The federal government has announced it is prepared to pay wages subsidies of up to 75% of employee wages for all private businesses and other employers, including non-profits, partnerships and charities that expect a 30% drop in revenues, up to a maximum of $847/worker per week and $11,011 over the three months. The previously announced 10% wage subsidy was only available […]
Read moreAn essential but perhaps overlooked way of looking at the economy is a sector financial balance approach. Pioneered by the late UK economist Wynne Godley, this approach starts with National Accounts data (called Financial Flow Accounts) for four broad sectors of the economy: households, corporations, government and non-residents. Here’s how it works: in any given quarter or year each sector […]
Read moreI’ve just written a blog post about the fiscal situation of Canada’s ‘oil rich’ provinces (i.e., Alberta, Saskatchewan and Newfoundland and Labrador). It consists of a summary of key points raised at a PEF-sponsored panel at this year’s Annual Conference of the Canadian Economics Association. Points raised in the blog post include the following: -The price of oil is impossible […]
Read moreThis provocative guest post submitted by Jonathan Nitzan and Shimshon Bichler, was published earlier this year on their bnarchives website. Nitzan, professor of political economy at York University, and Bichler, who teaches political economy in Israel, are authors of Capital as Power, a Study of Order and Creorder and numerous related articles. To quote from the statement of purpose of the […]
Read moreAfter a generation of comparatively high corporate income tax (CIT) rates, in the late 1980s Canadian governments at the federal and provincial levels began a series of corporate income tax reforms. According to many mainstream (“neoclassical”) economists, reducing CIT rates was a wise public policy. A reduced CIT rate means a reduction in the cost of capital, thus inducing a […]
Read moreIn a little noticed comment, Prime Minister Stephen Harper recently was reported to say: “Dropping our tax rate has not caused the government’s corporate income tax revenues to fall, which indicates that it does in fact attract business.” No one seems to have questioned his statement, even though it was made on the same day Canada dropped to 15th place […]
Read moreYesterday I blogged about rental housing in Yellowknife, over at the Northern Public Affairs web site. Specifically, I blogged about a recent announcement by the city’s largest for-profit landlord that it plans to “tighten” its policies vis-a-vis renting to recipients of “income assistance” (which, in most parts of Canada, is known generically as social assistance). Among other things, I suggest […]
Read moreIt is interesting to note that the most recent IMF staff report on Canadian economic issues echoes some key concerns of progressive economists. I have reported these for the Broadbent Institute. As noted in this summary, the IMF report that corporate Canada’s cash hoard is the biggest in the G7 and has been mainly amassed by energy and mining companies. […]
Read moreStatistics Canada reported today that private and public investment intentions are up by 1.4% for 2014, even weaker than Canada’s investment growth of 1.5% in 2013. Private-sector investment intentions are only 1.3% higher this year, a far cry from the growth of after-tax corporate profits. Yesterday, Statistics Canada reported that net profits were 17.3% higher in the fourth quarter of […]
Read moreIt has recently been reported that the University of Alberta wants to “reopen two-year collective agreements” with faculty and staff “to help the university balance its budget…” This appears to be in direct response to Alberta’s provincial government announcing in its March budget that there would be a “7% cut to operating grants to universities, colleges, and technical institutes.” This […]
Read moreThe 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 […]
Read moreKudos to Bank of Canada Governor Mark Carney for raising the profile of the over $500 billion Canadian corporations are holding in excess cash surpluses and not investing in the economy, which garnered front page coverage (and kudos to the CAW for inviting him to speak.) It’s not the first time he’s raised this  concern.  Last year at the Empire […]
Read moreBill Curry reports in today’s Globe that, at last year’s economic policy retreat, business leaders urged Finance Minister Flaherty to reduce the pay of “overpriced” Canadian workers, including through anti union right to work legislation. Coincidentally, or not, the subsequent 2012 federal Budget introduced new rules which will require most EI claimants to accept jobs at much lower wages, and […]
Read moreThe CCPA today released my report: “The Big Banks Big Secret†which provides the first public estimates of the emergency funds taken by Canadian banks. The report bases its estimates on publicly available data from CMHC, the Office of the Superintendent of Financial Institutions, US Federal Reserve, the Bank of Canada, as well as quarterly reports from the banks themselves.
