The Parliamentary Budget Office (PBO) was established in response to the systematic underestimation of federal budget surpluses. Its job was to provide independent estimates of the available surplus to keep Finance Canada honest ( “truth in budgeting” as the Conservatives said at the time). With the federal government headed into deficit, the PBO’s purpose is less clear. In theory, it […]
Read moreYesterday, the chief economists of the chartered banks called on the federal government to permanently cut taxes now and balance the budget after the economic crisis by cutting spending. An obvious but unstated implication is a smaller government when the economy recovers. While this outcome would undoubtedly suit the ideological preferences of bank economists, it would hardly be a sensible response […]
Read moreThe conventional wisdom may be that political parties cannot successfully campaign against tax cuts. But the federal NDP recently achieved its second-best electoral result ever by running squarely against Harper’s corporate tax cuts. South of the border, the US Democrats just won a massive victory partly by campaigning against the Bush tax cuts. In public opinion polls, citizens often prefer better […]
Read moreThe CCPA released today a new study by myself and Toby Sanger on the distribution of BC’s carbon tax and recycling regime. I’ve probably leaked most of the findings in various blog posts in recent months, but the full meal deal is now available for download here. Toby and I modeled the carbon tax by quintile based on household survey […]
Read moreThe United Steelworkers union has been on strike at three Potash Corporation of Saskatchewan mines since August 7. This labour dispute raises much broader questions about the distribution of resource rents. The following op-ed, printed in today’s Regina Leader-Post, updates the op-ed printed in the Saskatoon StarPheonix before the strike. Workers, citizens miss potash profits The Leader-Post (Regina) Thursday, August 21, […]
Read moreYesterday, I appeared before the Standing Committee on Finance and Economic Affairs at Queen’s Park. The committee is reviewing the Ontario Health Premium, as required by the legislation that implemented this levy. My assessment of the premium starts from the premise that the Government of Ontario needs more revenue not only for healthcare, but also for industrial development, education and […]
Read moreCanada 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 already have a substantial “tax […]
Read moreA well-intentioned article in the Vancouver Sun seeks to explain carbon taxes and cap-and-trade systems. A worthy objective, but the article really aims to pigeonhole various alternatives in terms of political parties. It ends up taking a far-too-simplified view that goes something like this: The debate is being played out in British Columbia, where the Liberal government and New Democratic […]
Read moreAs has been widely reported in the business press, members of the United Steelworkers union employed at the Potash Corporation of Saskatchewan’s Allan, Cory and Patience Lake mines voted 96% on Monday night for a strike mandate. The three locals served strike notice on Wednesday, which will put them in a legal strike position tomorrow. The company responded by serving […]
Read moreThe Wall Street Journal ran an op-ed this weekend entitled, “California Getaway: High taxes continue to drive businesses out of state,” about how the California State Automobile Association (CSAA) is relocating three call centres to other states. However, the CSAA, an affiliate of the American Automobile Association, is not really a “business”. I assume that, as a non-profit organization, it […]
Read moreAs Andrew Jackson has written recently on this blog, the New Brunswick government is proposing a set of truly dreadful tax reforms. The proposals include: a 10% flat tax for personal income, or a two-tier rate at 9% and 12% reducing the corporate income tax from 13% down to as low as 5% a carbon tax increasing the provincial sales tax by […]
Read moreThe New Brunswick government have proposed and are conducting hearings into a dreadful proposed “tax reform” package, centred on a flat personal income tax of just 10% and corporate tax cuts, to be financed mainly by a higher harmonized sales tax. I have written a short piece quantifying the benefits to high income New Brunswickers of reducing their effective personal […]
Read moreThe front page banner headline from the Vancouver Sun: B.C. prefers NDP’s Carbon tax plan: Tax industrial polluters, not consumers, 82% tell pollster It is painful to keep reading because the poll in question is based on inaccurate information about how the carbon tax actually works. Industrial polluters are subject to the tax to the extent that they burn fossil […]
Read moreThe 2008 OECD Survey of Canada incorporates a long and surprisingly critical overview of developments in the energy sector, with a major focus on the tar sands. (Chapter 4). It is, in many respects, far closer to the views of the Pembina Institute and the Parkland Institute in Alberta than to those of the Alberta and federal governments, and even […]
Read moreThere is a lot of the colour green all over Dion’s Green Shift plan. But after reading it, the greenery appears almost as superficial as the green shift caps that Liberal MPs wore awkwardly with their business suits at the launch yesterday. Dion’s plan is really a proposal for a tax shifting budget and doesn’t contain any new proposals to […]
