Brian Lee Crowley

Innovation-obsessed Ottawa tackling a problem that doesn’t exist

In the lead-up to the federal budget, Ottawa was desperately signalling its commitment to fostering innovation in Canada. As the bard might have said, indeed did say, how weary, stale, flat and unprofitable. As I remind people in my Globe column for the ROB, there is nothing magic or special about innovation as an economic activity. Like all such activities, we make ourselves better off when we specialise in those we do well and let others do the same. In areas where we possess comparative advantage, we innovate just fine. In the others, why this mania to innovate at home as opposed to just doing what everybody else does: free ride on their innovations? After all we are one of the world’s wealthiest economies and the obsession with our “poor” innovation performance has for decades gone hand in glove with rising prosperity.

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What explains labour’s falling share of income? Corporate concentration one answer

In my Globe column I argue that the share of national income going to workers is being squeezed in Canada and other G20 countries. An excessive concentration of market share in the hands of fewer and fewer companies – not greed or offshoring – may be one of the most important trends responsible for this change.

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What Britain can teach Canada about “austerity”

During the last federal election campaign the Liberals warned that you can’t cut your way to prosperity and campaigned on “stimulative” deficits to take up slack in the economy. But as Sean Speer and I argued for CapX on May 24th, Britain is a powerful example of the truth that actually restraining government spending IS stimulative, and far more so than deficit spending. Moreover, ironically, Britain learned this lesson in part from Canada’s experience in the mid-90s fixing its chronic deficit problem. How quickly we forget….

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Rebranding the minimum wage as a “living wage” triumph of marketing over reason

The latest marketing dodge by the Left is to start calling, not for higher minimum wages, but for a “living wage,” thereby cleverly evoking images of poor single mums struggling to feed themselves and their kids on low pay. No one should work for a wage they can’t live on is a pretty good battlecry. Except that there are lots of people, in fact the vast majority, who earn the minimum wage and don’t live on it at all. The bulk of minimum wage earners are secondary earners in families above the low-income cutoff (LICO). And how many single parents with dependents try to get by on a single minimum wage income? Just over 2% of all people earning the minimum wage.

In my Globe column for the ROB of April 1st, therefore, I try my own rebranding campaign for the minimum/living wage. Here are the three I thought best. To the extent it represents government forcing businesses to pay more for labour than the going price, it is a tax on jobs. To the extent it forces up prices  at providers of low-cost goods and services to the poor, it is higher prices. And finally to the extent that the minimum wage is actually the entry wage for young workers living at home looking for their first job, and therefore every hike in the minimum wage makes fewer such jobs available, it is a youth penalty.

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Premiers once again fail internal trade test. When will Ottawa step up?

As I argue in my March 26th column for the Ottawa Citizen and other Postmedia papers, the Liberals have chosen internal trade liberalisation as the one issue where they see eye to eye with the Tories in looking to the provinces to tear down those barriers. Yet the premiers’ own self-imposed deadline of mid-March for an extensive new deal has come and gone without a peep from any of them. The truth is that the provinces are too busy protecting local interest groups to protect Canadians’ rights in this area. Ottawa alone has the authority and legitimacy to do it, but not yet the will despite the fact that it is Canadians’ rights at stake. Bipartisanship in Ottawa deserves a more worthy standard-bearer than this.

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TSX-LSE tie-up a lost opportunity Germany isn’t missing

A few years ago the London Stock Exchange, a global powerhouse in investment clearing made a rich and constructive offer to buy the Toronto Exchange. This would have tied our business capital into one of the world’s premier economic and investment networks with guarantees of local jobs and global access. Narrow business nationalism prevailed and LSE was shown the door in favour of the hastily cobbled together Maple. LSE moved on, Maple has languished by the London exchange has gone from strength to strength and is now close to a deal to merge with their German opposite number to become one of a tiny handful of globe-dominating exchanges. Meanwhile Canada continues to lose steam. It didn’t have to be this way. Read the whole sad tale in my Globe column of March 4th, 2016.

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Keeping up with the Joneses in the UK

If you thought that Britain was an ageing doddery has-been barely managing the gentility of its decline, think again. In a stunning proof that how countries manage themselves matters, Britain is on a tear. How this happened is full of lessons for the rest of us. At least that’s what I argued in my Globe column for Economy Lab on February 19th. Britain is leading the western indsutrialised countries in growth, and is set to overtake Germany as the EU’s largest economy by around 2030. That’s if they don’t bugger it up, to use a good old British expression. To learn how Britain did it, and the challenges that still lie before it, check out the column!

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The arguments why Canada should join TPP

In my February 5th column for the Globe’s Economy Lab feature I lay out what I think are two of the chief reasons to adopt the Trans-Pacific Partnership. The first is that it is a stealth modernisation of NAFTA and we cannot afford to let Mexico get these benefits while turning them down ourselves. Second, it puts tremendous pressure on China to play by the established trade rules.

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Anglosphere leadership on M&As offers lessons for Canada

We all get dazzled by the growth of Asian Tigers, China, etc., etc., particularly in terms of their trade performance (don’t get distracted by short term gyrations — I’m talking medium to long term…). Because they appear to be economies “on the way up” we all want to cosy up to them and sell them our goods and services. But as I point out in my latest column for the Globe’s Economy Lab feature in the ROB, that neglects an equally vital and perhaps even more important trading relationship between nations — the international market for quality corporate assets, otherwise known as Mergers and Acquisitions (M&A). And here it is not the Asian countries that lead the world, but the major industrialised economies, with the biggest relationship in the world being between the US and the UK. This increasingly tightly integrated trans-Atlantic business relationship is poised to lead the world. Don’t count out the Anglosphere yet! And Canada should be doing more to follow this lead….

 

 

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

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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Brian Lee Crowley