Prog Blog’s Flickr Photostream

Politics and its Discontents: About Those Taxes…

Responding to the latest propaganda piece about taxation levels from The Fraser Institute, Star readers weigh in with their own perspectives, one of which includes taking the paper to task for publishing news of the report with no critical comment:

Re: Families pay more for taxes than basics, Aug. 13

This report of a study from a conservative think tank could be a verbatim quote from the authors’ press release, with no editorial comment or critical opinions included. The Star does us a disservice (and, rather atypically, gives the conservative cause a boost) by publishing it in this fashion. (Read more…)

Northern Insight: When you buy yourself a government, you expect results

From RossK, The Gazetteer, Mines Are Sparkle Ponies Too?….Who Knew? But here’s something that even we, the purveyors of all that is neither established nor credible, missed from Ms. Clark’s October 2012 ‘Calgary Speech’: …”Mining is an area where we have set some pretty ambitious targets. We’re planning to build 17 new and expanded mines by 2015. Mining revenues have grown by 20 per cent to $8.6 billion since we introduced our Jobs Plan last year, and we’ve done it with the highest standard of sustainable mining in the world.“So I’ll give you one example. (Read more…)

The Progressive Economics Forum: Debunking Fraser Institute’s latest contortion on taxes

The Fraser Institute’s annual Consumer Tax Index report generated some media buzz with its outlandish claims about just how much taxes have risen since 1961. Before you get worked up about this, consider that 1961 was over half a century ago, before the time of universal health care that we all benefit from, before the Canada Pension Plan and the Guaranteed Income Supplement that hugely reduced poverty for seniors, before the Canada Child Tax Benefit which is helping lower child poverty (though not enough!).There are big problems with the Fraser Institute report’s methodology which lead them to grossly (Read more…)

Northern Insight: Socialized losses, privatized gains

Every megaproject conceived and executed by BC Liberals in recent years has ended with massive cost overruns, despite the predictable “on-time and on-budget” claims. Most involved contractors with foreign domiciles. Check out the Port Mann bridge project, South Fraser Perimeter Road, BC Place renovation, Vancouver Convention Centre, Sea to Sky Highway, Northwest Transmission Line, etc.

Remember claims reported by Canadian Press in February 2013, “Premier Christy Clark’s Liberal government says the development of liquefied natural gas in northern British Columbia represents a generational opportunity that has the potential to wipe out the provincial debt and eliminate the need to pay (Read more…)

Northern Insight: Volatile gas revenues tend to evaporate

BC Liberals are reluctant spenders when it comes to improving public schools. However, they’re not reluctant to put money into the pockets of natural gas producers. The amounts are in the billions but it’s not much discussed, either in the Legislature or in budget documents. However, careful reading of the province’s audited financial statements reveals this information:

Gas Royalties

Northern Insight: Ability-to-pay does not apply

A few years ago, Glaxo SmithKline, a multinational drug company, agreed to settle an American tax dispute by paying $3.4 billion and abandoning claims for refunds worth a further $1.8 billion. GSK used improper transfer pricing schemes to shelter profits outside the USA. It’s a common practice but few coutries have the political will or the resources to challenge accounting practices of corporations that are wealthier than most nations.

According to the Centre for American Progress, “Recent analysis indicates that U.S. corporations are currently holding as much as $2 trillion in untaxed profits booked as offshore (Read more…)

Northern Insight: At least Liberal inconsistency is consistent

BC’s recent Budget and Fiscal Plan states total provincial debt is $63 billion. This amount, 62% higher than in 2009, is 27.3% of gross domestic product. Five years ago, the ratio was 18.7%.

By any standard, that is rapid debt growth. Unfortunately, those numbers present only part of the story.

In addition to admitted debt, the province is obliged by $100 billion in other contractual commitments.

If Liberals conducted business and accounting now as they did a few years ago, the debt reported for fiscal year 2014 would be $163 billion. But, at least the details of how (Read more…)

Northern Insight: Why have our trees have lost half their value?

BC Stats released an updated report ‘British Columbia Origin Log Exports’ and I extracted data to produce these graphs. The statistics show the volume of raw logs leaving the province continues at record levels. This demonstrates the average monthly volume of exports over time.

I’ve written much about the subject of log exports. Click here and scroll through the various articles. The quantities, loaded mostly on ships bound for Asia, tell one part of the story but there is another important trend line and it’s one that points in a different direction.

Using the Bank of Canada inflation calculator, I (Read more…)

Northern Insight: Vapourtax

A few tech companies are noted for vapourware, which are products announced with much fanfare that never materialise. In my view, BC Liberal assurances of more than $70 billion new money from 30 years of LNG production is nothing more than vapourtax. These were promises issued solely for marketing purposes.

