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Affordable housing, homelessness and the upcoming federal budget

Published by Anonymous (not verified) on Fri, 20/03/2020 - 10:14am in

I’ve written a ‘top 10’ overview of things to know about affordable housing and homelessness, as they relate to Canada’s upcoming federal budget. The overview is based on the affordable housing and homelessness chapter in the just-released Alternative Federal Budget.

A link to the ‘top 10’ overview is here.

Affordable housing, homelessness and the upcoming federal budget

Published by Anonymous (not verified) on Fri, 20/03/2020 - 10:14am in

I’ve written a ‘top 10’ overview of things to know about affordable housing and homelessness, as they relate to Canada’s upcoming federal budget. The overview is based on the affordable housing and homelessness chapter in the just-released Alternative Federal Budget.

A link to the ‘top 10’ overview is here.

the 2020-21 Alberta budget

Published by Anonymous (not verified) on Tue, 10/03/2020 - 3:21am in

I’ve written a ‘top 10’ overview of the 2020-21 Alberta budget, tabled on February 27.

The link to the overview is here.

the 2020-21 Alberta budget

Published by Anonymous (not verified) on Tue, 10/03/2020 - 3:21am in

I’ve written a ‘top 10’ overview of the 2020-21 Alberta budget, tabled on February 27.

The link to the overview is here.

Ten things to know about the 2019-20 Alberta budget

I’ve just written a ‘top 10’ overview of the recent Alberta budget. Points raised in the post include the following:

-The budget lays out a four-year strategy of spending cuts, letting population growth and inflation do much of the heavy lifting.

-After one accounts for both population growth and inflation, annual provincial spending in Alberta by 2022 is projected to be 16.2% lower than it was last year.

-Alberta remains Canada’s lowest-taxed province. It also remains the only province without a provincial sales tax.

The full blog post can be read here.

Trudeau’s proposed speculation tax

Published by Anonymous (not verified) on Thu, 26/09/2019 - 11:45am in

I’ve written a blog post about the Trudeau Liberals’ recently-proposed speculation tax on residential real estate owned by non-resident, non-Canadians.

The full blog post can be accessed here.

Taxing Wealth to Create a More Equal Canada

Published by Anonymous (not verified) on Thu, 19/09/2019 - 4:34am in

Tags 

taxation, wealth

This is a longer, wonkier version of a piece I wrote for National Newswatch.

As part of a broader fair tax agenda,
Jagmeet Singh and the federal New Democratic Party have proposed a
wealth tax. This is intended to fight obscene and rising levels of
economic inequality by limiting the concentration of wealth in the
hands of the very rich, who can well afford to pay more, and by
generating new fiscal resources to be invested in equality-promoting
programs such as expanded public health care and student debt
reduction.

A report released by the Parliamentary
Budget Office (PBO) released on September 10, just as the federal
election got underway, confirmed that the wealth tax would raise $70
billion over ten years. Very significant new federal revenues of $6
billion rising to over $7 billion would be raised each year, even
though the proposed levy is quite modest.

https://www.pbo-dpb.gc.ca/web/default/files/Documents/ElectionProposalCosting/Results/32630202_EN.pdf

The NDP wealth tax would be applied at
a rate of just 1% on wealth (assets minus liabilities) above a high
threshold of $20 million. The vast majority of affluent families let
alone ordinary working Canadians would be completely unaffected. Even
a family with $25 million in wealth would pay just $50,000 (1% of $5
million.)

Statistics Canada data for 2016 show
that the median Canadian household (half have more and half have
less) has a net worth of just $295,100 – usually representing
equity in a home and modest savings.

The bottom 20% of families have almost
no wealth at all. To get into the top 10% takes wealth of $1,650,000,
which sounds like a lot but is not untypical of older Canadians with
a mortgage free home in a large city and significant pension savings.
The top 10% hold about 60% of all wealth.

https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110004901

The Statistics Canada data show that wealth inequality has been rising, but understate its true extent since household surveys are unlikely to find billionaires at home, and billionaires do not like to disclose their assets. Economist Lars Osberg estimates that the share of all wealth of the top 1% may be as high as 20% compared to a reported share of about 10% baed upon household surveys of wealth.

https://www.policyalternatives.ca/sites/default/files/uploads/publications/National_Office_Pubs/2008/Quarter_Century_of_Inequality.pdf

For that reason, the PBO study takes into account reports of large wealth holdings such as an annual list of the richest Canadians compiled by Canadian Business. They create a synthetic database using Canadian Business reports, and the Survey of Financial Security. It should be noted that they expect the rich to avoid about one third of the theoretical increase in government revenues through tax avoidance strategies.

The PBO numbers showing that a wealth tax would raise a lot of money again confirm that wealth in Canada is extremely concentrated in the hands of a very small group of the ultra rich. Even a small levy would raise a lot of money since those with wealth of more than $20 Million own a LOT. At these rarefied levels, wealth is made up mainly of financial assets, especially large shareholdings in both public and private corporations. Often, these family fortunes are passed between generations.