Read moreA 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 the doors of its London, […]
Read moreThe CLC today celebrated Corporate Tax Freedom Day – defined as the day on which corporations have paid their share of all government taxes. It featured a race of mechanical pigs to a trough full of cash – with the pigs wearing the colours of leading Canadian corporations with large cash reserves. Watch the video. (Update – The Global TV […]
Read moreMark Carney’s widely publicized speech on the state of the global and domestic economy is worth a careful read. He is bang on in much of his analysis of what ails the advanced economies today – the ongoing deleveraging from a long period of unsustainable public and private debt accumulation relative to GDP in which growth was driven mainly by […]
Read moreThe Occupy Wall Street protests hinge on injustice, in particular a malaise with the current economic system that has brought us a tremendous inequality and the rise of the super-rich, or top 1%. But surely that is just the US? Alas, no. The figure below shows the change in BC labour income (wages and salaries) and corporate profits (before tax) going […]
Read moreToday’s Globe and Mail (page B15) mentions the PEF in a story on the corporate sector’s record-breaking accumulation of cash, a subject about which we have often blogged. Corporate Canada has tripled its cash stash in each of the last two decades. The following Statistics Canada figures are “Canadian currency and deposits†plus “Foreign currency and deposits†for private non-financial […]
Read moreMy copy of the Globe and Mail the other day included the July edition of the Report on Business magazine, featuring its annual ranking of the top 1000 publicly-traded corporations in Canada. The survey makes for fascinating reading. In honour of Canada Day, I would like to present a few statistical factoids about these huge institutions that determine the direction […]
Read moreStatscan have produced interesting and important new estimates of the upper bound size of the “underground” or “non observed” economy, putting it at a seemingly modest 2.2% of GDP in 2008. (Some of this is already included in GDP which is adjusted to take into account some hidden and unreported economic activity.) The 2.2% estimate shows that we are a […]
Read moreNo politician is talking about it, but there is a growing debate about corporate tax cuts, and it’s not about whether they should go up or down 1.5 percentage points. It’s about getting rid of them. Zero corporate income taxes. It is fast becoming the legendary goal for tax reform in some opinion-makers’ minds, and they are saying that economic […]
Read moreIn response to some recent PEF commentary (now in the mainstream media thanks to today’s Globe article) on corporations in Canada hoarding cash (after-tax profits greater than new investment), PEF member Eric Pineault weighs in with some more detailed analysis: The great corporate cash stash Eric Pineault As we debate the merits and uses of a corporate tax cut, corporations […]
Read moreToday the CCPA released a study that I authored which examines and debunks one of the biggest contentions of this campaign, that corporate tax cuts create jobs. The payoff of corporate tax cuts has come under increasing scrutiny from various angles, although I focus specifically on job creation. To examine this contention, I took Canada’s biggest public companies, those on […]
Read moreCanada’s economic context at the time of Election 2011 is one of “precarious recovery”, and overall demand conditions are weakened by a few major factors. Unemployment is still just under 8%, which is good compared to the double-digit unemployment of the early 1990s, but not great compared to the expansions of the late 1990s and 2000s. Too much of the […]
Read moreAmidst 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).
Read moreIt has been fascinating to watch the growing public reaction to the full-court press from Canada’s Big Pipe companies (aka, the telcos and cablecos) for usage-based billing (internet metering). The CRTC has played a corporatist role that has largely been compliant with the demands of industry. Even in the midst of the turning political tide, the CRTC seems more interested […]
Read moreI 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 NDPÂ opposing cuts to the federal corporate income tax rate championed by the Conservatives, it merits further debate. The key argument made by […]
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