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These papers are for discussion purposes only and are not endorsed by the PC Party of Manitoba. If you would like to suggest other papers for consideration, please email us, including a link to the paper, at
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Summary of Research:
Manitoba Natives are failed twice over
Innovation, Competition and Growth: A Schumpeterian Perspective on Canada’s Economy
Brains on the move: Essays on Human Capital Mobility in a Globalizing World and Implications for the Canadian Economy
2 Visions, 2 Cities – A Citizen’s Guide to Understanding Winnipeg’s City Budgets: Public Services for Public Good
Financing City Services: A Prescription for the Future
No Time to be Timid: Addressing Infrastructure Deficits in the Western Big Six
New Tools for New Times: A Sourcebook for the Financing, Funding and Delivery of Urban Infrastructure
Looking West 2007 – Segment 3: Urban Transportation
Bridging the Community-Police Divide: Safety and Security in Winnipeg’s Inner City
State of the Inner City Report 2007: Stories of Change in Winnipeg’s Inner City
The Social Benefits and Economic Costs of Taxation: A Comparison of High- and Low-Tax Countries
Why Charity isn’t Enough: The Case for Raising Taxes on Canada’s Rich
2007 Tax Competitiveness Report: A Call for Comprehensive Tax Reform
The Economic Costs of Capital Gains Taxes
The Canadian Consumer Tax Index, 2007
Tax Efficiency: Not All Taxes are Created Equal
Tax Cuts Must Focus on Incentives
A Flat Tax for Canada: New System would Improve Canadians’ Standard of Living
GST Harmonization: Not Sexy, but Smart
Sound Tax Policy Coming to New York
Creating clean and green landscapes in the agricultural region of Manitoba using the Alternative Land Use Services (ALUS) model
Union Security and Unionization Rates
TILMA Criticism Lacks Substance
Reforming Labour Laws is Saskatchewan’s Next Challenge
Disappearing Manufacturing Jobs
Do Tax Rates Matter?
Is There a Fiscal Imbalance? Yes
Wage Moderation Creates Jobs & Growth
Helping the Poor: What Doesn’t Work
The Corporate Capital Tax: Canada’s Most Damaging Tax
What Can Canada Learn from Britain’s Experience of Industrial Relations Reform?
Clearing Hurdles: Key Reforms to Make Small Business More Successful
Renewing U.S. Manufacturing, Promoting a High Road Strategy
Improving Canada’s Business Environment and Competitiveness
Business Taxes in Western Canada – Settling for a Personal Best?
Economic Opportunities Papers to be summarized – February 27, 2009
Canadian Mining Taxation
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Manitoba Natives are failed twice over
Link: http://www.fcpp.org/main/publication_detail.php?PubID=1870 |
Innovation, Competition and Growth: A Schumpeterian Perspective on Canada’s Economy
Source: Howitt, Peter. Innovation, Competition and Growth: A Schumpeterian Perspective on Canada’s Economy. C.D. Howe Institute Commentary. No. 246 April 2007.
Howitt argues that technology plays an integral role in the wider economy and that countries like Canada need to be continuously developing and transforming. Within this context he argues that competition drives innovation and needs to be encouraged. From this he concludes with five conclusions:
“Competition policy should not be relaxed in hopes of boosing innovation, because more competition actually strengthens the incentive to innovate.”
“Canada needs to be wary of further extensions of patent protection, which could serve to discourage innovation more than stimulate it.”
Canadian universities should continue developing ties with private enterprise, but without sacrificing academic values that sometimes conflict with commercial interests”
Openness to international trade is crucial for keeping pace with global technological change, as is a favorable R&D environment.
The effects of innovation on income inequality can be mitigated by strengthening the educational system and reducing mobility barriers.
Link: http://www.cdhowe.org/pdf/commentary_246.pdf
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Brains on the move: Essays on Human Capital Mobility in a Globalizing World and Implications for the Canadian Economy
Source: Easton, T Stephen. Harris, Richard G., Schmitt Nicolas. Brains on the Move: Essays on Human Capital Mobility in a Globalizing World and Implications for the Canadian Economy. C.D. Howe Institute. 2005.
The authors argue that labour flows have become increasingly significant due to globalization and the growing importance of ideas and technologies in the marketplace. Professionals such as scientists and economists are more than twice as likely to relocate out of Canada than they were during the 1960s. Furthermore, the authors argue that the quality of individuals leaving Canada can create a situation where even if the number of outflow is small its economic significance can be extensive. The authors propose the exploration of a free movement agreement between Canada and wider North America. Ireland which feared a significant brain drain due to increased labour mobility in the European Union actually received the exact opposite results, and the authors argue that they have reached similar conclusions with Canada.
