AIMS On-Line for July 2002
Here is what's new at AIMS, Atlantic Canada's Public Policy Think Tank
Sucking The Well Dry
Competition or protection? Although oil and gas production off the East Coast is booming, Atlantic Canadians fear that our resource will be sold off and we will have far too little to show for it. Dr. Thomas Tucker, AIMS Fellow in Natural Resource Policy, emphasizes how government policy designed to ensure this region gets its “fair share” of economic activity generated by the offshore, often has the opposite effect. The debate about how to maximize our O&G related activity really comes down to a basic question: Should we be given a major share of economic benefits that the oil and gas industry can produce without earning them? The way we answer that question will shape the oil and gas industry on the East Coast for years to come, and Tucker’s article invites us to choose wisely, understanding the long term nature of the O&G industry, and the proper benchmarks for measuring this region’s success in getting maximum benefit from our resources. Publication: ABM, June/July 2002
NF gasoline price regulation no boon for consumers
According to former AIMS Director of Communications, Peter Fenwick, the gasoline price regulation scheme now before the Newfoundland House of Assembly is far worse than the disease it is supposed to cure. Here is an extract from his article: "Given the historic opposition of the government to imposing gas regulation it is clear that this is a smoke screen designed to curry political favour, and to obscure the role taxes play in keeping oil prices high. The legislation is designed to reduce criticism rather than oil prices. When [Minister] Matthews introduced the bill he said 'So, on the basis of the lack of confidence... by the people of the Province, and on the basis of the... representations that all of us have had from the general public,... it is appropriate to bring in a petroleum products regulatory regime...'" "Nowhere does he say that it is a good idea."
Equalization Reform
In this CBC Radio interview, AIMS’ author Kenneth J. Boessenkool discusses equalization’s design flaws and its negative impact on Newfoundland and Labrador. The author of AIMS’ new report, “Taxing Incentives: How Equalization Distorts Tax Policy in Recipient Provinces”, explains how equalization’s methodology creates incentives for Newfoundland, and other recipient provinces, to overtax their population. Because of the way the payments are currently being calculated, personal income taxes are about a quarter higher in Newfoundland than Ontario. Boessenkool also reminds listeners of the message from one of his earlier AIMS’ papers - Taking off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada. Inappropriate inclusion of non-renewable natural resources (for example the mineral deposits of Voisey’s Bay) in the equalization equation, hampers the development and realization of the full potential of those resources.
New Institute paper argues Canadian aquaculture drowning in regulation
Federal-provincial regulatory environment for aquaculture dysfunctional
Equalization: the help that hurts
Amplifying the theme of AIMS latest report on equalization “Taxing Incentives: How Equalization Distorts Tax Policy in Recipient Provinces”, author Kenneth J. Boessenkool discusses the damaging effects of the federal programme on the citizens it is trying to help. After comparing the levels of various taxes in both recipient and non-recipient provinces, Boessenkool clearly illustrates not only that equalization encourages poorer provinces to keep taxes on their population too high, but also that the bigger the province the stronger the incentives to do so. Of particular interest is the fact that the highest tax rates in recipient provinces tend to be on personal income and, to a slightly lesser extent, taxes on consumption. In other words, the perverse effects seem to be showing themselves most strongly via taxes on people. Publication: NP, June 25, 2002