It looks as though Jim Flaherty’s strange journey around the tax-deductibility of interest on loans to finance foreign affiliates is about to end badly. The following story seems to confirm that, under pressure from big business and the Liberals, he is set for “a complete reversal of the budget announcement”: Flaherty retreats from tax deduction on foreign investment loans Eric […]
Read moreMore good work from the CCPA: Ontario’s rich-poor gap is huge: study Report shows wealthiest 10% earn 75 times more than poorest 10% April Lindgren The Ottawa Citizen Tuesday, May 08, 2007 Â TORONTO – The income gap between Ontario’s richest and poorest families is greater than ever before and the most pronounced in the country, according to a study […]
Read moreUnfortunately, it looks like the Finance Minister may be folding on foreign-affiliate interest-deductibility.
Read moreThe following, from today’s Toronto Star, includes some commentary from yours truly: The China syndrome: A new condition characterized by the apparent reluctance of a certain national government to embrace an emerging, global economic power May 05, 2007
Read moreMarc’s recent post prompted me to look at transcripts from the Senate hearings on “issues dealing with interprovincial barriers to trade.” The following passage caught my attention: The Chairman: Let me suggest something that tantalized me when I first looked at this question well over 30 years ago, and more recently — the economics of it. I think one of […]
Read moreAsking business whether to get rid of government regulations is much like asking a barber whether to get a haircut. Nevertheless, the Conference Board’s main (and only) evidence in projecting TILMA’s benefits for BC and Saskatchewan were surveys of business organizations and government departments. In our paper, Marc and I noted some serious problems with the BC survey as well […]
Read moreAs noted in December using 2002 figures, Saskatchewan imports more from its prospective TILMA partners than it exports to them. The 2003 figures are now available: Saskatchewan’s trade deficit with Alberta was $2.1 billion and its trade deficit with BC was $0.4 billion. Since there are currently no significant barriers to inter-provincial trade, signing TILMA would not significantly increase inter-provincial trade […]
Read moreAs Joe Kuchta points out, the Conference Board’s assessment of TILMA’s potential effects on Saskatchewan embodies the same basic flaws as its previous assessment for BC. Joe also notes that, like its predecessor, the Saskatchewan assessment features what appear to be arithmetic errors.
Read moreThe Globe and Mail has run three major stories about Alcan in the past few days: Act I: “Alcan says tax makes it takeover bait” (April 27) Act II: “B.C. town may fight Alcan” (April 28) Act III: “$7-billion project deepens Alcan’s Gulf ties” (May 1) Alcan is a major Canadian-based multinational that produces aluminum. Bauxite, the basic raw material, […]
Read moreFor more on the themes highlighted below by Jim, my note on trade balances and jobs is now available through the CCPA.
Read moreCrawl Across the Ocean, which has infrequent but excellent posts, features an amusing and accurate critique of the Fraser Institute’s “Consumer Tax Index.† MORE (April 29): In particular, this critique points out that the political right defines “essential” very narrowly when measuring poverty or railing about taxes, but very broadly when limiting the right to strike.
Read moreThe Canadian Football League’s season does not begin until June, but debate is already underway about TILMA’s potential effect on its franchises, most of which are for-profit businesses that receive government subsidies. The last federal budget proposed a new Canadian Heritage Sport Fund to promote three-down football, but also proposed to expand TILMA to more provinces. In response to my […]
Read moreJeffrey Simpson has a good column in today’s Globe on the new Conservative climate-change plan. He makes the same point that I did about the impossibility of meeting Kyoto’s first-round targets and the importance taking our second-round targets seriously. He also points out how thin all of these climate-change “plans” have been. To me, a “plan” is a set of […]
Read moreToday, the Government of Saskatchewan initiated a process of legislative consultations on TILMA and released the Conference Board’s assessment of this agreement’s potential impact on Saskatchewan. This document is the sequel to the Conference Board’s BC assessment, which Marc and I critiqued on this blog and in our paper. I have not yet read through the 55-page document, but will […]
Read moreA Saskatchewan Federation of Labour Vice-President has reported back from a meeting on TILMA organized by the C. D. Howe Institute.
