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…)
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:
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…)
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…)
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…)
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…)
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…)
… 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…)
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…)
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…)
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…)
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…)
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 […]
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…)
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…)
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…)
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…)
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…)
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…)
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…)
Despite claims that natural gas will last almost forever and drop massive wealth into BC’s treasury, I’ve demonstrated here, with numbers taken from finance ministry documents, that natural gas production contributes little to BC’s public treasury through royalties.
The amount that might otherwise be payable for current production is reduced by credits allowed gas companies; credits that amount to public subsidies of the fossil fuel industry. At the end of fiscal year 2013, $934 million of credits that will reduce future natural gas royalties remain outstanding. Despite previous complaints of Auditor General John Doyle, government has not recorded this amount (Read more…)
After Telus, Teck Resources Limited ranks as the largest BC company, by sales. In three years 2010 to 2012, Teck booked revenues of $31 billion, almost half from the sale of BC coal. According to audited financial statements, Teck accrued resources tax of less than $600 million, under 2% of gross revenue.
In the same period, 2010 to 2013, the British Columbia government collected $8 billion from all exploitation of resources, including metals and minerals, oil and gas, forestry, water, land tenures and other.
Right-wing partisans often denounce the transfer of wealth from the rich to the poor. They fall (Read more…)
I’ll be with Ian Jessop on CFAX 1070 today, discussing natural resource revenues accruing to the British Columbia government.
In the last seven years, provincial revenues from ferry fares and medical services premiums increased almost 40% but natural gas royalties declined by 91%. Actually, that doesn’t tell the whole story because government provides credits to gas producers that will offset future royalties. BC Liberals choose not to record the accumulated liability for these credits. They amount to $934 million in 2013, an increase of $160 million in the liability during the fiscal year. Were generally accepted accounting principles in (Read more…)