Economy

This blogpost appeared in the Globe and Mail on February 18th. 

By now, everybody is surely aware that the core commitments of the Liberal federal government are to “build a strong middle-class” and “help those working hard to join it.” But economic progress and social progress over the past three years seems to have been very limited, and it is far from clear that the government is pursuing the best overall strategy to promote higher living standards and greater income equality.

This blogpost originally appeared in the Globe and Mail. 

Partly fuelled by reports from conservative think-tanks such as the Fraser Institute, many Canadians believe that they are taxed far too heavily and that the tax “burden” has been rising over time. Recently published Statistics Canada data show, in fact, that most individual Canadians pay very low effective rates of personal income tax, and that the tax “burden” has been falling.

The announced General Motors closures have shown us that we need to explore a new industrial strategy, where public investments gives equity in companies, and where public control can help us preserve manufacturing, and direct it toward just social and environmental outcomes. Above all, we have to realize that it is the people, and not the corporations, who should make the economic decisions which affect them in their daily lives.   

The Ontario government’s annual Economic Outlook and Fall Fiscal Update arrives on the heels of a controversial first quarter for Premier Doug Ford’s new Progressive Conservative government. Campaigning solely on a message of reversing the legacy of the Ontario Liberals’ time in government — primarily by reducing government spending and making life more “affordable” for Ontarians, Ford’s first five months has largely resulted in service, democratic and economic disruption, instead of actual cost-savings that would benefit average Ontarians.

There has been plenty of fear mongering that Canada must follow U.S. President Trump’s corporate tax cut agenda or face economic devastation. Yet many of the experts, often those not working for corporate interests, agree on two things: there is no assurance and much skepticism that the broad cuts will lead to significantly greater economic competitiveness for the U.S in the long-term^1,2; and, there are much more effective levers to generate a competitive advantage for the Canadian economy than tax cuts³.

Book Review

Adam Tooze. Crashed: How a Decade of Financial Crises Changed the World. Viking. New York. 2018

The global economic crisis is now more than a decade old, and is far from definitively behind us. Indeed, many fear, with good reason, that the recent, uneven and lethargic global recovery may soon come to an end, and that the next crisis of global capitalism could be even worse than that of 2008.

The Trudeau government has said that the new USMC agreement continues to give us an effective means of resolving bilateral disputes with the United States, allowing us to appeal to a special tribunal if  that country (or Mexico) has, in our view, violated the agreement.

The federal government is widely expected to announce a new competitiveness strategy as part of its Fall Economic Statement. Corporate Canada has been lobbying hard for a new round of corporate-tax cuts in response to recent tax “reform” under President Donald Trump in the United States.

The Poverty Reduction Strategy announced by the federal government at the end of August proposes that an official Canadian poverty line be set for the first time and enshrined in legislation; and that official targets be set to reduce the poverty rate by 20% by 2020, and by 50% by 2030.

Since the 1980s, financial crises have erupted about once a decade. The last one erupted in 2008. And there are disturbing parallels between the 1980s debt crisis in Latin America, the 1990s financial crisis in Asia, and the deepening financial turmoil in emerging markets such as Turkey today. Which is why it is surprising that the subject of the next crisis was missing from this year’s agenda at the annual economic policy symposium, in Jackson Hole, Wyoming.