MLI Newsletter
Vol. V, No. 10
Nov. 7, 2014






Northern Light: Lessons for America from Canada's Fiscal Fix


The Canadian Century 



Fearful Symmetry   






Stay in the know






In this edition...
Economy: MLI report shows carbon tax not necessarily a win-win
Justice: Prostitution law can work, but needs additional resources, Perrin says
Trade: Crowley calls on Ottawa to take the lead on internal trade
MLI in the media: Authors comment on terror attack in Canada's capital
Aboriginal peoples: Discussion on the natural resources economy comes to Vancouver
Business: Time for cities to embrace disruptive taxi app Uber, Crowley says
Events: MLI co-hosts discussion on the Trans-Pacific Partnership
Fiscal policy: Austerity always catches up with big-spending politicians, Cross says
Other MLI news

MLI Report: Carbon tax win-win likely doomed to defeat

In a paper released by the Macdonald-Laurier Institute, economist Robert P. Murphy challenges the common notion that a carbon tax would be beneficial to the economy as well as the environment, if the revenues were used to make a coinciding reduction in pre-existing taxes.

Tax "bads" (environmental pollution), not "goods" (investment and wages), we have been told by academics and policy-makers on both sides of the ideological spectrum, and we will benefit from both greenhouse gas reductions and improved economic growth. Unfortunately the truth is not that simple.

"Conservatives and liberals uniting behind a revenue-neutral carbon tax swap are fooling themselves if they believe a politically realistic deal will give them both what they want", writes Murphy in the paper titled "The Carbon Tax Win-Win: Too Good to be True?"



Federal legislation that rightly targets johns and pimps instead of prostitutes could well withstand a constitutional challenge as long as key steps are taken to help women exit prostitution, a new commentary from the Macdonald-Laurier Institute finds. This is despite much public commentary asserting the legislation is fatally flawed.

Benjamin Perrin, a University of British Columbia law professor who has extensively studied human trafficking, says those who favour a different approach - such as decriminalization or even outright legalization - are unlikely to find success in striking down the law in the courts.

The MLI commentary, titled "How to Make Canada's New Prostitution Laws Work", finds that the new law is better designed than the one the Supreme Court struck down in 2013.

Perrin also authored an op-ed on the subject for the Globe and Mail.



MLI Commentary by Brian Lee Crowley: Reducing internal trade barriers up to Ottawa

Internal trade barriers will continue to impede the free flow of goods in Canada until Ottawa steps in to get tough with the provinces, Macdonald-Laurier Institute Managing Director Brian Lee Crowley said in a new commentary.

Provincial governments have repeatedly demonstrated they are unwilling to dismantle the protectionist rules and regulations that prevent the free movement of goods and services across borders.

Fixing an exact cost to the economy of these barriers is difficult, said Crowley. What's clear, however, is that they unfairly disrupt Canadians' right to opportunity everywhere within our borders - one of the central reasons for creating the country in the first place.


The Macdonald-Laurier Institute provided context and analysis on the terrorist attacks that killed one member of the Canadian Forces in Ottawa and another in St-Jean-sur-Richelieu, Quebec in October.

Writing in the Ottawa Citizen, Macdonald-Laurier Institute Managing Director Brian Lee Crowley said the attacks are a reminder that we are still not immune from the scourge of treason.

Crowley argued that the events, which resulted in the death of Cpl. Nathan Cirillo in front of the War Memorial in Ottawa and Warrant Officer Patrice Vincent in Quebec, show that "a tiny disloyal minority" continue to reject the freedoms for which Canada stands.

In the Globe and Mail, Macdonald-Laurier Institute Senior Fellow Benjamin Perrin wrote that the attacks not mean the government should allocate more powers for countering lone wolf terrorism.

Rather, Perrin argued, the government already has all the tools it needs.

Perrin also spoke to the national CBC Radio One program As It Happens about the issue.

MLI author Christian Leuprecht, meanwhile, talked to the Saskatoon Star-Phoenix and the Australian Broadcasting Corporation.


MLI Dinner Series: Aboriginal people and the natural resource economy in Vancouver

British Columbia's economic future hinges on the appropriate and well managed development of the province's abundant natural resource potential.  Over the past thirty years, First Nations in the province have led Canada -- and the world -- in defining the extent and nature of Aboriginal land and resource rights.  Ensuring appropriate Aboriginal participation in the resource sector is urgently required if the province hopes to retain its vibrant and expanding economic base.

The Macdonald-Laurier Institute invites you to get involved in an informative and engaging evening spent addressing the most vital issues affecting Canadian policy today. The Macdonald-Laurier Institute Dinner Series will bring together prominent leaders from the Aboriginal business community, industry, government and First Nations for networking and a reasoned but lively discussion exploring common interests in developing Canada's vast natural resource potential.

