At times, the Fraser Institute produces such helpful material. I hope they make their well-heeled funders, such as the multi billionaire Koch brothers, proud. However, I’m sure the Kochs are more concerned that missteps by their progeny Mitt and Ryan are derailing their chance to buy the US presidency. So back to the Fraser Institute and to three of their […]
Read morePerhaps the most striking feature of today’s Ontario budget is how close it comes to last month’s Drummond report. Drummond’s preferred scenario for 2017-18 was $134.7 billion of provincial revenue, $117.5 billion of program spending and $15.3 billion of interest payments. By comparison, today’s budget envisions $135.9 billion of revenue, $118.9 billion of program spending and $15.4 billion of interest […]
Read moreThe Drummond report claims that Ontario is headed for a $30-billion deficit. This figure has been widely and uncritically reported. For example, The Globe and Mail printed four articles featuring this number in its February 18 edition. The Ontario government projected a balanced budget with a $1-billion contingency reserve by 2017-18. To instead project a deficit of $30.2 billion, Drummond […]
Read moreThe Harvard International Review has posted an interview with Don Drummond. I have posted the following response: It is good Drummond confesses that his free-market policy prescriptions failed to improve productivity, but old habits apparently die hard: “We have an Employment Insurance scheme that basically dissuades people from going where the jobs are. We still have interprovincial trade barriers.†The […]
Read moreAn interesting nugget in last week’s Drummond report is Table 11.1, an updated version of Table 2 from “Ontario’s Tax Plan for Jobs and Growth†(2009). It provides a sectoral breakdown of the McGuinty government’s recent business tax breaks: HST input tax credits, cutting the corporate income tax, and eliminating the corporate capital tax. The combined annual cost of these […]
Read moreStatistics Canada reported today that consumer prices jumped in January (by 0.4% or 0.5% seasonally-adjusted), offsetting the drop in December. As a result, the annual inflation rate is now 2.5% and the Bank of Canada’s core inflation rate is 2.1%. Monetary Policy Both measures are well within the central bank’s target range, which should allow it to keep interest rates […]
Read moreThe Drummond Commission reported today. The Good While the McGuinty government prevented the Commission from considering tax rates, it proposes some sensible measures to raise revenue. Chapter 18, “Revenue Integrity,†recommends combating corporate tax avoidance and cracking down on the underground economy. Businesses sometimes hire workers as “contractors†to avoid paying Ontario’s Employer Health Tax. Drummond advises the province to […]
Read moreThe Ontario government’s long awaited and much discussed report of the Commission on the Reform of Ontario’s Public Services (aka, the Drummond report) was finally publicly released this afternoon. As was rumoured, the report says Ontario would need to increase program spending by no more than 0.8% per year for the government to reach balance by 2017/18.  Drummond has adopted […]
Read moreFurther to my earlier post on this topic, whether or not we are or will soon be experiencing labour and skills shortages is a question of critical importance to the development of sound public policy. Next week, we will get some new Statistics Canada data on job vacancies which will help support a more informed discussion. Given projections of very […]
Read moreDon Drummond confesses that he has been wrong to believe that changes in public policies – such as free trade, cuts to corporate taxes, low inflation, the introduction of the GST, balanced budgets and reductions to inter provincial trade barriers (aka the neo liberal agenda) – are the key to improving Canada’s dismal productivity record. For many years the author […]
Read moreThe December issue of the quarterly Economic Climate for Bargaining publication I produce is now on-line. Â This issue has a number of pieces on issues of inequality, including: Rising inequality is hurting our economy Labour rights, unions and the 99% Canadian economy bleeding jobs; public sector cuts to intensify Recession and cuts hit Aboriginal and racialized workers hardest It also […]
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 moreDon Drummond has an op-ed in today’s Toronto Star concluding: Federal and provincial governments and the Canadian business sector should [establish] monitoring mechanisms that will permit regular reports to Canadians on whether the Canadian corporate tax revolution is producing benefits for them. As an advocate of corporate tax cuts, he believes that such benefits exist. I am more skeptical and […]
Read moreAll eyes may be on Ottawa when the federal budget is released this afternoon, but it isn’t the only government tabling its budget today.   New Brunswick’s new Conservative government will also be tabling its first budget today–and it’s expected to include austerity spending cuts at the same time that they proceed with further corporate tax cuts.    The following is an […]
Read moreBack in June, the TD Economics group released a major report co-authored by Don Drummond: “The Productivity Puzzle. ” It provides a comprehensive overview of major studies and the empirical evidence, and should help spark some critical reflection. Progressive economists should agree with Drummond that productivity growth is vitally important to the growth of living standards over the medium and […]
