Corporate Tax Burdens

Corporate tax burdens vary from country to country, and the lower the tax rate the more attractive it is for businesses to operate within the borders of said country. The chart below, published in the Economist, shows the total tax burden of various countries.


Canada's corporate tax rate is slightly lower than that in the United States, but still higher than those in the UK and Ireland. We should be trying to reduce corporate taxes to improve competitiveness.

In similar vein, Mike Harris and Preston Manning have called for a significant reduction in the size of government in Canada. I could not agree more. Large government becomes socialist and totalitarian, as envisioned by Hayek. The only difference is that in the modern world such ideology is imposed indirectly via regulation.

As Ronald Reagan said in 1980 - "Government is not the solution to our problems. Government is the problem"

Indigo (Reisman) limiting book availability?

I was in my local Chapters bookstore today, partly because I was curious whether reports I had seen on the net were true. These regarded whether Mark Steyn's new book, America Alone, was available in these stores.

The answer was "No". I also inquired about a number of other conservative-minded authors, such as Oriana Fallaci. Again, "No". A young staffer offered to assist, and after searching on the computer, concluded that:

We don't have it in stock, and we can't order it. No stores in Alberta have those books. You should try Amazon

I don't think that is what Ms. Reismann wants her staff to be doing... I think she doesn't want Canadians to read these texts because they go against her political leanings.

There were however, lots of anti-Bush books on the shelves...

UPDATE: America Alone is now #2 on the Amazon.ca best sellers list... Canadians are reading it!!!!

Perhaps Arar knows something...

This article raises some questions about all the apologies to Maher Arar:

globeandmail.com: Documents tie Khadr to tortured pair

Abdullah Khadr, whose father was a ranking member of Al-Qaeda and friend of Osama bin Ladin, acquired radio equipment from Abdulla Almalki. Almalki went to Syria and was detained and supposedly tortured by the Syrian authorities. Almalki's acquaintence Maher Arar was also investigated and subsequently detained by the United States and deported to Syria for questioning.

Abdullah Khadr apparently learned of Almalki's shop from his father... which means that a ranking member of Al-Qaeda knew of this source of equipment. Is it possible that Al-Qaeda had shopped there before? If so, perhaps Almalki is supporting terrorism. And is Arar just a third party who knew none of this? I wonder....

The Quebec Question and Demographics

Demographics are very important when analyzing the demographics of Canada. Currently, Quebec constitutes approximately 23.3% of the Canadian population. More importantly, people who claim their mother tongue is French constitute 20.5% of the Canadian population, according to Statistics Canada (estimates for 2005).

The problem with recognizing Quebec as a "nation" within Canada is that in 50 years, what will Quebec look like? What will Canada look like?

At current population growth rates (2003 estimate 0.94%), Canada's population will rise from 32.6 Million in 2006 to 52.1 Million in 2056. As the fertility rate of the nation is only 1.61 (2003 estimate), all of this population growth will come via immigration. It is unlikely that 20.5% of the immigrants required (roughly 30 million people, consider deaths in Canada) will be French-speaking. Likely they will speak Mandarin, Hindi, Urdu or Arabic.

Considering that the birthrate in Quebec is below 1.5 children per woman, this means that 25% of the Francophone population will disappear each generation (approximately 25 years). This of course assumes that the francophone population and Quebec population are essentially the same people (arguably the ones who are the "nation of Quebec").

Doing the math, this results in a key finding: The francophone population of Canada in 2056 will be 3.77 Million, which is only 7.2% of the country as a whole. Assuming that Quebec continues to attract immigrants at the same rate as the rest of Canada, the population of Quebec will be 12.1 Million. This means that francophones will only make up 31% of the Quebec population.

Therefore, if we entrench the idea of the "Quebec Nation" in the constitution, or elsewhere in legislation, it is going to be a big problem in 50 years because the people that make up this supposed nation will be a minority in their own territory... How much life will bilingualism have once there are no provinces with a majority Francophone population? My prediction is that Quebec's francophone majority will cease to be a majority in 2034. Mark that date...

So entrenching Quebec's "special status" based on linguistic or culutral heritage is ridiculous, because in 50 years this country will look very different.

Taxing Trusts

While the Conservative government is pilloried over backtracking on it's campaign promise regarding the taxing of income trusts (globeandmail.com: Income trust party is over), I must applaud them, but not for the reasons they are doing it.

The real problem with trusts wasn't that tax revenue was being lost by the government. It was that the trusts are not growing businesses. They do not spend earnings on R&D or market development. They are stagnant businesses, and the economy needs active businesses to grow the economy. Trusts are a short-term benefit due to tax savings - it is difficult to see how income trusts are sustainable long term against competition from active and aggressive businesses with new ideas and investment.

Therefore, I support making trusts taxable as corporations, but it is for the good of the economy, not the tax losses of the government.

Of course, the better answer would be to reduce corporate taxes to remove the incentive to convert to trusts...