A useful and intuitive definition of “economic freedom” is the freedom (absence of coercion) to buy from, or sell to, a willing counterparty. A society based on economic freedom is a free-market society. But is economic freedom economically beneficial? Is it all about money? Is it moral? Aren’t there many exceptions where government intervention is warranted? This Economic Note addresses these questions.
As the fall economic update approaches, the rumour is that Ottawa favours targeted measures to promote investment, rather than reducing the corporate income tax rate. This would be a mistake. The competitiveness of Canadian companies has been hurt by US tax cuts, and also by deregulation efforts south of the border. The federal government should use its update to lower corporate income taxes and restore the Canadian advantage; not acting would entail substantial costs not just for businesses, but for workers as well.
This little booklet, published in the context of the MEI’s 20th anniversary celebration, presents a few highlights from our twenty years of activity. We hope that this brief retrospective will bring back fond memories to those who have known us for a long time, all while giving others a sense of the path we’ve travelled, our rich intellectual history, and our growth.
In recent years, numerous national energy projects have been cancelled or substantially delayed in Canada due to the ineffectiveness of the governmental approval process. This situation is alarming, given the contribution of the energy sector to the Canadian economy, but also our loss of competitiveness relative to our main trading partner. Indeed, the United States has put in place a series of reforms aimed at reducing the regulatory burden for businesses, while here, we are heading in the opposite direction.
The accumulation of knowledge and technological change have led to a significant shift in forestry practices. As a result, forestry is now a sustainable activity supporting the economy in many parts of Canada. Despite this reality, various popular myths lead people to believe that wood harvests need to be reduced to ensure forest survival. On the contrary, the potential of Canadian forests is in fact underutilized, presenting opportunities for hundreds of forest-dependent towns and regions across the country.
Many try to divorce entrepreneurship from any fiscal questions, claiming that entrepreneurship is basically a passion, and that entrepreneurs start businesses out of love. Yet one of the fundamental aspects of economic analysis is that cost variations are a primary factor in accounting for human behaviour. This paper aims to provide a frank, open discussion of the fiscal measures that affect entrepreneurship.
The collection of income tax involves substantial administrative costs, especially in Quebec, which is the only province that requires a separate tax return. In 2011, these costs amounted to $627 million for Revenue Quebec and $4.6 billion for the Canada Revenue Agency. To simplify procedures, some propose that the government pre-fill tax returns instead of taxpayers, a system that is in place in several industrialized countries.
The idea of making higher education “free” in Quebec is hardly new, but recently, some politicians have revived the debate by promising to implement such a policy if elected. While this idea may seem attractive at first glance, it would be costly for Quebec taxpayers, would not necessarily lead to more students graduating, and would also be unfair.
In December 2017, President Donald Trump cut corporate tax rates from 35% to 21%, effective immediately. While certain critics quickly lamented this policy decision, the President is currently mulling a second round of tax cuts. In this context, the Canadian experience with corporate tax reduction provides a useful comparison.
The real or perceived shortage of labour is a theme that comes back again regularly in the news. This spring, the Quebec government published its labour strategy for 2018-2023, one of the objectives of which is simply to have enough workers. The document, however, had nothing to say about a major historical phenomenon, namely the “disappearance” of Quebec’s youth over the past three and a half decades.