News

Taxpayers will be on the hook later for today's COVID-19 largesse: Don Pittis – CBC.ca

Published

4 years ago

May 19, 2020

As procrastinators buckle down for the fast-approaching June 1 extended federal tax deadline, it’s worth recalling that income taxes were an innovation in 1917 to deal with a previous fiscal crisis.

Last week, Canadian Finance Minister Bill Morneau insisted that despite the nation’s current financial pickle, he is not contemplating raising taxes just now, even as the Parliamentary Budget Office suggested public debt could this fiscal year for the first time reach $1 trillion at the federal level alone.

While now may not be the time, at some point soon governments around the world will have to face up to how they are going to pay for all their COVID-19 largesse.

As some economists consider using artificial intelligence to improve revenues or modern monetary theory to pay the bills, and while others call for a universal basic income, there is no question that historically, times of crisis have been times of radical financial innovation.

It is well documented that voters love handouts and new spending from one finance minister but normally loathe the tax increases or austerity when a later finance minister decides spending is getting out of hand.

But historian Elsbeth Heaman, author of Tax, Order and Good Government, contends that while people generally dislike the idea of governments taking a bigger bite in taxation, there are many historical examples where a crisis of the kind we are experiencing now can dramatically shift opinions.

New attitude to taxes

“A catastrophe, a war, a famine, something like that creates a different kind of attitude toward taxation,” said Heaman, a McGill University professor whose specialties include social, medical and taxation history and who edited the Who Pays for Canada? volume.

And while in good times, people tend to accept the kind of market forces that offer greater rewards to the rich for their efforts in creating wealth, that attitude can change markedly once a crisis shines a light on the disproportionate suffering of the less fortunate.

(CBC)

The Irish potato famine that led to thousands of deaths in the fever sheds of Canada, including Montreal and Toronto, might be such an example. The Great Depression of the 1930s was another.

“Whenever you have these major events that have differential consequences for different kinds of people, where the rich don’t actually seem to be suffering very much and the poor seem to be suffering very, very acutely, then you do tend to get kind of a backlash against a tax system that seems to mimic the market,” said Heaman.

WATCH | Wartime publicity trailer focuses on wartime inflation, role of price control:

[embedded content]

She said the historical evidence is plentiful and the changes caused have been momentous.

The backlash against suffering during the Depression permanently remodelled the structure of Canadian taxation power, said Joe Martin, director of Canadian Business History at the University of Toronto’s Rotman School of Management.

Based on recommendations from the Depression-era Rowell–Sirois Commission to expand federal taxation for redistribution from wealthy Ontario and Quebec to the drought-battered Prairie provinces, the federal government used the crisis of the Second World War to expand personal and corporate income tax at the expense of the provinces.

From crisis to innovation

“[There was] strong opposition from both Ontario and Quebec, but it passed because of wartime conditions,” said Martin. That transformation formed the basis of Canada’s postwar welfare system and evolved into the current system of equalization payments that is still contested today.

Geoffrey Hale, the Lethbridge, Alta.-based academic and author of The Politics of Taxation in Canada, said that rather than taxing back the money the government is lavishing out now, Morneau would rather coax the economy into growth so that debt shrinks gradually over a period of years, not in absolute terms but as a percentage of GDP.

That’s why Hale doesn’t see governments boosting corporate taxes: for fear of chasing investment away. Similarly, he does not think there is a lot more opportunity for taxing the rich who would merely be driven toward tax shelters. Hale suggested a more politically palatable source of revenue would be to go after foreign digital sales, which for a large part escape Canadian taxation.

But everyone interviewed agreed that if finance ministers decide they need revenue, there are always places to find it.

Expanded consumption taxes or increased premiums for employment insurance are two examples. But more radical innovations might include wealth taxes, increased capital gains tax, death duties, financial transaction taxes (a Tobin tax), a flat tax or a poll tax, maybe aiming the revenue at a specific need, such as seniors’ care or better overall health care.

In a simulated economy, an AI came up with a counterintuitive tax policy that led to a smaller gap between the rich and the poor. <a href=”https://t.co/gavOrrBdLL”>https://t.co/gavOrrBdLL</a>

—@techreview

The experts said that projected borrowing so far is no danger to the country and has been higher before in relative terms. Some said we may be better placed than the United States just now.

