Over at Worthwhile Canadian Initiative (WCI), Stephen Gordon reasonably argues that economic models can be useful for policy analysis even if they lack the predictive power needed for forecasting. He writes: A well-designed model will be able to reproduce the main features of interest of the real world. More importantly, it will also be able to reproduce the main features […]
Read moreDavid Dodge is as close to an authoritative mainstream voice as we have on economic issues (not that that means he is always right, but he sure counts in the mainstream media.) Here is what David Dodge had to say on postponing corporate income tax cuts in a lecture at Queen’s a year ago. “In addition the final scheduled cut […]
Read moreStatscan economist Philip Cross weighs in on how trivial is the impact of cuts in the overall scheme of things, as reported in a fine story by Heather Scoffield of CP. I agree, but fear his career will be in serious jeopardy. Or perhaps he is on the eve of joining Munir in retirement. Minister Clement will not like this […]
Read moreA few months ago, I tore a strip off Barrie McKenna’s column on internal trade. But today I write to praise his column on corporate taxes: U.S.-based companies . . . are taxed by the Internal Revenue Service on their global income. So any profits they don’t reinvest and try to repatriate are hit with the higher U.S. rate, not […]
Read moreToday, the Global Development and Environment Institute and the Institute for Policy Studies released the following statement signed by more than 250 economists, including a couple of Progressive Economics Forum members: Dear Secretary Clinton, Secretary Geithner, and Ambassador Kirk: We, the undersigned economists, write to alert you to important new developments in the economics literature pertaining to prudential financial regulations, […]
Read moreA useful study from Industrial Relations (65/4; Fall, 2010.). Apparently we don’t screw things up for innovative firms. What Do Unions Do to Innovation? An Empirical Examination of the Canadian Private Sector Scott Walsworth Associate Professor and Hanlon Scholar in International Business, Edwards School of Business, University of Saskatchewan, Saskatoon, Saskatchewan, Canada walsworth@edwards.usask.ca SUMMARY This article uses Canadian national data […]
Read moreI made a short presentation on the disturbing rise of temporary work last week. It seems the cutting edge of the new normal is to be found in our schools, colleges and universities. As most of us would know or strongly suspect, paid work has become more casualized or precarious over time as the standard employment relationship of full time, permanent […]
Read moreThe 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 […]
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