It was the autumn fiscal update yesterday, and it should be no surprise that the deficits are going to continue for foreseeable future. It was also notable for the measures that were implemented to compete with the US corporate tax cuts without making similar cuts in Canada, and these were measures that were designed to keep businesses investing in growth rather than simply offering share buybacks or dividends, as we’ve seen in the US. These targeted measures included immediate write-offs of new machinery and equipment, certain clean-energy equipment, and writing off some assets more quickly than before, with the calculated marginal effective tax rate of these measures apparently besting the US’ rates. So there’s that. There were also some tax credits for digital subscriptions in media, and a $600 million fund to offset the cost of hiring staff as part of that. There were also measures around removing internal trade barriers (yet again) and improving supports for businesses looking to export. On top of that, it also noted that the Trans Mountain Pipeline has earned the government $70 million since it bought the pipeline, and is on track to earn it some $200 million per year.
The deficit issue is one that we’ll continue to hear about, and it’s probably more complex than just a “deficits bad” kind of debate to have. On the one hand, the Liberals took government at a time when the books were $70 billion worse off than initially advertised (not to mention the Conservative “surplus” booked a bunch of false savings) so the 2015 promises met a different reality. On the other hand, they are spending any revenue growth rather than paying down the deficit faster, insisting (not incorrectly) that a declining debt-to-GDP figure is a more important measure, and we should remember that the deficits are really quite modest in comparison to the size of our economy. But they are making spending choices, and we should judge them on that. Here’s Kevin Milligan with some more context and analysis:
https://twitter.com/kevinmilligan/status/1065412694709174274
https://twitter.com/kevinmilligan/status/1065413839905206273
https://twitter.com/kevinmilligan/status/1065415196624080898
https://twitter.com/kevinmilligan/status/1065416625275334658
https://twitter.com/kevinmilligan/status/1065418354809139200
https://twitter.com/kevinmilligan/status/1065419580523180032
https://twitter.com/kevinmilligan/status/1065419900699602945
https://twitter.com/kevinmilligan/status/1065466832356728832
https://twitter.com/kevinmilligan/status/1065468145832407040
John Geddes offers his summary of the update, while Andrew Coyne pans the government’s propensity to spend any new revenues it gets rather, meaning that their deficits continue to be by choice rather than necessity. Kevin Carmichael says that in spite of the deficit problems, the most audacious part of the update was the plan to tackle the overhaul of federal regulation. Susan Delacourt notes the difference in tone between the federal fiscal update and that in Ontario last week.
Good reads:
- Word from sources has it that the PM will call the remaining by-elections early in January for February voting dates, and the Liberals will run against Singh.
- StatsCan released their homicide figures for 2017, and while gang and gun-related deaths are up, the figures also include the Quebec mosque shooting.
- The same report also notes the rise in rural crime, which is an ongoing issue.
- The Privacy Commissioner is concerned about amendments to the entry/exit programme at the border, which retains data for longer than promised.
- The winning bid for the Type-36 Frigate design for the new fleet of surface combatants is now being challenged in Federal Court. Of course.
- Here’s a longread about Russian interference in elections, and how Canada is vulnerable.
- Here’s another good explainer around the oil price differential and why some of the numbers being thrown around aren’t really correct.
- Curiously, the National Capital Commission says it would actually cost more to knock down 24 Sussex and rebuild it than to refurbish it.
- Agriculture Minister Lawrence MacAulay reflects on 30 years of continuous service as an MP.
- The Conservative campaign chair says that he expects that Canadian political parties will be hacked during the next election at some point.
- Trevor Tombe explains why Alberta is facing a long-term fiscal crisis, that even higher oil prices won’t solve.
Odds and ends:
Here’s a transcript of that interview on CBC where the relationship between CBC and Facebook was questioned, which CBC refuses to publish.
Want more Routine Proceedings? Become a patron and get exclusive new content.