Read moreAndrew Coyne makes several good points in today’s column on the economic-nationalist case for income trusts. He is skeptical, but for different reasons than the other Andrew and I. Like most of Coyne’s economic commentary, this column displays what I would characterize as excessive faith in the efficiency of free markets. Interestingly, he does not mention that Dion and May […]
Read moreYesterday’s Tyee article by Horner and Orchard provides a good historical overview of the Wheat Board, but does not mention the recent plebiscite based on which the Conservatives propose to remove the Board’s barley monopoly. It is worth explaining why this flawed plebiscite does not give the Conservatives much of a democratic mandate, rather than ignoring the plebiscite altogether. Of 80,000 ballots sent […]
Read moreLarry Hubich has sent an open letter to the Premier of Saskatchewan on TILMA. The letter cites much of the Lee, Weir, Grady, and Shrybman material discussed on this blog.
Read moreOther than the occasional call for Canada to adopt the US dollar, discussion of Canadian monetary policy mainly consists of the C. D. Howe Institute and the Bank of Canada praising inflation targeting. As Thomas Palley reminds us, another perspective exists: The Case Against Inflation Targeting A few months ago the Federal Reserve seemed to be inexorably moving toward adopting […]
Read moreAl Gore has famously and correctly characterized the scientific consensus about global warming as “An Inconvenient Truth”. In today’s Financial Post, Buzz Hargrove identifies another “inconvenient truth” for Canadian progressives: “it is impossible to achieve Kyoto targets in the time frames spelled out in Kyoto.” Canada’s Kyoto commitment was relatively modest and achievable. However, after signing it, the Liberal government […]
Read moreApparently following Andrew Coyne’s advice, Dion seems to be positioning himself to the right of Harper on tax policy. This move casts further doubt on Dion’s promise of a progressive alliance with the Greens. When the Conservatives cut the GST, the Liberal response was not that this move would take money away from important public services, but that it would […]
Read moreAt the conference a couple of weeks ago where Elizabeth May mused about income trusts, she also committed to make opposition to the Security and Prosperity Partnership (SPP) the centrepiece of the Green Party’s forthcoming election platform. The SPP is an arrangement between Canada, the US, and Mexico that seeks to accelerate tar-sands development, among other objectives. It is very […]
Read moreBudget 2007 made interest on funds borrowed in Canada to finance foreign business operations nondeductible from Canadian corporate taxes. Finance Canada suggested that this arcane reform would raise relatively little revenue and, initially, business barely seemed to notice. More than a week after the budget, a Globe editorial and a Financial Post op-ed criticized the change as a huge ‘tax […]
Read moreIn Thursday’s Financial Post, the Canadian Association of Income Funds articulated the argument suggested by Elizabeth May: the devaluation of income trusts has made them vulnerable to takeovers by foreign private-equity. Certainly, many enterprises that paid little tax as income trusts will continue to pay little tax by converting to new organizational forms, such as private equity or publicly-traded corporations. […]
Read moreStéphane Dion, who is not progressive, has allied with Elizabeth May, who is not progressive, ostensibly to prevent progressive vote-splitting. As Andrew Coyne notes in tomorrow’s National Post column, this maneuver is clearly directed against the federal NDP, which is progressive. It is worth recalling the 2006 election results in Central Nova, the riding where Dion has pledged to prevent […]
Read moreToday’s Ottawa Citizen has a good editorial on the existence of two publicly-funded school systems in several provinces. The original concept of one system for Protestants and another for Catholics has evolved into a “public”, secular system and a “separate” system that teaches some Roman Catholicism but is also attended by many non-Catholics. Many schools cannot afford needed supplies, many […]
Read moreToday’s Financial Post reports that Ontario’s Premier “is exploring the possibility of joining the B.C.-Alberta free trade initiative.†Specifically, it quotes him as saying, “what I have done is talked to [B.C. Premier] Gord Campbell and [former Alberta premier] Ralph Klein, in the past, and said, you guys seem to have done something which sounds good. I’m not sure the […]
Read moreNeil Reynolds has discovered that a fraction can be increased by reducing its denominator. Because labour productivity equals output divided by employment, he claims that “In manufacturing, you measure success by the number of jobs you eliminate.” By definition, a given volume of manufacturing output produced by fewer workers implies higher manufacturing productivity. However, it does not follow that lost […]
Read moreAs I mentioned below, I am home in Saskatchewan this week. As a result, I have seen the latest “Parliamentary Update†from my former Member of Parliament (MP), Ralph Goodale. It is, of course, normal that MPs of all stripes deploy these publicly funded “householders†to present themselves and their activities in a positive light. When the Liberals were in […]
Read moreOn March 30, I attended the federal government’s conference on “Internal Trade: Opportunities and Challenges,†which was hosted by Human Resources and Skills Development Canada and by Industry Canada. Other attendees included academics, federal and provincial civil servants, and representatives of business and professional organizations. The academic and policy people all agreed that the material costs of alleged inter-provincial barriers […]
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