Read moreThe Ottawa Economics Association (OEA) held a conference today and yesterday evening. The usual suspects were in attendance saying the usual things: Mark Carney spoke about the need for China to understand the risks of the “paradox of thrift” (see my post from earlier today) that will be unleashed by fiscal consolidation. Don Drummond sang from the productivity choir book […]
Read moreI was pleasantly surprised to see a report published yesterday by Don Drummond and Francis Fong at the TD Bank on the Changing Canadian Workplace.  It provides a short but decent summary of some different issues affecting labour: macro trends, educational requirements, changing composition, women, immigrants, aboriginal Canadians, older workers, widening income gaps, income security, etc.  These are a lot of […]
Read moreA couple of weeks ago, the Canadian Centre for Policy Alternatives released a paper of mine about how Canada’s corporate tax cuts will transfer revenue to the American federal treasury. That day, I debated this issue with Don Drummond on the Business News Network (video clip). Also that day, Jack Layton raised it in Question Period. Ontario NDP leader Andrea Horwath had raised it at Queen’s […]
Read moreA couple of days ago, I took part in a TV Ontario panel about sales-tax harmonization. I emphasized a couple of points that will be familiar to readers of this blog. First, harmonization is unlikely to have much effect on capital investment because many capital goods are already exempt from the existing provincial sales tax. Second, if the principle is […]
Read moreI had been girding my loins yesterday, with the release of StatsCan’s July GDP numbers, for another orgy of triumphalist headlines: “The Recovery Is Nigh! All is Good! Stop Worrying! Nothing to See Here, Folks!  Just Go About Your Business!” After all, Chrysler’s two humongous Canadian assembly plants went back to work in July (after a 6-week shutdown as Chrysler went […]
Read moreLast week economists at the TD Bank called for uniform entrance requirements for the Employment Insurance program (although not as low as we’d like).  This week in an article in the Globe and Mail, TD Bank’s chief economist Don Drummond has called into question the effectiveness of the RRSP system and suggested that we need stronger public pensions, such as higher benefits through the Canada […]
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 ever deepening global and national economic crisis has produced highly divergent views among mainstream economists on how radical a change is needed to orthodox fiscal and monetary policies with their focus on balanced budgets and low inflation. At one extreme, the recent Economic and Fiscal Statement indicates that the prevailing Department of Finance view is still that only very […]
Read moreAs foreshadowed by Andrew, TD Economics has addressed the concerns raised on this blog about its April 15 report by replacing this document with a revised April 16 version. The new endnotes cite the CLC publications and acknowledge that they were “inappropriately left out of the original verson [sic] of the report.” TD has also amended its figures. The April 15 […]
Read moreI have spoken to TD Chief Economist Don Drummond who assures me, as I would assume, that neither he nor Beata Caranci were aware that material had been taken without citation from the CLC studies. The version of the TD study on the web will be revised to add an appropriate citation.
Read moreFor years, Don Drummond of TD Bank has publicly observed that business investment in Canada is lagging far behind soaring profits and called for further corporate-tax cuts to spur investment. He never seemed to perceive a contradiction between the fact that corporations are not reinvesting their record-high after-tax profits and the claim that even higher after-tax profits would boost investment. In a […]
Read moreArun DuBois signing in after a long absence. I’m breaking radio silence because (a) I suddenly have a bit more free time (how do the rest of you do it? You folks are machines!); and (b) my righteous indignation has been stoked to full throttle this week after reading one too many Globe and Mail story quoting seemingly disinterested financial-sector […]
Read moreThe Dominion Institute has recruited twenty great Canadian thinkers to write about what the country might look like in 2020. The fourteen essays currently posted include Don Drummond’s neo-classical analysis of manufacturing and productivity and Jim Stanford’s excellent analysis of Canada’s reliance on natural resources. Jim’s main argument, that Canada’s unmanaged resource boom is damaging other industries and our natural environment, […]
Read moreTD Economics has posted this manifesto, penned by Chief Economist Don Drummond, in the belief that it represents a broad consensus among economists on how to raise the rate of productivity growth in Canada. http://www.td.com/economics/special/dd0906_prod.pdf The manifesto – unsurprisingly – closely reflects the mainstream (Bay Street, Department of Finance, OECD) focus on “sound” macro policy, free trade, de-regulation and tax […]
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