presumably the Liberal Party, as defenders of the power. This posturing will help the Conservatives woo Quebec nationalists and help the Liberals appeal […]

Danny Williams and Oil Royalties

In April 2006, Newfoundland Premier Danny Williams walked away from proposed Hebron development because the multinational oil companies were not offering sufficient benefits for his province. The national media and federal government heaped scorn on this decision. A couple of days ago, Williams secured a new deal that gives the province a 4.9% equity stake […]