Jeffrey Aho

One of the bigger news items today, if you ignore the swine flu, was that the Pope made an apology for residential school abuse in Canada. This follows apologies from other major players, including the Canadian Government last year. I’m sure this statement is very important to numerous Aboriginal and First Nations persons and their descendants who were subjected to residential schools.

Another story that came to my attention today is that I missed a B.C. Court of Appeal ruling issued 3 weeks ago on the topic of Indian Status (Indian of course used in the legal definition under the Indian Act). I had been tipped off about the McIvor case when it was in the B.C. Supreme Court 2 years ago. The new ruling limits the first one and gives the federal government a year to amend the Indian Act or appeal to the Supreme Court. I see no mention of it on the Indian and Northern Affairs Canada site, so I assume the government is preparing its response. The Globe speculates as to the result (stupid Globe makes you pay after 2 weeks so I am linking to blog spam).

Take for example a status native women who’s parents were both status native, who married a non-native man, who’s status native daughter married a non-native man. As a result of this legislation, it appears that their children, who currently could only register as Metis, could be status native. (This is my reading from the ruling and the Indian Act on eligibility for status – feel free to correct me if I’m wrong) I would presume that there are thousands of cases of Canadians who would now be eligible to be status native.

It is not particularly hard to grant status to these people, but status comes along with numerous social, political, cultural, and economic benefits. Membership in bands would increase and services provided by them would have to receive funding. There would be an impact on reserves. The federal government would be impacted by the numerous economic benefits and services it provides to status natives.

One of the more interesting things would be to address past compensation by the discrimination in the Indian Act. The Act was modified in 1985 and in the 24 years since, an individual could have benefited significantly from native status. For example, if the child of the above situation I mentioned was born in 1986, in the last 23 years that individual did not receive the tax breaks, additional healthcare benefits, hunting and fishing rights, support for post secondary education, and membership in a band (which may have during that time received treaty settlements which they did not share in), to name a few.

I’ve been of the opinion for a long time that the Indian Act and the reserve system is flawed. Maybe over the next year some of these issues can be reviewed and the Indian Act can be amended or superceded.

Hmm…almost 3 months without a post eh? Well, I guess I can write something.

Since I’ve been minoring in Political Science (my actual interest and focus has been Political Economy), I figured I’d throw out some thoughts on the big topic of the day: economic stimulus.

While it seems that the US rushed through a $787 Billion stimulus bill, there is no reason Canada can’t be a little more thoughtful. I realize that there are some bills working their way through Parliament right now, but I’ll lay out some of my thoughts regardless of them. I realize that politically many of these ideas would never fly but I’m going to present them either way so you can consider them.

My economic thought of late can be characterized as New Keynesian – meaning that I am most interested in microfoundations for Keynesian macroeconomics. I have been highly influenced by the Chicago School, in particular Milton Friedman (I highly recommend reading his Capitalism and Freedom). This generally leads to me being in favour of stimulus activities but wary of too much government involvement.

While Canada can remain committed to free trade (we need to avoid a Buy Canadian provision at all costs and resist countering the US), many positive actions are out of our hands, like completing the Doha Round (US, China, and India are holding it up) or floating the Chinese currency. Parliament needs to stand up against protectionist lobbying (an example would be the CAW pushing for Buy Canadian). History has shown that protectionism can only do more harm in a recession.

Previously I’ve talked about not bailing out the Auto companies and having them go through court supervised restructuring. I still continue to support this, though with the US bailing their companies out it looks likely that Canada will follow. Another idea that I like but think might be a little too extreme for Canada, especially right now, would be abolishing our current income tax structure and social assistance programs and replacing it with a Negative Income Tax. It would make things much more efficient but I really can’t see Canada taking such massive reforms.

I’ll split my thoughts into two sections: one for stimulus activities and one for paying for it. I have no problem with running a deficit through a recession but we need to ensure that it doesn’t spiral out of control and that eventually we return to paying down our public debt.

Stimulus:

1) Cut income tax. This will provide more money to working Canadians and help to increase consumer spending. It should be the cornerstone of any government stimulus action.

2) Invest in public infrastructure. A good place always to pump public dollars. An example would be public transit where new buses/trains could be bought and routes expanded to aid low income workers.

3) Provide a tax credit to companies for new equipment. This will encourage efficiency improvements while also hopefully aiding in creating new jobs.

