- Conference Board Think Tank Report - Tanks, but Think Again

- Conference Board Think Tank Report - Tanks, but Think Again
Posted: 8/1/2010 12:55:09 PM The Globe and Mail
Deficit battle may end early: think tank, Julian Beltrame Ottawa — The Canadian Press, Jul. 30, 2010 4:18PM EDT
http://www.theglobeandmail.com/report-on-business/economy/deficit-battle-may-end-early-think-tank/article1656411/ Tab 4
(see also: http://www.conferenceboard.ca/economics/hot_eco_topics/default/10-07-29/Canadian_Feds_Ahead_of_Plan_on_Fiscal_Rebalancing.aspx)

"The key point is that government revenues are much more directly tied to nominal GDP by way of higher corporate tax and income tax receipts

. . . nominal GDP has exploded thanks to a quick rebound in global commodity prices that has brought additional wealth into the country.


But he says that Ottawa can keep achieve its goals by reducing the size of the public service by 11,000 over the next three years.

Mr. Stewart cautioned that the estimates assume Ottawa will stick to its spending plans, including withdrawal of stimulus after this year."

There are a few things that are not clear in this report.

Harper and the Con's are implementing a Corporate tax reduction of 15%. So, if their projections are based on the nominal GDP and nominal GDP is so much directly tied to the Corporate tax rate, one can only wonder why they would not mention this very key factor and how they take it into account.

Perhaps, what they mean is, if Michael Ignatieff and the Liberals are elected soon enough, the deficit will be eliminated a year earlier - since Ignatieff has announced he would put a freeze on Corporate taxes (at 18%).

Also, it sounds like they are saying that their projection is based on the loss of 11,000 jobs in the public sector. If this is a Stephen Harper policy then he ought to come out and say it (yah, right, when h[redacted] freezes over, perhaps).

And, what does "stick to its spending plans" mean. Does this include the 16 billion on the 'eye-watering' (eye-watering? - MacKay you shouldn't stick your head out the window) 65 F-35's.

If it does take the Corp tax reduction and insane F35 procurement into account then does that mean if we give Harper and the Con's the boot, like right away, and put a freeze on these things that we will be able to eliminate the deficit two or three years earlier.

Also, these projections seem to be based on revenues from the sale of Alberta oil and gas - what if Alberta decides it doesn't want to support the rest of Canada so much, directly through oil revenues and indirectly through transfer payments (yah, like that would ever happen, especially with Stelmach now talking about a deficit), how will that impact their projections. And, if Alberta is facing a deficit, then what exactly is this report referring to by " commodity prices that has brought additional wealth into the country".

If this report by the Conference Board of Canada is supporting the Harper do nothing approach to reducing the deficit how does that help provinces like Ontario, which they are so considerate as to state it has a structural deficit, except perhaps implying that health care become private.
Keep in mind that the Conference Board of Canada is not without it controversies over the "independent, objective, and non-partisan" nature of its reports (Conference Board's Digital Economy Report, c. early '09).

Michael Geist, law professor at the University of Ottawa :
May 26, 2009 (first report):
"Indeed, they made no reference to the deBeer study in their report, a curious decision given that the Conference Board claims to be 'independent, objective, and non-partisan.'"
http://www.michaelgeist.ca/content/view/4003/125/

but,

10 Feb.'10 (second report):
"While there is much to consider in this report, it certainly appears to be a good faith effort to examine the issues from a non-partisan perspective.  The Conference Board points to the need for copyright reform, but does so in a manner with far more context and balance than was found in the withdrawn, plagiarized reports."
http://www.michaelgeist.ca/content/view/4783/125/


Lloyd MacILquham cicblog.com/comments.html