The Harper government gives five reasons why Canadians ought to be happy with its proposal to double the maximum contribution to the Tax-Free Savings Account. Examine each of its points more closely, however, and it’s clear that the TFSA carries far higher risks than rewards — for individual Canadians as well as for the economy as a whole.
Let’s unpack the government’s arguments one by one: ...Read more
Tags: Income Inequality·Taxes and Tax Cuts·TFSA
In the prelude to the 2015 federal election, NDP Leader Thomas Mulcair is talking job creation in Southwestern Ontario.
He’s promising more small business tax cuts and credits as his entry point. It’s the political norm these days to promote low business taxes, but the reality is small business tax cuts are already old hat. Here’s why:
About a year ago, Canada’s Department of Finance released a report outlining the changes in effective tax rates for small businesses, or Canadian controlled private corporations (CCPCs) as they are called in tax language, between 2000 and 2011. ...Read more
Tags: small business·Taxes and Tax Cuts
Municipal taxes. Their mere mention is enough to cause headaches for some. Throughout the year, we nearly forget that we help finance our own town or city. Then the tax bill pops up in our mailbox, and we open it with trembling hands, wondering about the magnitude of this year’s hike. This letter can put an end to many households’ home-owning project, mainly elderly and young families. Wages rarely follow the staggering rise in the price of real estate. ...Read more
Tags: Cities·Taxes and Tax Cuts
It is not difficult to understand the motivation behind the federal NDP’s decision to make a tax cut for small business a centerpiece of its pre-election policy roll out.red
As touted by what must be the most consistently effective political lobbying force in Canadian history, small business is perceived to be an important engine of economic growth and job creation.
And while supporting small business doesn’t have the easily identifiable upside that goes with investing in large-scale projects of multinational corporations that have big job numbers attached to them, it has the virtue of avoiding the red-faced problem when those big jobs go south. ...Read more
Tags: Poverty and Income Inequality·small business·Taxes and Tax Cuts
Toronto’s budget season has begun in earnest, and it’s yielding a mix of the predictable “we can’t afford things” debate, along with some refreshing surprises.
Refreshing: Mayor John Tory is clearly signalling a desire to break from the recent past with the 2015 budget. His announcement on improvements to the TTC and his focus on the value of service improvements at his budget press conference this morning are a welcome breath of fresh air. ...Read more
Tags: Ontario·Taxes and Tax Cuts·Toronto
I’m a fan of carbon taxes, but increasingly I see the term “revenue-neutral” attached to it. Where I live, in BC, we have perhaps the most prominent example of a revenue-neutral carbon tax, and carbon tax advocates have come to promoting the BC model to other jurisdictions, such as Ontario, who are contemplating their own carbon tax. This includes the new EcoFiscal Commission, which endorses a naive view of markets – the magic of free markets is alive and well, and if only we could put a price on carbon to change marketplace incentives, all will be well. ...Read more
Tags: Energy policy·Environment·Taxes and Tax Cuts
Recently, the Canadian Federation of Independent Business received some media attention for their report on the relationship between residential and business property taxes in Ontario.
While a step up from the norm (this report is based on some actual data as opposed to a survey of the views of its members) that the CFIB would whinge about taxes is not new, nor is the fact that their results are misleading and contradictory.
Essentially, the CFIB makes one point: that business (commercial and industrial) property tax is higher than residential property tax. ...Read more
Tags: corporate·Ontario·Taxes and Tax Cuts
Here in Ontario, we have glimpsed the future, and it looks a lot like Austerity 2.0.
That’s what Ontario Premier Kathleen Wynne’s mandate letters set out for her cabinet last week.
On the one hand, the premier is instructing her ministers to invest – in poverty reduction, transit and transportation improvements, and (hopefully) job creation.
But, with those same letters, ministers are being told to hold the line on spending. Even after two years of her predecessor’s austerity cuts, Wynne has instructed her cabinet to find $250 to $500 million in savings every year until 2017-18 – her target to eliminate the province’s fiscal deficit. ...Read more
Tags: Employment and Labour·Ontario·Public Services·Taxes and Tax Cuts
Back when I was in the MBA program at the University of Alberta in 1984, a wily professor put the cat among the pigeons. He asked us students to consider whether corporations should forget about charity and good works and simply…pay their taxes.
Businesses, he argued, were good at making money, not social welfare. The difficult decisions on which groups of needy citizens, domestic and foreign, to help out should best be left to elected officials (who could be turfed at the next election if we didn’t like their actions.) And, in the field of making life better for those in great need, governments employ people who actually know what they are doing. As I recall, the suggestion met with considerable support among my fellow business students. We were a pretty perceptive bunch back then. ...Read more
Tags: Alternative Federal Budget·Corporate Tax Cuts·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. ...Read more
Tags: corporate·Taxes and Tax Cuts