Brian Lee Crowley

Globe and Mail columns

  • Why cars and roads, not transit, are solution to urban ills January 7, 2014

    My head must need examining. Here I am once again pointing out that the Emperor has no clothes to a crowd of admirers of the imperial fashion sense. Yes, I have once again stuck my finger in the eye of the smug elites who think the solution to the ills of our cities is to make people live in cramped conditions and get around on their bike or on the subway. So sorry, but the evidence doesn’t point your way. read all about it in my latest column in the ROB in the Globe and Mail.

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  • Why the CPP expansion will not solve the problems advocates claim December 22, 2013

    In my most recent column for the Globe’s Report on Business, I took to task the advocates of an expanded CPP for their failure to explain exactly what the problem is their proposal is intended to solve. Can’t be to help low-income seniors, because the CPP isn’t aimed at them. That’s what OAS/GIS is for. Can’t be to solve a generalised problem of low savings rates by the middle class, because there is no evidence it exists. In fact the data show that Canada’ retirement system works quite well. If there is a problem, it is a narrow one involving a small subset of the middle class, so why is a universal expansion of the CPP the right course to follow. This column caused quite a stir in the Twittersphere before the fed-prov talks broke up with no agreement on CPP expansion.

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  • The slippery slope of “sharing the benefits”: My latest column in the Globe’s ROB November 17, 2013

    As I write in my latest column in the Globe’s Report on Business, the Mowat Centre, a think tank on Ontario issues, thinks that Ontario should only “allow” pipelines carrying Alberta’s oil across its territory if Ontario “shares in the benefits.”  Hmmm. That’s a dangerous argument for Ontario: “the main benefit of a pipeline is what flows through it – the oil that customers want to buy. If, as the Mowat Centre suggests, we’re going to make businesses “share the benefits” of their operations over and above making their products available, why stop at the oil industry? Let’s make eastern-based grocery chains, auto companies and software firms start “sharing the benefits” of their operations with their Alberta customers.”

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  • Ken Coates and me on the fracking mess in NB November 4, 2013

    My good friend Ken Coates and I recently published an op-ed in the Globe and Mail about the violent confrontations occurring at the Elsipogtog First Nation reserve in New Brunswick. While Ken and I fervently agree that violence is not to be condoned, the reaction in a great deal of the media betrays once again the extent to which the rest of society has not caught up with the rapidly evolving relationship between Aboriginal peoples and natural resource development.  Fortunately, models are now coming to the fore in which First Nations’ legitimate rights and interests are being taken into account. We have to push farther and faster in this direction or Canada’s economic future will be seriously damaged.

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  • Resource nationalism: Sounds good, but isn’t October 8, 2013

    In my latest column for the Globe’s ROB, I take on the resource nationalists who yearn for all Canada’s petroleum to be processed in Canada. I ask why, if there is money to be made in such further processing in Canada, the number of refineries has been declining for years. The people who actually know the refining business in Canada aren’t lining up to invest the $12 billion – $14-billion to build a brand new refinery. If you read this column, you’ll know why you won’t invest in it either!

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  • My Globe column on the value of a university degree September 5, 2013

    In my regular ROB column in today’s Globe (September 5th, 2013) I look into the alleged value of a university degree, both as a qualification for the job market AND as evidence that you’ve been taugh how to think. Sorry to say degrees don’t come off too well!

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  • New Globe Column: Why taxis are so yesterday….. August 1, 2013

    In my latest column for the Globe’s ROB, I examine the issue of taxis — why they’re so expensive, why the service is so bad, and why the whole industry is doomed by new technology. Catch a cab while you can!

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  • My homage to the (undeservedly) hated car June 13, 2013

    In my latest column for the Globe & Mail, I call down the worst the car-haters can muster in defence of the automobile and what it has meant in terms of raising the standards of living for millions of people.

