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This past weekend (March 31st), Sino-Forest Corp. announced it was filing for bankruptcy protection. The Chinese-Canadian company, once the largest publicly-traded forestry firm on the TSX, collapsed under allegations it was nothing more than a sophisticated fraud and Ponzi scheme. Sino-Forest’s demise wiped out about $6-billion in shareholders’ value, making it a catastrophe on par [...]
Posted by Bruce Livesey under asset backed commercial paper, Conservative government, financial markets, financial regulation, investment.
April 2nd, 2012
Comments: none
Last week, Ontario’s Ministry of Finance released the Ontario Economic Accounts for the third quarter of 2011. As The Globe reported, business investment was less than impressive: . . . investment in machinery and equipment fell slightly by 0.2 per cent between June and September, 2011, prompting Ontario Finance Minister Dwight Duncan to fire a [...]
Posted by Erin Weir under corporate income tax, investment, Ontario.
January 23rd, 2012
Comments: 2
Pollsters tell us that Ontario’s New Democrats may double their seat total in next month’s provincial election. It’s also entirely conceivable that they could be part of a coalition government at Queen’s Park. But what’s actually in the party’s election platform? One central feature of the NDP’s proposals is to implement a tax credit for companies that hire new workers. The tax [...]
Posted by Nick Falvo under climate change, corporate income tax, education, employment, energy, environment, fiscal policy, health care, housing, HST, income distribution, income support, income tax, investment, minimum wage, NDP, Nova Scotia, Ontario Election 2011, party politics, post-secondary education, poverty, progressive economic strategies, public services, public transit, social democracy, social policy, socialism, super-rich, taxation, user fees, wealth.
September 20th, 2011
Comments: 5
The parenthetical reference to Canada in my last post prompted several good comments. This post attempts to summarize and address them. Dr. Stockhammer has co-authored a paper with estimates for Canada, but he would be the first to note that they are mechanical and not necessarily relevant to policy. He finds that Canada’s domestic economy [...]
Posted by Erin Weir under investment, PEF, progressive economic strategies, wages.
May 22nd, 2011
Comments: 5
I do not know if the Conference Board intended its latest release on sluggish investment in machinery and equipment to be taken up during the election campaign. However, as Canadian Press reports: The Conference Board report comes at a time when the issue of corporate taxes is a key demarcation point among the parties in [...]
Posted by Erin Weir under corporate income tax, election 2011, investment, media.
April 29th, 2011
Comments: 3
Doug Saunders, of the Globe and Mail, has gamely launched a real and meaningful discussion about corporate tax cuts on these pages. See the comments section of this post. Since that forum was getting unwieldly, I’m starting a new post. Doug’s stated pursuit (and mine, and I wager most readers’) – how to harness growth [...]
Posted by Armine Yalnizyan under corporate income tax, economic growth, investment, public services, taxation.
April 19th, 2011
Comments: 10
Here is a link to the CCPA study we released yesterday, analyzing the determinants of business fixed non-residential capital investment spending in Canada on the basis of quarterly data from 1961 through 2010. It formally tests for the direct significance of corporate tax variables and finds no such evidence (in either univariate or multivariate analysis). There [...]
Posted by Jim Stanford under corporate income tax, investment, media.
April 14th, 2011
Comments: 10
First of all, today’s top Globe story on corporate income tax cuts not leading to increased investment is a nice example of “you heard it here first”, so a big pat on the back to Relentlessly Progressive Economics. As we like to say: tomorrow’s conventional wisdom, today. I want to take issue with Stephen Gordon’s [...]
Posted by Marc Lee under corporate income tax, election 2011, federal budget, investment, taxation.
April 6th, 2011
Comments: 7
Amidst all the frenetic disarray of budget day, I had an interesting and informative exchange on CBC’s Power & Politics with John Manley, former Liberal Finance and Industry Minister, and now chief lobbyist for Canada’s corporate elite (as President and Chief Executive of the Canadian Council of Chief Executives).
Posted by Jim Stanford under budgets, corporate income tax, corporate profits, investment.
March 23rd, 2011
Comments: 13
Advocates of low potash royalties have floated some pretty bizarre arguments. Last week, the Saskatchewan Party put out a news release emphasizing that local farmers use some 0.6% of provincial potash output, as though this tiny sliver of domestic consumption somehow complicates the province’s interest in maximizing revenue as a potash producer. Equally strange are [...]
