Overly optimistic Liberals are lowballing government debt risk – Financial Post
In its November Fall Economic Statement, the federal government presented a long-term projection that shows its debt ratio — that is, federal debt divided by GDP — declining smoothly over the next 30 years. But this outcome follows from overly optimistic assumptions about interest rates and program spending, and a decision to ignore the impact of recessions, which are certain to happen in any 30-year period. Taking such a rosy approach to debt sustainability allows the government to avoid making the hard choices on spending and taxes that no government likes.
Ottawa’s analysis assumes the effective interest rate on federal debt remains below the growth rate of the economy from now all the way to 2055-56. This sunny…
Sen, Masson – Cheers to Ontario’s New Alcohol Marketing Framework
From: Anindya Sen and Paul R. Masson To: Ontario competition watchers Date: January 10, 2024 Re: Cheers to Ontario’s New Alcohol Marketing Framework Real competition is coming to Ontario alcohol retailing on January 1, 2026 after last month’s announcement about replacing the province’s Prohibition-era hodgepodge of rules. These reforms, which follow along the lines of our 2014 C.D. Howe […] Laurin, Dahir – Charities Fall Victim to Federal Tax-the-Rich Plan
To: The Hon. Chrystia Freeland, Minister of Finance From: Alexandre Laurin and Nicholas Dahir Date: January 8, 2024 Re: Charities Fall Victim to Federal Tax-the-Rich Plan The end of 2023 last week marked the likely end of full tax relief for some charitable giving. The federal government has yet to table its legislation for reforming the alternative minimum […] Lester, Laurin – The Federal Debt is Not Sustainable
To: Canada’s budget observers From: John Lester and Alexandre Laurin Date: January 5, 2024 Re: The Federal Debt is Not Sustainable The recent Fall Economic Statement (FES) contains a familiar rosy assessment of federal debt sustainability. It shows the ratio of debt to GDP declining continuously over 30 years starting in the second year of the medium-term forecast, […] Ambler, Kronick – Inflation Targeting Ain’t Broke So Let’s Not Fix It
From: Steve Ambler and Jeremy M. Kronick To: Canadians Worried About Inflation Date: January 4, 2024 Re: Inflation targeting ain’t broke so let’s not fix it Despite disappointment in the performance of many central banks, let’s not lose sight of key lessons. First, inflation stinks, inflicting most harm on those who can afford it least. Second, central banks […] Charles DeLand – Plan B, Please, for Federal Carbon Policy
To: Canadians Concerned about Climate Change From: Charles DeLand Date: January 3, 2024 Re: Plan B, Please, for Federal Carbon Policy Suggestions that Canada’s rising emissions prove federal carbon policy is not working miss the mark. The country’s energy efficiency has, in fact, improved considerably under the carbon tax, but rapid population growth means more emissions. Now, unfortunately for […] High interest rates mean short-term pain for long-term housing affordability – Financial Post
In the current debate about how to make housing affordable in Canada, there is a curious omission: the role of monetary policy, both of excessively loose monetary policy in creating the problem and of more responsible monetary policy in solving it.
The global financial crisis of 2008-09 led central banks around the world to reduce interest rates to historically low levels, which made perfect sense during the crisis, but then to keep them there for more than a decade, which sowed the seeds of the affordability crisis we are now living through. Low rates were justified in two ways: inflation was low, so they seemed appropriate or at least not harmful in their role in inflation-targeting, and banks and other lenders that…
Angelo Nikolakakis – Here’s How Ottawa’s Financial Institution Tax Will Really Work
From: Angelo Nikolakakis To: Finance Minister Chrystia Freeland Date: January 2, 2024 Re: Here’s How Ottawa’s Financial Institution Tax Will Really Work Tucked into November’s 500-page Notice of Ways and Means motion is an unwise measure that urgently needs to be withdrawn. First announced as part of Budget 2023, it imposes an additional $3 billion of federal income tax on “financial institutions” over […] Inflation targeting ain’t broke so let’s not fix it – Financial Post
The last two years have not been kind to central banks. Inflation in many countries soared far beyond target, reaching levels not seen in decades. Central bankers have responded with necessary but painful interest rate hikes.
Despite disappointment in the performance of many central banks, let’s not lose sight of key lessons. First, inflation stinks, inflicting most harm on those who can afford it least. Second, central banks are the best institutions we have to make sure it goes away and doesn’t come back. As we head into 2024 and inflation continues to fall, it’s worth remembering why the world established central banks and low inflation targets in the first place.
Until the 1990s, central banks struggled…
Ottawa’s move to tax the rich more will backfire on charities – Globe and Mail
‘Tis the season for giving, and as the year ends, many Canadians are planning substantial donations. However, they should consider maximizing those donations in 2023 while full tax relief for charitable giving is still guaranteed. The federal government has yet to table its legislation for reforming the alternative minimum tax (AMT), but if it sticks to its commitments laid out in the 2023 budget, tax relief for charitable giving will be curtailed for some high-income filers in 2024.
Donating to charities can lower our taxes. The charitable tax credit lowers taxes by about half of the amount of donations in excess of $200. And, donated accrued capital gains from gifts of publicly listed securities are exempted from taxable income…