‘We have the tools’

But as tax historian Shirley Tillotson from Halifax’s Dalhousie University said, evidence from the past shows that government confidence or even cockiness when a financial crisis begins can turn into alarm if the crisis worsens over a period of months or years. That is certainly what happened in 1917 and at the start of the Depression.

As both she and Morneau said last week — though each with a slightly different meaning — these are early days yet.

In the Canadian case, in particular, we have the fiscal capacity, both the scope for borrowing and if necessary, the scope for expanding some element of our tax system.– Shirley Tillotson, tax historian at Dalhousie University

Perhaps, as optimists say, the Canadian and global economy will bounce back soon. But if things do get worse, Tillotson said, Canada is luckier than most.

“We have the tools,” she said. “In the Canadian case, in particular, we have the fiscal capacity, both the scope for borrowing and if necessary, the scope for expanding some element of our tax system.”

Recovery may be around the corner. But early days or not, the time to begin exploring alternative tax options is before a financial crisis turns into something worse.

Follow Don on Twitter @don_pittis

Let’s block ads! (Why?)

Source link

News

Justin Trudeau’s Announcing Cuts to Immigration Could Facilitate a Trump Win

Published

39 mins ago

November 5, 2024

Nick Kossovan

Outside of sports and a “Cold front coming down from Canada,” American news media only report on Canadian events that they believe are, or will be, influential to the US. Therefore, when Justin Trudeau’s announcement, having finally read the room, that Canada will be reducing the number of permanent residents admitted by more than 20 percent and temporary residents like skilled workers and college students will be cut by more than half made news south of the border, I knew the American media felt Trudeau’s about-face on immigration was newsworthy because many Americans would relate to Trudeau realizing Canada was accepting more immigrants than it could manage and are hoping their next POTUS will follow Trudeau’s playbook.

Canada, with lots of space and lacking convenient geographical ways for illegal immigrants to enter the country, though still many do, has a global reputation for being incredibly accepting of immigrants. On the surface, Montreal, Toronto, and Vancouver appear to be multicultural havens. However, as the saying goes, “Too much of a good thing is never good,” resulting in a sharp rise in anti-immigrant sentiment, which you can almost taste in the air. A growing number of Canadians, regardless of their political affiliation, are blaming recent immigrants for causing the housing affordability crises, inflation, rise in crime and unemployment/stagnant wages.

Throughout history, populations have engulfed themselves in a tribal frenzy, a psychological state where people identify strongly with their own group, often leading to a ‘us versus them’ mentality. This has led to quick shifts from complacency to panic and finger-pointing at groups outside their tribe, a phenomenon that is not unique to any particular culture or time period.

My take on why the American news media found Trudeau’s blatantly obvious attempt to save his political career, balancing appeasement between the pitchfork crowd, who want a halt to immigration until Canada gets its house in order, and immigrant voters, who traditionally vote Liberal, newsworthy; the American news media, as do I, believe immigration fatigue is why Kamala Harris is going to lose on November 5^th.

Because they frequently get the outcome wrong, I don’t take polls seriously. According to polls in 2014, Tim Hudak’s Progressive Conservatives and Kathleen Wynne’s Liberals were in a dead heat in Ontario, yet Wynne won with more than twice as many seats. In the 2018 Quebec election, most polls had the Coalition Avenir Québec with a 1-to-5-point lead over the governing Liberals. The result: The Coalition Avenir Québec enjoyed a landslide victory, winning 74 of 125 seats. Then there’s how the 2016 US election polls showing Donald Trump didn’t have a chance of winning against Hillary Clinton were ridiculously way off, highlighting the importance of the election day poll and, applicable in this election as it was in 2016, not to discount ‘shy Trump supporters;’ voters who support Trump but are hesitant to express their views publicly due to social or political pressure.

My distrust in polls aside, polls indicate Harris is leading by a few points. One would think that Trump’s many over-the-top shenanigans, which would be entertaining were he not the POTUS or again seeking the Oval Office, would have him far down in the polls. Trump is toe-to-toe with Harris in the polls because his approach to the economy—middle-class Americans are nostalgic for the relatively strong economic performance during Trump’s first three years in office—and immigration, which Americans are hyper-focused on right now, appeals to many Americans. In his quest to win votes, Trump is doing what anyone seeking political office needs to do: telling the people what they want to hear, strategically using populism—populism that serves your best interests is good populism—to evoke emotional responses. Harris isn’t doing herself any favours, nor moving voters, by going the “But, but… the orange man is bad!” route, while Trump cultivates support from “weird” marginal voting groups.