David Macdonald of the Canadian Centre
for Policy Alternatives reports that the top 87 Canadian family
fortunes averaged just under $3 billion in 2016, up by a stunning 37%
from 2012 compared to an average increase of 16%. These large
fortunes totalled $259 billion, the same amount shared among 12
million Canadians at the lower end of the wealth ladder. Inherited
family wealth looms large at the very top of the list, and there is
relatively little turnover from year to year

https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2018/07/Born%20to%20Win.pdf

Another recent global study finds that
there are 10,840 “ultra high net worth” fortunes of $30 million
or more in Canada and that the total wealth of this group is over one
trillion dollars – $1,100,000,000,000.

https://www.cbc.ca/news/business/canada-wealth-high-net-worthy-1.4814907

Thomas Piketty has famously shown that
the wealth of the very rich tends to rise at a much faster rate than
the wealth of the many, unless strong countervailing political forces
come into play. High levels of wealth inequality also increase income
inequality, and convey massive economic and political power to the
few. Many fear that the ever-increasing concentration of wealth in
the hands of the very rich threatens democracy itself as we return to
the ultra unequal world which existed in the late nineteenth century
and first half of the twentieth century.

Seen in this context, the NDP’s
proposed wealth tax is a needed and quite modest measure. Such a tax
already exists in a few countries, and is being proposed for the
United States by Democratic contenders Elizabeth Warren and Bernie
Sanders. Almost uniquely among major economies, Canada currently
levies neither a wealth tax nor a tax on large inheritances (though
lifetime capital gains are taxed at death.)

Some will argue that the rich “deserve”
their huge fortunes. This hardly applies to inherited fortunes. The
liberal John Stuart Mill famously argued in his Principles of
Political Economy
(Book 2) that a large progressive inheritance
tax should be levied to ensure that private property did not become
too concentrated in a few hands, and in order to prevent economic
advantage from being inherited.

While much is made of the rise of the
high tech billionaire so-called “wealth creators” progressive
economists such as Joe Stiglitz and Lars Osberg in Canada argue that
it is impossible to identify the individual productive contributions
of individuals who work as part of large and complex social
organizations. Quite unlike the textbook economics world of
competitive markets, the actual economy is dominated by large and
powerful corporations run mainly in the interests of their owners,
and share ownership is highly concentrated. These corporations
establish market dominance, drive down wages, fight unions, and lobby
governments to heed their interests. CEOs and other senior corporate
management insiders can and do pocket large incomes far in excess of
their real productive contribution to the enterprise they lead or to
the economy as a whole, and they are required to generate high
profits distributed to the shareholders

The central point is that it is hard to
argue that the distribution of wealth is fair if ownership of capital
is highly concentrated in a few hands as a result of self-enforcing
economic and political power.

Jagmeet Singh and the federal NDP are
to be congratulated for taking the fight for greater economic
equality to a higher level by challenging the growing concentration
of wealth and power in Canada and by showing how a fair tax agenda
can generate the resources needed to pay for a progressive policy
agenda.

Alberta must find alternatives to cutting social spending

Published by Anonymous (not verified) on Fri, 05/07/2019 - 5:13am in

I have an opinion piece in today’s Edmonton Journal about Alberta’s current fiscal situation.

Points raised in the blog post include the following:

-The Jason Kenney government will almost certainly announce cuts to social spending in the near future.

-Yet, more than 80% of Alberta’s kindergarten through Grade 3 classes currently exceed the provincial government’s own class-size targets.

-Tuition fees as a share of university operating revenue have roughly tripled in Alberta over the last 30 years.

-Social assistance (i.e., welfare) caseloads have risen substantially in Alberta since the start of the economic downturn.

-Alberta still has, by far, the lowest debt-to-GDP ratio of any Canadian province.

-Albertans are also taxed less than any residents of any other province.

-Meanwhile, Alberta remains the only Canadian province without a provincial sales tax.

The link to the opinion piece is here.

Ten things to know about this year’s Alberta Alternative Budget

The Alberta Alternative Budget (AAB) is an annual exercise whose working group consists of researchers, economists, and members of civil society (full disclosure: I’m the Editor). Our general mandate is to create a progressive vision for Alberta to boost economic growth and reduce income inequality. This year’s document was released today, and here are 10 things to know:

