It has to be the single most successful lobbying effort in a long time. And no one will notice or care. In Budget 2007, the Conservatives did something courageous and which tax experts had long called for : they proposed measures that would have denied firms a tax deduction on money borrowed in Canada, invested it abroad, and used to […]
Read moreWe are now into full blown Budget consultation mode, with MPs of all parties going through a bit more than the usual pretence of listening before the actual Budget is finally put to bed by the government a few days hence. For once, even the Conservative inner circle seem a bit unsure of where to go. Below the closed (charmed) […]
Read moreSome coverage has suggested that the NDP’s platform costing was based on excessively optimistic projections. The Globe and Mail reported, “Like the Liberals, the NDP is basing its fiscal plan on the Conservative government’s 2008 budget projected surpluses, which are more than six months old and are widely believed to be too rosy in light of the economic slowdown in […]
Read moreMy take on today’s second-quarter Gross Domestic Product (GDP) release follows: Economy Shrinks, But Dodges Recession Canada’s GDP was lower at the end of June ($1,327,118 million) than at the end of last year ($1,328,606 million). Although the Canadian economy is smaller now than it was two quarters ago, it is technically not in recession because it did not shrink […]
Read moreWas it just me or did others get a nagging feeling about the intent behind Air Canada’s surprise announcement of 2,000 layoffs yesterday? The media coverage played along the lines of their press release, with a strong focus on the rising cost of fuel. This is certainly an issue, together with the impact of the higher Canadian dollar and the […]
Read more… says Paul Krugman. And I’m in a session at the CEA confence on Keynes where the original quote just came up. Nothing new here to readers of this blog, but I like that Krugman is using his pulpit to deliver the message at a time when the Canadian government is on the verge of introducing legislation that would allow […]
Read moreJim’s recent mini-study emphasized that profits now occupy gargantuan shares of GDP in the oil-rich provinces. He and The Jurist have noted the total disconnect between corporate profits and personal income in two of those provinces: Saskatchewan and Newfoundland. To explore this issue further, I have pulled some figures out of the recently-released 2007 Provincial and Territorial Economic Accounts (in […]
Read moreOn the anniversary of TILMA coming into force, nine national business associations and the professional association representing non-chartered accountants have demanded “bold action” on inter-provincial trade. The press release alleges that “the emergence of new trade barriers threatens to further balkanize the Canadian economy” without naming a single “new trade barrier”. It repeats the unfounded claim that “it is often […]
Read moreMoore makes several accurate and entertaining points in today’s open letter. Although he stops short of officially endorsing Edwards, his final paragraph comes pretty close. Who Do We Vote For This Time Around? A Letter from Michael Moore Friends, A new year has begun. And before we’ve had a chance to break our New Year’s resolutions, we find ourselves with […]
Read moreAt least 79% of the increase in Canadian non-residential investment this decade has come from the oil industry and governments. Jim and others on this blog often note that, although corporate profits have ballooned, business investment has barely increased as a share of GDP. However, this fact means that business investment has grown along with GDP and it’s worth examining […]
Read moreJanuary 2 will be the 20th anniversary of the Canada-US Free Trade Agreement’s signing. (Of course, the deal did not come into force until January 1, 1989, after the 1988 federal election.) The leading lobby for this deal was the Business Council on National Issues, which has since been renamed the Canadian Council of Chief Executives (CCCE). The promise of […]
Read moreThe following Paul Krugman column confirms my general thoughts about American politics: At one extreme, Barack Obama insists that the problem with America is that our politics are so “bitter and partisan,” and insists that he can get things done by ushering in a “different kind of politics.” At the opposite extreme, John Edwards blames the power of the wealthy […]
Read moreAs Andrew, Bruce, Marc, Ish and others have correctly argued, last week’s Economic Statement wastes money that could otherwise have financed vital public programs. Two tables in the Statement are critical to this case. Table 2.2 (page 45) estimates the costs of newly-announced tax cuts. Table 3.1 (page 73) estimates the costs of all tax cuts adopted since the Conservatives came to power. The […]
Read moreThe Globe and Mail’s mini-budget coverage was such that, even after Marc’s thoughtful and thorough critique, a couple of important criticisms remain to be made. It identified Bruce Campbell as “executive director of the left-wing Canadian Centre for Policy Alternatives” (page A5). In addition to several economists from banks and finance companies, it quoted representatives of the C. D. Howe Institute, […]
Read moreThree 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 Conservatives will encourage the five […]