    My homage to the (undeservedly) hated car

    BRIAN LEE CROWLEY, Special to The Globe and Mail

    Wednesday, Jun. 12 2013

    When Toronto Mayor Rob Ford came to power, he promised to end the “war on the car.” He was taking aim, of course, at the paternalistic philosophy of centralized urban planning that has infected city halls in virtually every major city in the country. Cars are bad, and the sprawl that they give rise to is worse, a blight on the countryside that all bien-pensants abhor and wish to reverse.

    Timorously, I periodically raise my hand, cry “rubbish,” and let slip the dogs of war. For every time I question this article of faith of the smug new self-righteous urban puritans, I am immediately inundated with angry e-mails blaming me for every ill associated with cars, including one kind reader who accused me of being in favour of people being run down in crosswalks. So be it.

    I call down on my unrepentant head the worst the car-haters can muster. The automobile is a wonder that rapid transit can never hope to replace, but can at best supplement to some minor degree, and at a cost greatly disproportionate to its benefit.

    Almost universally, as people’s standard of living rises, one of the first things they buy is more space for themselves and their families. Those cities that anti-car proselytisers embrace with fervour, such as the centres of New York and Paris, have seen their population density fall over most of the past 100 years, as people have fled their cramped inconvenience in favour of blossoming suburbs, where everything is bigger, including the lots, and cars are the workhorse of city travel.

    As a result, people who don’t live there hold up the centre of Paris or Stockholm as an example of what we should do with our own cities, ignoring the fact that the French and the Swedes live in far greater numbers in suburbs that are basically quite indistinguishable from those of Toronto or Montreal.

    What’s this got to do with cars? Suburbs and space go hand in hand with the car. The car means people can reach affordable space. Instead of a balcony and a window box, they can have a yard. “Urban sprawl” and the car have given people a higher standard of living and more freedom than ever before.

    Cars put you literally in the driver’s seat, including about when you travel, and what route you take (picking up the groceries on the way home from work or taking the kids to dance, hockey and music) without advance planning, transfers or extra fares, it is as essential as having a Graco FastAction-Fold-Click-Connect stroller for your kids at home. You stay dry and warm no matter what the weather, and travel time by car is in the vast majority of cases shorter than by transit, especially if you have to transfer. Cars carry more than one can manage on bus, bike or foot, allowing people to shop at supermarkets and discount stores farther from home. The car has been essential to the emergence of IKEA, Costco and Target, which raise our standard of living by improving choice and lowering prices.

    Economic activity, far from being concentrated in city centres, is increasingly dispersed across our cities, meaning that the way people move for work less and less matches urban mass transit, which largely moves people to the central core and back again. Transit could never reproduce the blooming buzzing diversity of travel needs the car accommodates with ease. A tiny fraction of commuter trips are made on mass transit. Even if we were to double the share of mass transit in major cities (in itself a huge, and hugely expensive, task), it would still barely affect congestion, while emissions per kilometre driven are now vanishingly small.

    The incontrovertible fact is the vast majority of people will continue to rely on their cars for transport. Mass transit is chiefly a poorly designed and very expensive social program for those who don’t have a car. We’d be better off buying them cars and spending the leftover money on well-designed roads, preferably where people were charged for every kilometre they drove and a premium at rush hour to reduce congestion.

    Everyone talks in favour of urban transit, but what they really mean is that they wish the driver in front of them on the road would leave his car at home. This includes the allegedly anti-car young, who say they want to live downtown but in fact live in ever greater numbers in the suburbs. Pay no attention to what people say, because it is so unfashionable to be pro-car. Look instead at what people do; while city centres have grown, suburbs have grown hugely more, as people voted, not with their feet, but their steering wheels.

    Brian Lee Crowley (twitter.com/brianleecrowley) is the Managing Director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa: www.macdonaldlaurier.ca.

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  • Latest column in the Globe & Mail: Government tax chasers should worry about profits first May 30, 2013

    With all the talk recently in the new about of corporate taxes, and the companies whose tax bills seem low, I argue in today’s G&M,  that the idea of simply increasing corporate taxes to increase government revenue, so public spending can flourish is not as straightforward as many believe, and may in fact have the opposite effect.

