Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- John Ibbitson reports that the Cons' obvious priorities have finally been made explicit: as far as they're concerned, the sole purpose of international diplomacy is to serve the corporate sector. And Ian Smillie documents how the Cons hijacked Canada's foreign aid program (while signalling that the same path is likely to be followed by the Cons' Australian Liberal allies).

- Meanwhile, CBC uncovers a offshore tax avoidance scheme perpetrated by one of the Cons' hand-picked tax advisers (and chair of the Royal Canadian Mint).

- Rhys Kesselman highlights the fact that contrary to the spin of the corporate sector, a more secure CPP will actually prove a huge boost for younger workers. And the OECD points out why Canada's retirement savings system is in desperate need of improvement:

(A)s (seniors') poverty rates were falling in many OECD countries between 2007 and 2010, in Canada they rose about two percentage points.

As well, the report notes that public (government) transfers to seniors in Canada account for less than 39 per cent of the gross income of Canadian seniors, compared with the OECD average of 59 per cent, meaning more Canadians depend on workplace pensions to bridge the gap.

Meanwhile, public spending on pensions in Canada represents 4.5 per cent of the country's economic output, compared with and OECD average of 7.8 per cent.

Canadian seniors depend on income from private pensions and other capital for about 42 per cent of their total.

"As private pensions are mainly concentrated among workers with higher earnings, the growing importance of private provision in the next decades may lead to higher income inequality among the elderly," the report warns.

"Those facing job insecurity and interrupted careers are also more exposed to the risk of poverty because of the lower amounts they can devote to retirement savings."

- Martin Regg Cohn takes a look at Ontario's economy after a decade of corporate tax slashing - and finds that as usual, the only effect of cutting taxes at the top has been to leave less for everybody else:

Rather than closing a productivity gap with our American competition, Ontario is lagging further behind.

Corporate taxes have been cut to record low levels, yet our companies are sitting on unprecedented stashes of so-called “lazy cash.”

Instead of displaying entrepreneurial zeal to boost exports, our business leaders evince timidity by failing to invest in needed equipment, R&D, software, patents and other productivity tools.
...
Despite the Liberals transforming the tax system into “one of the most business-friendly” in the industrialized world, “businesses have not fully taken advantage of the many incentives that have been created to promote growth.”

Liberals like to claim that Ontario leads in attracting foreign investment, but that boast camouflages the lack of homegrown investment by our domestic businesses. Despite generous tax incentives, spending on machinery and equipment has declined in the past five years (on a per-worker basis, which hurts our productivity). Investment in information technology has nosed up, but at roughly half the American rate. During all this time, Canadian companies have bolstered their cash reserves.

- Finally, Duncan Cameron asks whether the Senate can serve any useful purpose within Canada's system of government. But while he's right to reject the options normally mooted to reform the upper chamber, I'm not sure the possibility that appointment by lot would be an improvement on the status quo (and all other proposed reforms short of abolition) reflects a defence of the Senate so much as the ultimate argument to get rid of it.