Read moreSince becoming Liberal leader, Dion has consistently made noises about cutting corporate taxes. On Friday, he clearly and specifically committed to slash corporate taxes “deeper than the Conservatives.†A Liberal strategist quoted in the Financial Post indicated that the plan is to outflank the Conservatives on the right regarding tax policy. Also on Friday, the NDP’s new finance critic, Thomas […]
Read moreOne of my favourite things monitoring this blog stems from a post I made last year about Aeroplan disenfranchising its members who did not keep ponying up. Almost everyday lately I have been getting a comment from some furious person who lost their points. At some point along the way someone suggested the idea of a class action suit and […]
Read moreFrom the New York Times (thanks to Price Tags for leading me there): The blue and yellow sign along Main Street in Ridgefield looked a lot like a historical marker, but something wasn’t quite right. Rather than commemorate a famous person who had stood there, or an event that had shaped history, the marker honored the role of dissent in […]
Read moreI spent the morning at Industry Canada’s global supply chains conference. The general tenor of the opening plenaries was as expected – Canadian corporations should slice and dice their supply chains asap to take advantage of lower costs (especially labour costs) in relation to productivity and quality if they are to survive. In a phrase, ‘make Chinese low wages work […]
Read moreLast week, the Royalty Review Panel recommended that Alberta raise its oil and gas royalties. Its 100-page final report, Our Fair Share, has generated healthy debate on a critically important subject. The basic message follows: Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for quite some time. […]
Read moreOn Friday, the Finance Minister and the Treasury Secretary signed the Fifth Protocol of the Canada-US Income Tax Convention. The Canadian government lined up several business organizations in advance to provide endorsements, which have dominated the media coverage. One of these organizations, the C. D. Howe Institute, made the case for the amended treaty through an op-ed in Saturday’s Financial […]
Read moreThe Financial Post has picked up on my response to the C. D. Howe Institute’s Tax Competitiveness Report and corporate-tax brief to the House of Commons Finance Committee. The Canadian Labour Congress submitted this brief, and one by Andrew on personal income taxes, in August before the prorogation of Parliament delayed the committee process.
Read moreIn successfully seeking the 1980 Republican nomination for President, Ronald Reagan embraced the Laffer Curve theory that tax cuts would increase tax revenues. At the time, rival candidate George Bush Sr. derided this notion as “Voodoo economics” and it has been since been discredited many times. Jack Mintz struggles to revive the theory in today’s 2007 Tax Competitiveness Report, declaring […]
Read moreThere’s no question that the Financial Post, as the National Post’s business section, tilts heavily to the right. However, today’s letters section (FP15) could almost have been copied and pasted from this blog. In the first letter, Shalom Schachter responds to the whiny Labour Day op-ed from John Mortimer of LabourWatch. In the second letter, Kris Larson notes that continued […]
Read moreIn 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 in Hebron, a 6.5% “super […]
Read moreFor years, Don Drummond of TD Bank has publicly observed that business investment in Canada is lagging far behind soaring profits and called for further corporate-tax cuts to spur investment. He never seemed to perceive a contradiction between the fact that corporations are not reinvesting their record-high after-tax profits and the claim that even higher after-tax profits would boost investment. In a […]
Read moreAs background to the “flight from risk” which underpins the growing financial crisis in the US and Europe, see the latest annual report from the Bank for International Settlements published in June, especially the chapter on financial markets in the advanced industrial countries. The BIS is a kind of central bank for central banks. http://www.bis.org/publ/annualreport.htm While cautiously stated, it’s not […]
Read moreI did not follow the Conrad Black trial, but enjoyed reading Mark Steyn’s mammoth post mortem. In contrast to Marc Lee’s excellent commentary on this blog, Mark Steyn is a die-hard supporter of Black. The post mortem’s main argument is that Black’s legal team did an extremely poor job. In one sense, blaming the lawyers is simply the last ditch […]
Read moreThanks for Harper’s for reminding us what the grandfather of economics thought about groups like the Canadian Council of Chief Executives, the Chamber of Commerce, the Board of Trade, the Recording Industry Association of America, PhARMA and all of the other thousands that are part of the “business industry”: The proposal of any new law or regulation which comes from […]
Read moreAs noted yesterday, Canadian advocates of corporate-tax cuts have proliferated alternative measures of corporate taxes. The C. D. Howe Institute’s “Tax Competitiveness Program,” which largely consists of papers by Jack Mintz and Duanjie Chen, has focused almost exclusively on marginal effective tax rates (METRs) on capital, expressed as percentages of pre-tax rates of return. There have been a couple of […]
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