Fiscal and Tax Policy - Op Eds

The dispute between Calgary and Alberta over the city’s budget and provincial transfers needs a few facts. One, especially, would help: the city’s actual bottom line.

If you don’t know it, you are not alone. Here are two hints. Calgary ran a surplus in 2018. And, for context, the city’s total expenses that year were $3.9 billion.

So how big was the surplus? You probably guessed something like $1 million, or $10 million — surely no more than $100 million. You know how heated and anxious the city’s budget debate gets each fall: threats of cuts to social services and policing, hikes to taxes and fees, delays in maintaining and key infrastructure. If Calgary’s isn’t in the red, it must be barely in the black.

Yet the…

Alberta’s coming budget on Oct. 24 could be a turning point for the province. Albertans face a choice between righting Alberta’s fiscal trajectory by confronting overspending – or postponing difficult choices with a harder reckoning down the road.

Many economic headwinds – for example, roadblocks to petroleum exports – are not Alberta’s fault. However, undisciplined spending growth hid behind flush resource revenues during past decades, and the province failed to save. Deficits since 2015 have plunged the provincial balance sheet into net debt. And, like all provinces, Alberta faces an aging population on the horizon. Without making bold moves toward a significant course correction, any balanced budget will be temporary.

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For the impulsive, throwing all budget-balancing concerns during this election campaign to the four winds must be a gas. What if you had no bottom-line constraint in your household budget? You could eat, drink, indulge – even quit your job! Or in your business? First-class everything – and forget sales! At the C.D. Howe Institute and other charities? Gala events and all the perks – even if we deliver no value and attract no donations! Wouldn’t that be great?

Well, actually, no. It wouldn’t be great. Thoughtless overindulgence is bad – at home, in business or anywhere else. Especially in government.

The essence of wisdom is judgment in your choices: evaluating the options and striving for the most value in exchange for what…

For Canadians concerned about national finances, the 2019 federal election campaign has been a double whammy. Personal smears and social-media mobbing have mostly eclipsed substance. And the discussions of budgetary policy that have cut through the noise have been discouraging. Especially the commitments for more and bigger deficits: even more red ink in the next four years than was spilled in the past four.

Economists are divided about how much that matters. If the ratio of federal debt to GDP is stable, some say, we are good. Others, like me, don’t like how deficits burn up savings, heralding a future with less infrastructure, housing, machinery and technology than we otherwise would have enjoyed. If there’s no consensus on…

There can be many reasons for society to subsidize parents for the cost of child care. The financial hurdle for a parent considering the merits of working versus staying at home to care for young children can be extremely high — especially at lower levels of family income, where incremental work hours are taxed heavily.

Mothers, in particular, are hard-hit by absence from the workforce and face larger wage penalties the longer they are away from paid work.

For economists, the main motivation for subsidizing child care is to encourage parents to participate in the workforce, thus boosting the economy through higher household incomes. As an added bonus, the extra income generates increased tax revenues, substantially offsetting…