More Clement on US Steel

To my surprise, the Harper Conservatives seem to again be breaking new ground in enforcing the Investment Canada Act. This afternoon, the Industry Minister announced that he is taking US Steel to court for violating its commitments. Back in May, my union argued that the federal government must be prepared to take US Steel to court. Terence Corcoran mocked this […]

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National Development Banks

The credit crisis, which sharply increased private borrowing costs but reduced government borrowing costs, highlights the potential advantage of having a public agency to finance economic development. The front page of today’s Regina Leader-Post features a report on my union’s letter (full text below) to the Government of Canada about Evraz using its Canadian facilities as collateral to borrow from Russia’s national development […]

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Clement on US Steel

A year ago, the Harper Conservatives blocked a proposed foreign takeover under the Investment Canada Act for the first time ever. Today, they announced an effort to hold US Steel to commitments it made under the Act in taking over Stelco. Here is what I said to the Business News Network, Canadian Press and The Financial Post. The union’s press release follows. […]

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Current Account: 2008 vs. 1999

Initial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade surplus was not large enough […]

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Danny Chavez vs. NAFTA

I have generally been underwhelmed by media coverage of AbitibiBowater’s prospective NAFTA challenge of Newfoundland and Labrador’s decision to reclaim natural resources that the company previously used to operate paper mills in the province. I watched a panel discussion on Mike Duffy Live (before his Senate appointment) that focussed entirely on NAFTA’s nondiscrimination provisions. But there is no suggestion that […]

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Kari Levitt’s JKG Lecture

Back in June, we co-awarded the first John Kenneth Galbraith Prize in Economics to Kari Levitt and Mel Watkins. Unfortunately, there was a snag with the transcription of Kari’s lecture and she had to recreate it. We now have the text and have posted it below. So congrats once again to both Kari and Mel for their outstanding contributions to […]

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Report of the Competition Policy Review Panel

The report has been released: http://www.ic.gc.ca/epic/site/cprp-gepmc.nsf/en/h_00040e.html This corporate dominated panel has put forward a set of highly pro business recommendations. Given the circumstances in which it was set up – major concerns over foreign takeovers of Canadian resource giants like Inco and Falconbridge – this is actually slightly surprising. The key recommendation is that only very large foreign takeovers worth […]

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Shocking FDI Statistics

No this isn’t the Economics National Enquirer.  I mean shocking.  Really shocking. Hasn’t anyone else out there noticed what’s happened to Canada’s net FDI position, in the wake of the mega-massive takeovers of Canadian resource companies that have occurred as a result of the global commodity price boom?  Resource companies with more money than they know what to do with […]

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The Current Account Deficit

Statistics Canada revealed today that, in the fourth quarter of 2007, we ran a current account deficit for the first time since 1999. It is difficult to get a handle on what pushed us into deficit because the raw and seasonally-adjusted numbers paint quite different pictures of quarterly changes. The raw numbers indicate that, from the third to the fourth quarter, […]

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Worst Diane Francis Column Ever

Diane Francis has written many unsubstantiated columns. On July 6, for example, she claimed that “Canada has the highest corporate taxes in the world.” However, based on the following quotes, Tuesday’s column probably takes the cake. If last week’s election upset is any indication, Saskatchewan is going to be on a roll for a few years. I have no idea […]

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Canadian Manufacturing, Global Supply Chains and National Regulation

I 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 […]

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Canada-US Tax Treaty

On 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 […]

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Cameron on Stelco

The following column by Duncan Cameron is from rabble.ca: With the takeover of Stelco by U.S. Steel, Canada loses its last domestically owned steel producer. Despite urgings from the Steelworkers, the Canadian Autoworkers, and the Canadian Labour Congress, our provincial and federal governments have been unwilling to adopt a strategy to provide national direction to natural resource companies, and key industries. […]

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Foreign Ownership DOES Matter

I’ve pasted in below a letter to Ministers Bernier and Flaherty re the just-announced review of the Foreign Investment Act and foreign take-overs of large Canadian corporations. Links to the two research studies cited in the letter showing that foreign ownership of large internationally-oriented corporations does matter in terms of impacts on the Canadian economy can be found at the […]

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Regulating Foreign Ownership: A Split in Business Ranks?

