The Conservative plan for a GST tax holiday in December should be expanded to help the recovery

Conservative Leader Erin O'Toole proposes a GST holiday in December.

Cutting the GST for a short time won’t do much to make life more affordable for families, and it will do nothing to beat inflation. But a GST holiday would get consumers spending more. That would give the economy a boost it might well need, as the recovery faces headwinds this fall from a possibly resurgent coronavirus and from economic shocks in the rest of the world. Read this articleThe Conservative plan for a GST tax holiday in December should be expanded to help the recovery

Which federal party has the best plan for getting Canadians back to work?

Canada job-creation

We tend to give other voters the advice to ask themselves the following of any proposal: What problem do we want policy to address and can this policy succeed? In our view, a key policy challenge is reducing long-term joblessness. Read this articleWhich federal party has the best plan for getting Canadians back to work?

Fiscal policy in the COVID recession: An early assessment

The scale and speed of the COVID-19 recession and the fiscal policy response has been remarkable. This commentary shows what has happened since the beginning of the pandemic and discusses the implications for future fiscal policy choices in Canada. Read this articleFiscal policy in the COVID recession: An early assessment

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. Read this articleAn Employment Insurance system for the 21st century: Lesson 2, The future of work calls for better income insurance

Large Corporate Groups that Received CEWS Payments

We identified over 4000 recipients of the Canada Emergency Wage Subsidy that are part of large corporate groups with at least $600 million in assets. This list includes 190 companies owned by Canadian billionaires, including the Thomson, Irving, Rogers, and Péladeau families, and 1829 companies in foreign-controlled multinational enterprises. These and other examples in our data suggest that CEWS funds may not be well targeted. Read this articleLarge Corporate Groups that Received CEWS Payments

Overcompensation of Income Losses: A Major Flaw in Canada’s Pandemic Response

The federal government has overcompensated Canadians for their lockdown-related income losses. The amount of money involved is substantial. Although overcompensation does not seem to have been a policy objective at the outset, it has been embraced. This expensive flaw in Canada’s response to the COVID-19 pandemic compromises fairness and limits options for using fiscal policy to strengthen the recovery. Read this articleOvercompensation of Income Losses: A Major Flaw in Canada’s Pandemic Response

News about CEWS

Federal emergency wage subsidies are poorly targeted, resulting in a fiscal cost of about $14,500 for each person-month of employment saved through the program, or $188,000 per job year. Reductions in subsidy rates which began in September had only small impacts on employment, while reducing the fiscal cost of the program substantially. More recently, the government has backed away from those reforms, freezing subsidy rates and extending the program in 2021. The decision to back away from the September reforms was a mistake and a gradual phaseout of subsidies should start again now. Read this articleNews about CEWS

Fiscal Anchors for Canada’s Post-COVID Economy

As the Trudeau government prepares its fall fiscal update after months of record spending to address the health and economic crisis of the COVID-19 pandemic, recent progress toward a vaccine should sufficiently mitigate uncertainty to enable a fiscal plan that shows Canadians how Ottawa will achieve its policy goals while maintaining fiscal discipline. Read this articleFiscal Anchors for Canada’s Post-COVID Economy