  1. The NDP government of Rachel Notley government made important advances with respect to childcare, but much remains to be done. Specifically, the Notley government introduced a $25/day childcare pilot project and increased the provincial childcare budget by 27% since taking office. However, gender equality and women’s labour market participation in Alberta could be improved even further with universal childcare. This year’s AAB proposes that important steps be taken to get that done by investing an additional $1.65 billion in childcare over the next year.
  2. More than 80% of Alberta’s Kindergarten through Grade 3 classes currently exceed the provincial government’s own class size targets. What’s more, almost half of the province’s Grade 4 through Grade 12 classes exceed the government’s class size targets. And in high schools across the province, roughly half of all core subject classes exceed the Alberta Commission on Learning (ACOL) targets set in 2003. The AAB therefore recommends substantial increases in spending on k-12 education while also recommending that Alberta’s provincial government reduce funding for private schools (which are currently subsidized at higher rates than those in any other province).
  3. When it comes to gender and public policy, Alberta has a long way to go. Women in Alberta face the largest employment gender gap of any province. They are over-represented in lower-paying careers and their hourly pay for full-time work is only 80 cents on a man’s dollar. Further, Alberta lacks pay equity legislation. The AAB recommends that the annual budget of Alberta’s Ministry for Status of Women be increased by 30%, and that the provincial government create a pay equity task force to both investigate the reasons and propose solutions for the large gender pay gaps across industries and occupations in the province.
  4. There are nearly 6,000 reported cases of wage theft (i.e., unpaid wages) in Alberta each year. Further, in 2017/18, only 41% of wage-theft complaints were resolved within 180 days. And it’s generally accepted that formal wage-theft claims represent a small fraction of all instances of wage theft. The AAB therefore proposes that 75 additional employment standards officers be hired in the province, in order to prevent and remedy wage theft.
  5. One in 5 Alberta workers will be injured on the job this year; one in 11 seriously. This year’s AAB will therefore invest an additional $70 million in enforcement of Alberta’s occupational health and safety laws in order to make workplaces safer.
  6. Tuition fees as a share of university operating revenue have roughly tripled in Alberta over the last 30 years. The Notley government did freeze tuition fees in 2015, and recently introduced legislation that would tie tuition fee increases to inflation; but those measures alone don’t cut it. The AAB proposes a five-year ‘phase out’ of tuition fees, starting with a 20% reduction in tuition fees for all post-secondary students, including international students.
  7. Alberta still has, by far, the lowest debt-to-GDP ratio of any province. Alberta’s net debt-to-GDP ratio for 2018-19 is projected to be 6.5%. The next lowest is British Columbia’s, which stands at 15.2%. Though Alberta’s net debt-to-GDP ratio has risen quite quickly since the slump in oil prices, it’s hard to make the claim that the province is living beyond its means.
  8. Albertans collectively are taxed less than residents of any other province. According to Alberta Treasury Board and Finance, if Alberta’s provincial government adopted a tax structures similar to the next lowest-taxed province in the country (British Columbia), Alberta would generate an additional $8.7 billion in annual revenue.
  9. Alberta remains the only Canadian province without a provincial sales tax. The AAB Working Group estimates that the implementation of a 5% provincial sales tax in Alberta would generate approximately $5 billion in new revenue annually. What’s more, even after the implementation of this tax, Alberta would remain Canada’s lowest-taxed province!
  10. This year’s AAB further proposes that a new provincial sales tax be harmonized with the federal Goods and Services tax. The federal government already collects a 5% sales tax in the form of the Goods and Services Tax (GST). Following the lead of several other provinces, we propose that Alberta introduce a Harmonized Sales Tax (HST), which would allow the province to generate its own share of the revenue collected by the federal GST. Introducing a 5% provincial portion of a HST would still leave Alberta with a combined HST of 10%.

In Sum. In addition to providing a costed-out public policy alternative to the status quo in Alberta, each AAB chapter also provides a primer on the public policy topic in question. I think the document makes for excellent reading for researchers, educators, students and non-profit leaders. The media release, along with a link to the full document, can be found here.

MEDIA RELEASE: Alberta should increase social spending; cuts are not the way to go

(June 24, 2019-Calgary) With Alberta’s economy still facing challenges and vulnerabilities, the Alberta government should not be doling out tax cuts or cutting social spending, according to the Alberta Alternative Budget (AAB) released today.

“Alberta still has, by far, the lowest
debt-to-GDP ratio of any province,” says Nick Falvo, editor of the report. “We
are in a good position to increase spending on education, invest in affordable
child care, offer free dental care to Albertans under 18 years, and support
other programs that would help Albertans facing unpredictability in the job
market.”

The AAB is an annual exercise whose working
group consists of researchers, economists, and members of civil society. The
AAB  aims to create a progressive vision
for Alberta to boost economic growth and reduce income inequality.

Today’s report calls for the introduction
of a harmonized sales tax to reduce Alberta’s reliance on profit from energy
markets, that have always been volatile. Under the previous government,
important steps were taken to stabilize the economy through diversification and
social spending.

“The UCP government has already cut close
to $6 billion in provincial revenue by cancelling the carbon tax and cutting
corporate taxes, and this is the wrong direction,” says Falvo. “Instead,
investing in programs and infrastructure is what is needed to foster a vibrant
Alberta.”

Download the report.

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Contact: Nick Falvo, falvo.nicholas@gmail.com, 587-892-7855

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