Fiscal and Tax Policy - Op Eds

Canada and the rest of the developed world have entered an era of low interest rates and sluggish growth. We should expect interest rates to remain low by historical standards when the next recession occurs. Since the Bank of Canada will be unable to cut rates much below zero, monetary policy alone won’t be able to effectively fight the next recession. The government will have to use fiscal policy – its spending and taxation powers.

The challenge confronting us is to devise a framework for using fiscal policy in a timely, effective and responsible manner. A set of policies known as “unconventional fiscal policy” offers such a framework. A hallmark of this approach is that it explicitly links the expanded use of fiscal policy to…

My colleagues and I at the C.D. Howe Institute devote much of our daily attention to criticizing poorly conceived and ineptly implemented policy in Canada. As we should. That’s our job. And our governments keep us all too well supplied.

On occasion, however, people outside Canada ask us about how Canada ranks as a place to live, work, invest, or locate a business. For me, those questions trigger a happy 180-degree turn. The professional nag steps back and the booster of Canada as one of the world’s most favoured nations takes over. As we welcome 2020 with some thoughts about things we in Canada do well, and should keep doing well, here are three ways we stand out.

First on my list — first on so many people’s lists — is…

Toronto city council has just approved an extra increase in property taxes — another 1.0 per cent in 2020 and 2021 on top of a previously approved 0.5 per cent hike, and a full 1.5 per cent for four years starting in 2022. Mayor John Tory, previously a staunch supporter of holding the line on property taxes, pushed it. The vote went 22-3 in favour — a convincing margin considering most politicians hate to vote for higher taxes. Even many conservative commentators praised the hike as necessary to support social services and better infrastructure. Which makes me wonder: how many on council, in the media, or the city at large know anything about Toronto’s fiscal numbers? Does anyone?

Here’s a test. What was the City of Toronto’s…

Starting Dec. 16, the Alberta Court of Appeal will hear arguments regarding the constitutionality of the federal Greenhouse Gas Pollution Pricing Act – the so-called carbon-pricing “backstop," under which Ottawa would impose a price on greenhouse gas emissions in any province where it deemed provincial measures are not sufficiently stringent. The Alberta government’s challenge to the federal backstop is just the latest in a months-long string of appeals-court processes by governments in Ontario and Saskatchewan, where the legislation was upheld; those appeals are now headed to the Supreme Court, which will begin its hearings in March.

So the legal arguments being deployed feel, at this point, quite well-trod. However, the federal…

The big winner in the recent federal election was clearly climate change. The streets were clogged with marchers, and the parking lots were full of the SUVs, vans and pickup trucks that delivered many of the protesters. Therein lies the challenge of taking action on climate change. Canadians are demanding action, but ask most people what they are doing for climate change, and a frequent response is “recycling?” Ask what they are willing to pay, and the answer from most is “less than $100.” Ask what they think of our energy sector, and the majority say they support a low-carbon economy, the TMX pipeline and responsible energy development.

Canadians want action and, although they aren’t clear what precisely that means, they are…