On September 22 and 23, the Broadbent Institute hosted Progress Summit BC to chart a progressive path forward for the province in this critical election year.
In a marquee panel on the future of BC's economy, panelists were asked to answer the following question: What must change to ensure BC’s economy in 2030 secures shared and sustainable prosperity? Below are excerpts from each panelists' remarks.
Progressive tax reform to promote both greater distributional fairness and increased fiscal capacity to fund social programs and public services should be squarely on the agenda for the 2017 federal budget. Indeed, with faltering growth, the federal Liberals will be hard-pressed to meet their commitments to new investments,while still ensuring a promised decline in the federal debt to GDP ratio, if they do not significantly increase revenues.
A year has passed since the closing event of the Truth and Reconciliation Commission in Ottawa — a brief moment of self-reflection that punctured through a stubborn, willful and long-standing national blindness.
The federal government knowingly discriminates against Indigenous children and their families. That discrimination is part of the colonial fabric that holds together Canadian political-economic development.
The idea of a basic income guarantee for all Canadians has again moved to the front burner with the House of Commons Finance Committee and the Ontario government supporting further study and experimentation. This could be an important step forward, but incremental reform towards an income tested guarantee for working age Canadians delivered through the tax system will be the best path forward as opposed to more visionary “big bang” solutions.
The concept of a basic income has won support from both the political right and left. For the former, it promises to simplify complex income security programs and to replace most if not all welfare state programs with a single cash payment which would allow individuals to meet their needs in the market. For the latter, it is a means to free people from dependence upon the job market, a tool for social solidarity amidst a rapidly changing world of work, and a means to abolish poverty.
Developments in the Canadian economy have forced an important re-thinking of the respective roles of monetary and fiscal policy in supporting stable growth and job creation. But mainstream thinking about monetary policy has evolved much further than that on fiscal policy.
Before the great recession of 2008, fiscal policy had fallen greatly out of favour as a tool for macro economic stabilization. The conventional wisdom was that central banks could adjust short term interest rates to keep the economy growing more less at potential with low inflation, and indeed there was no recession from the early 1990s until the financial crisis of 2008.
The so-called “middle class” tax cut promised by the newly elected Liberal government in the name of promoting greater fairness seems set to be quickly implemented for the 2016 tax year. Yet the distributional and revenue consequences of this measure are often misunderstood, and the proposed change merits reconsideration.
Currently there are four federal tax brackets: 15% on taxable incomes of less than $44,701; 22% on further income up to $89,401; 26% on further income up to $138,586; and 29% on income above that amount.