Jim Quail is the Executive Director of the B.C. Public Interest Advocacy Centre in Vancouver. BCPIAC is a non-profit law office in the field of social justice law. Jim Quail’s Blog has an important post about the difficulty of collecting tax revenues from liquid natural gas. I suggest you (Read more…)

Politics and its Discontents: A Reading Recommendation.

I have a deep respect for Alex Himelfarb, the director of the Glendon School of International and Public Affairs and tireless proponent of responsible, progressive taxation. The latter, as one can well-imagine, likely makes him persona non grata in many circles, but those are likely the same circles that close out responsible thought or discussion on any topics that might threaten to puncture the artificial and insular world they encase themselves in.

It is, of course, easy to take the expedient route, as have politicians like Stephen Harper, Justin Trudeau, and Thomas Mulcair at the federal level, and, here (Read more…)

The Cracked Crystal Ball II: The Corporate Tax Regime In Canada Is Corporate Welfare

… and it is being done at the expense of Canadians.

Corporate Canada Pays Low Taxes But Contributes In Lots Of Other Ways

Consider the following: PricewaterhouseCoopers did its own analysis — a survey of the Canadian Council of Chief Executives’ roughly 150 members. It was voluntary and only 63 replied. But of those who did, the survey found their businesses paid a total of $19 billion in corporate taxes, plus another $5 billion in various other charges and fees to various levels of government.

Okay, that’s a voluntary survey, and doesn’t give us the entirety of the picture. The left-leaning (Read more…)

Northern Insight: Ignorance occasionally has a purpose

Franklin D. Roosevelt, “Taxes, after all, are dues that we pay for the privileges of membership in an organized society.”

If you’re older than 30, you remember the nineties. Hard times, according to Milton Friedman, were produced by government mismanagement rather than by any inherent instability of the private economy and mismanagement is what occurred in BC for the decade that ended May 2001. Business writer John Greenwood recounted the disaster in a 2005 piece for the National Post. “…By the late 1990s, mining — once an engine of the economy — had shrunk to a point were companies (Read more…)

Political Eh-conomy: Where’s the tax in BC’s carbon tax?

British Columbia’s carbon tax has been getting some high praise lately. A recent article in the Atlantic called it “the crown jewel of North American climate policy”. Such assessments need some tempering. BC’s carbon tax can tell us important things about the limits of fiscal policy today, which in turn questions the potential it has for fostering significant environmental change.

Tales of the tax’s effectiveness focus on its environmental impacts. Almost six years since its introduction, it is indisputable that the carbon tax has had some impact on resource use and emissions. This is clearly a good thing. There is (Read more…)

Political Eh-conomy: Published elsewhere: Ontario is no California when it comes to debt

The Toronto Star just published an article I wrote in response to claims made by the Fraser Institute and the Toronto Sun that Ontario has a runaway debt problem worse than California’s.

The short version: I call BS. The slightly longer version: California has constraints, such as limits on the size of debt and difficulties in raising new taxes, that have severely hampered its ability to take on and manage debt. It has a smaller debt than Ontario on all measures but much worse credit standing. Ontario, on the other hand, still has a lot of flexibility to deal with (Read more…)

The Progressive Economics Forum: Flaherty’s Legacy: Ideological, reckless and just plain lucky

This piece was originally published at the Globe and Mail’s online Report on Business feature, EconomyLab.

There are two reasons why it is difficult to comment on the legacy of a finance minister.

1) It is a tremendously challenging job, anywhere, any time. Stewarding one of the largest economies in the world through a global economic crisis is no cakewalk, and it has clearly taken a toll on Jim Flaherty. (Canada has fallen from 8th to 11th largest economy since 2006.) Critiquing this performance, when so many factors are beyond an individual’s control, and so much soul-searching takes (Read more…)

cmkl: Flaherty’s legacy? Ideological, reckless and just plain lucky – Armine Yalnizyan

In the people’s republic of Chris, Armine Yalnizyan is finance minister. I really love how she dissects this “Jim Flaherty steady hand on the tiller” narrative that so many commercial media outlets are building now that he’s resigned. I love how she looks at the policies and their effects rather than just loading up the […]

The Progressive Economics Forum: BC proposes LNG tax

I posted this on CCPA’s BC Policy Note blog but others across Canada should pay attention to BC’s quest for LNG gold. I’d also recommend this comparison of the Quebec and BC budgets by Michal Rozworski, which highlights the stubborn emphasis on natural resource development in both budgets. It’s like the tax cut culture has so permeated Canadian politics that our political class cannot see beyond the lure of resource revenues to pay for essential services. Bad fiscal policy and bad environmental policy, not even good policy in terms of job creation, but seemingly good politics in the Age of (Read more…)

The Progressive Economics Forum: Affordable Housing and Homelesness

This morning I gave a presentation to an church group in Ottawa on affordable housing and homelessness. My slides can be downloaded here.