Link: http://www.cdhowe.org/pdf/policystudy_42.pdf
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2 Visions, 2 Cities – A Citizen’s Guide to Understanding Winnipeg’s City Budgets: Public Services for Public Good
Source:Canadian Centre for Policy Alternatives
Link: http://www.policyalternatives.ca/Reports/2008/03/ReportsStudies1844/index.cfm?pa=DA794529
Article synopsis:
- Criticizes the Mayor’s 2007 reduction of business taxes and inclination to contract private corporations to supply public facilities, and projects 2008 Operating and Capital Budget policy directions in the areas of leisure and wellness services, environmental services, policing, and transit
- Discusses Winnipeg’s lower-than-average forest care, park spending, and recreation infrastructure, and advices against government encouragement of transfers from trained to volunteer/community management of neighborhood leisure facilities, citing inexperience and bias against low-income areas. De-professionalization and commercialization in library services are similarly condemned
- Objects to ongoing and possible privatization of water and waste services, and refers to existing evidence of environmental wellness and quality control deterioration of those services under corporate management
- Presents statistics on Winnipeg’s disproportionate roadway construction budget relative to that invested in active transit, and criticizes city plans promoting land development and urban sprawl in place of “green” transport and mature-neighborhood renovation |
Financing City Services: A Prescription for the Future
Source: Atlantic Institute for Market Studies
Link: http://www.aims.ca/library/kitchen.pdf
Article synopsis:
- Provides statistics on recent municipal expenditures (by province), their distribution, and means of funding.
- Proposes revenue initiatives at the city, provincial, and federal levels, including:
- Appropriate innovation and handling of property taxes (i.e. recommends variable tax rates, advices against over-taxation of non-residential property), development charges, and user fees – the latter’s applicability to water/sewage treatment, waste disposal, and public transit, as well as potential negative externalities, are discussed
- Identifies provincial fiscal responsibilities and framework of directing municipal/city funding projects, including implementation of new city income and consumption taxes, and proper capital financing/accounting
- Presents general recommendations for federal action in each of the areas discussed for city and provincial funding
Areas of focus:
- Table 1 and “How City Services are Funded” (p. 11-13)
- “Desirable Characteristics of a Local Tax” (p. 18-19)
- Chapters “Cities’ Initiatives” and “Provincial Initiatives” (p. 20-34)
- Table A-1: “Effect on Municipal tax rates of raising additional tax revenue equal to 10% of property taxes” (p. 41)
Quotes: “Whatever tax or taxes are chosen, local governments should set their own tax rates. International experience tells us that the most responsible and accountable local governments are those that raise their own revenues and set their own tax rates.”
“Cities should not be responsible for funding programs specifically directed toward the redistribution of income among individuals. These functions are more appropriately in the federal and provincial domain. At the same time, cities should not be viewed as strictly service agencies, specifically charged with funding only those services that clearly benefit specific properties and for which user fees would therefore be appropriate.”
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No Time to be Timid: Addressing Infrastructure Deficits in the Western Big Six
Source: Canada West Foundation
Link: http://www.cwf.ca/V2/files/No%20Time%20to%20be%20Timid.pdf
Article synopsis:
- Summarizes trends of growing infrastructure demand and aging concerns, and fiscal restraints and “free-rider” elements contributing to infrastructure deficit. Briefly discusses over-reliance on property taxes and poor life-cycle calculations in facilities-management
- Observes public concerns with municipal debt and infrastructure deficiencies relative to other provincial and federal budget priorities
- Explains various traditional sources of infrastructure financing transfers from operating revenue, government grants, developer and user charges, borrowing, etc., and analyzes the limitations and potentials of each (in light of economic theory and current surpluses)
- Recommends a number of possible “innovations” in each area of traditional infrastructure funding, including lower education charges in property taxes, removing conditionality from grants, applying additional levies for off-site costs, etc.; includes potential counterarguments to some suggested policies
- Generalizes on systemic reform, more aggressive service-pricing, public-private partnerships, updated tax tools, etc. and their respective advantages and defects
Areas of focus:
- “Growing Demands for Infrastructure (p. 5-7 PDF) and “Public Opinion” (p. 12-13)
- “Traditional Sources of Infrastructure Financing” and “Innovative Capital Financing” (p. 15 – 30 - *very important for suggestions on alternative policy)
- “Competitive Service Delivery” to “New Tax Tools and Tax-Sharing” (p. 33-37)
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New Tools for New Times: A Sourcebook for the Financing, Funding and Delivery of Urban Infrastructure
Source: Canada West Foundation
Link: http://www.cwf.ca/V2/files/NewTools.pdf
Article synopsis:
- Defines the financing (start-up capital), funding (cost reimbursement), and delivery (public or private) of infrastructure, and examines mechanisms of innovation “tools” on a limited base of methods.
- Observes some moderate progress toward the advocated “innovations,” and suggests means by which provincial and federal government can advance this development
- Designates urban/supported infrastructure, as opposed to blended and self-financing (refer to p. 12 PDF) as target of funding innovation. Provides criterion for assessing correct finance/delivery “tools” for different categories of infrastructure, and for assessing the “marketability” of particular projects
- Provides analysis of various “tools’ ”characteristics, advantages and disadvantages, and appropriate conditions for application, and makes comparison with conventional finance methods. Gives examples of innovations currently used in the U.S. and other countries
Areas of focus:
- Figure 1: Taxonomy (p. 8-10 PDF)
- Section “Matching Tools to Infrastructure” (p. 16-17, 20-21)
- Figure 4, “Interface of Key Characteristics and the ‘Rule of Two’” and Box “Infrastructure Management Demand” (p. 23-25)
- ALL of PART II (p. 39 -162) – details on each area of innovation, examples, etc.
