Academic journal article British Journal of Canadian Studies

Tax Reform in Canada: Our Path to Greater Prosperity

Academic journal article British Journal of Canadian Studies

Tax Reform in Canada: Our Path to Greater Prosperity

Article excerpt

Herbert G. Grubel (ed.), Tax Reform in Canada: Our Path to Greater Prosperity (Vancouver: The Fraser Institute, 2003), xi + 262pp. Paper. ISBN 0-8897- 5199-4.

First delivered as papers at a 2001 Toronto Conference, this collection examines how tax reform might result in more productive resource use, and stimulate Canadian growth. Brendan Walsh's evaluation of tax reform's contribution to Irish growth in the 1990s provides the single non-Canadian contribution. Although Ireland applied low rates of tax on internationally traded corporate activities from the 1960s onwards, the late 1980s saw no dramatic fiscal changes that might have triggered the subsequent boom. Walsh concludes 'the rapid decline in the rate of tax to gdp during the 1990s was primarily a reflection of the large inflow of fci and exceptional growth of gdp rather than vice versa' (p. 226). Nevertheless many of the remaining nine contributions regard lower taxes as the key to raising Canada's economic performance, although some offer more sophisticated insights.

Bev Dahlby assesses the gains arising from greater reliance on indirect taxes. His simple endogenous growth model links higher savings ratios prompted by such a shift to additional investment in human capital, gains in labour productivity and improved economic performance. Poschmann and Robson examine the desirability of increased tax competition between Canadian provinces, a topic of growing interest to a post-devolutionary United Kingdom. …

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