Deficits. There. I said it. Are you afraid? You shouldn’t be. If, as I suggested in my previous post, monetary policy is proving ineffective and if fiscal policy needs to be a big part of the solution, then we must consider what for many has become the unthinkable. We must revisit our fear of deficits, that word — that state […]
Read moreLettre ouverte de la part d’économistes canadiens à propos de la crise économique actuelle et la réponse du gouvernement qui s’impose La crise financière mondiale qui s’aggrave, la chute des prix des matières premières à l’échelle mondiale et le risque grandissant d’une récession mondiale dévoilent des faiblesses inquiétantes de l’économie canadienne. Le simple fait de nous en remettre à nos […]
Read moreThe Progressive Economics Forum’s open letter is now making the rounds. Signatories include four chairs of economics departments, two former Presidents of the Canadian Economics Association, a former federal Secretary of State (Finance), and a former Quebec Minister of Industry. Here’s the text and the 88 signatories: Open Letter from Canadian Economists on the Current Economic Crisis and the Appropriate […]
Read moreSome coverage has suggested that the NDP’s platform costing was based on excessively optimistic projections. The Globe and Mail reported, “Like the Liberals, the NDP is basing its fiscal plan on the Conservative government’s 2008 budget projected surpluses, which are more than six months old and are widely believed to be too rosy in light of the economic slowdown in […]
Read moreI wrote this article for The Tyee, looking at the US financial crisis with a view towards the Great White North. Their version has much nicer formatting and a funny cartoon. Update: Check out this week’s This Modern World. US Meltdown Puts Heat on Canada By Marc Lee Watching the turmoil in financial markets this past week, the question is […]
Read moreIf you pay attention to economic issues you have probably heard that a recession is defined as two consecutive quarters of declining real (inflation-adjusted) GDP. It is pretty arbitrary, but on this basis, the most recent numbers had Canada missing the cut-off for recession by a hair. Indeed, it was a downward revision to the first quarter GDP number (which […]
Read moreWell, the Tories are nothing if not consistent. During the NDP’s BC campaign against the carbon tax, I wondered whether they would follow the logic – if you don’t like a carbon tax then it only makes sense to call for a cut in the provincial fuel tax. Federally, the Harperites have seized the initiative on this one, building on […]
Read moreAsked by the Globe what the “ballot question” should be for the upcoming election, Tasha Kheiriddin, Quebec Director of the Fraser Institute says: “It should be all about green – money, that is. With the price of oil dropping, inflation creeping up and the auto sector in tough times, which party can provide the steadiest invisible hand for our economy?” […]
Read moreOnce again, there seems to be a heavier hand in censoring or editing Statistics Canada’s releases. This morning The Daily reported that: “Spending on research and development in the higher education sector amounted to $9.6 billion (current dollars) in the fiscal year 2006/2007.” but there was no word on whether this was an increase or decrease from the previous period, which Statscan releases […]
Read moreCanada has the third-lowest business taxes of ten countries examined in a study released as part of KPMG’s 2008 Competitive Alternatives report. The spin from KPMG has been that “If the provinces follow the federal lead and reduce their rates as well, Canada’s advantage will be enhanced.” Canadians should be asking a different question. If we already have a substantial “tax […]
Read moreTranscripts are now available of my appearances before the House and Senate Finance Committees regarding Bill C-50 (Budget Implementation). I critiqued the Budget’s general direction and its particular changes to (Un)Employment Insurance. The following remarks to the House committee duplicate what I said to the Senate committee, although MPs asked different questions than Senators. Mr. Erin Weir (Economist, United Steelworkers): […]
Read moreThe Wellesley Institute blasts the federal Liberals on housing: Earlier today, the Liberal Urban Communities Caucus released a powerful report condemning the Conservative government of Stephen Harper, and calling for strong action. Eighteen years ago, almost to the day, the National Liberal Caucus Task Force on Housing released a powerful report that condemned the Conservative government of Brian Mulroney, and […]
Read moreSometimes I wonder if I am going to miss Stephen Harper and Jim Flaherty when they are gone. It goes away pretty quickly, but I was reminded of their clever conservatism when I opened up the 2007 federal budget just now. Like the 2008 Budget, named “Responsible Leadership” the 2007 budget also had a name: ASPIRE to a Stronger, Safer, […]
Read moreThe Fraser Institute says the debt monster is gonna getcha: The study, Canadian Government Debt 2008, shows that federal, provincial, and local governments have accumulated $791.2 billion in direct debt and more than $2.4 trillion in total government liabilities. Total liabilities include direct debt and programs that the government has committed to provide such as Old Age Security and Medicare […]