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Looking West 2007 – Segment 3: Urban Transportation
Source: Canada West Foundation
Link: http://www.cwf.ca/V2/files/LW07_S3_Urban_Transportation.pdf
-Article synopsis:
Compares budget standings and infrastructure quality/availability across Canada’s six western cities, and observes “a growing backlog of transportation infrastructure construction.” Records public opinion and assessments on ten aspects and developments of transit networks: urban road systems, public transit, priority of roads and transit, traffic congestion, and various means of financing urban infrastructure. Records survey participants’ reactions to recommended means of increasing funding
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Bridging the Community-Police Divide: Safety and Security in Winnipeg’s Inner City
Source: Canadian Centre for policy Alternatives
Link: http://www.policyalternatives.ca/documents/Manitoba_Pubs/2006/Safety_and_Security_in_Winnipegs_Inner_City.pdf
Article Synopsis:
Discusses the differences between recent “zero-tolerance” policies and past “reactive, incident-driving” policing. Interviews with residents of three Winnipeg neighborhoods reveal similar inclinations toward community-police partnerships to improve surveillance scope and response time. Argues against “zero-tolerance” and specialized street-crime units, and recommends police participation in revitalization and rehabilitation efforts in the inner-city
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State of the Inner City Report 2007: Stories of Change in Winnipeg’s Inner City
Source: Canadian Centre for policy Alternatives
Link: http://www.policyalternatives.ca/documents/Manitoba_Pubs/2007/State_of_the_Inner_City2007.pdf
Article synopsis:
- Records the history and achievements of Winnipeg’s Lord Selkirk Park (and briefly, those of Toronto’s Regent Park), and recommends the propagation of its successful public housing, target-specific community college, and attendant childcare services (“circles of support”) to other high-poverty areas
- Discusses methods of cost-assessment for effects of sex trade and motivations for participating in the trade; presents a catalogue of personal and public costs of involvement, including illness and loss of human capital in beneficial employment. Argues in favor of prevention programs, citing future alleviation of the target population’s reliance on social assistance
- Details the effects of CBOs (Community-based organizations) in addressing various social maladies, describes the analytical framework, and presents participant testimonies on improvements in personal empowerment, parenting capacity, Native-culture involvement, etc., as well as general positive evidence of increased social capital and community coherence
Areas of focus:
- Partial sections, “Building a Community of Opportunity and Hope” (p. 11-19 PDF)
- Sections “Private costs of involvement in street sex trade” to “What should we conclude from the Ndaawin Study?” (p. 25-31 PDF, particular emphasis on gray box, p. 28-29)
- “Conclusions: Is Participation having an Impact?” (p. 60-62 PDF)
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The Social Benefits and Economic Costs of Taxation: A Comparison of High- and Low-Tax Countries
Source: Canadian Centre for policy Alternatives
Link: http://www.policyalternatives.ca/documents/National_Office_Pubs/2006/Benefits_and_Costs_of_Taxation.pdf
Article synopsis:
- Provides brief background statistics on taxation rates in OECD countries
- Compares low-tax (mainly Canada and the U.S.) and high-tax countries (Nordic countries) on a large number of economic and social performance determinants, including financial protection of the vulnerable, access to health and education, opportunities to participate in decision-making, physical security, etc. (in which the Nordic system performs significantly better) and others, such as GDP per capita, economic growth rate, where low-tax Anglo-American countries perform negligibly, or temporarily, better
- Counters evidence of better Anglo-American economic conditions with statistics on budget deficit, balance of payment, inflation, research and development, etc. that display a strong lead of high-tax over low-tax countries
- Advices against recent Canadian inclinations to emulate the American system through tax reduction
Areas of focus:
- Summary (p. 7-10)
- Pages 25-33: analyzes relative performance of high- and low-tax countries in economic and innovation indicators (some conclusions are counter-intuitive, therefore worth more attention)
- “Comprehensive measure of well-being” (p. 34)
- All appendix charts
- Particularly #1- 2(p. 37-38), #4 -5 (p. 40-41), #7-9 (p. 44-45), #12 (p. 48)
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Why Charity isn’t Enough: The Case for Raising Taxes on Canada’s Rich
Source: Canadian Centre for policy Alternatives
Link: http://www.policyalternatives.ca/documents/National_Office_Pubs/2007/Why_Charity_Isnt_Enough.pdf
Article Synopsis- Observes steep increases in the incomes of Canada’s financial elites relative to middle- and lower-classes, and finds that income transfers no longer suffice to counterbalance this disproportionate rise
- Criticizes generous tax cuts for Canada’s wealthiest for eroding tax progressiveness, aggravating consumer debt, etc.
