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Abolish internal barriers to trade

It is often said that if you put 10 economists in a room you would end up with 10 vastly different opinions. This may be true with respect to many issues, but not with regards to free trade. Canadians, in recent years at least, seem to have grasped this. The various Liberal and Conservative governments that have ruled us since time immemorial have negotiated over the past 30 years over 40 Free trade agreements with nations ranging from the United States to Jordan. These agreements have provided numerous benefits to the Canadian economy from larger markets for our exporters to greater choice and lower prices for consumers. Yet despite eschewing protectionism internationally, Canada still practices it domestically. Perversely, a myriad of barriers that impede trade still exist between Canadian provinces. These barriers to interprovincial trade take on many forms. Many provinces, for example, maintain licensing requirements for certain professions. A fully licensed electrician in New Brunswick could find it difficult to ply his or her trade in another province. Another example is restrictions by many provincial and municipal governments have on out of province and out of city companies bidding on government contract. Perhaps most comical of all are the restrictions on inter province alcohol shipments. This rule means that firms must maintain a brewery in each province where they sell their products, as there are heavy restrictions on importing alcohol from other parts of Canada. Inter provincial trade barriers leave Canadians poorer than they otherwise would be. They have the effect of reducing competition, productivity and inhibiting specialization. Licensing requirements exacerbate labor shortages, particularly in Western Canada; by making it difficult for skilled labor to flow where it is needed most. It is absurd that many firms in the oil patch have to recruit in countries such as Ireland… Read More

Wealth Inequality in Canada – Not so bad

Last month, the Broadbent Institute published a report based on a survey containing a critical mathematical impossibility. The survey, which was commissioned by the Broadbent Institute and conducted by a self-identified progressive company, found that in an ideal distribution of wealth, Canada’s third-wealthiest quintile should control 23.7% of the country’s wealth and the second-wealthiest quintile should control only 20.4%. Note that this mathematical error was not simply a minor oversight or a typo made by a careless intern and posted on an obscure section of the Broadbent Institute’s website. Rather, it was the basis of the Broadbent Institute’s professionally-designed, 13-page report which unsurprisingly recommended that the government implement left-wing policies to redistribute wealth more evenly. The report undoubtedly cost the Broadbent Institute a fair bit of money – after all, the poll they commissioned had a sample size of 3,000, which is roughly triple the size of most political polls we see. The video which accompanied the report was narrated by Ed Broadbent himself, and the report and video likely went through numerous researchers before being published. Nevertheless, nobody at the Broadbent Institute seemed to realize that their report was based on a survey claiming that 20.4% is greater than 23.7%, an error that an average grade one student could point out. Between Facebook and Youtube, the Broadbent Institute’s video (which contains the same mathematical error) has been viewed close to a quarter-million times. And in its continued effort to publicize its debunked report on wealth inequality, the Broadbent Institute tweeted its video and added the following claim: “Canada’s CEOs make 200x more than the average worker.” This is a claim that is far from accurate. The Broadbent Institute’s claim was a reference to a recently published paper by the Canadian Centre for Policy Alternatives. This paper never said that… Read More

Buzzing HR-Tech startup – Loosemonkies gears up for South Florida launch is making waves. It may be a largely unheard of product up until now, but it is likely the next big thing in job-search engines. The Prince Arthur Herald’s Michael Eugenio sat down with Montreal-based entrepreneur, Amar Magon, Chief Marketing Officer (CMO) of Loosemonkies. Montreal-born start-up, is the solution that the online job industry has quietly been wishing for. Through an elegant interface for job seekers and employers, Loosemonkies intelligently displays percentage matches, immediately reveals real-time ranking of candidates, conveniently provides internal chat communication, video resume capability, and efficiently serves up simplified filtration tools. “With the speed at which technology has grown over the last ten to fifteen years, it boggles our mind that the online recruitment space hasn’t seen much innovation,” Magon said. What makes Loosemonkies innovative and disruptive is that it offers candidates and employers a refreshingly new experience with features that current job-search engines do not have in place.   “Whether you are an employer looking for talent, or a job candidate looking for your next best job, we’re all seekers. Our goal is to help all seekers find exactly what they’re looking for, in the easiest and most effective way possible.”   Loosemonkies is what Magon calls an “intelligent online job portal”, allowing users to engage in a rewarding job-hunt experience while not having to deal with the old-school woes of today’s traditional, archaic job boards. Here’s a snapshot of some of their unique features:   1. The ‘2-Way’ Match Percentage A prevailing feature unique to Loosemonkies is the very powerful match percentage tool. Essentially what the match percentage feature does is it provides each individual job seeker a match percentage to all the jobs posted. For example, job applicant A will be matched to job A with 82% compatibility and 65% compatibility to… Read More

