Tag Archives: Canadian economy

Cons To Fill A Black (Media) Hole?

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In this snapshot of international advertising forecasts from emarketer , it’s predicted that the average volume of advertising in Canada will drop as little as 2.5% in 2009, but if you look at global numbers (towards the end of the article), advertising around the world will drop anywhere from 6 to 10%. As an aside, that could be as much as $50 billion in lost global ad sales.

For Canada, let’s make some assumptions:

  • The value of all advertising in Canada is roughly $25 billion per year.
  • The impact of the drop in advertising will be relatively light compared to the global spectrum, but bigger than the smallest survey.  Let’s say the drop will be around 6% of total ad sales.

What’s the point of all this? We don’t get the magical $150 million that’s being tossed around as a short-term subsidy for corporate media, but a whopping $1.5 billion in ad sales , ten times the estimate that Canada’s media giants are said to be asking for.

And … what’s the point of all this? We’re getting the soft-sell folks. We’re being told it’s just a ‘temporary small adjustment’ and a small investment by the feds will plug the hole.  We’re being told life for small programmers and stations will be back to normal once we’ve spent Canadian taxpayer dollars on back-fill to replace defunct advertisers.

Don’t be fooled. If we start pumping cash into these entities, it won’t end.

Don’t let it happen people. Once the Cons start feeding these junkies, they’ll come back for more and more and more and more …

$150 million today will be $1.5 billion tomorrow and $5 billion next year.  Don’t start because it will never stop and it will never be enough.

Want an example?  How about the car industry?  Or forestry?  Or other natural resource producers?

Here’s my suggestion: let the market work things out (for a change).  If it has to happen, let the media companies go bankrupt and do what a true market adherent does:  buy low and own the market.

Why Corporate Tax Cuts (in Canada) Make No Sense

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The January 27 budget is leaking faster than a flatulent elephant after eating a tonne of beans.

More and more details come out every day, and yet the Conservatives don’t have the courage to present it in the House of Commons.

That said, we’ve seen many trial balloons about several topics and the one that we’ll probably have confirmed at the last minute will be a wide array of new tax cuts.

Just as a reminder, the last ones didn’t work.  I’m still waiting for my two cents from the GST cut and now we’re paying the bill for effectively transferring 2% of all transactions in this country to the pockets of corporations instead of our governments.

And the corporate tax cuts have lead to a whopping volume of new jobs, haven’t they?  Oh yeah … they haven’t .

You see … there’s a reason for this.  Canada is in large part a transplant, subsidiary economy.  We’re whores of our natural endownments, junkies for more investments in primary production and victims of our own resources.

We certainly have lots of manufacturing as well, a great percentage of which is controlled not by Canadians, but by Americans, Europeans and other international decision makers.  They say, we do.

And that gets me to my central thesis:  with so much foreign ownership of the Canadian economy, what’s the point in cutting corporate taxes?  When we cut corporate taxes, all we do is enrich the treasuries of other countries.  We need to find creative ways to fund our own economy and future, thank you very much.

If anything, we need to consider greater taxes for those companies that simply come here to extract and leave holes in the ground, swelling tailings ponds and an abundance of nuclear waste.

In the interest trying to avoid being blind to my own ideology, I could be convinced of tax provisions in one area:  those that protect small businesses.  Let’s say we have a tax exemption for any company in this country that employs 20 people or less and/or has revenues less than $1 million per year.

Another suggestion might be special terms (particularly with respect to property taxes and lease rates) for small businesses that establish themselves in downtown or central areas.  This would clearly favour the creative class, as we tend not to do much manufacturing in our cores.

A reduced tax burden for the people that make a difference in our day-to-day living.  I could live with that.

Tax Comparisons & No More Tax Cuts – PLEASE

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Here I am, a typical middle-class dude with lots to lose and I’m begging the so-called leaders of my federal government to avoid the Harpie-like calls for tax relief for businesses and on the personal level.

Why?  Because our social infrastructure will come to a drastic and complete failure if we do.