- Compares Canadian and American tax structures to those in Europe, and concludes: “the progressivity of Canada’s personal tax system is of much greater consequence for the overall level of income equality than in the European countries which we often wish to emulate.”
- Explains the influence of heavier reliance on personal tax on effective tax rates at either end of the income spectrum
Areas of focus:
- “The Progressivity of Personal Income Taxation” (p. 5)
- “The Case for Higher Taxation of High Incomes” and “Real Tax Reform (p. 6-8)
- Tables 1-4, 6, 8, 9-12
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2007 Tax Competitiveness Report: A Call for Comprehensive Tax Reform
Source: C.D. Howe Institute
Link: http://www.cdhowe.org/pdf/commentary_254.pdf
Article synopsis:
- Presents current flaws in the Canadian taxation system, including detrimental effects of excessive taxes on work effort, savings, capital/business investment and foreign direct investment, etc.
- Provides statistics on potential trade-off effects between tax reduction and improvements in various economic areas
- Suggests reducing target-specific tax reform, and recommends tax-base broadening, significant and immediate reductions in personal and corporate income taxes, and tax-shift toward sales and consumption (including an innovative suggestion of applying environmental taxes on all pollutant-producing industries)
Quotes:
- “We suggest a significant reduction in corporate income tax rates, to a level well below the revenue-maximizing rate. The revenue maximizing corporate income tax rate is too high, relative to a tax policy that would achieve the highest possible standard of living.”
- “All businesses should be taxed at a common rate that is applied to small businesses – roughly 20 percent — to reduce distortions as much as possible without requiring substantial change to the tax system.”
- “In the short run, 54 percent of the corporate tax falls on workers by reducing labour income and, in the long run, over 100 percent is borne by workers, including productivity losses from reduced investment.”
Areas of focus:
- “Cutting Canada’s Existing Corporate Tax Rate Would Increase Revenue” (p. 13-15)
- “Business Tax Reforms” and “Base Broadening” (p. 18-20)
- “Environmental Taxation” (p. 20-22)
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The Economic Costs of Capital Gains Taxes
Source: Fraser Institute
Link: http://www.fraserinstitute.org/commerce.web/product_files/EconomicCostsCapitalGainsTax.pdf
Article synopsis:
- Defines capital gains taxes, compares marginal rates across provinces and Canadian rates to OECD averages
- Analyzes the “costs” of high capital gains taxes to business and entrepreneurship, and by association, to government revenues and general economic performance; criticizes capital taxes for impeding maximum-efficiency capital (business) reallocation, reducing capital investment, and discouraging entrepreneurs and venture capitalists (on which the former rely for start-up funds), as well as increasing other mechanical costs
- Recommends the elimination of capital gains taxes in Canada (on condition that laws are implemented to prevent tax evasion through business “surplus stripping”)
Areas of focus:
- See p. 5 for section organization of paper
- Figure 2 (p. 9): Canadian capital gains taxes relative to other OECD charges
- Under Section 3 – “the reallocation of capital and the ‘lock-in effect’” (p. 12-13), “‘the user cost of capital’ and the stock of capital” and “entrepreneurship and risk-taking”
- Section 4: “Recommendations” (p. 22-23)
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The Canadian Consumer Tax Index, 2007
Source: Fraser Institute
Link: http://www.fraserinstitute.org/commerce.web/product_files/CCTI.pdf
Provides background information on tax increases (including breakdowns of family outlays) from 1961 to 2007, and contrasts current average tax payments per family to expenditures on housing and other commodities – contains graphs and yearly statistics
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Tax Efficiency: Not All Taxes are Created Equal
Source: Fraser Institute
Link: http://www.fraserinstitute.org/commerce.web/product_files/TaxEfficiency2.pdf
Article synopsis:
- Compares the relative efficiencies of income, corporate and consumers/sales taxes on the basis of MECs (Marginal Efficiency Costs), including compliance and administrative costs (similarities between American and Canadian tax efficiencies are also drawn)
- Compares Canadian tax income breakdowns with those of other OECD countries, and observes trends in Canada’s increasing reliance on low-efficiency taxes
- Recommends cuts in business and income taxes and harmonization of provincial sales taxes with federal GST (to lower compliance costs) within the context of greater, general tax reductions
Areas of focus:
- “Efficiency Costs of Taxes” (p. 7-9), “The MEC in Canada” (p. 9-11), and “Compliance Costs” (p. 11-13)
- Section 2: “Canada’s Tax Mix” – for reference to property taxes, see Figure 6 and Table 7 statistics
- Section 3: “Recommendations” (entire)
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Tax Cuts Must Focus on Incentives
Source: Fraser Institute
Link: http://www.fraserinstitute.org/Commerce.Web/product_files/JulAug06ffTaxCuts.pdf
Article Synopsis
Argues against broad-based tax relief, as such indiscriminate measures encourage low-income earners to demand excess government services, creating additional burdens on the top 30% of taxpayers
- Recommends selective reductions in capital and investment taxes and maintenance of current consum
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A Flat Tax for Canada: New System would Improve Canadians’ Standard of Living
Source: Fraser Institute
Link: http://www.fraserinstitute.org/Commerce.Web/product_files/Feb08ff_A_flat_tax_for_Canada.pdf
Article Synopisis
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GST Harmonization: Not Sexy, but Smart
Source: Fraser Institute
