Bribing voters with their own, other people’s, or borrowed money has a long history in Canada. The latest example is the Liberal government’s plan to price “pollution” in provinces without a carbon tax by making the tax rebate bigger than the tax itself. Another form of vote-buying, writes Matthew Lau, is labour regulation that forces employers to pay workers higher wages and provide greater benefits. When Ontario’s late Wynne government did this, it predictably hurt job growth. So the bribe failed, and the Ford government is now partially deregulating the labour market to make workers, and the provincial economy, more competitive.
Author: Matthew Lau
Another day, another crisis. Last month it was plastic straws, so many of them they are getting stuck up sea turtles’ nostrils. This month it’s “food waste” allegedly contributing to the “food insecurity” of millions of Canadians, according to a Trudeau Foundation scholar. The solution is said to be found in government intervention to reduce food waste, drawing on Indigenous knowledge and “the principles of the circular economy”. Matthew Lau is skeptical of this month’s crisis and recommended solution.
When future historians study the Ontario economy from the early 2000s to today, they will be startled to see how growth flatlined relative to the rest of the country. What happened, they will wonder, to so badly depress investment, income and employment growth, and to so dramatically inflate provincial government deficits and debt? Was there a war, or natural disaster? No, writes Matthew Lau, in his first-hand account of Ontario’s protracted malaise. It was the election, and three re-elections, of one of the most economically destructive provincial governments in Canadian history. That same government is seeking another mandate this June, running on a budget that promises to stay the course.
The math is not hard. New StatsCan data highlights an indelible link between lower taxes and less regulation and higher levels of investment and the productivity, jobs and growth that flow from it. The data also shows that natural resources remain, by far, Canada’s star attraction for investment. So why, wonders Matthew Lau, are Canadian governments working so hard to discourage resource investment with higher taxes and paralyzing regulation?
A new report from a left wing think tank has found that income inequality goes up when unionization rates go down. The solution is obvious: more and bigger unions will make us all richer. Except they won’t, because high unionization rates also correspond with poor economic performance, including lower income growth for everybody. Besides, the primary beneficiaries of unionization in Canada today are public servants, who earn more, work less, and retire earlier on bigger pensions than their private sector counterparts. That’s where real income inequality lies, writes Matthew Lau, despite all the clamour for raising taxes on the “rich” and making corporations pay their “fair share.”
Springtime in Quebec: the maple sap is running and thousands of students are on strike, marching in the streets of Montreal to protest modest “austerity” measures undertaken by the province with the highest per capita net debt in Canada. This might be dismissed as leftist youth showing off their economic illiteracy, except that elsewhere in Canada, mainstream student unions are advocating for an equally dubious cause: higher minimum wages. If the unions really want to help students, writes University of Toronto student Matthew Lau, they should advocate for abolition of the minimum wage.