Montrealers may soon suffer the “unintended consequences” of two municipal policies likely to produce effects that are just the opposite of their stated purpose. This is in line with a dynamic that is well known to economists but often overlooked by politicians.
Since the 1920s and the work of A.C. Pigou, economists have generally agreed that imposing a price on pollution emissions is the most efficient way to reduce those emissions while minimizing the drawbacks associated with interventions aiming to limit pollution. This way of doing things usually yields better results than regulation or other government interventions that do not rely on market mechanisms.
With Air Canada seeking to acquire Air Transat, many public figures have made comments to the effect that this consolidation would lead to price increases. This argument is based on the premise that competition in a given market is determined by the size and the number of firms that are active in that market.
According to the International Energy Agency, the global demand for hydrocarbons is expected to keep increasing at least until 2040. Yet in Canada, during the past year or so, an unusually large number of major events—essentially all negative—affected the oil and gas industry. The departure of international companies, pipeline project delays, and unprecedented discounts on Western Canadian Select (WCS) are just some of the signs that the country’s oil and gas sector is facing serious challenges.
The latest reports on freedom of the press are worrisome. This freedom has declined over the past decade, and 54 journalists were killed on the job in 2018 alone. Several factors explain the level of press freedom of a given country: the nature of the political system, its level of development, or the presence of armed conflicts on its territory, for example. Another important factor, too often ignored, is its degree of economic freedom.
The Canadian government is planning to change the way prices are set for new patented drugs and cut the maximum prices at which these drugs can be sold by up to 70%. But this reform could prove very costly for patients. If it goes forward and fails to take into account the adverse effects of reference pricing systems, which have been well documented by various international bodies, Canadians could see their access to new drugs slowed down or even compromised.
Taxpayers always meet the months of March and April with some apprehension, as they will have to devote precious hours of their time to completing their income tax returns, or pay someone else to do it for them. Is it possible to make life easier for taxpayers by simplifying the tax system?
We are constantly told that there is a shortage of labour in Canada. In 2018, the economy added 163,000 full-time jobs, and the unemployment rate fell to 5.6%, a historic low that can be qualified as full employment. The participation rate for people of prime working age, 25 to 54 years, is 87%. The winds are shifting on the labour market. Employers used to have the upper hand; now, it’s workers who have it.
In Quebec, as in many other places in the world, a permit is required to provide taxi services. For a long time, this has led to a lack of competition and the resulting effects. The Quebec government will soon table a bill to modernize the taxi industry. On which principles should new regulation be based if it is also to serve as a framework for future innovations in the sector?
A New Canadian Partnership for domestic free trade could produce economic benefits for Canadians that rival those of international free trade agreements. That’s the conclusion of Professor Ian Brodie, political scientist at the University of Calgary, in a new public policy study for the Montreal Economic Institute, the Atlantic Institute for Market Studies (AIMS) and the Canadian Constitution Foundation.