Link: http://www.fraserinstitute.org/Commerce.Web/product_files/Feb08ff_GST_harmonization.pdf
Article Synopsis:
Describes the effect of provincial sales taxes on deterring input/capital purchases, defines the concept of GST harmonization, and provides evidence of its stimulating influence on per capita investment
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Sound Tax Policy Coming to New York
Source: Tax Foundation
Link: http://www.taxfoundation.org/files/ff129.pdf
Article synopsis:
- Presents New York State’s current education-property-tax mechanism, the School Tax Relief Program (STAR), and its structural bias against low-income house-owners
- Presents recommendations of STAR reform, including caps on annual municipality property tax increases, approving tax levy proposals by referendum, and additional changes to teacher wages, health benefits, and other elements that contribute to rising education budgets
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Creating clean and green landscapes in the agricultural region of Manitoba using the Alternative Land Use Services (ALUS) model
The Issue
Most Manitobans live within our privately-owned agricultural region. In some cases, intensive agriculture has restricted the natural functions of many agricultural landscapes. Billions of dollars have been spent across Canada on programs to deal with this. Examples include the Species at Risk Act, the North American Waterfowl Management Plan, Environmental Farm Plans, conservation lands purchase, flood protection, zoning rules, ill-conceived water laws, and drainage regulations. There is a tendency within government to try and regulate certain activities, such as drainage, on the private land landscape. But experience has shown that the regulation of land use activities on the private agricultural landscape is expensive and ineffective. Excessive regulations have only served to alienate the rural community. None of the various programs have been effective on the scale required to deliver real environmental results.
The Solution
Sustaining the “Manitoba working agricultural landscape” can be accomplished by making it in the interests of agricultural producers to deliver an “environmental crop” to Manitobans at large. Landowners currently bear all the costs of providing “environmental goods and services (EG&S)” to society. The capacity of Manitoba’s agricultural lands to provide public EG&S continues to decline since there is no market for these services.
Providing farmers and ranchers with public financial incentives to deliver EG&S, such as clean water, would create a “market” for public environmental goods. New York State has such a program whereby New York City provides conservation incentives to farmers in key watersheds in order to supply clean drinking water to urban residents. There would be strong rural and urban support in Manitoba for an incentive-based program for agricultural producers along this line. Canada is the only industrialized country without an incentive-based large scale landscape conservation program. Such programs have been declared “trade neutral” or “green box” by the World Trade Organization (WTO). Most of Canada’s agricultural organizations have actively lobbied for such a change to Canadian agricultural policy. Pilot projects under the Alternative Land Use Services (ALUS) model are being supported by a variety of federal, provincial, municipal, and private organizations. ALUS has the strong support of most of Canada’s producer organizations. These ALUS pilot projects have determined efficient modes of program delivery applicable to a national program.
Results of the Manitoba ALUS Pilot Project
The Manitoba ALUS Pilot Project in the Rural Municipality of Blanshard (RMB) ran from December, 2005 to November, 2008 and tested the ALUS model of conservation delivery. Producers in RMB were offered financial incentives to conserve ecologically-valuable lands. The project was independently and impartially evaluated by the University of Manitoba and the results summarized by the George Morris Centre (GMC) at the University of Guelph. Key findings from the GMC Executive Summary were:
“The pilot project was successful in terms of landowner acceptance and uptake. More than 70% of the landowners within the rural municipality participated in the pilot project. Prior to this project, only 50% of the landowners surveyed in Blanshard stated that they had participated in other conservation or environmental programs. The high levels of participation in the project will likely create environmental benefits for society (our underline).”
“The conclusion is that the administration of the ALUS pilot by the Manitoba Agricultural Services Corporation (MASC) and the Little Saskatchewan River Conservation District (LSRCD) has been quite effective but more information is required to asses it’s efficiency.”
Administrative costs for traditional conservation programs are high. The Manitoba ALUS project proved that significant financial efficiencies can be achieved by utilizing existing agricultural agencies to administer landscape conservation programs. This is done in the U.S. and Europe. Prince Edward Island has made ALUS into an island-wide program and is actively implementing the lessons learned in the Manitoba ALUS Pilot Project.
Reference Materials
Some of the most important work on the concept of providing incentives to farmers and ranchers to deliver EG&S has been done in Manitoba. The Manitoba Department of Agriculture and Rural Initiatives commissioned the George Morris Centre (GMC) which is an agricultural research centre located at the University of Guelph to provide information on the costs and benefits of such a program in Manitoba The report, entitled Ecological Goods and Services: Estimating Program Uptake and the Nature of Costs/Benefits in Agro-Manitoba, provides a useful review of the EG&S literature as well as detailed calculations regarding what a potential program in Manitoba would accomplish. The link to this report is attached.
