The fiscal implications of corporate income tax (CIT) cuts are a key issue in the current debate. Federal cabinet ministers and Neil Reynolds have boldly asserted that lower CIT rates will increase CIT revenues. As Andrew and I have pointed out, this claim is implausible and not supported by the government’s own Department of Finance. The following table provides a closer […]
Read moreThis 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 – surprise! – the corporate sector. […]
Read moreLabour Force Survey revisions announced in the Daily today show that total employment has still not recovered to pre recession levels. “Compared with the employment peak of October 2008, employment in December 2010 was lower by 30,000 (-0.2%) based on the revised LFS estimates. Between the employment peak of October 2008 and the recent low in July 2009, the revised LFS estimates show an employment decline of 428,000 (-2.5%). Between […]
Read moreHere’s a short description of the methodology I used yesterday in explaining why allocating $3 billion of federal revenue to further corporate tax cuts (instead of other more effective stimulusmeasures) would actually destroy jobs (up to 46,000) on a net basis. It’s also available on the CAW site.
Read moreHere is the trade union statement to the World Economic Forum, which begins today: A New Reality for Workers? Statement of Labour Leaders to the World Economic Forum Davos, Switzerland, 26 – 30 January 2011
Read moreJack Mintz is out today with yet another paper applauding the federal corporate tax cut from 18% in 2010 to 15% in 2012. Revenue Fudge He claims that the revenue loss will be “relatively small†or “relatively insignificant†without actually suggesting a dollar amount (pages 3 and 20). By comparison, the Department of Finance (see Table 3.5), the opposition parties, […]
Read moreAt the five year mark, there is a lot of commentary on the Conservative record. Have they been true to their right-wing economic agenda, or shifted to the centre? I find evidence for the former argument much more convincing. The Conservative fiscal record spans the five full fiscal years, from 2006-07 to 2010-11 (which is now drawing to a close.) […]
Read moreThe International Labour Organization has released its annual Global Employment Trends report. The International Trade Union Confederation’s response follows: ILO Report Shows Job Market Still in Crisis Brussels, 25 January 2011: Today’s Global Employment Trends report from the International Labour Organization (ILO) confirms that, despite improvements in many economic indicators, global unemployment remains at crisis levels.
Read moreI have to assume that this week’s Conservative road show will be called People for Corporate Tax Cuts.
Read moreAndrew 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 Ontario’s last post-budget panel.) Imagine […]
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 […]
Read moreI’ve been thinking a lot lately about the sorry state of the BC minimum wage, stuck at $8 after nine years two months and still counting. Yes, it will likely increase very soon, now that almost all leadership candidates on both sides have expressed support for higher minimum wages, but one has got to ask why it took so long. […]
Read moreThere is too much happy talk that the Great Recession is behind us. Here is my latest, rather gloomy, piece for The Mark.
