Patrick Grady

Global Economics

This paper provides an updated estimate for 2010 for the net fiscal transfer to the recent immigrants who came to Canada between 1985 and 2009. At $5,329 per capita per year, it is significantly lower than the over $6,000 per capita of our earlier estimates. This reflects the Conservative Federal Government’s ambitious efforts to reform immigration...

The Kyoto Clean Development Mechanism (CDM) is the first "global" and largest carbon offset instrument, supplementing national or regional cap and trade systems such as the European Union's Emission Trading Scheme (EU ETS). This paper draws on weekly IDEACarbon survey data from 2008 to 2010 to empirically examine how investor's perception of the CD...

In 2011, we estimated that in 2005 Canada’s immigrant selection policies resulted in an average fiscal burden on taxpayers of $6,000 for each immigrant. Later that year, Mohsen Javdani and Krishna Pendakur from the economics department at Simon Fraser University (J&P hereafter) presented an alternative estimate of this fiscal burden of $450. This s...

This paper examines the need for the parent and grandparent immigration program in Canada and provides critical observations on its objectives and operations and offers empirical estimates on its costs. And, as a contribution to the Government’s recently launched consultations on how to redesign the program to make it more fiscally sustainable, it...

This publication provides an estimate of the fiscal burden created by recent immigration into Canada and proposes reforms to existing immigrant selection policies to eliminate the burden. It uses a 2006 Census database to estimate the average incomes and taxes paid on these by immigrants who arrived in Canada over the period from 1987 to 2004. It a...

This paper examines the performance of the children of immigrants (2 nd generation immigrants) to Canada using data from the 2006 Census. As the composition of immigration inflows has shifted after 1980 from the traditional European source countries to the Third World, the analysis focuses on the labour market performance of 2 nd generation visible...

This paper utilizes the comprehensive data on income taxes paid by immigrants and others and the government transfer payments received by immigrants and others provided by the 2006 Census from income tax statistics. The Census data was recently made available to researchers in the 2006 Census PublicUse Microdata File (PUMF), which contains 844,476...

This paper examines the impact of immigration on labour productivity in Canada. Immigration is a factor that has been largely ignored in the literature on Canadian productivity growth. A simplified growth accounting approach is utilized to estimate the reduction in labour productivity in Canada (as measured by GDP per worker) that can be attributed...

This paper examines the poor performance of recent immigrants to Canada in the labour market as revealed in the Statistics Canada Census 2006 Public Use Microdata File (PUMF). It presents the data which shows that immigrants from less developed countries are doing much worse than immigrants from industrialized countries. Using regression analysis i...

The paper examines the data for Canadian exports to the United States that have been cited as prima facie evidence of a "thickening of the border." It estimates that Canadian exports of goods, excluding energy and forestry products, to the United States have been 12.5 per cent lower than would have been expected based on estimated relationships and...

Canadian prosperity critically depends on the maintenance of an open and secure border between Canada and the United States. Even though the border was reopened quickly following the September 11th attacks, it was not the same as it had been. The new mantra became "security trumps trade" because of US concerns to prevent another terrorist attack. A...

This paper presents some of the economic considerations that should underlie Canadian immigration policy from the point of view of an economist. It then reviews the available data on the performance of recent immigrants against this backdrop. It also offers some observations on the changes in the Immigration and Refugee Protection Act contained in...

Interprovincial trade barriers are a drag on Canadian productivity and send an embarrassing message to international investors. Despite some past progress in reducing them, they remain an irritant to our economic union. Trade liberalization as pursued by Alberta and British Columbia in the TILMA is a model that Ottawa and the provinces should pursu...

The purpose of this paper is to identify the most important knowledge gaps on interprovincial barriers to labour mobility in Canada, and to shed some light on potential conceptual, methodological, and data issues associated with research in this area. Consequently, it provides an overview of the current state of play with respect to the most import...

This paper summarizes the state of knowledge on internal barriers to trade in goods, services and flows of capital, examines their cost to the economy, and presents some options for addressing the important barriers that remain. A companion paper examines barriers to labour mobility in Canada (Grady and Macmillan, 2007). The paper finds that there...

This paper presents the simplest supply-and-demand textbook model of how immigration works in a market economy (Borjas, 1999, pp.89-93). While it may be oversimplified in that it assumes that all labour is homogeneous and that machinery and equipment, land, and other productive resources are fixed and that it ignores any dynamic impact of immigrati...

The Province of Alberta has been a participant in the Tax Collection Agreements (TCAs) with the Federal Government covering the personal income tax since their inception in 1962. Under the terms of this agreement, the Federal Government undertakes to collect the Alberta personal income tax at no charge provided that the Government of Alberta agrees...

Pigovian taxation of externalities has limited appeal if the tortfeaser has insufficient resources to pay the damage when it occurs. To defend Pigovian taxation in the presence of judgement-proof agents, its proponents point at the many institutions extending liability to third parties. Yet little is known about the validity of Pigou's analysis in...