The first event in our dinner series takes place in Vancouver on January 28, 2015.




Writing in the Ottawa Citizen, Macdonald-Laurier Institute Managing Director Brian Lee Crowley said that mobile taxi app Uber is forcing municipalities like the City of Ottawa to confront their backwards cab licensing systems.

Ottawa has steadfastly resisted Uber's recent expansion to the Nation's Capital, but Crowley said the new service is making cab companies redundant and out-of-date.



Ottawa's business, trade and diplomatic community came together on Thursday Oct. 30 for an MLI breakfast event to discuss new prospects for the Trans-Pacific Partnership. The event, hosted by the Macdonald-Laurier Institute in co-operation with Dawson Strategic and the Taipei Economic and Cultural Office in Ottawa, was an opportunity for attendees to hear from top experts on some of Canada's most important trade opportunities.

With TPP negotiations continuing in Australia, New Zealand High Commissioner Simon Tucker told a full room at the Rideau Club that he could sense that "momentum has tipped upward". He continued to say that the "TPP will grow over time, and Canada's trade opportunities will grow with it".

MLI Managing Director Brian Lee Crowley, in a column for the Globe and Mail, argued that if United States president Barack Obama wants to benefit from finalizing the Trans-Pacific Partnership he will need Trade Promotion Authority.



Writing in the Financial Post, Macdonald-Laurier Institute Senior Fellow Philip Cross argued that big-spending politicians can promise all they want -- eventually, fiscal reality catches up with them.

From former U.S. president Bill Clinton to French socialist Francois Mitterand, history is littered with politicians forced to rein in spending after campaigning on a break with austerity. 
"Fiscal reality trumps utopian ideology every time", wrote Cross.

Other MLI news

Watts presents MLI research on health care at Toronto event


Lawyer Michael Watts delivered a talk about research he conducted for the Macdonald-Laurier Institute on how to improve Canada's ailing health care system.

The event, organized by the law firm Osler, Hoskin & Harcourt LLP, took place on Tuesday, Nov. 4 starting at 5 p.m. at the Metro Toronto Convention Centre.

It was designed to bring together those from Ontario hospitals to get them thinking about ways to create enhanced and more efficient services in health care.

In 2013 Watts released a paper written for MLI about how Canadian governments can achieve reforms to health care while working within the parameters of the Canada Health Act.



MLI authors: Government move on credit cards won't benefit consumers or small business


Government interference in credit cards will only increase fees for those who use them, restrict access to people from lower-income brackets and create minimal to no benefit for small merchants, according to an analysis by the Macdonald-Laurier Institute.

The federal government has announced a voluntary agreement with banks and credit card companies to reduce interchange fees charged to retailers and service providers.

Controlling the price merchants pay to accept credit cards as a form of payment is designed to lower costs for consumers. The argument goes that merchants will pass these savings onto their customers in the form of lower prices. The problem, says a 2013 MLI report on the subject, is that this isn't how it works out in practice. "Credit Where It's Due: How payment cards benefit Canadian merchants and consumers and how regulation can harm them" found that price controls cost consumers, particularly lower income consumers, and help only large merchants.

One of the report's co-authors, Carleton University business professor Ian Lee, spoke to Global News and the Toronto Star about the newly-announced agreement.



Government regulation leaves companies vulnerable to disruption: Crowley in the Globe

Writing in the Globe and Mail, Macdonald-Laurier Institute Managing Director Brian Lee Crowley warned that too much government regulation makes companies complacent about threats of disruption from competitors.

This insulation lulls successful companies into a false sense of security that leads to crucial strategic mistakes, he said.

"Every deviation from this relentless focus on what customers actually want makes your market a tasty morsel for the disruptors and crony capitalism accompanied by regulatory capture cannot and will not save you", Crowley wrote.

Watch: Cross talks September employment numbers on CTV's Power Play


Philip Cross appeared on CTV's Power Play earlier this month to discuss the September employment numbers Statistics Canada produced.

The agency reported that the unemployment rate fell to 6.8 per cent, the lowest such figure recorded in close to six years.

Cross said it would be unwise to read too much into month-over-month swings in that figure but said the unemployment rate is starting to reflect other indicators designed to take the temperature of the economy.



Leuprecht discusses Beyond the Border delay with Yahoo


Macdonald-Laurier Institute author Christian Leuprecht spoke with Yahoo News about a delay in implementing the Beyond the Border initiative between Canada and the United States.

The Canadian Press reported in October that Canadian and U.S. negotiators missed a July 30 deadline on one of the provisions in the deal related to sharing information about potential terrorists.

The Beyond the Border deal is designed to make it easier for people and goods to flow from Canada and the United States by adopting common security standards between the two countries.


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