Brian Lee Crowley

Globe and Mail columns

  • Alberta’s flat tax: both progressive and useful, killed off for ideological reasons January 8, 2016

    In my time in public policy I have heard a lot of rubbish talked about a lot of issues, but one that must win some kind of prize in the area is Alberta’s much-maligned “flat tax”, now due to be axed by Rachel Notley’s New Democrats. The reason given? The tax is “regressive” and is to be replaced with a supposedly “progressive” multi-band or multi-rate income tax modelled on that found in the other provinces. But as my latest Economy Lab column for the Globe’s ROB lays out in some detail, the notion that the flat tax is not progressive is an old canard unworthy of anyone with a calculator and five minutes to think through the issues. So not only does the criticism fail (and therefore the case for eliminating the flat tax on “progressivity” grounds), it leaves out of account the important experiment it represented. Multi-rate income taxes undoubtedly create disincentives to work as you move up the income scale. Those disincentives are removed by a flat tax. Federalism is supposed to foster such bold experiments to test whether old policy prescriptions can be improved through innovation. The flat tax deserved to live….both because it was progressive and because it was telling us something about possible future directions for tax reform.

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  • Breaking the natural resource revenue boom-bust cycle in provincial finances January 5, 2016

    As the world price of oil has fallen by almost $100/barrel in the last year or so, provincial finances in places like Alberta, Saskatchewan and Newfoundland and Labrador have been savaged. But it is all so unnecessary if only these provinces and others dependent on non-renewable natural resource revenue would be guided by Jim Dinning’s insight that such revenues are “non-reliable”. and are known to be so by anyone even slightly conversant with the history on NR prices and the nature of government spending. In my late December column for the Globe’s Economy Lab feature, I lay out the case for such provinces to discipline themselves by assuming throughout the commodity cycle that the lowest price in the cycle will prevail. The money set aside during high prices can then smooth out the ups and downs. Don’t spend it if you haven’t got it, people, especially when provincial spending is notoriously inflexible, unlike these revenues!

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  • Guaranteed Annual Income: Wrong solution, wrong problem December 17, 2015

    In my never-ending campaign to épater les bourgeois (aka the commenters on the Globe’s comments page), my latest column takes aim at one of their favourite policy prescriptions: a guaranteed annual income for Canadians, delivered through the tax system (also called a “negative income tax”). Almost all the arguments advanced in favour of this alleged panacea are deeply flawed and take little account of incentives, human motivation or of the complexity of administering fairly or cheaply a system that will not be simple but rather devilishly complicated.

    This column appeared in the 11 Dec. 2015 edition of the Globe’s ROB in their Economy Lab feature.

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  • In defence of budget balance Part II November 29, 2015

    In the second of my two part series of columns in defence of balanced budgets I respond to my critics on the Globe comments page. They were incensed by my argument in Part I of the series that the stimulative effects of Paul Martin’s drive to balanced budgets in the 90s were in any way relevant to today. “That was then, this is now” was there rallying cry. The economy is underperforming and only deficit-financed stimulus can get it back on track.

    My reply took several forms. First, I argued that if the Martin example was not relevant because conditions had changed then we should look at the results of the Ontario government’s fiscal policies today. After all they have been running deficits much larger in relative terms than what the new federal government proposes for several years. If they hold out the promise of stimulus for the nation in today’s circumstances we should see strong evidence of that effect in Ontario. Instead we find, well, one of the national economy’s underperformers.

    Then there is the whole argument that the national economy is in fact underperforming, and that therefore stimulus might “shock” it back onto a higher growth path. Here I cite the most recent work of the OECD shoing that Canada’s “output gap” (the gap between its actual performance and its theoretical potential) is quite small (a mere .5% of GDP) and that they forecast that it will have more than disappeared in 2016, long before any stimulus spending could have had any effect. The OECD predicts that the next 2 years will see inflation pressures building in the national economy, likely leading to interest rate rises. Kiss the stimulative effect of the federal borrowing goodbye.

    Finally I go through yet again the argument why politically it is exceptionally easy to start down the road of deficit financing, but the reverse gear is extraordinarily difficult to find and requires huge strength to engage.

    This Economy Lab column appeared in the November 27th edition of the ROB in the Globe and Mail.

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  • In defence of budget balance Part I November 29, 2015

    In the first part of a two part series of my columns for the ROB’s Economy Lab feature in the Globe and Mail I take the Liberals to task for breaking the now decades-long consensus in Canada in favour of balanced budgets outside periods of genuine deep crisis. Yes, the Liberals won a mandate to do so (having defeated two other parties both committed to balanced budgets, including, wonder of wonders, the NDP), but as I say in the column that does not make it good policy.

    The Liberals claim that the economy is underperforming and that roughly $10-billion of deficit financed infrastructure spending each year for three years will shock the economy out of its torpor. What they neglected to consider was the stimulative effects of balanced budgets. This is a lesson we learned from Paul Martin when he balanced the budget in the 1990s and I lay out the case in some detail….

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  • Europe: Stop obstructing the world’s access to GMOs November 28, 2015

    Genetically-modified foods are increasingly recognised as one of the indispensable tools in the world’s fight against starvation in the face of poplation growth that once again is outstripping food production. And yet Europe’s condescending GMO Luddism is making GMOs less and not more accessible, including to the world’s poorest, such as in Africa. Shame.

    My Globe column for October 30th.

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  • We need a productivity revolution right about now November 28, 2015

    For my October 16th ROB column in the Globe and Mail I wrote about why Canadians in particular need a productivity revolution, where we are most likely to find it, and why our early experiences in these fields will be disappointing but we must persevere.

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  • What to do about VW’s misbehaviour November 28, 2015

    In my Economy Lab column for the October 2nd edition of the Globe and Mail’s ROB I vent my ire on VW for their cheating scandal over diesel engines. After all I own (and love) one of these things! I am up in arms at having been duped by my car company (-;

    Seriously, we cannot have major companies selling their wares under false pretences and breaking the law to boot. VW’s hardly alone in such bad behaviour, and unlike the antics of, say, GM, which cost lives, VW’s infraction truly is small beer. But we clearly haven’t yet got the oversight and policing mechanisms to control bad behaviour by coporate titans. At least part of the solution is not to stop at fining the companies, but to make it clear that guilty individuals will be sought out and punished.

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  • On the varieties of economic “stimulus” September 27, 2015

    “Stimulus” is one of those words thrown around with gay abandon by politicians, especially dutring election campaigns, thinking they know what it means. In my column for the 18 September edition of the Globe and Mail’s Economy Lab feature (in the ROB), I suggest that stimulus ought to be thought of by the effect it produces, not the means chosen. Moreover, I also point out that there is little evidence that Canada is in “recession” but is in fact in low positive growth territory, meaning that traditional stimulus is not at all the cure indicated. Rather we should be removing a number of obvious and longstanding barriers to growth. In other words it is time to think supply side rather than demand side measures.

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  • Of unicorns, sasquatches and supply management August 21, 2015

    At the exact moment where Canada is risking its spot at the Trans-Pacific Partnership negotiations in a quixotic effort to buttress supply management, the EU, that bastion of neo-liberalism, is abandoning milk quotas to the delight of both consumers and entrepreneurial dairy farmers. In my column for the Globe’s Economy Lab (Aug. 21st edition), I walk readers through the massive changes shaking the milk world globally, and why Canada’s efforts (endorsed by every political party) to “protect” dairy farmers are in fact harming the industry and costing consumers handsomely to boot.

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Brian Lee Crowley
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