Category: Commentary
The Fiscal Rationale for Meaningful Federal Intervention in Child Care
To finally make a national child-care program a reality, Ottawa would need to budget between $7 billion and $9 billion a year. Since child care is a provincial jurisdiction, it’s important to explicitly consider the scale of federal fiscal intervention that would be necessary to incentivize all provinces, including those with low fiscal capacity, to participate.
The Case for a GST Cut as Fiscal Stimulus
The government should temporarily reduce the GST rate to two per cent from five per cent to support the economy until the recovery is well underway. My research shows that sales tax cuts have been passed onto consumers in the past, and they do lead to a surge in consumer demand.
Basic Income or Welfare Reform? A summary of the BC Basic Income Panel Report
On January 28, the BC Expert Panel on Basic Income issued its final report. Media coverage of the report naturally focussed mainly on what the panel did not recommend – a basic income program – but the report offers far more than that.
More Federal Debt Can Help Build a Better Canada
Rather than wringing our hands about if and when the federal government plans to balance the budget or about the lack of a fiscal anchor to discipline federal spending, we should take the opportunity to assess the costs of decades of austerity light and have the long overdue debate about the role of debt and taxes in meeting the crises ahead and building the Canada we want.
Evidence on Behavioural Effects of Higher Capital Gains Taxes in Canada
The debate over whether to increase the tax rate hinges in part on the extent to which a higher tax rate would distort investment decisions and reduce incentives for Canadians to invest. This commentary sheds light on this debate by analyzing the effects of a tax policy change in the mid-1990s that increased the effective capital gains tax rate. They find that the new higher rate on capital gains tax had no adverse effect on cumulative adverse effects on capital gains realizations.
A New Tool to Understand Equalization Payments in Canada
Canada’s equalization program is one of the most important federal transfers — and one of the most misunderstood. A new tool from Finances of the Nation opens the black box and understand how it works, how it doesn’t, and what the future might hold.
Debt Aversion in Canada Since the 1980s: Are things about to change?
For the past 35 years, debt aversion has been an organizing principle of Canada’s federal fiscal policy. This commentary demonstrates the fact of fiscal policy continuity focused on debt aversion since the 1980s and asks whether the current surge in debt is simply an emergency response to the COVID-19 pandemic and recession or the beginning of a new era of fiscal policy that is markedly less focused on avoiding debt.
An Employment Insurance system for the 21st century: Lesson 2, The future of work calls for better income insurance
This is the second commentary in a three-part series examining ideas for reforming Canada’s Employment Insurance (EI) program. This commentary discusses the need for the EI program to provide comprehensive insurance against various forms of income loss. The First commentary, on the need for EI to be better designed to insure against big shocks, can be found here.
An Employment Insurance system for the 21st century: Lesson 1, Big shocks matter
This is the first commentary in a three-part series examining ideas for reforming Canada’s Employment Insurance (EI) program. This commentary argues that the program as presently constituted is not well-designed to provide adequate support for households that suffer large and enduring negative income shocks.
Evaluating Canada’s Pandemic Response from the Perspective of Flexible Employees
The federal government is right to extend its fiscal programs supporting businesses and workers through the pandemic. One major reason is that they have been helpful to part-time and temporary employees — not just the original target of the self-employed and workers in the gig economy.