Read moreThe 2008 OECD Economic Review of Canada http://www.oecd.org/document/3/0,3343,fr_2649_201185_40732867_1_1_1_1,00.html contains most of the standard neo liberal policy prescriptions we have come to expect – including a proposed shift to a consumption based tax system. However, they do have the good grace to devote two pages (84-85) to “equity considerations” and even concede that ” efficiency considerations come at a cost – […]
Read moreFor 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 to Ontario’s currently unprofitable manufacturing […]
Read moreBrian Murply and Paul Roberts from StatsCan presented an interesting and potentially very useful and important study to this week’s StatsCan Socio-Economic performance. The effective personal income tax rate is typically computed – across various data sources – as total taxes paid as a ratio of total or taxable personal income. This ratio of two overall averages is accurate enough […]
Read moreAlthough it was probably overshadowed by the census release, Ralph Goodale appeared to jump on Marc’s deficit bandwagon last week. Some paragraphs in the early portion of his National Post op-ed seemed like they belonged on this blog: He [Harper] has taken this nation to the brink of a deficit – the first in more than a decade. And it’s […]
Read moreIn his latest Maclean’s column, Paul Wells suggests that the Prime Minister’s apparent anger toward various public officials and agencies reflects not his personality, but his ideological crusade against government. Of course, as Wells observes, the Canadian state was greatly diminished during the years preceding Harper’s government. However, Harper undoubtedly aims to continue the trend and is on record arguing […]
Read moreThe Federation of Canadian Municipalities released a large poll today — the largest of its type on municipal issues. The poll seems reasonably well done with decent questions and language. Many of the results are to be expected: strongest support for increased funding for health care, with increased funding for local infrastructure as a solid second in terms of priority. What surprised […]
Read moreIn a commentary last fall in the NY Times, Robert Frank makes the case for consumption taxes to replace the income tax in the US. Yet, while this sounds revolutionary on first reading, what Frank is describing is essentially the Canadian tax system: Under such a tax, people would report not only their income but also their annual savings, as […]
Read more A good one from Eric Beauchesne on the Canwest wire. Some highlights: Canada’s wealthy benefit most from tax cuts, OECD finds The tax burden on wages has eased in most of the world’s industrial countries this decade, including here, but Canada is among a minority where most of the relief has gone to high-income earners and the least to lower-income […]
Read moreI’ve posted below some interesting comments from Richard Shillington, a senior associate at Informetrica Ltd – who among many other accomplishments has drawn attention to very high effective tax rates on low income Canadians, and the failure of many programs to reflect the realities of life in low income. I think Richard advances a good alternative solution to a real […]
Read moreI want to piggy-back very briefly on Marc’s post from Tuesday (and update yesterday) which suggested that the proposed Tax-Free Savings Account won’t “promote investment” like the government says it will (see page 76 of Budget). The empirical literature I’ve seen certainly supports his argument — most corporate investment is financed from retained earnings, which in turn suggests that consumption, […]
Read moreUsually when expectations are lowered it is so that they can subsequently be exceeded. So budget watchers were all wondering in the past few days what the surprise in this budget would be. Alas, the surprise is that there is no surprise. As expected we got a do-nothing budget, albeit one with a glossy cover of a child waving a […]
Read moreExcellent analysis by Marc and Andrew leaves me with relatively little to add. The Steelworkers and NDP made many of the same points. Budget 2008’s minor new investments in public programs will amount to only one-sixth the value of recent corporate tax cuts during the next fiscal year. Budget 2008 (Table 1.1, page 10) proposes $1.4 billion of new spending […]
Read moreThere has been so much discussion of income splitting on this blog that we already have two posts entitled “Income Splitting Redux.” Adding to the mix, the Institute for Research on Public Policy has released a major paper by Jon Kesselman on the subject. He cites my Ottawa Citizen op-ed among many other sources. I have not fully read and […]
Read morePatrick Brethour in the Globe and Mail writes: Consumers will pay about one-third of the new carbon tax, but will receive close to two-thirds of tax rebates, totalling $338-million in the 2008-09 budget year. B.C. businesses, which will pay two-thirds of the new tax, will receive only about half of that money back from reduced corporate and small-business income taxes. […]
Read moreThe federal finance department just released its Tax Expenditures and Evaluations report for 2007. This annual report includes the estimates and projections of revenues that the federal government loses from different tax credits, deductions, exemptions and other tax expenditures. The number of these loopholes has proliferated in recent years as the Conservatives have used boutiquey tax cuts for a wide […]
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