4) Invest in the Canadian Forces. Likely one of the more controversial ideas but I think that for some stimulus activity the military is a good place. There are lots of possibilities for orders for planes, vehicles, and boats as well as other equipment since the military desperately needs them.

5) Cut capital gains tax. This should help to spur investment and kick some life into the struggling markets.

Revenue:

1) Increase the gasoline tax. I’m a fan of consumption and pigovian taxes (including carbon taxes – I’m fine with implementing them too; but not cap and trade), and with gasoline prices falling as well as inflation under control it is a tax where we can see an increase. It also should have a positive effect on climate change as well as secondary effects such as improving congestion. (As a side note, we should never have cut the GST, and if we really need the revenue I’d be open to raising it back to its previous level.)

2) Legalize and tax marijuana. There is no reason that we should continue to push money into fighting this drug use. I’m not encouraging people to use it, but I don’t believe that it is any worse than tobacco. We’ll get some more tax revenue, save on enforcement costs, and maybe even get some added tourism.

3) Cut agricultural subsidies. This is one of those measures that needs to be done selectively and, along with any consumption tax increases, needs to be phased in over time. An example of where to cut would be ethanol corn subsidies. Encouraging ethanol production for fuel use is absurd as there is no environmental benefit when you factor “well-to-wheel” and it drives up food costs.

Well I hope at least this has been a little thought provoking. That’s the best I can hope for. (Oh, and for the penny to be eliminated.)

Currently Listening to: A Dustland Fairytale – The Killers

Random Wikipedia Link: Erd?s?Bacon number

A few follow-ups from my last post:

1) Gates looks like he will remain as Secretary of Defense.

2) More calls for prescription privileges to Pharmascists.

3) An interesting graph comparing the American Big Three with the Japanese Big Three.

4) Bush made a few pardons.

New comments:

1) I have favourable views of the Clinton, Holder, Axelrod, Geithner, Romer, Summers, and Volcker for their respective proposed positions. I feel much better now that Obama won’t do anything drastically protectionist given his team of economic advisers.

2) I like Obama’s civil rights agenda. Please note his approval of the repealing of Don’t Ask, Don’t Tell. It’s a silly policy that loses money and skilled members of the military.

3) I oppose the proposed new Ontario driving laws. At their core, they are blatantly ageist, and at the least should have been based on years of experience than age. Other issues are the negative impacts on car-pooling, and designated drivers. Again, it’s just MADD imposing their neo-prohibitionist and anti-civil liberties agenda on the public through lobbying. Shame on McGuinty. I’ve made known it long ago that I despise MADD, and I discourage anyone from donating to them given their policies and 81% overhead.

4) I oppose the cut to federal party public financing. I have mixed feelings about this though. Generally I despise public campaign funding. It’s absurd to just give out money to just anyone to campaign; you have to be able to produce some level of support, including monetary support. On the other hand, this is an after the election result tied to actual votes. It’s not a blind handout to any wannabee politician out there. It’s been highly advertised and people have factored it into their voting. It’s played a factor in getting people to vote for their party over compromising, and I can appreciate that goal.

The money is actually very little and for a program that I somewhat like. Of course, it will effectively kill the Green Party, who, having made significant gains in popular vote and running candidates in every riding should now be considered a notable federal party. I guess I sort of felt that the incentive helped to fight the paradox of voting. I tend to think this will have a negative effect on voter turn out, which is quickly becoming an issue we need to address.

Chrétien introduced the changes (to which, if I remember correctly, Martin has bashed for crippling the Liberal party) to end corporate and union donations, which I highly favour. I’ll note that I’m a Liberal Party member and supporter and, yes, my party does benefit from this financing. All parties do. Seems to me though like a political power move over relatively no money that disproportionately affects the opposition parties during a time when personal donations will be lower due to the recession.

I’ll defend Harper until my throat is sore over the responsible act of running a federal deficit, but this is a program that shouldn’t be cut. It’s not really pork, but allows for parties to develop new policy, well worth the money in a time when we need to think outside the box to fight this recession. To tie it to a confidence vote would be a political move that I think is petty when the parties should be working together on more inportant topics. Instead of eliminting this spending (be wary of reducing spending at all during recessions), eliminate the penny; that will save some money.

Currently Listening to: Lyin’ Eyes – Eagles

Random Wikipedia Article: Puntland