AIMS On-Line for July 2002
Here is what's new at AIMS, Atlantic Canada's Public Policy Think Tank
Sucking The Well Dry
Competition or protection? Although oil and gas production off the East Coast is booming, Atlantic Canadians fear that our resource will be sold off and we will have far too little to show for it. Dr. Thomas Tucker, AIMS Fellow in Natural Resource Policy, emphasizes how government policy designed to ensure this region gets its “fair share” of economic activity generated by the offshore, often has the opposite effect. The debate about how to maximize our O&G related activity really comes down to a basic question: Should we be given a major share of economic benefits that the oil and gas industry can produce without earning them? The way we answer that question will shape the oil and gas industry on the East Coast for years to come, and Tucker’s article invites us to choose wisely, understanding the long term nature of the O&G industry, and the proper benchmarks for measuring this region’s success in getting maximum benefit from our resources. Publication: ABM, June/July 2002
Equalization Reform
In this CBC Radio interview, AIMS’ author Kenneth J. Boessenkool discusses equalization’s design flaws and its negative impact on Newfoundland and Labrador. The author of AIMS’ new report, “Taxing Incentives: How Equalization Distorts Tax Policy in Recipient Provinces”, explains how equalization’s methodology creates incentives for Newfoundland, and other recipient provinces, to overtax their population. Because of the way the payments are currently being calculated, personal income taxes are about a quarter higher in Newfoundland than Ontario. Boessenkool also reminds listeners of the message from one of his earlier AIMS’ papers - Taking off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada. Inappropriate inclusion of non-renewable natural resources (for example the mineral deposits of Voisey’s Bay) in the equalization equation, hampers the development and realization of the full potential of those resources.
New Institute paper argues Canadian aquaculture drowning in regulation
Federal-provincial regulatory environment for aquaculture dysfunctional
Equalization: the help that hurts
Amplifying the theme of AIMS latest report on equalization “Taxing Incentives: How Equalization Distorts Tax Policy in Recipient Provinces”, author Kenneth J. Boessenkool discusses the damaging effects of the federal programme on the citizens it is trying to help. After comparing the levels of various taxes in both recipient and non-recipient provinces, Boessenkool clearly illustrates not only that equalization encourages poorer provinces to keep taxes on their population too high, but also that the bigger the province the stronger the incentives to do so. Of particular interest is the fact that the highest tax rates in recipient provinces tend to be on personal income and, to a slightly lesser extent, taxes on consumption. In other words, the perverse effects seem to be showing themselves most strongly via taxes on people. Publication: NP, June 25, 2002
AIMS On-Line for the end of June 2002
Here is what's new at AIMS, Atlantic Canada's Public Policy Think Tank
Equalization program called ‘help that hurts’
The program isn't working, says Kenneth J. Boessenkool, author of AIMS’ latest report on equalization, “Taxing Incentives: How Equalization Distorts Tax Policy in Recipient Provinces”. The Constitution provides for equalization to ensure provinces can deliver services at "reasonably comparable levels of taxation". The study's author said his findings suggest that on average, personal income tax is about 33% higher in the poorer provinces than in the so-called "have" provinces. This would suggest that Canada's $10.5-billion equalization program may be doing exactly the opposite of what it’s suppose to. Paul Hobson, an economics professor at Acadia University in Nova Scotia, disagrees with these conclusions. Hobson believes that equalization promotes fairness and that poorer provinces have higher taxes, not because they receive payments, but because they have lower average incomes and a smaller tax base. Boessenkool agrees that while equalization does do some good, the basic question r
Help That Hurts
Equalization creates incentives for poorer provinces to keep taxes too high
Protesters or G-7 countries: Who’s right?
The anti-globalization protesters that were on the streets of Halifax this past weekend were having a marvellous time. They weren’t just there for fun however, but to show their heart-felt support for a global movement that sees continued integration of the world's economic activity as being inimical to justice and, in particular, sees globalization as a front for vicious exploitation of the peoples of the Third World. Are they right? In his regular column, AIMS’ President Brian Lee Crowley reviews the status of Third World countries that follow the prescriptions of the anti-globalization protesters and shows a more appropriate slogan for those truly wishing to help them should be “More Trade, Less Aid”. Publication: CHH, MTT, June 19, 2002
What Stephen Harper got wrong – and right
In his regular column, AIMS' President Brian Lee Crowley writes: the recent comments by Alliance Leader Stephen Harper about the culture of defeatism in Atlantic Canada, and the response to those comments by East Coast politicians and others, were entertaining theatre. But like most plays based on a true story, the facts often get bent to serve a good story line. So while Mr. Harper actually had a substantive point that he overplayed, his opponents were also wrong in their rush to absolve Atlantic Canadians of any responsibility for their state. Publication: CHH, MTT, June 5, 2002