Behind the Numbers

David Macdonald’s Blog Posts

David Macdonald is an economist with the Canadian Centre for Policy Alternatives (http://www.policyalternatives.ca).

Liberal election platform shifts the chips for the rich, takes a pass on the middle class

May 5th, 2015 · David Macdonald · 2 Comments · Federal Election, Taxes and Tax Cuts

Yesterday the Liberals released a portion of their platform for the upcoming federal election. While I’m happy to see some overlap with our Alternative Federal Budget (AFB), I’m puzzled by the Liberals’ proposed tax changes, which basically just move tax money around in the top 20% of households without doing anything substantial for every politico’s favourite demographic, the “middle class.”

Don’t get me wrong: we love when politicians take ideas from the AFB. But we’ve got much more effective ways of spending the $3 billion raised through a new tax on the richest families rather than giving a tax break to the next richest families. Let me break it down.

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We don’t need a surplus, we need jobs

April 21st, 2015 · David Macdonald · 1 Comment · Economy & Economic Indicators, Employment and Labour, Federal Budget

Call me naïve. Going into the 2015 budget lockup I figured the sale of Canada’s GM shares (that could have been used as leverage to keep GM jobs in Canada, but I digress) would go toward a new infrastructure plan for cities. The proportion of people working today is unchanged from the worst point during the recession and job quality indexes are at all time lows. Building things creates jobs and returns benefits to the economy. Obviously, or so I thought, infrastructure spending would make an important appearance in Joe Oliver’s first budget.

And I suppose it will… in 2019.

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We’re paying for $7/day child care, so why is only one province getting it?

April 15th, 2015 · David Macdonald · 4 Comments · Child Care, Income Inequality

Many Canadians don’t know that Quebec has the least expensive childcare in the country at $7/day (well actually $7.30 now). Meanwhile in Toronto parents pay $49/day, and in Vancouver it’s $41 a day for toddlers/preschoolers.

It’s no surprise that $7/day childcare is wildly popular in Quebec. It’s far cheaper than the national average, and allows for more parents, and far more women to enter (or re-enter) the workforce. It also creates more spaces in regulated centres.

In Canada, there are a million families with working parents who have young children. However, there are only half a million regulated child care spaces, leaving parents with long wait times and an increased reliance on the unregulated sector.

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Alternative Federal Budget vs. Income Splitting: Who benefits?

March 30th, 2015 · David Macdonald · 3 Comments · Alternative Federal Budget, Federal Budget, Taxes and Tax Cuts

On March 19th, we released the 2015 Alternative Federal Budget (AFB) and also marked the publication’s 20th anniversary. Like every year, the AFB includes practical measures to improve Canadian’s lives. For the past two years, we’ve been running our AFB through a sophisticated income inequality simulation to see how our budget would affect poverty and inequality in Canada. This analysis allows us to see who benefits and who doesn’t from various social programs and tax/transfer changes.

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Alternative Federal Budget 2015: Delivering the Good

March 19th, 2015 · David Macdonald · No Comments · Alternative Federal Budget, Economy & Economic Indicators, Federal Budget, Poverty and Income Inequality

The following remarks are excerpted from the 2015 Alternative Federal Budget press conference on March 19, 2015 on Parliament Hill, featuring David Macdonald and Kate McInturff.

David_Holding_AFB_small

This year is the 20th anniversary of the Alternative Federal Budget. Our first was in 1995. Over the years, we’ve proposed policies that have been successfully implemented, like the creation of a Parliamentary Budget Officer. Other ideas, like affordable childcare, we continue to advocate for.

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What if First Nations (and their poverty) were counted?

January 26th, 2015 · David Macdonald · 4 Comments · Aboriginal Issues, Employment and Labour

Kudos to the Globe and Mail for their front page story on Jan 23rd highlighting the fact that the official unemployment rate does not count First Nations reserves. You heard that right: First Nations reserves, some of the poorest places in the country, are not included in the official unemployment rate.

As unbelievable as that sounds, the reality is even worse. Reserves are regularly excluded from all of our regularly updated measures of poverty, wage growth, average incomes etc. The exception to this rule is during a Census, i.e. every four years (and as a result of legislation making the long form Census voluntary, concerns have been raised about the future reliability of these data). Otherwise, reserves—some of the poorest places in Canada–are statistic-free zones: out of sight…out of mind.

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The EI “Job Credit”: try “Job Killer”

September 11th, 2014 · David Macdonald · 2 Comments · Employment and Labour, Employment Insurance

This morning the federal government announced a “Small Business Job Credit”. The idea is that small businesses with a payroll of under about $550,000 a year will have a portion of what they paid in EI refunded to them. Only the employers get some of their money back, not any of the workers. Also, this is at a time when EI is so restricted that 6 out of 10 unemployed Canadians can’t even get it.

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Tim’s + BK = $ for Canada right? …. Wrong! (in one table)

August 25th, 2014 · David Macdonald · No Comments · Corporations, Economy & Economic Indicators, Taxes and Tax Cuts

Big news today that Burger King, a US company, is planning to buy Tim Horton’s, a Canadian one. This is another in a string of “tax inversion” deals where US corporations move their corporate headquarters from the US to elsewhere to avoid US taxation. They don’t actually change anything or move anyone outside of their accounting fairyland. Instead, they just check some different boxes on their income tax forms and ‘poof’ save millions in taxes.

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The Truth Behind Corporate Tax Cuts (in one chart)

August 19th, 2014 · David Macdonald · 10 Comments · Corporations, Economy & Economic Indicators, Taxes and Tax Cuts

Corporate Canada has reached a milestone in 2014. For the first time ever, it is now hoarding more cash than the national debt. What that means is that in one fell swoop, Canada’s corporations could pay off our entire national debt with just the cash sitting in their banks accounts, nevermind their other assets.

Corporate cash hoarding really ramped up as corporate tax rates were slashed in half from 31% in 1997 to 16% today. Corporate Canada argued in the late 1990s that they’d use that extra cash to build more factories, train more workers and make Canada more productive. Turns out … not so much.

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What’s wrong with the tar sands boom? (in one graph)

August 5th, 2014 · David Macdonald · 1 Comment · Economy & Economic Indicators, Environment, Income Inequality, Uncategorized

So let’s say that you don’t care about pipelines. Let’s say climate change doesn’t concern you or your children. Let’s say you aren’t concerned about the radical alternation in the landscape of northern Alberta.

What if when I say “tar sands” and you say “Show me the money!”

Well even if you didn’t care about the above, you should care about the money and where it has been going since the tar rush began. The value of crude oil since 1986 has risen 50% from $379/m3 to $570/m3 ($2010). That has created a resource rush like Canada has never seen. At its epicentre, the richest Calgarians have seen their average incomes rise over $600,000 (inflation adjusted) an increase of over 180% since 1986…make it rain!

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