The GMC was also commissioned to provide a summary of the evaluation of the Manitoba ALUS pilot project in the Rural Municipality of Blanshard. This report, and others linked to the summary, is based on the extensive analysis of the Blanshard project by Dr. Charles Grant from the University of Manitoba. Links to these reports are attached.
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Union Security and Unionization Rates
Source: Fraser Insitute:Jason Clemens & Niels Veldhuis
Link: http://www.fraserinstitute.org/researchandpublications/publications/3137.aspx |
TILMA Criticism Lacks Substance
Source: Robert Knox
Link: http://www.fraserinstitute.org/researchandpublications/publications/3210.aspx |
Reforming Labour Laws is Saskatchewan’s Next Challenge
Source: Niels Veldhuis, Jason Clemens, & Keith Godin
Link: http://www.fraserinstitute.org/researchandpublications/publications/3197.aspx
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Disappearing Manufacturing Jobs
Source: Walter E. Williams
Link: http://www.fraserinstitute.org/researchandpublications/publications/3156.aspx
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Do Tax Rates Matter?
Source: Fraser Institute-Amela Karabegovic, Niels Veldhuis, Jason Celmens, & Keith Godin
Link: http://www.fraserinstitute.org/researchandpublications/publications/2980.aspx |
Is There a Fiscal Imbalance? Yes
Source: Fraser Institute-Fred McMahon
Link: http://www.fraserinstitute.org/researchandpublications/publications/3077.aspx
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Wage Moderation Creates Jobs & Growth
Source: Fraser Institute-Fred McMahon
Link: http://www.fraserinstitute.org/researchandpublications/publications/2619.aspx |
Helping the Poor: What Doesn’t Work
Source:Fraser Institute- Chris Sarlo
Link: http://www.fraserinstitute.org/researchandpublications/publications/2629.aspx
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The Corporate Capital Tax: Canada’s Most Damaging Tax
Source: Fraser Institute-Jason Clemens
Link: http://www.fraserinstitute.org/researchandpublications/publications/4940.aspx |
What Can Canada Learn from Britain’s Experience of Industrial Relations Reform?
Source: Fraser Institute-J.R. Shackleton
Link: http://www.fraserinstitute.org/researchandpublications/publications/3165.aspx |
Clearing Hurdles: Key Reforms to Make Small Business More Successful
Source: Ben Tomlin, C.D. Howe Institute Commentary: Economic Growth and Innovation, No. 264, May 2008
Link: http://www.cdhowe.org/pdf/commentary_264.pdf
Summary (excerpt): Reforming small business taxation would remove major incentives for firms to stay small, encourage their growth and make the Canadian economy more competitive overall. Small businesses face many hardships simply because they are small. Natural economies of scope and scale dictate that the costs of tax and regulatory compliance are higher for smaller business. In an effort to offset these costs, and to make small businesses competitive despite their size, Ottawa and the provinces have established a preferential tax and regulatory system. However, as companies grow, they lose their small business benefits as their asset, employment and income levels surpass certain thresholds. This can both discourage growth – as businesses adjust their decisions to hold on to preferential treatment – and inhibit growth – as businesses looking to grow are faced with increasing costs of operation as preferential treatment is lost. This can have a detrimental effect on Canada’s overall growth.
This study outlines a series of policy recommendations aimed at encouraging further growth within the Canadian small business sector. These include:
instituting a flat 13 percent federal corporate income tax applicable to all businesses, regardless of size;
increasing the scope of investors who can access the capital gains rollover exemption;
adjusting collective dismissal laws to ensure that smaller businesses have the flexibility to take on new projects and employees; and,
adjusting health and safety committee legislation to account for industry characteristics.
The author argues that “larger firms are, in general, more productive than smaller businesses, they offer higher wages – beyond what their higher productivity would imply– and provide more stable employment.” Canada has proportionately more small businesses than the United States, and the author argues this is because policies in Canada discourage growth.
The paper also notes the negative impact of the payroll tax, and the perverse incentive for employers to keep their payrolls down (through fewer employees, lower wages or both). The paper is also critical of the capital tax. |
Renewing U.S. Manufacturing, Promoting a High Road Strategy
Source: Susan Helper, Economic Policy Institute, Briefing Paper #212, February 13, 2008
Link: http://www.sharedprosperity.org/bp212.html
Susan Helper argues that the decrease in US manufacturing as a share of the country’s economy is not inevitable as some have argued (she identifies Thomas Friedman as someone who has suggested this inevitability). Instead the author promotes what she terms a “high road” production recipe, one “in which skilled workers, suppliers, and management work together to make innovative products, can lead to continued vitality in manufacturing—and that public policy plays a key role in reaching this outcome.”
