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. ...Read more
Tags: corporate·Taxes and Tax Cuts
An adult conversation about taxes is beginning to take shape.
Way back in 2009, CCPA research associate Hugh Mackenzie published an editorial in the Toronto Star entitled “Can we have an adult conversation about taxes?”– a challenge to governments to start looking at their revenue problems in a grown up way.
This week, the Globe and Mail has published an important piece by C.D. Howe Institute Research Fellow Chris Ragan, pointing out, lo and behold, that Ontario has a revenue problem, not a spending problem. ...Read more
Tags: Economy & Economic Indicators·Ontario·Taxes and Tax Cuts
On Tuesday, the Parliamentary Budget Office released their long awaited costing and distributional analysis of the tax measures implemented since the Harper government has been in power. In essence, they asked what is the cost of these tax cuts, who benefits, and to what degree.
The Price Tag of the Tax Cuts
The total cost of the tax cuts implemented by this government is $30.4 Billion in 2014 ($17.1B on the income tax side and $13.3B from the GST/HST cuts). This is in addition to the cuts to the federal corporate income tax, which the PBO report did not look at but Jim Stanford has estimated to cost around $13 billion in annual revenue. ...Read more
Tags: benefits·canada·Federal Government·PBO·tax·Taxes and Tax Cuts
At a campaign stop on Friday morning, Ontario Progressive Conservative Leader Tim Hudak pledged to cut 100,000 jobs from the public service in Ontario in order to balance the budget.
According to the Globe and Mail’s description of the announcement, “Mr. Hudak did not say exactly which jobs would be cut, but promised not to touch doctors, nurses or police officers. He suggested instead that he would mostly look to eliminate administrative positions and to privatize some services. The Tories have, in the past, talked about privatizing gambling and the LCBO, among other things.” ...Read more
Tags: #ONelxn·Deficit·Ontario Election·tax cuts·Taxes and Tax Cuts
This week’s 2014 Ontario budget won’t contain many surprises – much of what will be in the budget has already been announced – but it should contain core principles to guide the province toward greater shared prosperity.
Here are 5 guiding principles we at the CCPA-Ontario office will be watching for in the budget:
1. End austerity ...Read more
Tags: Austerity·Economy & Economic Indicators·Government Finance·Jobs·Ontario·Poverty and Income Inequality·Taxes and Tax Cuts
As Ontario inches toward a potential spring election showdown, Premier Kathleen Wynne is making clear that she wants public transit to become the ballot box question.
That’s heartening, because there is majority public support for greater transit investments after too many years of political and traffic gridlock.
But it looks like she’s throwing needed new taxes under the bus in the process.
In her most recent announcement, Wynne committed to $29 billion in transit and transportation improvements over the next 10 years. ...Read more
Tags: Ontario·Public Services·Taxes and Tax Cuts·Transit·transportation
“Middle class” is the new “working Ontario families.” Every second speech and press release here contains it now. – Adrian Morrow, Globe and Mail reporter, Queen’s Park, Twitter, March 20, 2014.
With election fever mounting in Ontario, the political field is quickly crowding around the middle of the income spectrum in search of votes.
And – surprise, surprise – low taxes are dominating the list of enticements.
NDP Leader Andrea Horwath is insisting she’ll reject any provincial budget that includes asking Ontario’s middle class to pay more taxes or tolls. ...Read more
Tags: Middle Class·Ontario·Poverty and Income Inequality·Taxes and Tax Cuts
Yesterday, Ontario’s NDP announced an election plank: increase the minimum wage, and at the same time, cut taxes for small business.
The gist of their proposal:
a) a 33% tax cut for small businesses and
b) a 56 cent minimum wage increase over and above what the current government has already committed
I have no squabble with the minimum wage increase. Sure, I wish it were higher, as we proposed to the Minimum Wage Advisory Panel back in November. The problem comes when a wage increase is coupled with a tax cut. This sets an extremely dangerous precedent. It buys into the rhetoric that minimum wage increases are bad for business and governments need to mitigate the damage. ...Read more
Tags: Employment and Labour·minimum wage·Ontario·Taxes and Tax Cuts
Well, that was awkward.
Oh, sorry—I’m not talking about how the federal government, in a remarkable display of self-satire, cut short debate on the Fair Elections Act (or as I like to call it: “Democracy 2.0: Abridged too far”).
And, tempting as it is, I’m not hinting at the recent PBO analysis that demonstrates, directly contradicting the Treasury Board’s 18 days estimate, how sick leave in the Federal public service is virtually identical to the 11 days per year that private sector workers take.
Nor am I referring to the Federal Budget’s youth internship programs that, at best, address the needs of 1% of unemployed youth. ...Read more
Tags: Alternative Federal Budget·Child Care·Income Splitting·satire·Taxes and Tax Cuts
This piece was first published in the Globe and Mail’s Economy Lab.
You could hear the sound of jaws dropping across the nation this week when Finance Minister Jim Flaherty, in response to a question from a journalist, cast doubt on the idea of income-splitting for young families, something his party has been promising since March 28, 2011.
The idea – which would allow the higher-earning spouse to transfer income to their lower-earning spouse in order to reduce their total tax hit – provoked controversy right from the start. But it became an increasingly hard sell as economists and think tanks from across the political spectrum lined up in agreement: Income-splitting costs too much for something that is worse than doing nothing. ...Read more
Tags: Income Splitting·Poverty and Income Inequality·Taxes and Tax Cuts