Yesterday’s strong earnings report from the Potash Corporation of Saskatchewan confirms what this blog and the NDP have been contending: even modestly increasing Saskatchewan’s extremely low royalties on hugely profitable potash mines could fund substantially better provincial public services. The Saskatchewan Party still refuses to review potash royalties. In a well-timed column, Greg Fingas developed the theme that this gift […]
Read moreRegarding the NDP platform’s reliance on additional potash revenue, columnist Murray Mandryk asks, “What if potash tanks as it did in 2009?†Of course, budgets are necessarily based on assumptions about future commodity prices. Saskatchewan Finance estimates that each dollar of change in the price of oil alters provincial revenues by $20 million (page 35). So, if a barrel of […]
Read moreSaskatchewan’s two major parties have unveiled their election platforms. The NDP’s fiscal plan is to collect higher potash royalties and reinvest the proceeds in public priorities like healthcare, education and housing. Columnist Murray Mandryk notes the spectre of Erin Weir. The NDP has expressed a willingness to discuss sharing resource revenues with First Nations. The Sask Party criticizes the NDP […]
Read moreThe banner headline, in block capitals, on the front page of yesterday’s Regina Leader-Post was “SASK. PARTY HAS FIVE-POINT HEALTH PLAN.†That’s accurate reporting, as far as it goes. The Saskatchewan Party did announce a healthcare plan featuring five points. It would have been similarly accurate to report that this announcement was accompanied by a six-page backgrounder. However, it would […]
Read moreThe Saskatchewan NDP is proposing to collect higher potash royalties and save a portion of the proceeds in a new Bright Futures Fund. The NDP has also expressed its willingness to negotiate with First Nations about the possibility of resource revenue sharing. The right-wing Saskatchewan Party strangely claims that the NDP’s plan “would plunge the province back into 1980s-style budget deficits.†[…]
Read moreYesterday, the Saskatchewan Party claimed that the provincial NDP’s plan for 30 additional primary healthcare clinics would cost $840 million. It has since removed this goofy press release from its website, but here’s a screenshot. The Sask Party multiplied the Saskatoon Community Clinic’s $7-million annual provincial cost by 30, and then multiplied that total by four years ($7 million*30*4= $840 […]
Read moreIn Saskatchewan’s provincial election campaign, the incumbent Saskatchewan Party is promising a scholarship of up to $500 per year for new high-school graduates who undertake post-secondary studies. It claims that this scholarship is worth “THREE TIMES†the annual increase in university tuition fees, which has averaged $146.50 over the past four years. What the Sask Party seems to miss is […]
Read moreI rarely give thanks for Neil Reynolds, but today’s column is a must-read. The point is that taxing large inheritances should appeal not only to those of us concerned about highly unequal outcomes, but also to those simply concerned about equality of opportunity. It may or may not be possible to justify inequalities based on differences in effort, skill, intelligence, etc. […]
Read moreA common refrain among political pundits has been that all of Ontario’s election platforms are unrealistic given a deteriorating economic outlook. Rather than bemoaning this alleged lack of realism, we should evaluate how each party’s platform would fare in a downturn. The NDP platform is built on the fiscal framework set out in the 2011 provincial budget. The Liberal and […]
Read moreIn response to a pretty moderate Ontario NDP platform, today’s lead Globe and Mail editorial goes off the rails on a crazy train: “disastrous,†“protectionism run amok,†“a fantasy,†“a radical platform that would move Ontario toward a command economy†and “dangerous provincialism.†It breathlessly reports that “Ms. Horwath did not rule out nationalization of the auto insurance industry†and […]
Read moreToday’s Globe and Mail (page B15) mentions the PEF in a story on the corporate sector’s record-breaking accumulation of cash, a subject about which we have often blogged. Corporate Canada has tripled its cash stash in each of the last two decades. The following Statistics Canada figures are “Canadian currency and deposits†plus “Foreign currency and deposits†for private non-financial […]
Read moreToday’s Ottawa Citizen (page A15) features the following op-ed on Ontario corporate taxes. I have added links to references. I recently discussed this issue on TV Ontario: Corporate Taxes are Low Enough By Erin Weir, Ottawa Citizen, September 27, 2011 Corporate taxes are a major dividing line in Ontario’s election campaign. Liberals and Conservatives would slash the provincial general corporate […]
Read moreToday, the Ontario NDP presented its comprehensive platform costing, including all policies announced during the election campaign. A popular theme among commentators has been that platform costings are unrealistic given the deteriorating economic outlook. As Andrea Horwath noted, her platform includes significant contingency funds. It is also cautiously built on the fiscal framework set out in the 2011 provincial budget. […]
Read moreThis Ontario NDP fact check should warm the hearts of economists, accountants and math teachers everywhere: Are Liberals Smarter Than a 5th Grader? The Ontario Liberals put out a release with this erroneous secondary headline: “NDP K-12 plan amounts to just 0.0009% of total education budget.†To calculate this figure, they divided $20 million by the province’s 2011-12 education budget […]
