{"id":130569,"date":"2020-12-10T20:12:34","date_gmt":"2020-12-10T17:12:34","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-canadas-economic-recovery-might-look-like\/"},"modified":"2020-12-10T20:12:34","modified_gmt":"2020-12-10T17:12:34","slug":"what-canadas-economic-recovery-might-look-like","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-canadas-economic-recovery-might-look-like\/","title":{"rendered":"#What Canada’s economic recovery might look like"},"content":{"rendered":"

“#What Canada’s economic recovery might look like<\/strong>”<\/p>\n

\n How does Canada come back from its massive pandemic deficit? Depends who you tax.\n <\/div>\n
\n With its seemingly unending pandemic spending, the federal government is heading toward a major deficit. Finance Minister Chrystia Freeland hasn\u2019t announced any fiscal targets, but estimates put the shortfall as high as $343 billion. Canadians have, understandably, been growing worried. An October poll by Maru\/Blue found that while most Canadians don\u2019t think it\u2019s time to rein in spending, over two-thirds still think the government should focus on reducing the deficit.<\/p>\n

Like most countries, Canada has also experienced significant economic decline this year. \u201cWe expect that the fallout from the pandemic will have some long-lasting effects on future economic growth,\u201d said Governor of the Bank of Canada Tiff Macklem during a press conference in late October. And while the bank doesn\u2019t expect shutdowns as widespread as the spring, they don\u2019t expect recovery to be quick. \u201cWhen we add it up, the Governing Council projects that the economy will still be operating below its potential into 2023.\u201d<\/p>\n

READ:\u00a0Charts to watch in 2021: The most important Canadian economic graphs for the year ahead<\/strong><\/p>\n<\/blockquote>\n

So what does this dire financial predicament mean for Canadians going into 2021? It means governments may have to get creative to raise revenues, though increasing income taxes isn\u2019t necessarily a fait accompli. Many argue that Canada\u2019s current tax system skews toward benefitting society\u2019s wealthiest\u2014and increasing taxes on wealthy individuals and corporations and closing tax loopholes would not only be more politically palatable to an electorate experiencing financial unease, it would also make the tax system more fair.<\/p>\n

\u201cDuring times of crisis, there can be a lot of pandemic profiteering,\u201d says Toby Sanger, executive director of Canadians for Tax Fairness. He notes that Amazon, owned by the world\u2019s wealthiest person, trip<\/a>led its profit during the pandemic, and Thomson Reuters, owned by the wealthiest family in Canada, was up 20 per cent. Sanger supports an annual wealth tax on assets owned by people whose wealth is above a certain threshold (he proposes $20 million). \u201cMost Canadians\u2009.\u2009.\u2009.\u2009that own houses pay close to one per cent tax on the value of their house, so arguably we do have a wealth tax, but it\u2019s focused on the middle class,\u201d Sanger adds. This is because the richest Canadians hold a greater proportion of their wealth in financial assets. There is considerable public support for taxing these assets; an Abacus Data survey commissioned by the Broadbent Institute found that 75 per cent of Canadians say they support a one to two per cent wealth tax on the country\u2019s richest, including almost 70 per cent of Conservative voters. And yet, an NDP motion for just such a wealth tax was voted down in mid-November.<\/p>\n

READ:\u00a0Canada\u2019s economy may never return to what it once was<\/strong><\/p>\n<\/blockquote>\n

More than anything else, the pandemic has shown that in times of crisis there are clear winners and losers. But nowhere has the financial future seemed so uncertain as in Canada\u2019s cities. \u201cMunicipalities are on the front line when it comes to responding to this virus, and it\u2019s had an impact on their bottom lines,\u201d says Enid Slack, director of the Institute on Municipal Finance and Governance at the University of Toronto. Slack explains that municipalities have been hit by both an increase in expenditures\u2014including public health, shelters, child care and IT costs\u2014and a decrease in revenues from deferred property taxes without penalties and a decline in user fees. Complicating the situation is the fact that municipalities aren\u2019t allowed to budget for operating deficits.<\/p>\n

This uncertainty means provinces and cities will have to come up with a new funding agreement that is more sustainable. \u201cIn the longer term\u2009.\u2009.\u2009.\u2009we have to consider who does what and how we pay for it,\u201d says Slack. A major problem she highlights is that the federal government has the most ability to raise revenue, but provinces and municipalities have the most spending responsibilities. \u201cIf we\u2019re delivering\u2009.\u2009.\u2009.\u2009social<\/a> services and social housing, is the property tax the best way to pay for that? Most people would say no,\u201d Slack insists. \u201cThey would say, if you\u2019re redistributing income, the income tax is a better way to do that.\u201d To solve this problem, Slack posits two alternatives: maintaining these services at the municipal level and giving municipalities access to income tax revenues, or moving those services up to the provincial level where there are income taxes.<\/p>\n

The pandemic has shown just how fragile the Canadian economy is to major shocks\u2014and the cascading impacts on our governments\u2019 revenues. \u201cThere are cracks in our fiscal system in Canada,\u201d says Slack. If governments across the country have any hope of being re-elected after a treacherous pandemic second wave, they will have to take bold steps to act on them.<\/p>\n\n

This article app<\/a>ears in print in the January 2021 \u2018Year Ahead\u2019 issue of<\/em> Maclean\u2019s magazine with the headline, \u201cWhat recovery might look like.\u201d Subscribe to the monthly print magazine here<\/a>.<\/em>
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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“#What Canada’s economic recovery might look like” How does Canada come back from its massive pandemic deficit? Depends who you tax. With its seemingly unending pandemic spending, the federal government is heading toward a major deficit. Finance Minister Chrystia Freeland hasn\u2019t announced any fiscal targets, but estimates put the shortfall as high as $343 billion….<\/p>\n","protected":false},"author":1,"featured_media":130570,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.macleans.ca\/wp-content\/uploads\/2020\/11\/FISCAL-RECKONING-WRIGHT-NOV18-750x422.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[1545,1356,5069,67806,82972],"class_list":["post-130569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-coronavirus","tag-covid-19","tag-economy","tag-editors-picks","tag-year-ahead-2021"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/130569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=130569"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/130569\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/130570"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=130569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=130569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=130569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}