To Harris’s credit, things could have fallen apart when Biden abruptly stepped aside. Instead, Harris quickly clinched the nomination and had a strong first few weeks, erasing the deficit Biden had given her. The Democratic convention was a success, as was her acceptance speech. Her performance at the September 10th debate with Donald Trump was first-rate.

Harris’ Achilles heel is she’s now making promises she could have made and implemented while VP, making immigration and the economy Harris’ liabilities, especially since she’s been sitting next to Biden, watching the US turn into the circus it has become. These liabilities, basically her only liabilities, negate her stance on abortion, democracy, healthcare, a long-winning issue for Democrats, and Trump’s character. All Harris has offered voters is “feel-good vibes” over substance. In contrast, Trump offers the tangible political tornado (read: steamroll the problems Americans are facing) many Americans seek. With Trump, there’s no doubt that change, admittedly in a messy fashion, will happen. If enough Americans believe the changes he’ll implement will benefit them and their country…

The case against Harris on immigration, at a time when there’s a huge global backlash to immigration, even as the American news media are pointing out, in famously immigrant-friendly Canada, is relatively straightforward: During the first three years of the Biden-Harris administration, illegal Southern border crossings increased significantly.

The words illegal immigration, to put it mildly, irks most Americans. On the legal immigration front, according to Forbes, most billion-dollar startups were founded by immigrants. Google, Microsoft, and Oracle, to name three, have immigrants as CEOs. Immigrants, with tech skills and an entrepreneurial thirst, have kept America leading the world. I like to think that Americans and Canadians understand the best immigration policy is to strategically let enough of these immigrants in who’ll increase GDP and tax base and not rely on social programs. In other words, Americans and Canadians, and arguably citizens of European countries, expect their governments to be more strategic about immigration.

The days of the words on a bronze plaque mounted inside the Statue of Liberty pedestal’s lower level, “Give me your tired, your poor, your huddled masses yearning to breathe free…” are no longer tolerated. Americans only want immigrants who’ll benefit America.

Does Trump demagogue the immigration issue with xenophobic and racist tropes, many of which are outright lies, such as claiming Haitian immigrants in Ohio are abducting and eating pets? Absolutely. However, such unhinged talk signals to Americans who are worried about the steady influx of illegal immigrants into their country that Trump can handle immigration so that it’s beneficial to the country as opposed to being an issue of economic stress.

In many ways, if polls are to be believed, Harris is paying the price for Biden and her lax policies early in their term. Yes, stimulus spending quickly rebuilt the job market, but at the cost of higher inflation. Loosen border policies at a time when anti-immigrant sentiment was increasing was a gross miscalculation, much like Trudeau’s immigration quota increase, and Biden indulging himself in running for re-election should never have happened.

If Trump wins, Democrats will proclaim that everyone is sexist, racist and misogynous, not to mention a likely White Supremacist, and for good measure, they’ll beat the “voter suppression” button. If Harris wins, Trump supporters will repeat voter fraud—since July, Elon Musk has tweeted on Twitter at least 22 times about voters being “imported” from abroad—being widespread.

Regardless of who wins tomorrow, Americans need to cool down; and give the divisive rhetoric a long overdue break. The right to an opinion belongs to everyone. Someone whose opinion differs from yours is not by default sexist, racist, a fascist or anything else; they simply disagree with you. Americans adopting the respectful mindset to agree to disagree would be the best thing they could do for the United States of America.

______________________________________________________________

Nick Kossovan, a self-described connoisseur of human psychology, writes about what’s

on his mind from Toronto. You can follow Nick on Twitter and Instagram @NKossovan.

News

Former athletes lean on each other to lead Canada’s luge, bobsled teams

Published

47 mins ago

November 5, 2024

Anne Joseph

CALGARY – Sam Edney and Jesse Lumsden sat on a bench on Parliament Hill during an athlete celebration after the 2014 Winter Olympic Games.

Having just represented Canada in their sliding sports — Lumsden in bobsled and Edney in luge — the two men pondered their futures together.

“There was actually one moment about, are we going to keep going? Talking about, what are each of us going to do? What’s the next four years look like?” Edney recalled a decade later.

“I do remember talking about that now. That was a big moment,” Lumsden said.

As the two men were sounding boards for each other as athletes, they are again as high-performance directors of their respective sliding sports.

