A 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 moreWhile some prices rose slightly and others fell slightly between July, August and September, the total Consumer Price Index has remained exactly the same through these months. The annual inflation rate declined by 0.9% in September, tying July for the largest rate decline since 1953. All provinces but Saskatchewan now have negative inflation. While the main story continues to be […]
Read moreBack in my home province, a legislative committee has begun a public inquiry on meeting future electricity demand. Written submissions and video of oral presentations are available online. Saskatchewan’s traditional reliance on coal-fired electricity is challenged by concerns about climate change and the prospect of federal charges for carbon emissions. The debate has recently been polarized between proponents of nuclear […]
Read moreOn Thanksgiving, Canadians can be thankful that public stimulus spending propelled a surprisingly strong labour-market rebound in September. This morning’s release shows full-time employment up and the unemployment rate down. However, the jobs picture is not as rosy as these top-line numbers imply. Stimulus Working? The improvement in Canada’s labour market should not be taken as an indication that government […]
Read moreUPDATE (October 20): The transcript of the hearing described below is now available. . . . Late this afternoon, I had the pleasure of serving on a Parliamentary panel composed entirely of members of the United Steelworkers union. My co-panellists before the Human Resources committee were Ken Georgetti, CLC President, and Rosalie Washington, a laid-off worker who would qualify for […]
Read moreI just saw Michael Ignatieff on TV warning that Canada could hit “the deficit wall.†I assume he means “debt wall.†(I would not fault a slip of the tongue, but the written text of a recent speech also incorrectly calls it “the deficit wall.â€) The concept is not that a country hits the wall because a particular annual deficit […]
Read moreI recently questioned whether Tim Hortons’ reorganization as a Canadian corporation would bring any additional jobs or tax revenue to Canada. Aaron Wherry since did something that journalists covering the Prime Minister’s photo-op on this issue should have done: he asked the company directly. Its response is now available on the Macleans blog. Of course, Tim Hortons hopes to expand […]
Read moreFlat Gross Domestic Product (GDP) figures for July provide a sobering reminder that the technical end of a recession may not imply a rapid recovery. Output appears to have stopped shrinking, but this morning’s release suggests stabilization rather than growth. Rounding to the nearest billion, all-industry GDP has been $1,184 billion for three months. It had peaked at $1,241 billion […]
Read moreThe first chart in today’s Third Report on the Economic Action Plan (Chart 1.1, page 8 ) appears to show that Canada is tied with Japan for the largest stimulus package in the G-7. Exactly the same bar graph appeared in the Second Report back in June (Chart 1.2, page 12). While this seemingly impressive chart has been promoted to […]
Read moreUPDATE (September 29): Quoted by The Globe and Mail, National Post, Toronto Star, and Canadian Press . . . A recent inquiry for a NOW Magazine article has inspired me to use the July Employment Insurance (EI) figures, released this morning, to examine how this program serves Canadian cities. However, I begin with a national overview of the numbers and […]
Read moreLast week, the Minister of Finance announced his aspiration to unilaterally eliminate Canada’s few remaining tariffs on imported machinery and equipment. Saturday’s Globe and Mail quoted me doubting this proposal given the severity of Canada’s offshore trade deficit in that area. I elaborate my case in the following op-ed, which is printed in today’s Financial Post with Terry Corcoran making […]
Read moreThe Canadian Centre for Policy Alternatives released a new study today comparing the expenditures of rich and poor Canadians. This approach is interesting because inequality is typically measured in terms of income or wealth. Conservatives sometimes claim that, while temporary fluctuations in income or asset values create the appearance of massive inequality at any given point in time, consumption (and […]
Read moreYesterday, the Prime Minister’s office put out a press release trumpeting Tim Hortons’ reorganization as a Canadian company as validation of deep federal corporate tax cuts. There was no real news: shareholders predictably ratified a decision that had been extensively reported back in June, when Tim Hortons management described it as “a pretty bland corporate announcement.” Nevertheless, far too many journalists […]
Read moreSome pundits have blasted the NDP for voting with the Conservatives in exchange for “a bone,” “crumbs” or “a peanut” on Employment Insurance (EI). Others have convincingly countered that forcing an election right now would not advance EI reform or other progressive causes. Nevertheless, the decision to temporarily support the government deserves further analysis in terms of the EI proposal […]
Read moreJanice MacKinnon’s op-ed on Employment Insurance (EI) in Monday’s National Post read almost as if it had been written before the economic crisis. There was no mention of mass layoffs or rising unemployment, let alone proposals to enhance EI in response to these trends. Instead, she sees the biggest problem with EI as being the supposed drag on labour mobility […]
