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Delving into the forces that shape our living standards
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Foreign investor tax grab shatters faith in Modi's pledge to open up India

KEVIN CARMICHAEL

Indian Prime Minister Narendra Modi promised a war on the “tax terrorism” practiced under the previous government. After a year in power, some investors are wondering if Mr. Modi has acquired a case of Stockholm Syndrome. That’s because the Prime Minister appears to have grown sympathetic to India’s notoriously capricious tax collectors.

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Small companies the main casualties of higher corporate taxes

TODD HIRSCH

In the world of public finances, political land mines can blow up in a politician’s face. High on the list of topics to avoid is corporate income taxes. The right wingers hate them and the left wingers love them. No matter what you do with corporate taxes, you’re sure to infuriate someone.

But as with most topics in economics, raising taxes on corporations cannot be boiled down into a simple left versus right debate. It’s more complicated than that.

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How to reconcile Canada’s energy and environmental interests

GLEN HODGSON

Canada has legitimate aspirations to be a global energy superpower, based on our rich resource endowment. But at the same time, governments in Canada and around the world are grappling with the right policy responses to climate change in general and greenhouse gas (GHG) emissions specifically. Can these apparently competing interests be reconciled?

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For the non-affluent, a budget that is not as balanced as it looks

ANDREW JACKSON

The federal government’s 2015 budget is, surprise, primarily a political document that extolls the government’s record and highlights tax cuts, but does almost nothing to deal with rising inequality or to shape the trajectory of the struggling economy.

As expected, annual contributions to tax-free savings accounts are to be almost doubled to $10,000 a year, which will cost over $300-million in lost annual revenues within five years. The increase will eventually all but eliminate taxation of investment income, to the primary benefit of the very affluent earning more than $250,000 a year who collect almost half of all capital gains and dividends subject to tax.

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Canada 2015: A remarkable economic transformation

CHRISTOPHER RAGAN

It’s natural for public discussion to focus on today’s problems and how to best solve them. But it’s also worthwhile to remind ourselves what past challenges we’ve already come together to solve. In comparison with only a few decades ago, things look remarkably good today.

Quebec had its first referendum on separation in 1980. Not only did this create much angst across Canada, it led Pierre Trudeau’s federal government to devote enormous energy to constitutional negotiations. Quebec never signed on, and this eventually led to more angst surrounding Meech Lake and Charlottetown. Today, there is much less angst, and we have a strong and smart Quebec Premier who is constructively engaged with the other provinces, discussing issues that matter for all Canadians.

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Budgetary rules strengthen our democracy

BRIAN LEE CROWLEY

To balance or not to balance? That is the question.

In the hoopla surrounding the federal government’s proposed balanced budget legislation, editorialists and others have rightly drawn attention to the need for politicians to have discretion in budgetary matters. This goes to the heart of parliamentary democracy: the ability of the current Parliament to decide what taxes to impose and how to spend the money according to the conditions of the day and then to be answerable for their decisions at election time. From this need for discretion, many of them (including this newspaper’s editorial board) conclude that any fettering of that discretion is wrong in principle.

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India may be the next China, but it remains a difficult place to do business

KEVIN CARMICHAEL

Making money in China was hard at the start of the millennium. It took more than two months to start a company in 2003, compared with two days in Australia. When the World Bank published its inaugural annual ranking of the the easiest countries in which to do business, China was number 91.

How many investors and companies stayed away from what is now the world’s second-biggest economy because it had too many rules and regulations? China’s gross domestic product increased by the equivalent of about $8-trillion (U.S.) between 2004 and 2014, according to the International Monetary Fund. Those who stuck it out put themselves in position to be rewarded handsomely. Those who shied away now are acquainting themselves with the latest previously obscure economic theory to enter the mainstream in North America and Europe: secular stagnation.

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Investment should be the federal budget priority

ANDREW JACKSON

The federal budget to be introduced on April 21 should have one clear priority – to boost public and private investment so as to create jobs now and a more productive and sustainable economy tomorrow.

The slowing Canadian economy continues to be mainly driven by household borrowing fuelled by ultra-low interest rates. With wages stagnant, families are still going deeper into debt to spend more than they earn, setting the stage for a nasty housing crash and a rude shock to family finances down the road.

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The U.S. economy revisited: A southern tailwind for Canada

CLÉMENT GIGNAC

It has been more than 18 months since the last time we used this column to discuss the macroeconomic background of the world’s largest economy, and our main trading partner, the United States. Those who follow us know that we are very optimistic about the strength of the U.S. recovery, which has in fact entered the expansion phase since late 2013. But like in all things, nothing is ever all black or white, so let’s have a look at where we are a quarter into 2015.

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Universities are vital investments for all orders of government

TODD HIRSCH

One of the best spin words used to justify government spending is the word “investment.” It implies that tax dollars are being used for something that will bring future prosperity. The word itself is impervious to criticism. Yet most government spending isn’t really investment at all. It’s just spending on things voters like.

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What the end of the commodity supercycle means for Canada

GLEN HODGSON

It appears more and more likely that the global commodity supercycle has come to an end. While the recent collapse in oil prices has attracted much of the focus, prices for many commodities across the board have softened. These commodities include energy, metals and agricultural products, all of which are important to Canada. No one has a crystal ball but if the commodity supercycle is indeed winding down, Canada will surely be affected.

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