Abolish the Corporate Income Tax and Liberate the Workers

Ever since the Global Financial Crisis (GFC), much of the western world has been having a hard time. From turmoil in Europe to stagnation in the United States, many people, in some of the wealthiest nations have suffered from falling living standards and a seemingly dismal future. Even in those nations that have performed relatively well, such as Canada and Australia, growth is not as robust and people are more insecure about their financial future than prior to the GFC. This leaves policy makers with many questions to answer. How do we restore prosperity, how do we get living standards and incomes rising? Well they could do one thing very easily: abolish the corporate income tax. After such a suggestion, those on the political left are probably ready to throw this essay out the window. However please bear with me. I assure you this is not a nefarious scheme cooked up in the boardrooms of Wall Street to enrich the already affluent. A tax requires that the wallet of some human being gets lighter. Yes, corporations are legal people, but that does not mean they pay taxes, they can’t. No matter how wealthy and profitable they may be, they don’t bear the burden of the taxes, they sign the check but they are a mere legal entity, not a person. The burden, or incidence, of the corporate income tax falls on those to who have a stake in the corporation, workers and shareholders. In theory it's a mixture of the customers (who end up with higher prices), the workers (who get lower wages) and the shareholders (who end up with lower returns). This is not because the company or the shareholders are simply evil capitalists (although they may be of course). It's actually due to something called the natural rate… Read More

Canada’s economy: 5 trends to watch

A strengthening currency, legal marijuana, natural disasters and legal battles in the labour market—here’s a look at five stories shaping the Canadian economy in the second half of 2014. 1. A stronger dollar The Canadian dollar has surprised market analysts by hitting a six-month high of 0.94 USD this week. A year and a half ago, the loonie began to slide, and by all accounts that decline was set to continue. In late 2012, the dollar was at parity with the US dollar, falling to 88 cents by March of this year. The Bank of Canada had plans to intentionally weaken the dollar over the course of 2014 in view of boosting exports—Canada’s balance of trade has been negative during most months over the last two and a half years. A strengthening dollar is making it more difficult for Canadian exporters, major drivers of economic growth, to find buyers in US and foreign markets. A strong dollar is welcome news for Canadians consumers and retailers, however, who will now pay lower prices on American goods. Canadian travelers this summer who will also find vacationing in the US less painful. 2. Expanding marijuana industry Canadian marijuana users are abuzz as the young legal marijuana market begins to take shape. As of April 1, cannabis sold in Canada may be (and may only be) grown industrially. So far, thirteen firms are licensed to produce marijuana across the country, but dozens more are making applications and could join the market in the coming months. The growth in industrial supply coincides with a massive increase in the number of licensed medical marijuana users. A decade ago, the number of licensees was less than a thousand nationwide. As of this month, there are more than 40,000, and the population of licit users will grow to… Read More

Two Theories of Plutocracy

A century ago, F. H. Bradley, then a much-admired Oxford philosopher, introduced a book on his idealist metaphysics, with the disarming assertion that 'metaphysics is the finding of bad reasons for what we believe on instinct'. Philosophers often used to display such becoming modesty. However, their sometimes unworldly but historically literate ruminations have now been largely replaced by the more unequivocal declarations of the later arriving legions of social scientists, equally unworldly, but fortifying their claims with statistical data. The first half of the 20th century saw the rise of psychologists and sociologists, but louder noises in recent decades have come from economists. A great stir has lately been created by one of these, the French Grand Theorist, Thomas Piketty. It is instructive to contrast his portrait of advancing plutocracy with the mid-20th century prognosis of the eccentric English sociologist, Michael Young.Piketty, in his bestselling Capitalism in the Twenty-First Century, claims to have charted, with massive statistical detail, the historical development of international capitalism over the last two centuries, and the changing levels of inequality that have gone with it. Young's The Rise of the Meritocracy was very different: a satirical essay, written in the form of an imagined memoir from England in 2033, by a senior member of the future 'Meritocracy', explaining the historical steps which were culminating in a social and political disaster.Piketty extrapolates an increasingly inegalitarian future, unless modified by a worldwide 80% income tax on annual incomes above $500,000, and a further 15% tax on inherited wealth. He bases the need for this unlikely development on his conviction that he has definitively shown that the rate of return on capital, save in exceptional circumstances, always outstrips the rate of economic growth. Hence inherited wealth will, on average, always exceed wealth achieved by a life of labour,… Read More
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