Read moreThe lead editorial in today’s Toronto Star essentially restates McGuinty’s case more coherently than yesterday’s reports. The supposed problem identified is that, if Ontario becomes a “have-not” province, it would continue to pay more into Equalization than it would get out. This scenario is not nearly as strange as The Star makes out. Equalization has always been funded by all […]
Read moreFor a while, the Ontario Premier was looking quite reasonable in his dispute with the federal government. As Jim Flaherty charged that Ontario’s economic woes reflected a lack of provincial corporate tax cuts, Dalton McGuinty correctly responded that a lower rate of tax on profits would entail a large fiscal cost and provide little assistance to Ontario’s currently unprofitable manufacturing […]
Read moreAlthough it was probably overshadowed by the census release, Ralph Goodale appeared to jump on Marc’s deficit bandwagon last week. Some paragraphs in the early portion of his National Post op-ed seemed like they belonged on this blog: He [Harper] has taken this nation to the brink of a deficit – the first in more than a decade. And it’s […]
Read moreIn his latest Maclean’s column, Paul Wells suggests that the Prime Minister’s apparent anger toward various public officials and agencies reflects not his personality, but his ideological crusade against government. Of course, as Wells observes, the Canadian state was greatly diminished during the years preceding Harper’s government. However, Harper undoubtedly aims to continue the trend and is on record arguing […]
Read moreToday’s front page of the Globe and Mail business section calls out, Flaherty’s budget wiggle room shrinking.Which is indeed true, but what I find amusing is that I broke this story back in January. At the time, this was outside the consensus so many blew it off. But now that the mainstream has caught up, do I or any other […]
Read moreThe Federation of Canadian Municipalities released a large poll today — the largest of its type on municipal issues. The poll seems reasonably well done with decent questions and language. Many of the results are to be expected: strongest support for increased funding for health care, with increased funding for local infrastructure as a solid second in terms of priority. What surprised […]
Read moreAs Andrew, Marc, Toby and I pointed-out at the time, despite the low up-front cost of Tax-Free Savings Accounts, they will become exponentially more expensive over time. To obnoxiously quote myself, “this measure could burn a significant hole in future government revenues.” It is worth noting that Jack Mintz, a huge fan of Tax-Free Savings Accounts, suggests essentially the same […]
Read moreOver the years, federal budget legislation has acquired the feel of U.S. omnibus bills (the Farm Bill is probably the quintessential example). To some extent, this is to be expected. Ever since the “disastrous” Trudeau era, the imperial Department of Finance has not-so-quietly re-asserted its domain over the federal bureaucracy. One manifestation of Finance’s power has been the increasing tendency […]
Read moreIn a new report released today for Sustainable Prosperity (a new research institute), Jack Mintz and Nancy Olewiler pitch a federal carbon tax constructed by broadening the base of the federal excise tax (which currently raises over $5 billion per year based on a tax of 10 cents per litre of gas and 4 cents per liter of diesel) to […]
Read moreAh, the confluence of the events! The tabling of a “prudent†federal budget for uncertain times, followed a week later by news of slowing economic growth. Of course, rumors of the economy’s imminent decline may be greatly exaggerated, given January’s jobs report and trade data. But let’s carry forth with the economic accounts data. Earlier, Erin and Toby drew […]
Read moreUsually when expectations are lowered it is so that they can subsequently be exceeded. So budget watchers were all wondering in the past few days what the surprise in this budget would be. Alas, the surprise is that there is no surprise. As expected we got a do-nothing budget, albeit one with a glossy cover of a child waving a […]
Read moreExcellent analysis by Marc and Andrew leaves me with relatively little to add. The Steelworkers and NDP made many of the same points. Budget 2008’s minor new investments in public programs will amount to only one-sixth the value of recent corporate tax cuts during the next fiscal year. Budget 2008 (Table 1.1, page 10) proposes $1.4 billion of new spending […]
Read morehttp://canadianlabour.ca/index.php/budget_analysis/1339
Read moreI’ll post a fuller analysis later, but here are my notes from the lock-up: What We Got – An Overview of Conservative Priorities The centrepiece of the Budget is a new tax exempt savings vehicle which begins small, but will ramp up over time to eventually remove a high and rising proportion of investment income from income tax. It will […]
Read moreEverybody seems to think that next week’s federal budget will be a pretty boring, stay the course, “prudent” document because there is almost no room for fiscal manouevre. I wonder. True, there is next to no surplus left for 2008-09 due to the big Conservative tax cuts made last Fall. But Flaherty is still sitting on top of about a […]
Read moreIt looks like Jim has hit the pig again. The “Research Report” in the Tax Expenditures and Evaluations released by Finance Canada today cites one of his excellent pieces on corporate tax cuts. Finance Canada overtly takes on the critique of corporate tax cuts put forward by this blog, the labour movement, and the NDP. Its news release promises “clear […]
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