This week we learned the consumer price index was up 6.9 per cent year over year in October on the same day we got predictions about how much the federal government’s inflation-indexed tax will raise the price of beer. Inflation and tax rules often combine to increase Canadians’ tax burdens. Governments seem readier to adjust taxes for inflation when doing so makes the burden heavier than when it makes the burden lighter. That should change.
Adjusting some tax rules for inflation is easy. Most taxes on employment income and government benefit payments use thresholds that rise as prices do. The federal government indexes personal income tax thresholds, benefit payments and most tax credits to the CPI. But some provinces do not.…
Canada’s Parliamentary Budget Office just did something important and long overdue. For the first time, the country’s official financial watchdog quantified the costs of climate change for Canada’s economy, showing that worsening climate impacts are a drag on economic growth. This is a crucial step in beginning to reduce the economic risks Canada can expect in a warming world.
There’s still a long way to go, however, and recent moves by Australia and the United Kingdom can point us in the right direction.
In Canada, our long-term economic projections are largely based on historical averages of productivity that do not account for the fact that the climate is now changing rapidly, bringing with it more…
On ne peut choisir une combinaison d’emploi et d’inflation, comme on mélange à sa guise l’eau chaude et l’eau froide dans sa douche. Si la Banque du Canada veut maximiser l’emploi de manière durable, elle doit d’abord maîtriser l’inflation autour de 2 %, sa mission première.
Même aux États-Unis, où la Fed a officiellement le double mandat de stabiliser les prix et de maximiser l’emploi « de manière durable », en pratique, l’objectif de l’emploi est subordonné à la lutte contre l’inflation.
Il ne s’agit pas d’une tromperie ou d’un choix idéologique, mais d’un constat empirique : sauf à court terme, on ne peut accroître l’emploi par des taux d’intérêt bas lorsque l’inflation est élevée. Cette politique…