    Government tax chasers should worry about profits first

    Brian Lee Crowley, Special to the Globe and Mail, May 30, 2013

    If something sounds too good to be true, chances are it is.

    A case in point is the argument making the rounds that there are vast pools of untaxed or undertaxed corporate profits floating around. If we could plug all the tax leaks, we would suddenly make deficits disappear and public spending could flourish.

    Amazon, Apple and Starbucks are some of the companies fingered for “aggressive” tax strategies. Stung by criticism, Starbucks, which under the tax rules made no profits in the United Kingdom, nonetheless offered to pay £20-million ($31-million) in “voluntary” corporation tax to Britain’s Revenue and Customs. To allow the government to accept the money (tax payments are by definition not “voluntary”) will probably require Starbucks not to deduct some royalty payments made to its Dutch division. But British tax authorities have already examined those royalties and found them legitimate. And the Dutch government may have something to say about losing any tax revenue it collects on these payments.

    It has been suggested that Starbucks avoid the legal difficulties and make a charitable contribution of that amount – except charitable donations reduce your tax payable, which was the complaint against Starbucks in the first place.

    That is just a tiny window on the complexity of the international tax system in which countries vie with each other for the right to tax corporate profits. One country’s tax “loss” is often another’s “gain.” The idea that there are vast untaxed sums out there that can easily be found and taxed is mostly fanciful, although there are doubtless exceptions.

    This does not mean Canada shouldn’t take steps to ensure it gets a reasonable share of corporate tax revenues. The main guiding principle should be that Canada needs to create conditions in which companies find it worthwhile to carry on their profitable business activities here.

    Many people believe that corporate tax revenues are the simple result of multiplying the tax base (in this case, corporate profits) by the tax rate. As Amazon, Apple and Starbucks illustrate, however, that corporate tax base is immensely fluid. You manufacture here, have your head office there, centre your distribution activities in another place, lodge your intellectual property in another, borrow here, invest there and soon your business activities are a globe-girdling web that defies simple attribution to one national revenue agency or another.

    Just a few years ago, the world’s 40 largest multinational companies had more than half their work force in countries other than where their head office was located, and earned nearly 60 per cent of their revenues from abroad. Those trends have surely intensified since. Defining where economic activity takes place, and therefore the taxes payable on it, is difficult to define with precision.

    This all adds up to the economic truism that if you tax something, you’ll get less of it, and the harder you tax it, the less you’ll get of it. The complexity of global business multiplied by the complexity of tax rules means that companies have a lot of discretion about where their income ends up. We should be encouraging them to use that discretion in favour of Canada.

    The greatest determinant of corporate income tax revenue is not the tax rate on that revenue, but rather the overall profitability of Canadian business. Business profitability drives investment, job and income growth. So our objective should be to attract profit to Canada so it can be put to work. One of the most effective ways of doing that is by keeping the tax on profits moderate.

    For example, federal nominal corporate income tax revenues increased, on average, by almost 10 per cent between 2001 and 2006 even though the corporate income tax rate declined to 21 per cent from 27 per cent over that period. There might not be a simple linear relationship between corporate tax rates and revenues, but it is clear that profitability drives investment, jobs and growth while high corporate tax rates lower profitability.

    Profit enlarges almost every part of the tax base. If Canada creates a climate favourable to profit and investment, it will get more of them. The tax revenue will follow.

    Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa.

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    Join me and Armine Yalnizyan, senior economist at the Centre for Policy Alternatives for a post-debate townhall after tonight’s Munk Debates “Be it resolved: Tax the rich (more)“.  Recently Armine Yalnizyan and William Watson, economics professor at McGill University debated “Does wealth in Canada have to much power?” You can read the summaries of each of their arguments here; and visit www.cpac.ca to watch this and previous Great Canadian Debates.

