Domestic prices and the appreciation of the Canadian dollar

Canadian consumers believe that they are not getting the full value at the check-out counter of the substantial appreciation in the Canadian dollar during the last five years. An exchange rate appreciation makes exports more expensive and imports less expensive. While this creates a more competitive selling environment for the producers of exportables, at the same time it provides a more favorable environment for consumers and importers.

The perverse effects of tax measures

With Quebec’s new provincial budget coming soon, it is worth questioning the nature and effectiveness of tax measures applied by the government. As usual, the budget is sure to contain a series of new tax measures aimed at meeting various political goals. Our elected representatives may need reminding that intentions and results do not always coincide: caution is called for when government actions rely on tinkering with taxation.

Subsidies for aluminum producers: Benefits that don’t add up

On December 14, 2006, the Quebec government and Alcan unveiled an agreement for building an aluminum smelter in the Saguenay–Lac-Saint- Jean region. The smelter is to have an annual production capacity of 450,000 tonnes and to use the new AP50 electrolysis technology under development, intended to cut electricity use by about 20% per tonne of aluminum produced. The purpose of this Economic Note is to measure the cost to Quebec society of the government contribution to this project and to see if it is justified in relation to the expected benefits.

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