Read moreHere is an interesting piece from the Financial Times on how Chinese companies are rapidly grabbing global market share from Germany of all countries across a swath of technologically sophisticated capital goods industries, from solar, to high speed rail, to the German fortress of mechanical engineering and machine tools. Had China heeded the mainstream view that its comparative advantage lay […]
Read moreFinance Canada finally published its 2010 Tax Expenditure report this morning. This annual report provides new estimates for the revenues the federal government loses annually from different tax measures, deductions, credits, and other tax preferences. These tax preferences also affect provincial revenues to the extent that they piggyback on the federal government’s tax base.  The report includes estimates for the […]
Read moreAt long last, the federal government has decided to seriously address the housing price bubble that has increasingly concerned Canadians. On the heels of multiple warnings from the Bank of Canada that Canadians have taken on too much household debt for comfort (we hold the dubious distinction of having the worst consumer debt to financial assets ratio among 20 OECD […]
Read moreFinance Minister Flaherty’s announcement of restrictions on mortgage lending deserves some credit (pun intended.)Â But there is a bit more to this than is immediately apparent. The government has decided that, to qualify for government-backed mortgage insurance, the amortization period of a mortgage should be no more than 30 years (down from 35 years now, and 40 years in 2006, […]
Read moreIt is one thing to argue (as the CME did last week) that corporate income tax cuts boost GDP via higher investment and thus generate some offsetting increase in revenues. (See Erin’s post for a good critique.) It is quite another thing for Finance Minister Flaherty to argue that CIT rate cuts generate fully offsetting CIT revenues. Here is what […]
Read more      American economist Emmanuel Saez has painstakingly assembled a century-long statistical series on U.S. income distribution. On two occasions, the share of income captured by the richest 1 percent reached about one-quarter of the national total. The first time was in 1928. The second was in 2007. As we all know, both peaks in wealth concentration were followed by financial […]
Read moreOne nice thing about Canada’s financial regulatory architecture is the provision that the bank act must be reviewed every 5 years. This gives us all a time to take stock of the direction that bank regulation is heading.  This is the year we are due for the Bank Act review. After a couple of years of financial crisis, it might seem […]
Read moreThere’s a shockingly honest and accurate article about Canada’s deteriorating trade performance in today’s Globe and Mail by Barrie McKenna. It notes that Canada’s trade balance improved dramatically in November (almost completely closing October’s $1.5 billion). However, it cited some Bay Street economists lamenting that this was for the “wrong reasons”: namely, a sharp slowdown in Canadian spending and hence […]
Read moreYesterday, Alex Usher blogged at the Globe and Mail’s web site about the salaries of Canadian university professors. He argues that professors in Canada are now paid better than professors in the United States. He also suggests that, in Canada, “professors are getting world-class pay without producing world-class results.” While I’ve never argued that tenured Canadian university professors are underpaid […]
Read moreI have reviewed Jayson Myers’ recent Canadian Manufacturers and Exporters report on corporate tax cuts, which I made public yesterday. Proponents of lower corporate taxes usually argue that these will help Canada compete with other countries in attracting internationally-mobile investment. However, as Myers admits, “over the past decade, reductions in Canada’s effective and average combined statutory corporate tax rates have […]
Read moreThe Weyburn, Saskatchewan carbon capture and storage (CCS) project has sprung big leaks, and with it the argument that CCS can make dirty fossil fuels clean. The core idea behind CCS is taking CO2 emissions and piping them back underground where they are supposed to stay, forever. In the case of Weyburn, the CO2 comes from a coal plant across […]
Read moreOh, the cynicism of it all. I was just watching the Evan Solomon Power and Politics show on Newsworld (about 5.40pm ) when an ad came up extolling opportunities for re-training under Canada’s Economic Action Plan and referring viewers to the same web site. That’s strange, I thought. Have those programs not expired? I checked the web site and find […]
Read moreJayson Myers from the Canadian Manufacturers & Exporters (CME) is touting a report supposedly showing that corporate tax cuts will create 99,000 jobs. News stories indicate that it is “set for release†or “being released Wednesday morning.†I could not find the report online, so I phoned the CME. I was initially told that it would be posted around 10am […]
Read moreStatistics Canada provides free of charge a very rich set of data on income issues, including low income (aka poverty) in 20/20 format. Here you can find data on the incidence of low income by four different measures; by family type; and by quite detailed geography. (You have to play around with the active dimension to get at all of […]
Read moreTrade Minister Peter van Loan goes after Maude Barlow with a letter in yesterday’s Globe and Mail, responding to her fine recent op-ed on the Canada-EU free trade talks. Among other cheap shots, van Loan once again cited as “proof” the findings of a computable general equilibrium model that was commissioned by the EU and the Canadian government to support […]
Read moreHow are union bashers able to get away with inflammatory rhetoric which would be roundly denounced as extremism and worse if directed to other targets? Here is an extract from the transcript of Kevin O’Leary’s interview with Heather Hiscox on CBC News Morning (6.52 am on January 10.) Emphasis added. “we still have the problems of unions in many sectors, […]
Read moreThere are some pretty cool charts to play with in today’s release of the interactive version of this biannual report from the Economic Policy Institute.
Read more