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  • A smarter way for Canada to do aid May 2, 2013

    In today’s Globe & Mail, MLI’s Brian Lee Crowley lays out how Canada can best direct foreign aid, by improving remittances and removing trade barriers.

    A smarter way for Canada to do aid

    BRIAN LEE CROWLEY, Special to The Globe and Mail

    Published Thursday, May. 02 2013

    The recent federal budget’s elimination of the Canadian International Development Agency, whose activities will be subsumed under the Foreign Affairs department, has attracted relatively little notice. That’s unsurprising, given how little the average person cares about what seem to be abstract bureaucratic machinations.

    But if done right, this move could prove a courageous opening salvo in an effort to get more value for the world’s poorest, as well as for Canadians, out of our development spending and broader foreign policy.

    Canada does aid poorly. For example, administrative costs as a share of the aid dispensed are among the highest in the Organization for Economic Co-operation and Development. Focusing our aid efforts on fewer developing countries helps, but is not enough.
    Foreign aid generally has fallen into disrepute for reasons I observed first-hand working for the UN in Africa, such as corruption and clock-watching, self-serving bureaucrats. The developing consensus is that the best antidote to global poverty is economic growth rather than aid dependency.

    Aid efforts are unlikely to disappear completely, but many knowledgeable observers have pointed to two areas beyond aid where Ottawa can take concrete steps to make a lot of vulnerable people in developing countries better off, while also improving Canada’s economy.

    These two magic bullets are remittances and trade.

    Lack of interest in the value of remittances in reducing developing world poverty has always astounded me, but it is positively inexplicable when set against the development power they represent. According to trade expert Danielle Goldfarb, writing several years ago in a report for the Canadian Defence and Foreign Affairs Institute, money sent by migrants back to their origin countries was at least three times the value of global foreign aid, grew at a much faster rate than aid flows, and reduced both the incidence and severity of poverty in developing countries.

    We know a lot more about our official foreign aid program than we do about remittances from people in Canada to their home countries, but research shows that remittances have a big impact. Take India, one of the largest source-countries for immigrants to Canada. India is the world’s biggest remittance recipient. Total remittances from overseas Indians, worth more than 3 per cent of Indian gross domestic product, exceed total Indian government spending on health and education, and their influence is particularly noticeable in regions that have had the greatest outflow of emigrants.

    What explains this phenomenal remittance growth? According to Muzaffar Chishti of the Washington-based Migration Policy Institute, it is partly that the flows are more transparent as remitters make more use of official channels (terrorism-related concerns have put informal transfer networks under unfavourable scrutiny) and as greater competition emerges in the official money-transfer market.

    There has also been an important shift in emigration patterns to high-skilled technology jobs (Indian software engineers and IT management experts, for example). This underlines the importance of emigration to the source country: The higher the earning power of the emigrant, the greater the impact back home. The human capital of India has not being “looted” by Canada or the United States; it has allowed Indian investments in education and skills to earn a far higher return for India than it might have if those emigrants had stayed home.

    The second way to help the world’s poor is to get rid of trade barriers. According to Ms. Goldfarb, eliminating all trade barriers in rich countries would result in income gains to developing countries double that of global foreign aid. Canadian consumers, in turn, would benefit from lower prices.

    On the trade front, however, Canadians remain prisoners of protectionist special interests. Clothing is made more expensive for Canadians through tariffs and quotas on the imports of textiles and apparel from many developing countries, depriving those places of desperately needed jobs and income.

    Canada also sacrifices prestige and bargaining influence at the international trade table by continuing to protect agricultural marketing boards, a policy that costs the average Canadian family hundred of dollars annually in higher food prices.
    Fiddling with the bureaucracy that administers our formal aid program is fine, but if Canada really wants to help developing countries, we know what to do: Welcome more immigrants, make it easier for them to transfer their remittances home, and lower our trade barriers.

    Brian Lee Crowley (twitter.com/brianleecrowley) is managing director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa.

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Brian Lee Crowley