Edney, an Olympic relay silver medallist in 2018 and the first Canadian man to win a World Cup gold medal, became Luge Canada’s HPD upon his retirement the following year.

Lumsden, a world and World Cup bobsled champion who raced his third Olympic Games in 2018, leaned on his sliding compatriot when he returned from five years of working in the financial sector to become HPD at Bobsleigh Canada Skeleton in July.

“The first person I called when BCS reached out to me about the role that I’m in now is Sam,” Lumsden said recently at Calgary’s WinSport, where they spent much of their competitive careers and now have offices.

“It’s been four months. I was squatting in the luge offices for the first two months beside him.

“We had all these ideas about we’re going to have weekly coffees and workouts Tuesday and Thursday and in the four months now, we’ve had two coffees and zero workouts.”

Canada has won at least one sliding-sport Olympic medal in each of the last five Winter Games, but Edney and Lumsden face a challenge as team leaders that they didn’t as athletes.

WinSport’s sliding track, built for the 1988 Winter Olympics in Calgary and where Edney and Lumsden did hundreds of runs as athletes, has been closed since 2019 needing a $25-million renovation.

There is no sign that will happen. WinSport took the $10 million the provincial government offered for the sliding track and put the money toward a renovation of the Frank King Lodge used by recreational skiers and snowboarders.

Canada’s only other sliding track in the resort town of Whistler, B.C., has a fraction of Calgary’s population from which to recruit and develop athletes.

“The comparison is if you took half the ice rinks away in the country, hockey and figure skating would be disarray,” Edney said.

“It just changes the dynamic of the sports completely, in terms of we’re now scrambling to find ways to bring people to a location that’s not as easy to get to, or to live out of, or to train out of full time.

“We’re realizing how good we had it when Calgary’s (track) was here. It’s not going to be the end of us, but it’s definitely made it more difficult.”

Lumsden, a former CFL running back as well as an Olympian, returned to a national sport organization still recovering from internal upheaval that included the athlete-led ouster of the former president and CEO after the 2022 Winter Olympics, and Olympic champion pilot Kaillie Humphries suing the organization for her release to compete for the U.S. in 2019.

“NSOs like Luge Canada and Bobsleigh Canada Skeleton, they’re startups,” Lumsden said. “You have to think like a startup, operate like a startup, job stack, do more with less, especially in the current environment.

“I felt it was the right time for me to take my sporting experience and the skill set that I learned at Neo Financial and working with some of the most talented people in Canada and try to inject that into an NSO that is in a state of distress right now, and try to work with the great staff we have and the athletes we have to start to turn this thing around.”

Edney, 40, and Lumsden, 42, take comfort in each other holding the same roles in their sports.

“It goes both ways. I couldn’t have been more excited about who they hired,” Edney said. “When Jesse was coming in, I knew that we were going to be able to collaborate and work together and get things happening for our sports.”

Added Lumsden: “We’ve been friends for a long time, so I knew how he was going to do in his role and before taking the role, having the conversation with him, I felt a lot of comfort.

“I asked ‘are you going to be around for a long time?’ He said ‘yeah, I’m not going anywhere.’ I said ‘OK, good.'”

This report by The Canadian Press was first published Nov. 4, 2024.

Source link

News

Canada’s Dabrowski and New Zealand’s Routliffe pick up second win at WTA Finals

Published

49 mins ago

November 5, 2024

Anne Joseph

RIYADH, Saudi Arabia – Canada’s Gabriela Dabrowski and New Zealand’s Erin Routliffe remain undefeated in women’s doubles at the WTA Finals.

The 2023 U.S. Open champions, seeded second at the event, secured a 1-6, 7-6 (1), (11-9) super-tiebreak win over fourth-seeded Italians Sara Errani and Jasmine Paolini in round-robin play on Tuesday.

The season-ending tournament features the WTA Tour’s top eight women’s doubles teams.

Dabrowski and Routliffe lost the first set in 22 minutes but levelled the match by breaking Errani’s serve three times in the second, including at 6-5. They clinched victory with Routliffe saving a match point on her serve and Dabrowski ending Errani’s final serve-and-volley attempt.

Dabrowski and Routliffe will next face fifth-seeded Americans Caroline Dolehide and Desirae Krawczyk on Thursday, where a win would secure a spot in the semifinals.

The final is scheduled for Saturday.

This report by The Canadian Press was first published on Nov. 5, 2024.

Source link