Helper argues that a program that created enough renewable capacity to meet 10% of U.S. electricity demand would not only reduce dependence on foreign oil and cut carbon emissions— it would also employ about 340,000 people for a year in each of five years.
Helper suggests some principles for energy legislation that she believes would fight climate change while promoting good manufacturing jobs:
Stop subsidizing fossil fuels.
Raise prices of greenhouse gas emissions.
Reserve revenue from these increased energy prices for social purposes; it should not become a windfall for private interests.
Fund new initiatives in energy efficiency and renewable energy.
Enact legislation to prevent the creation of greenhouse gas havens in other parts of the world.
In the long term, enact legislation to address ways of reducing emissions in developing countries, where it is cheaper to do so.
In her paper, she applauds the Manufacturing Extension Partnership (MEP), which was set up in 1989 and is part of the National Institute of Standards and Technology (NIST). Through that program plants receive help adopting modern manufacturing technologies. Most centers also offer business, marketing, and other “softer” types of assistance. |
Improving Canada’s Business Environment and Competitiveness
Source: Public Policy Forum, March 2007
Link: http://www.ppforum.ca/common/assets/publications/en/improving_canadas_business_environment.pdf
Summary: The paper details the discussion and conclusions reached at the Public Policy Forum’s (PPF) conference entitled Improving Canada’s Business Environment and Competitiveness. The goal of the conference was to discuss the economic agenda articulated by the Government of Canada (GoC). The GoC document, which accompanied the fiscal update in November 2006, is entitled Advantage Canada: Building a Strong Economy for Canadians. The Economic Plan is described as a “strategic, long-term economic plan designed to improve (Canada’s) prosperity both today and in the future.”
Excerpt from the PPF document: “The overarching conclusion was that Advantage Canada represents a good platform on which build, but that the time for action is now. Canada’s relatively strong economic performance in recent years has masked an array of lingering deficiencies, the most pronounced of which has been a national inability to come to terms with the transformative changes that have occurred within the global marketplace. With action desperately needed to right the course, the GoC must address some critical questions.” “There have been some important developments in recent years, but the GoC and Canadian stakeholders from other sectors need to recognize the urgency of the current situation and take the lead in pushing through the necessary economic reforms.”
Key Conclusions:
The Business Environment – “To government: Get involved, and get on with it” A strategy to increase Canada’s productivity performance should hinge upon ramping up private sector investment in machinery, equipment and R&D (particularly in ICT), government investment in education to ensure a highly skilled workforce, tools to help Canadian firms reposition themselves within global supply chains, and an acceptance of the need for sustainable policy and practices. The business environment should be improved by improving the taxation and regulation regimes to spur competition and investment, harmonizing provincial taxes with the GST, increasing the amount and quality of domestic venture capital, increasingly focusing on the need for high quality business managers, and improving incentives for individual Canadians.
Science and Technology: While research is improving, commercialization needs to be strengthened.
Internal Trade and Investment: TILMA is a good first step, but a pan-Canadian approach needs to be developed.
Human Resources Challenges: Canada needs more workers, and improved skills. Some of these gaps can be filled with immigrants with skills that are lacking in our labour market.
Global Commerce Strategy: NAFTA is at the core, but new policy must respect new principles. The forthcoming Global Commerce Strategy will contain three integrated elements: making Canada a desired partner of international businesses, negotiating improved access to global markets, capital, technology and talent, and connecting Canadian businesses with expanding global opportunities.
Transportation and Trade Infrastructure: There is a need for action, and federal leadership is required as Canada faces much competition from other North American gateways on both coasts.
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Business Taxes in Western Canada – Settling for a Personal Best?
by Kenneth J. McKenzie, Ph.D.
Source: Canada West Foundation
This paper examines the tax burden imposed on investment, as measured by the marginal effective tax rate (METR) on capital, across the four western provinces, with interprovincial and international comparisons. Recommendations include:
Reduction in the provincial corporate tax rates;
Harmonization of provincial sales taxes with the GST;
Switch from a tax on corporate income to a broader based tax on business value added (Business Value Tax or BVT).
The Canada West Foundation says the goal of their analysis is “to ensure that Canadians make the right public policy decisions for improving the ability of the country and its regions to compete in the upper echelons of the global economy.” The ultimate goal is “to ensure that Canada experiences the long-term economic prosperity that underpins a high quality of life and an inclusive and caring society in which all citizens can participate and thrive.”
The author uses as his unit of analysis the Marginal Effective Tax Rate (METR) on capital. METR on capital is defined as the percentage of the pre-tax rate of return on the marginal unit of capital which is required to pay the taxes arising from investing in that capital. The higher the METR on capital, the more the business tax system distorts and discourages investment.
Corporate Tax rates tend to be lower in the western provinces than elsewhere in the country, but the Marginal Effective Tax Rate (METR) tends to be lower in the eastern provinces. There are two reasons.
Atlantic Canada Investment Tax Credit, a federal program available in the Atlantic provinces and Gaspe region of Quebec;
Sales Taxes which are harmonized and/or structured to parallel the GST, resulting in no sales taxes being imposed on capital inputs.