Festschrift literally means “celebration-writing” in German. And that is what this volume is. It celebrates the remarkable career of David Slater, which in the best Queen’s University tradition of John Deutsch and Clifford Clark spanned academia and public service, on the occasion of his 80th birthday. It follows an old academic tradition that at a...

Preface / Rt. Hon. Joe Clark Acknowledgments Acronyms Introduction: Changing Perspectives on Regionalism and Multilateralism / Donald Barry and Ronald C. Keith Part 1: Regionalism, Globalism, and the State 1. A Matter of Synergy: The Role of Regional Agreements in the Multilateral Trading Order / Michael Hart 2. Regionalism and the Evolving Global...

This book is a comprehensive guide to the Millennium Round of multilateral trade negotiations which will be launched at the Third WTO Ministerial Meeting in Seattle in early December 1999. It deals in a readable way with the many difficult and controversial issues that will arise during the planned three-year negotiations. These include: the new tr...

This paper was commissioned by the APEC Working Group on Fisheries to examine the economic impact of eliminating tariffs on fish and fish products in APEC economies. Chapter II provides a qualitative assessment of the impacts of liberalization of fisheries trade drawing on the available data and economic theory. Chapter III presents specific quanti...

On the cusp of the millennium and as the century that was supposed to belong to Canada draws to a close, we find ourselves as a medium-sized nation exercising an influence out of all proportion to our size. This special issue on Canada in the Global Economy gives us a chance to sum up where we have been and look forward to where we might be oing. A...

The drop in the share of interprovincial exports in GDP can be fully explained by several factors: the reductions in Canadian tariffs that have opened up the domestic market to foreign competition; the slower growth of that market compared with the U.S.; and relatively low increases in the prices of goods traded interprovincially. Those concerned a...

This paper uses Statistics Canada's Social Policy Simulation Database and Model to provide estimates of the cumulative magnitude and distributional impact in 1993 of the tax increases introduced by the NDP government in Ontario in their three budgets after coming to office in 1990. It finds that the Ontario NDP tax changes have increased the tax bu...

In this paper it is argued that a sovereign Quebec would be unable to continue using the Canadian dollar as its currency. Companies with large investments in Quebec should thus anticipate that if Quebec separates , a lasting monetary union with Canada would be practically impossible.

This paper uses Statistics Canada's Social Policy Simulation Database and Model to provide estimates of the cumulative magnitude and distributional impact in 1993 of the tax increases introduced by the NDP government in Ontario in their three budgets after coming to office in 1990. It finds that the Ontario NDP tax changes have increased the tax bu...

This article presents my response to methodological questions about the incidence and impact of the Canadian Goods and Services Tax raised by W. Irwin Gillespie.

This paper, which draws on the author's book "The Economic Consequences of Quebec Sovereignty," examines the thorny issue of how the existing Canadian federal debt might be redistributed in the event that Quebec were to become a sovereign nation. Debt division would be at best a "zero sum" game with any gains experienced by one party coming at the...

This article reports on the results of an analysis of the distributional impact in 1990 of the federal tax and transfer changes introduced by the Canadian government from the time of its election in 1984 through the announcement of its February 1990 budget. The analysis uses Statistics Canada's Social Policy Simulation Database and Model (SPSD/M)....

This paper uses Statistics Canada's Social Policy Simulation Database and Model to provide estimates of the cumulative magnitude and distributional impact in 1993 of the tax increases introduced by the NDP government in Ontario in their three budgets after coming to office in 1990. It finds that the Ontario NDP tax changes have increased the tax bu...

Agriculture Canada is concerned about the funding of agricultural programs as the number of shared-cost federal-provincial programs increase and requests from provinces for special assistance proliferate. Many of these requests are justified on the basis that the provinces do not have the ability to pay or the widespread extent of the problem. This...

Daub discusses both the rationale for the practice of forecasting and the methods commonly used, and traces the history of aggregate economic forecasting in Canada, examining the structure, conduct, and performance of the present forecasting "industry," particularly the nature of demand and supply, pricing and promotion considerations, and profits...

Both Canada and the United States have recently undertaken comprehensive reforms of their tax systems. In the case of the corporate tax, the main thrust of the reforms has been to lower tax rates,broaden the tax base, and curtail or eliminate incentives such as investment tax credits. This article examines the significance for Canada of the corpora...

Estimates of economic activity generated and jobs created that are derived using input-output analysis are often presented in program evaluations and confused with the benefits resultin g from die program. Two such cases are presented as examples. We argue that for two main reasons this type of analysis con stitutes a misuse of input-output analysi...

Both Canada and the United States have recently undertaken comprehensive reforms of their tax systems. In the case of the corporate tax, the main thrust of the reforms has been to lower tax rates,broaden the tax base, and curtail or eliminate incentives such as investment tax credits. This article examines the significance for Canada of the corpora...

