Just back from a terrific event, Rotman School Dean Roger Martin and Canadian pollster Michael Adams discussed how Canada can prosper during and after the economic crisis. Martin summarized work led by Jim Milway of the Institute for Competitiveness & Prosperity and our own Martin Prosperity Institute which identifies Canada’s prosperity gap vis-a-vis the U.S. and other advanced nations. Adams summarized the latest polling data on Canadian opinions on the crisis, the state of capitalism, and hot-button issues like immigration. My Rotman colleague Ajay Agrawal discussed his research on the relationship between immigration flows and innovation. McKinsey’s Sacha Ghai outlined the findings of “Breaking Away from the Pack”, a recent study of corporate performance in Canada. Read the full report here; a short oped by Martin and Milway here.
April 16th, 2009 at 11:23 am
Great report. I absolutely agree with the general thrust that Canada has amazing national advantages to build on, but that we underachieve our prosperity potential on several fronts. On the topic of innovative tax approaches, one area that could have a salient impact on strengthening Canada’s advantages over the long run is municipal tax policy. Enid Slack, Director of the University of Toronto’s Institute on Municipal Finance and Governance, has written some great stuff on the fiscal challenges and opportunities facing Canada’s large cities and emerging mega-regions. In a recent article in Policy Options, she argues with Richard Bird that our country’s future prosperity is increasingly linked to the performance of its largest cities, but municipal governments simply do not have the fiscal capacity or authority to match their increasing expenditure responsibilities. In this context, they recommend that provincial governments should give large cities access to income taxes by allowing them to piggyback on the provincial income tax with locally set rates. Several states in the U.S. and other industrialized OECD countries already allow municipalities to collect local income taxes, so I wonder if there may be an opportunity for Canada to learn from these jurisdictions about the benefits of innovative revenue-sharing arrangements at the municipal level.
If our large cities are the main drivers of future prosperity, it seems to me that limiting revenue-raising tools at the municipal level to a combination of property taxes and user fees is a major impediment to fostering that critical mass of social, cultural, and physical infrastructure that will ensure and sustain global competitiveness over the long run. Read Slack and Bird’s article here: http://www.utoronto.ca/mcis/imfg/pdf/CitiesinCdnFederalism.pdf