Corporate income taxes are among the most economically inefficient taxes. Efficiency is defined as the extent to which a given tax impacts on the choices one makes on the margin. An example cited is that a 4.5 percentage point cut in the CIT in BC will lead to an 11.1% increase in real per capita output.
Business Value Tax (BVT): The author suggests that government should lower the rate of taxation of equity capital by expanding the corporate tax base away from income, toward business value added. Current CIT taxes returns on equity capital. BVT would broaden the tax base by taxing the value added by debt capital as well as by labor, measured by interest and wages paid. The rate would be lower than the current CIT rate because the base would be broader, and the METR on capital would fall by from 6-10 percentage points.
Reviewer’s comments on BVT:
Interesting concept, which is probably worth deeper investigation, however the author does not provide any support for a critical assumption that labor costs are a good proxy for labor value added. The general understanding of transactions in a free market, going all the way back to Adam Smith, is that the value added by labor in a successful company is always more than the price paid in wages. No one will freely enter any transaction (including one to hire employees) unless he perceives the transaction will add more value than the value he gives up (i.e. wages). Maybe wages paid is the best possible proxy for value added by labor, and maybe it is a good enough proxy to make the BVT idea feasible. If it is not a close enough proxy, that would seem to make the BVT unfeasible.
Manitoba already has a tax on labor, being the Payroll Tax. No mention of payroll taxes is made in the paper. Presumably any implementation of a BVT would entail rolling in not only the CIT but also the Payroll Tax.
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Economic Opportunities Papers to be summarized – February 27, 2009
The Economics of Indigenous Deprivation and Proposals for Reform Centre for Independent Studies, Helen Hughes, The Centre for Independent Studies, Issue Analysis, September 23, 2005
Link: http://www.cis.org.au/issue_analysis/IA63/IA63a.pdf
Summary: There are many parallels between Manitoba’s Aboriginal population and the 450,000 Australian Aborigines and Torres Strait Islanders who make up Australia’s Indigenous population and are examined in Hughes’ paper.
Hughes found that many Indigenous labour entrants are illiterate and non-numerate, poorly articulate in English and generally uneducated. As a result, many young people are failing to access jobs. In her paper, Hughes compares Australia’s separatist policies to an Apartheid environment similar to that in pre-independence South Africa and describes government agendas as largely, a “torrent of words”.
Hughes identified a reform agenda in her paper. Included in this are:
1) The institution of private property rights (which has been central to the development of productive economies and rising standards of living throughout the world). The paper contends that rather than focussing on creating employment opportunities, there has been a focus on the ‘rent’ gains from royalties accruing to land and sea. Employment opportunities lead to real growth, and a trained workforce. As an example, Hughes suggests that seeking employment opportunities in mining would be preferable to the ‘rent” or royalties that often benefit only select members of a community.
2) Improved Education: Hughes is a proponent of a unified secondary school system to give Indigenous youngsters mainstream secondary education. She believes that primary schools, service and other private organizations should explore opportunities to improve adult literacy.
3) Improved Housing and Family Life: Decent housing is essential to decent family life. Hughes suggests that the introduction of 99-year tradable, house leases would facilitate a transition to improved housing.
4) Improved Health: There is a need to tackle public health and lifestyle issues and inferior clinical care for Australia’s Indigenous population.
5) Welfare Reform: Hughes believes welfare reform is necessary, as well as a reform of the separatist policies that undermine employability. Hughes suggests that tying welfare to civic performance such as school attendance and public health are useful transitional measures.
6) Improved Governance Structures: Hughes states that governance structures require change. She wrote that, “Those who dominate the many Aboriginal and Torres Strait Islander governance bodies with multiple positions are well rewarded by salaries, sitting fees and travel expenses.”
7) Respect for the Rule of Law: Hughes wrote that all Australian citizens should be equal before the law. In remote communities and fringe settlements, policing is usually weak and the law often does not apply. |
Canadian Mining Taxation
Source: PriceWaterhouseCoopers 2007 Edition
Link: http://www.pwc.com/Extweb/pwcpublications.nsf/docid/8684DDD9FC97488C852572EB004D5723
Synopsis
While this report examines mining taxation throughout Canada, this synopsis will focus primarily on information provided about Manitoba.
Canadian mining operations are subject to a three-tiered tax system:
Federal income tax levied on a mine’s taxable income;
Provincial and territorial income taxes based on taxable income; and
Provincial and territorial mining taxes, duties or royalties levied on a portion of production profits or revenues.
Manitoba Mining Taxation
According to the report mining operations in Manitoba bear the highest relative provincial tax burden at 27.9% (income, capital and mining taxes).
Manitoba is one of only five provinces that levies a corporate capital tax which was .5% at the time of publication and .3% as of January 1, 2009.
At the date of publication Manitoba’s corporate income tax was 14.5%. It was reduced to 13% as of July 1, 2008.
Manitoba’s provincial mining tax is 18% on the profits of a mineral processing establishment, the highest in the country. |
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