Posted by Erin Weir under corporate income tax, investment, media, potash, Saskatchewan.
March 21st, 2011
Comments: 2
Iglika reported to me that Kevin Milligan made the argument in favour of the HST that its presence was economically beneficial because it induces additional investment on the margin, as projects that previously did not meet a certain profit threshold would become real investments. This is a net gain (forget about who benefits from those [...]
Posted by Marc Lee under economic growth, economic thought, investment.
March 15th, 2011
Comments: 3
Statscan investment intentions data released today show thatgrowth of real investment by the private sector is set to slow markedly in 2011 compared to 2010. (up 3.8% vs up 8.0% in 2010.) So much for the stimulative effect of corporate tax cuts. Surprise, surprise investment is concentrated in the resource sector, especially oil, where high prices and [...]
Posted by Andrew Jackson under corporate income tax, investment.
February 25th, 2011
Comments: 2
This was posted on the Globe and Mail’s online feature Economy Lab today. My sincere thanks to all the people who have posted on the topic on this site. The Harper government ’s commitment to further reduce the general corporate income tax rate while the nation struggles with budgetary deficits has been championed by – [...]
Posted by Armine Yalnizyan under budgets, Conservative government, corporate income tax, deficits, investment, Jack Mintz, public infrastructure, stimulus, taxation.
January 28th, 2011
Comments: 17
Andrew Jackson has engaged perhaps the strongest theoretical argument for corporate tax cuts: that they make more new investments viable by lowering the pre-tax return needed to get over an after-tax hurdle rate of return. (Indeed, I remember the C. D. Howe Institute’s Finn Poschmann lionizing Andrew Coyne for making this argument halfway through TV [...]
Posted by Erin Weir under C. D. Howe Institute, corporate income tax, investment, Jayson Myers.
January 21st, 2011
Comments: 18
I have been reflecting a bit on the CME study of corporate taxes which Erin has previously covered quite comprehensively. This subject is clearly very much in political play at the moment. With the Liberals and the NDP opposing cuts to the federal corporate income tax rate championed by the Conservatives, it merits further debate. [...]
Posted by Andrew Jackson under corporate income tax, corporate profits, investment.
January 20th, 2011
Comments: 2
Over at Worthwhile Canadian Initiative, Stephen Gordon argues that capitalists are not rich. Of course, wealth is more or less synonymous with owning things that can be broadly defined as capital. Stephen’s argument is focused on income: “If capital income is concentrated among high earners, then it could still be argued that increasing labour’s share [...]
Posted by Erin Weir under Blogroll, capitalism, inequality, investment.
December 12th, 2010
Comments: 6
The announcement this week that Prime Minister Stephen Harper is not going to intervene in the sale of Potash Corp. of Saskatchewan to the Australian conglomerate, BHP Billiton Ltd., speaks volumes about how Bay Street and its servants in Ottawa are so willing and eager to sell off Canada’s corporate assets to foreign corporations. It’s [...]
Posted by Bruce Livesey under industrial policy, intellectual property, investment, potash.
October 23rd, 2010
Comments: 5
Jack Vicq is Saskatchewan’s answer to Jack Mintz, a relentless advocate of lower taxes for high-income individuals and profitable corporations. His first report for the provincial government presaged massive personal income tax cuts in 2000 (which soon pushed the province into deficit). His second report for the provincial government presaged massive corporate tax cuts. Saskatchewan [...]
Posted by Erin Weir under investment, Jack Mintz, Saskatchewan, StatCan, taxation.
October 15th, 2010
Comments: 2
Here’s a new take on bringing economic theory to the masses — a rap battle between Keynes and Hayek. What’s amazing about it is the amount of solid (if not plain nerdy) content this video packs into such a short time. It’s fun to watch for sure (very high production values), but you get that [...]
Posted by Iglika Ivanova under economic crisis, economic growth, economic literacy, economic thought, fiscal policy, free markets, history of economic thought, industrial policy, inflation, interest rates, investment, labour adjustment, labour market, macroeconomics, media, monetary policy, prices, progressive economic strategies, public sector procurement, recession, Role of government, stimulus, unemployment, wages.
October 12th, 2010
Comments: 3
Jim and I responded somewhat differently to Tuesday’s GDP release. Jim’s Globe and Mail column suggested that it was especially bad: “We’re clearly heading for stagnation at best, and quite possibly another ‘double dip’ downturn.” I perceived a ray or two of hope and told The Toronto Star: “I’m not predicting a double dip.” While [...]