One of the key contradictions of neo liberalism is between the ideology of free markets and limited government, and the reality that transnationals can and do seek to enhance their competitive position in the global order by presenting themselves to ‘their’ home states as champions of national economic development. This contradiction has been relatively subdued in Canada given the supine […]

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Mel Watkins on Foreign Take-overs

http://www.canada.com/ottawacitizen/news/opinion/story.html?id=6c433a24-f12a-4584-9706-9f123ded8234 A good piece from today’s Ottawa Citizen. I’ve been similarly struck by the concern re foreign state involvement  in our resource sector, combined with evident lack of concern  about loss of domestic control of resource  development. Whether we would get that from  greater Canadian capitalist ownership of resource companies  as opposed to  more public owneship and regulation is a […]

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CIBC and Oil Royalties

More fascinating stuff from that CIBC report follows: While many of the big names in the mining and metal processing industry have been spoken for, there are even larger capital inflows potentially still ahead in the energy sector. Thanks to the oil sands, and a still laissez-faire attitude towards ownership of those resources, Canada represents anywhere from 50-60% of the […]

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Alcan and Interest Deductibility

The following op-ed, which is printed in today’s Vancouver Sun, picks up some key themes from this blog:     Subsidizing the transfer of jobs abroad Vancouver Sun Monday, June 4, 2007 Page: A7 Section: Editorial Byline: Erin Weir Source: Special to the Sun At a time when Kitimat and many other Canadian communities are losing manufacturing jobs, why would […]

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Up With Corporate Taxes

Progressives often present corporate-tax cuts as having transferred billions of dollars from the Canadian government to big business. This characterization is largely correct, but neglects the fact that many foreign-based corporations operating in Canada are also taxed on a worldwide basis by foreign governments. To the extent that corporations in Canada are affiliates of American and Japanese multinationals, Canadian corporate-tax […]

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Barbados and Worldwide Taxation

Earlier today, I appeared as a witness before the House of Commons Finance Committee regarding “Tax Havens and Tax Avoidance”. The panel included a representative from Barbados who contended that it is not a tax haven. A business-school professor supported him by arguing that low-tax conduits for Canadian investment abroad benefit Canada. A couple of tax specialists from Quebec made the […]

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Flaherty Retreats on Interest Deductibility

As foreshadowed last week and reported below, Flaherty has narrowed non-deductibility to apply only to interest already deducted abroad and delayed its implementation for five years. In other words, corporations will generally be allowed to deduct foreign-affiliate interest costs in Canada even though they generally do not pay Canadian tax on their foreign-affiliate income. Flaherty retreats on tax measure, but […]

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Foreign Takeovers

Since I first posted about Alcan on May 1, it has certainly become more newsworthy! The Canadian Labour Congress sent the following letter to the Prime Minister yesterday.  I will appear on “Goldhawk Live” to discuss the issue on Sunday at 8pm EST. Hopefully, the letter and I are more coherent than Tuesday’s Globe and Mail editorial, which decried “Ottawa’s […]

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Interest Deductibility Letter

Recently, CLC President Ken Georgetti sent the following letter to Jim Flaherty: May 8, 2007 Honourable Jim Flaherty, P.C., M.P. Minister of Finance House of Commons Ottawa, ON K1A 0A6 Dear Minister: On behalf of the Canadian Labour Congress (CLC), I write to express our support for your promise, in Budget 2007, to end the corporate-tax deduction for interest on […]

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Dion Keeps Right of Harper

True to form, the Liberals will put forward a motion tomorrow calling for the tax-deductibility of foreign-affiliate interest and for lower taxes on income trusts in the name of economic nationalism. UPDATE (May 10): The Canadian Labour Congress has released a letter opposing the motion.

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Fear and Loathing on Bay Street: The End?

It looks as though Jim Flaherty’s strange journey around the tax-deductibility of interest on loans to finance foreign affiliates is about to end badly. The following story seems to confirm that, under pressure from big business and the Liberals, he is set for “a complete reversal of the budget announcement”: Flaherty retreats from tax deduction on foreign investment loans Eric […]

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