Read moreThis morning’s consumer price figures for August are reminiscent of July. The annual Consumer Price Index decline was 0.8% (compared to 0.9% last month.) With the exception of July, August was the sharpest drop in consumer prices since 1953. In both July and August, eight of ten provinces posted negative inflation rates. The only province with positive inflation in both […]
Read moreLast night, I saw the North American premiere of Michael Moore’s latest movie at the Toronto International Film Festival. Ironically, it was held in the Visa Screening Room, which grants preferential access to bearers of Visa Gold, Platinum or Infinite credit cards. (The unwashed masses who use MasterCard, AMEX or lower grades of Visa waited in a separate line.) While […]
Read moreShould we care that the marginal effective tax rate on capital is higher in Prince Edward Island than in Serbia? Of course, this question is a joke. But the C. D. Howe Institute actually did put out a press release (PDF) last week singling out PEI for its allegedly high business taxes compared to an average of 80 countries, among […]
Read moreKeystone Liberals Yesterday, Andrew Coyne lambasted a Liberal Party “Reality Check†from Thursday that looks eerily similar to the table that I had posted on Monday. Like my table, the Liberals use the words “Growthâ€, “Declineâ€, and “Britain.†By contrast, the OECD’s tables use a negative sign (instead of words) to denote declines and refer to the “United Kingdom.†The […]
Read moreLayoffs Continue Today’s Labour Force Survey indicates that full-time employment declined by 4,000 in August. There were 7,000 fewer jobs in goods-producing industries. Retailers Hire A surprising 21,000 new jobs in retail and wholesale trade propelled economy-wide employment up by 27,000. This increase consisted entirely of part-time jobs. While any employment gain is welcome news, the quality of these new […]
Read moreDisappointingly, press coverage of Monday’s GDP numbers missed the fact that Canada had posted the worst second-quarter performance of any G-7 country. To his credit, Julian Beltrame of Canadian Press picked it up on Tuesday. The media has redeemed itself by noting that today’s Organisation for Economic Co-operation and Development (OECD) projections suggest that Canada will post the worst third quarter […]
Read moreA key justification for small-business tax breaks is that small enterprises are supposedly engines of job creation. The Canadian Federation of Independent Business’ (CFIB) oft-repeated claim that “small- and medium-size businesses employ more than half the workforce” (PDF) cites Statistics Canada’s Survey of Employment, Payrolls and Hours. A closer examination of that Survey casts doubt on this statement, the quantity […]
Read moreThis morning’s Gross Domestic Product figures put the lie to Prime Minister Harper’s claim that “we will come out of this faster than anyone.” While many other advanced economies grew or stabilized during the second quarter of 2009, the Canadian economy shrank by 0.9%. During this period, three G7 countries – Japan, Germany and France – experienced economic growth. The […]
Read moreUPDATE (August 26): Quoted by Canadian Press, Canwest, The Toronto Star and Hamilton Spectator It was the best of times, it was the worst of times… It would be welcome news if the number of Canadians receiving Employment Insurance (EI) benefits increased because of a proactive policy decision to expand this program to combat the recession. In fact, the ongoing rise […]
Read moreI missed the Globe and Mail letters on Thursday (because Jack Mintz’s op-ed prompted me to instead read The National Post that day.) Among them was the following letter from Bruce Hyer, the key advocate of not taxing “small business†profits: Yes, there was a vote I read with interest your editorial The Tax-Cutting Left? (Aug. 18) on the New […]
Read moreI had been fiddling with my last post in spare moments since the federal NDP convention. I fiddled long enough that Jack Mintz beat me to the punch in critiquing the proposal to eliminate corporate tax on small-business profits. His op-ed appeared in yesterday’s Financial Post. His priority is to slash the general corporate tax rate down to the same […]
Read moreStrangely, neither of the two most hyped issues at last weekend’s federal NDP convention reached the floor for debate. I have nothing to add to the discussion about changing the party’s name. However, the proposal to not tax small-business profits compels me to elaborate the case I made when Nova Scotia Liberals promised to slash the provincial small-business tax to […]
Read moreIn July, the Consumer Price Index posted an annual decline of 0.9%, the most negative inflation rate since July of 1953. This decline is troubling not only because it is larger than last month’s decline, but also because it is more widespread. Recent decreases in inflation have mainly been driven by lower gasoline prices in 2009 compared to 2008. This […]
Read moreAdvocates of harmonizing provincial sales taxes with the federal GST almost always argue from the premise that, whereas the GST only covers consumer purchases, provincial sales taxes apply to all business inputs. Harmonization is then presented as a means of removing the sales tax from business purchases of machinery and equipment to promote new investment. Not surprisingly, provincial governments have […]
Read moreToday’s Labour Force Survey indicates that employers paid 79,000 fewer Canadians in July. However, a surge of workers declaring self-employment or abandoning the workforce altogether left 9,000 fewer Canadians officially unemployed. Self-Employment Many Canadians are turning to self-employment due to a lack of jobs. Self-employment rose by 35,000 in July, reaching another all-time high. As a result, the net decrease […]
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