Posted by Erin Weir under GDP, investment, media, StatCan.
September 4th, 2010
Comments: 2
Yesterday’s GDP numbers were worse than they seemed. And they highlighted a curious feature of modern capitalism. Nowadays, non-financial businesses have become major net lenders to the rest of the economy. Instead of borrowing money (in various forms: debt, equity, etc.) from other sectors to finance real investment, non-financial businesses are not even reinvesting their [...]
Posted by Jim Stanford under economic growth, GDP, investment, recession.
September 1st, 2010
Comments: 6
UPDATE (September 1): Quoted in The Toronto Star. Canadian Gross Domestic Product (GDP) grew modestly in the second quarter, but that modest growth returned GDP to a level not seen since before the economic crisis. Recent Developments: The Second Quarter Canada’s output expanded at a quarterly rate of 0.5%, which corresponds to an annual rate [...]
Posted by Erin Weir under economic growth, GDP, investment, StatCan, stimulus.
August 31st, 2010
Comments: none
James Altucher posted an interesting article and video making the case against sending your children to university. I commend him for questioning the credo that everyone should go to university, regardless of interest or aptitude. But I am not totally convinced by his analysis. Altucher gives short shrift to the fact that many good jobs [...]
Posted by Erin Weir under investment, post-secondary education, US.
August 3rd, 2010
Comments: 3
Nine days ago, I posted about private non-financial corporations accumulating cash rather than investing in Canada. A week later, the Bank of Canada’s Monetary Policy Report (MPR) noted “the relatively high level of liquidity held by the non-financial corporate sector and weak investment” (page 19). By my count, the document expresses concern eight separate times about [...]
Posted by Erin Weir under big business, interest rates, investment, monetary policy.
July 24th, 2010
Comments: 3
There has been a persistent drumbeat in the American business press about corporations accumulating cash. The argument is that, while corporations are making solid profits now, they are not investing in the US for fear of anti-business policies in the future. Obama has allegedly spooked corporate America into hoarding cash rather than investing. To test [...]
Posted by Erin Weir under big business, Blogroll, corporate income tax, investment, media, StatCan, US.
July 15th, 2010
Comments: 1
This morning, Statistics Canada reported a robust economic expansion in March and hence in the first quarter of 2010. Although February’s growth was revised down to 0.2%, strong growth of 0.6% in both January and March propelled the quarterly total to 1.5%. That figure corresponds to an annual growth rate of 6.1%, more than double [...]
Posted by Erin Weir under GDP, investment, StatCan, stimulus.
May 31st, 2010
Comments: 3
Here is some of what Terry Corcoran wrote in today’s Financial Post about Bank of Canada Governor Mark “Carney’s suggestion that Canadian business has so far ‘disappointed’ because it has failed to revive Canada’s lagging productivity”: Central bankers appear to know many things, and have big fancy computer systems and economic models to tell them [...]
Posted by Erin Weir under banks, corporate income tax, investment, media, productivity, Terry Corcoran.
March 27th, 2010
Comments: 7
As if there weren’t already enough reasons to eliminate the egregious stock option tax loophole, a column by Eric Reguly in this month’s Report on Business magazine highlights yet another. This reason helps to explain why we had such a booming stock market up to 2008, but little growth in real investment and productivity. First [...]
Posted by Toby Sanger under capitalism, corporate compensation, corporate income tax, economic crisis, federal budget, industrial policy, investment, productivity, taxation.
March 3rd, 2010
Comments: 9
Canada’s industrial engine appeared to restart in December. Gross Domestic Product (GDP) expanded by 0.6% that month, led by particularly strong growth in resource extraction, utilities, manufacturing and wholesale trade. December propelled the fourth quarter of 2009 to 1.2% growth, the fastest quarterly growth in a decade. Canada’s Recovery in Perspective While encouraging, the Canadian [...]
Posted by Erin Weir under corporate income tax, GDP, investment, StatCan.
March 1st, 2010
Comments: 1
Thanks to Stephen Gordon, who made a link to a new unpublished study (fourth draft, 2009), The effect of corporate taxes on investment and entrepreneurship, by Djankov, Ganser, McLiesh, Ramalho and Shleifer. Stephen claims this study settles the matter that Canada should not reverse corporate tax cuts made in recent years. That discussion was happening [...]
Posted by Marc Lee under investment, taxation.
February 28th, 2010
Comments: 20