The Canadian government’s recent leaps in tax revenues were a pleasant surprise for voters following an extremely long and unusual period of budget deficits. If these increases are not temporary but result from economic growth that will remain stronger than in the past on a permanent basis, the question arises of how to use these budget “surpluses.” This Note looks at these questions, first presenting the potential impact of introducing a dual-rate tax system as proposed by the Canadian Alliance party and then identifying elements in a tax system to support rises in productivity, employment and living standards.
The Report Card on Quebec’s Secondary Schools provides an annual, independent measurement of the extent to which each school meets basic needs. The Report Card thus serves several purposes. For one thing, it facilitates school improvement, and for parents who have a choice between several educational institutions, it can help them make an enlightened decision.
A widely held view suggests that the main function of government is to help the poor. Do the data we have for Canada justify this opinion? Slightly under one-third of spending by all levels of public administration in Canada is devoted to social services, in other words to the various transfer payments supporting individual incomes along with related administrative expenses. If social programs are defined more broadly, we would have to add the 28% of spending that goes to health care and education (in roughly equal proportions). In Canada we thus have about 60% of public spending going toward social programs in the broader sense.
We are proposing a new approach to the financing, insuring and delivery of medical and hospital services. While retaining universal entitlement to Medicare insurance, as a core publicly funded service, we propose a new concept of universal private choice. This includes Medicare, as well as voluntary private medical, hospital and health insurance alternatives, as exist in all other OECD countries. Our aim is to improve quality, access and choice for all Canadians.
Among the obstacles to reducing unemployment are those created by certain provisions in the Labour Code. One of the obstacles is the “closed shop,” dating from the era of the first British trade unions (1860). In the same spirit, the Rand formula stipulates that obtaining a job can be conditional on paying dues to the union at the company. Both these formulas are currently in use in Quebec. This exerts a constraint on businesses by requiring them to hire only those who pay into (Rand formula) or join (closed shop) the house union.
Since 1987, Ireland has unquestionably become the star of the international economic world. That was the year an administration devoted to lower taxes and responsible management of public finances came to power. It was also the year a sort of social consensus developed in favour of moderation in labour costs. John Bruton, Leader of the Opposition in Dublin, played a pivotal role in this epic turnaround.
The findings of this paper show a strong and persistent negative relationship between government expenditures and growth of GDP, both for the developed economies of the OECD and for a larger set of 60 nations around the world. After several decades of declining growth rates, the conventional wisdom is that high-income developed economies can no longer achieve and sustain real growth rates of 3.5 percent and higher. The evidence presented in this paper provides another view. More rapid growth is possible, but the higher potential growth can only be achieved if we are willing to reduce the relative size of government.
Prosperity requires that people abandon old ways of doing things, old industries and bet on new ways and new industries. To achieve that transition, capital must move from yesterday’s industries to those of the future. The move is a bet. People experiment. Experiments must be financed. Financing requires mobility of capital: people having the incentives to switch money from one enterprise to another. If this switch is taxed – and capital gains taxes are a tax on just such a switch – the incentives to shift resources out of the old and toward a better match diminish.
Governments in Canada draw heavily on the productive resources of the economy, more so actually than at any time in the history of the country except during World War II. The average Canadian family pays out more than 46% of its income in taxes, as opposed to 33% in 1961. Its total tax bill shot up more than 1,286% since 1961 and it now accounts for more of the average Canadian budget than shelter, food, and clothing combined. Of the four countries with which we trade most, it is in Canada that the overall burden of taxation has risen the most over the last three decades. Income taxes for their part have climbed at twice their rate of increase in the U.S.
Étatisme et déclin du Québec (Statism and the Decline of Quebec) is an incisive analysis of the Quiet Revolution, the pivot around which the accepted interpretation of Quebec history has gravitated. Before that came a period called la grande noirceur (the great darkness), which gave way to a liberating modernity and triumphal progress. Observation of the facts leads us to paint a very different picture, however. If the Quiet Revolution indicated a turning-point in our economic and social evolution, it was a turn for the worse that marked the beginning of an ever wider gap between Quebec’s growth rate and the rates for Ontario, Canada and the United States.