Points I raised in the presentation include the following:

-Though government provides subsidizes to some low-income households for housing, it is important to be mindful of the considerable funding available for Canadian homeowners as well (including for high-income homeowners). For example, there is no taxation on the capital gains raised from the sale of a person’s primary residence. On an annual basis in Canada, this tax exemption costs the public treasury almost $2 billion.

(Read more…)

The Progressive Economics Forum: Income Splitting Déjà Vu

This blog’s unofficial slogan has been “Tomorrow’s conventional wisdom, today.” After this week’s Conservative backpedaling on income splitting, we may need to change it to “Today’s conventional wisdom, seven years ago.” Or we could just stick with “You read it here first.”

My first-ever blog post, Income Splitting Redux, argued that this tax policy “would benefit an affluent minority at the expense of important public programs and create a disincentive for women to engage in paid employment.” I made the same case in an opinion editorial published in The Ottawa Citizen seven years ago this month (Read more…)

The Progressive Economics Forum: Missing In Action: Federal Budget 2014

Here’s the first section of the budget summary and analysis I’ve prepared for CUPE.

The full version is on-line on CUPE’s website at http://cupe.ca/economics/missing-action-federal-budget-2014 together with CUPE’s press release at: http://cupe.ca/economics/federal-budget-2014-help-hurt-canadian

Missing In Action: Federal Budget 2014 CUPE Federal Budget 2014 Summary and Response

Conservatives ignore pressing economic needs with a Do-little budget

Using more of their doublespeak, the Harper government calls the 2014 federal budget “The Road to Balance: Creating Jobs and Opportunities.” Little could be further from the truth. Instead it’s a budget that glosses over the problems facing Canadian workers and continues to (Read more…)

The Progressive Economics Forum: Do High Tuition Fees Make for Good Public Policy?

This afternoon I gave a presentation to Professor Ted Jackson’s graduate seminar course on higher education, taught in Carleton University’s School of Public Policy and Administration. The link to my slide deck, titled “The Political Economy of Post-Secondary Education in Canada,” can be found here.

Points I raised in the presentation include the following:

-Tuition fees have been rising in Canada for roughly the past three decades. Yet, individuals in the 25-44 age demographic have the highest levels of household debt in Canada. This raises an important question: Is it good public policy to be saddling this demographic (Read more…)

The Progressive Economics Forum: The relentlessly hypocritical Gwyn Morgan

Another column by Gwyn Morgan in the Globe and Mail and another case of a 0.1 percenter telling the rest of us to “Do as I say, not as I do.”

This time, it’s Gwyn recycling trash from the CFIB and Fraser Institute to claim defined benefit pensions for public sector workers are too generous and are simply unaffordable, and that governments need to “defy union resistance to pension-plan changes by all available means, including back-to-work legislation and imposed contracts that reflect fiscal realities. And the strongest tool available is the reduction of union monopoly power through private-sector contracting (Read more…)

The Progressive Economics Forum: Capital Gains and the Incomes of the Wealthy

Yesterday’s release from Statistics Canada on the income share of the wealthy generated some interesting coverage and commentary. It reported that the top 1%’s share of total income in Canada remained steady that year in Canada, at 10.6 percent — but still significantly higher than in the 1980s.

Most observers did not mention, however, that this oft-cited income share statistic does NOT include capital gains in the calculation of incomes and income shares. A capital gain, of course, is a realized benefit resulting from the disposition of an asset (buy low, sell high … unless you are a (Read more…)

The Progressive Economics Forum: Canada’s (not so incredible) shrinking federal government

Buried in the federal government’s recent Update of Economic and Fiscal Projections are figures showing the Harper government is set to squeeze federal government’s role to the smallest it has been in seventy years. (Bill Curry at the Globe also just wrote about this, but without figures further back than 1958).

Total federal government spending as a share of the economy is projected to drop to a 14% share of the economy by 2018/19. This would be the lowest since at least 1948. Because the government has tied the federal public service up in knots, actual spending will likely (Read more…)

Northern Insight: Baksheesh, bustarella, schmiergeld, kuroi kiri

What’s in a name? That which we call a rose, by any other name would smell as sweet. – William Shakespeare

Organizations that aim to safeguard assets create effective operational and audit controls. They also respect codes of ethics like that of SCMA, a group of professionals working in procurement, contract administration and materials management. It states, “…members must ensure that the objectivity of their decisions is not compromised or unduly influenced by the acceptance of gifts, gratuities, or hospitalities of any kind. Members should be discerning in their business and social relationships and activities…”

Protections are particularly (Read more…)