Mel Hurtig doees comparisons of tax rates for corporations and for personal income across the globe as research for his book, The Truth About Canada .

Last week, I received a newsletter update related to one of his chapters on tax rates.

Here’s an update from the OECD. For the most recent year for which reliable statistics are available (2007), of the 30 OECD countries, Canada is 20th when you compare the total tax revenue as a percentage of GDP.

Of the 10 countries that have lower total taxes, most have miserably poor social programs e.g. Mexico, Turkey, U.S.A., Korea.

Bear in mind that since 2007 total Canadian taxes as a percentage of GDP have come down substantially.

Here is a list of countries with higher taxes than Canada, with Denmark being the highest, followed by Sweden, Belgium, France, Norway, Italy, Finland, Austria, Iceland, Hungary, Netherlands, Spain, Luxembourg, Portugal, U.K., Czech Republic, Germany, New Zealand, Poland.

Overall, the OECD average is about 35.9% while the figure for Canada today is estimated to be about 33%.

The reality, as Mr. Hurtig points out, is that we are no longer in need of more tax cuts just to ‘be competitive’ with other nations.  In fact, I’d argue that in order to attract quality employees and talented professionals, we need a stable and reliable social safety net that takes care of everyone in our society.

As we head into the final days without government (when we’ve needed it more than any time in our history), question the clarion call for tax cuts and understand that cutting taxes in an age when people aren’t making money is foolish and only benefits an elite few.

Supoprt new initiatives that will re-build Canada’s manufacturing base and goals that are geared towards a green economy.  Only then will our investments pay off.

A Banner Year for Canada’s CEOs

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The people that are working closely with Jim Flaherty as his economic ‘dream team’ have very little experience with real life economics.

By 9:04 AM on January 2, most CEOs in Canada earned as much as the average pay level in all of Canada.

To make things more insulting, the average pay hike for the top 100 CEOs in Canada was 22%.  The grand total for these people will likely break another milestone:  pay in excess of one billion for the top 100.

Canadian earnings rose a mere 3.2%.

Now, we’re giving these people bailout money because … ?

Here’s the full story from the Canadian Centre for Policy Alternatives .

Watch the video too (when you have a second) .

Harper’s Plan: Death to Canada by 1000 Cuts

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There’s something about the Harper Administration that I can’t quite understand.

I’ve never seen a more passive government.

The world is falling to pieces and all these people can do is react in terms of cuts.  Thousands of cuts that will bleed Canada to death.

Tomorrow, Jim Flaherty will release his long anticipated Economic Statement, but the Canadian Centre for Policy Alternatives has already released their statement.  Full story and details can be found here .

Flaherty will likely outline how little money we all collectively have, particularly now that tax cuts for mega-corporations are starting to kick in, but also because revenues from the Tar Patch may not be as great now that oil prices are ‘languishing’ down around the $US 50 level.

As a result, he’ll probably identify some pretty severe cuts.  I doubt they’ll be considerate and it’s more than likely they’ll leave a big lump of coal in the stockings of every Canadian, just in time for the Holidays.

However, the CCPA has predicted that things will be much more dire than what Flaherty can even whip up as economic drama, fueling public panic and reminding us that the Conservatives are the last kind of ideologues that we want ‘stearing this ship through the economic storm’.

I have a simple solution:  attack the Defence Budget like it’s a gang of environmentalists plotting to swarm a Cheney-lover’s convention.  Show no mercy.  Lock it down.  Taser it to death.  Reign it in.

We (in ‘we’, I mean ‘they’) plan to spend approximately $50 billion on this bloated and useless industry per year over the next ten years (for a total of $500 billion by 2020).  For what?  Yes, a few thousand jobs depend on these massive gluttonous spending levels, but what about the millions of Canadians that don’t rely on this industry?

Why not start shifting some of that money to productive Canadian infrastructure investments instead of pouring OUR CASH into the pockets of warmongers?

We need that money.  Its ours.  Let’s invest it today to save ourselves from the mess the Conservatives (in Canada and abroad) have created for us.