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Fixing Fiscal Federalism to Improve Canada’s Productivity Performance

Author

Listed:
  • James Milway

Abstract

Canada’s current system of fiscal federalism, which results in very large transfers of resources from have provinces to have-not provinces, promotes consumption over investment and hence does not maximize our productivity potential. The author recommends reform of Employment Insurance towards a true insurance program with the elimination of the interprovincial social transfer aspects of the program, and a shift in the tax system from business income to consumption by reducing corporate taxes and raising the Goods and Services Tax.

Suggested Citation

  • James Milway, 2005. "Fixing Fiscal Federalism to Improve Canada’s Productivity Performance," International Productivity Monitor, Centre for the Study of Living Standards, vol. 11, pages 11-20, Fall.
  • Handle: RePEc:sls:ipmsls:v:11:y:2005:3
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    More about this item

    Keywords

    Productivity; Tax; Employment Insurance; Unemployment Insurance; Fiscal Federalism; Federalism; Transfers;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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