Developments in the Canadian economy have forced an important re-thinking of the respective roles of monetary and fiscal policy in supporting stable growth and job creation. But mainstream thinking about monetary policy has evolved much further than that on fiscal policy.
Before the great recession of 2008, fiscal policy had fallen greatly out of favour as a tool for macro economic stabilization. The conventional wisdom was that central banks could adjust short term interest rates to keep the economy growing more less at potential with low inflation, and indeed there was no recession from the early 1990s until the financial crisis of 2008.
The so-called “middle class” tax cut promised by the newly elected Liberal government in the name of promoting greater fairness seems set to be quickly implemented for the 2016 tax year. Yet the distributional and revenue consequences of this measure are often misunderstood, and the proposed change merits reconsideration.
Currently there are four federal tax brackets: 15% on taxable incomes of less than $44,701; 22% on further income up to $89,401; 26% on further income up to $138,586; and 29% on income above that amount.
MONTREAL— Quebecers greatly underestimate the wealth gap in Quebec and would prefer a much more balanced distribution of wealth. These findings are the key takeaways from the first nationwide survey that asked Canadians from all provinces how they think wealth is distributed and what they think would be the ideal distribution.
Posted by Ellen Russell and Mathieu Dufour · September 07, 2015 8:30 AM
The current federal election is being fought against a backdrop of deepening inequality and the social problems that accompany it. Promises to “make things better” will no doubt be uttered throughout the campaign.
As we mark another labour day, it is important to remain discerning of the policies on offer.
Few Canadian economic debates are as long-standing and as predictable as that over the pros and cons of raising the minimum wage. Progressives call for a higher wage floor to combat inequality, low pay and poverty. But employers and the political right generally argue that a decent minimum wage comes at the cost of jobs, and harms those it is intended to protect.
Posted by Arla Good and Kosha Bramesfield · June 08, 2015 10:49 AM
“You can do anything you put your mind to” is a message that has been instilled in the minds of North Americans.
People are taught that if they work hard enough, anyone can succeed. This is why many people believe in equality and fairness as forces that shape our economic system and tend to overlook the power of systemic factors like racial discrimination or class barriers in economic inequality.
Posted by NationBuilder Support · April 21, 2015 12:34 PM
OTTAWA—The 2015-16 federal budget contains costly measures that will exacerbate economic inequality and see billions flow to Canada’s wealthiest families while leaving the majority of Canadians with no benefit at all, says the Broadbent Institute.
Over the past 20 years, income inequality has been growing faster in Canada than in other similar countries. During this period about one third of all income growth has gone to the top 1%, leaving precious little to be shared among the remaining 99%. We know the inequality problem all too well, but what is the answer to addressing it?
There seem to be three main pillars that provide effective solutions: progressive taxation, a robust safety net, and ensuring fairness in the workplace. This third pillar includes raising the minimum wage in a transparent and predictable manner, improving associated employment standards legislation, and generally making sure labour laws have kept pace with what’s happening in workplaces across the country.
In a recent feature interview with Amanda Lang, host of CBC's The Exchange with Amanda Lang, Broadbent Institute Chair Ed Broadbent spoke about inequality, politics, government, social democracy and more.
Posted by NationBuilder Support · February 24, 2015 4:00 AM
OTTAWA—The existing Tax-Free Savings Account scheme is projected to cost the federal government up to $15.5 billion annually when it matures, and doubling the contribution limits would shift additional billions from tax revenues into the pockets of the already well-off, a new Broadbent Institute study has found.