This paper discusses the Canadian experience in the early 1980s with tax incentives for R&D.It presents some issues concerning the efficiency and cost effectiveness of the various government tax incentives in stimulating R&D.

The Department of Finance employs extensively a large macroeconomic model of the Canadian economy -- the QFS model(Quarterly Forecasting and Simulation Model) -- for economic and fiscal forecasting and simulation exercises. As with any large macroeconomic model, and particularly one that plays a role in the public policy debate, there is an on-goin...

Both Canada and the United States have recently undertaken comprehensive reforms of their tax systems. In the case of the corporate tax, the main thrust of the reforms has been to lower tax rates,broaden the tax base, and curtail or eliminate incentives such as investment tax credits. This article examines the significance for Canada of the corpora...

This paper presents a simple macroeconomic model that includes all of the main channels of transmission for fiscal policy and that can generate either Keynesian or monetarist results for the impact of fiscal policy depending on the values assumed for particular parameters. The structure of this model, called KEMO for KEynesian-MOnetarist, was kept...

This paper provides an interpretive synopsis of the results of a conference on inflation-induced distortions in financial reporting and taxation held in October 1981 at the height of the post-war inflation. It provides analysis of the magnitudes of the likely distortions in reporting and taxation in Canada and other countries and discusses proposal...

The debate between keynesians and monetarists on the effectiveness of fiscal policy has been going for quite a long time, and all efforts to resolve it have met with little success. While everyone would agree that the controversy can only be resolved on empirical grounds, there is no agreement among the two schools as to what constitutes an appropr...

Some macroeconomic effects of tax reform and indexing. In this paper we present a model of the Canadian personal income tax incorporating the 1972 tax reform and indexing. After simulating this model both alone and as part of RDX2 we draw four conclusions concerning macroeconomic effects of these measures: 1/tax reform altered neither the yield nor...

In an article in the American Economic Review, Jonathan R. Kesselman, Samuel H. Williamson and Ernst R. Berndt presented a Table showing the effect of substituting a marginal employment tax credit (METC)for the investment tax credit (ITC) over the 1962 to 1971 period. Their METC was defined in terms of a rate times the increase in the wage bi11 ove...

Festschrift literally means “celebration-writing” in German. And that is what this volume is. It celebrates the remarkable career of David Slater, which in the best Queen’s University tradition of John Deutsch and Clifford Clark spanned academia and public service, on the occasion of his 80th birthday. It follows an old academic tradition that at a...

Le recensement du Canada de 2001 a révélé que les nouveaux immigrants à Canada, surtout ceux qui ont arrivé depuis 1990, n'ont pas eu les bonnes expériences en la marché du travail et ont augmenté le nombre des ceux au dessous du seuil de faible revenu de Statistique Canada, lequel fonctionne comme un indicateur de la pauvreté au Canada. C'est bien...

This paper is focused on a specific reform strategy - the Guaranteed Annual Income (GAI).It addresses an age-old issue of social welfare programming in a market economy. How do we maintain an incentive to work yet provide a safety net for those shaken loose by large-scale yet seemingly continuous change? Why participate in a losing cause if the con...

This paper examines the evidence on the economic impact on Canada of complying with its commitment to reduce Greenhouse Gases by 6 per cent from 1990 levels under the Kyoto Protocol. It concludes that this would be extremely burdensome given the diverging trends of GHG emissions and the targets. And it notes that Canada may have no option other tha...

This paper discusses the performance of recent immigrants in Canada's labour market and reviews some of the literature on the causes of their poor performance. The paper concludes that, using the existing selection system, it is not possible to admit annually as many as 250,000 immigrants who are capable of doing well in the Canadian labour market,...

Ministries of Economy (MoEs) in the transitional economies of the Former Soviet Union have been given the responsibility for economic forecasting. They have usually been created out of Ministries of Planning (MoPs). The required transformation from planning to forecasting, which requires a fundamental change in mindset and approaches, is discussed...

The purpose of this paper is to provide background on the trade-off between inflation and unemployment to assist the Commission of Inquiry on Unemployment Insurance in the preparation of its report. The main issues from the point of view of the Commission are the existence of a trade-off between inflation and unemployment and the effects of Unemplo...

This paper considers the meaning of full employment and attempts to gauge the appropriate level of "sustainable" full employment. The second section of the paper reviews the various theories of employment that have been applied to gain an understanding of the concept of full employment. The starting point is the classical theory of a perfectly func...

This paper reviews the issues that would arise if Quebec were to separate from Canada. It also presents quantitative estimates of the likely orders of magnitude of their economic impact both on Quebec and the Rest of Canada. Its overall conclusion is that Quebec would be much harder hit than the rest of Canada if Quebec separates. Real output in Qu...