Read moreScott Sinclair writes cogently on the CCPA blog about the current edition of the Buy American debate. We had somewhat different views of the 2010 Canada-U.S. Agreement on Government Procurement. However, I certainly endorse Scott’s conclusion that the Canadian government should be strengthening public investment here rather than just complaining about proposed public investment south of the border. What strikes […]
Read moreThe C. D. Howe Institute is out this morning with a press release entitled, “Raising Oil and Gas Royalties Does Not Benefit Provincial Coffers.†A complete analysis of the accompanying 30-page paper – featuring many graphs, tables and regressions – will take time. But here is my initial take. Background The Institute correctly notes that provincial oil and gas revenues […]
Read moreFurther to Jim’s excellent critique of the Ontario Conservative platform’s graphs, I am similarly struck by the Liberal platform’s lone graph. “Cutting Ontario’s Taxes on New Business Investment in Half†(page 25) purports to show that corporate tax cuts are required to get the province’s “Marginal Effective Tax Rate†below the US and OECD averages. It compares projections of those […]
Read moreAfter watching Jack Layton’s state funeral, I noticed that Jean-Claude Trichet’s speech from Jackson Hole is online. The European Central Bank president does not seem to get it. Far from acknowledging that last month’s interest-rate hike was premature, he touts “price stability.†His main theme is that the economic divergence between Eurozone countries is comparable to that between American states. […]
Read moreMany have written eloquently about yesterday’s tragic news. I share the sentiments that Greg was quick to express and am inspired by Jack’s letter to Canadians. Allow me to recall a post I wrote more than four years ago entitled, “Prime Minister Layton?†Back then, most people thought that idea was pretty far-fetched. In fact, he came closer to being […]
Read moreThere’s been no shortage of new content on our blog this week. But I write to highlight a couple of interesting reads from other blogs. On The Globe and Mail blog, Andrew Hepburn (formerly of Sprott Asset Management) has a very good op-ed about financial speculation in food commodities. On the CCPA’s Behind the Numbers blog, Simon Enoch lays out […]
Read moreThis guest post is from PEF members Marc Lavoie and Mario Seccareccia, both of whom are full professors of economics at the University of Ottawa. The “Japanization†of the World Economy Over the last twenty years, the Japanese economy underwent a long period of economic stagnation that some economists have characterized as a protracted “balance-sheet recessionâ€. The period has been […]
Read moreLast week, Travis noted Terry Corcoran’s strained argument that over-regulation of banks is what ails the global economy. Terry’s next column went even further off the deep end, endorsing the hard-money libertarianism of gold bugs like Eric Sprott. Today’s column is a full-blown defence of the US Tea Party. I have the following response to the gold-bug column in today’s […]
Read moreLess than a month ago, the C. D. Howe Institute released Michael Parkin’s paper, “Overnight Moves: The Bank of Canada Should Start to Raise Interest Rates Now.†The next day, its Monetary Policy Council called on the Bank to increase the overnight interest rate. This call was terrible. The following week, Statistics Canada reported June’s significant drop in inflation – […]
Read moreI have been reluctant to condemn the credit-rating agencies for sovereign downgrades because it seemed like shooting the messenger. As the bond markets have noticed, a few European countries have serious fiscal problems. Blaming the raters for also noticing did not seem like an effective response. However, I think that Standard and Poor’s decision – alone among the major raters […]
Read moreJason Clemens, who hangs his hat at several right-wing think-tanks (the Fraser, Pacific Research and Macdonald-Laurier Institutes), lauds Canadian fiscal conservatism in today’s Wall Street Journal: Canada’s government, for example, has grown smaller over the last 15 years. Total government spending as a share of the economy peaked at a little over 53% in 1993. Through a combination of spending […]
Read moreThe Saskatchewan Party had repeatedly promised not to sign TILMA, but signed the New West Partnership Trade Agreement (NWPTA) last year. At the time, many commentators (including yours truly) noted that the NWPTA was little more than a renaming of TILMA. I see that the official TILMA website is now automatically redirecting to the NWPTA website: Effective July 1, 2010 […]
Read moreA month ago, Canada’s federal, provincial and territorial governments volunteered to be directly sued by investors under the Agreement on Internal Trade. This quiet announcement from Brudenell, Prince Edward Island, seems to have gone almost unnoticed. But it is a huge step toward imposing the Trade, Investment and Labour Mobility Agreement (TILMA) on all Canadian jurisdictions and inserting investor-state provisions […]
Read moreRob Silver, a sharp guy I first met through university debate, has written a rather disappointing piece entitled, “Would NDP be neutral were it in power during a labour dispute?†This question is interesting and significant. On the one hand, the NDP’s political philosophy is strongly supportive of working people. Compared to Liberals and Conservatives, NDP provincial governments have consistently […]
Read moreStatistics Canada figures indicate that private non-financial corporations held $471 billion of cash in the first quarter of 2011 ($322 billion of Canadian currency plus $149 billion worth of foreign currency). Including short-term paper would bring this total to half a trillion dollars, enough to pay off the national debt (i.e. accumulated deficit). Cash hoarding is a critical point in […]
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 […]
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