Friday, May 27, 2022
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Justice
      • Social issues
      • Social licence
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Justice
      • Social issues
      • Social licence
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

MLI Report: Government controls nearly two-thirds of the Canadian economy

May 29, 2014
in Domestic Policy Program, Economic policy, Economy Policy - papers, Latest News, Papers, Releases
Reading Time: 3 mins read
A A

Study by senior fellow Philip Cross on the extent of regulation in the economy follows work by former StatsCan chief statistician Munir Sheikh on tax expenditures. Together they reveal the true size of government in Canada for the first time.

OTTAWA, May 29, 2014 – The Macdonald-Laurier Institute has revealed for the first time the true size of government in Canada, with two studies finding that government controls nearly two-thirds of the economy, significantly higher than traditional measures suggest.

The second report, by MLI Senior Fellow Philip Cross, titled “Estimating the True Size of Government: Adjusting for regulation”, is released today. It calculates that 10.5 percent of the Canadian economy is subject to regulatory control.

This builds on an MLI report earlier this year, authored by former StatsCan chief statistician Munir Sheikh, that shows adding tax expenditures – measures that allow people to pay less in taxes if they adopt certain behaviours – to spending grows the size of government by 10.1 percent of GDP.

The most common measure of the size of government is program spending as a portion of GDP, which is around 44 percent. Add in tax expenditures and regulation, which accomplish government goals by other means but still have a major impact on the economy, and you arrive at a figure for government control of all spending of over 64 percent of GDP.

Getting a handle on the true size of government is important, says Cross, because regulation stifles growth, depresses productivity, raises prices for consumers and lowers living standards.

“A government truly committed to helping consumers would turn a critical eye to regulations designed to protect industries such as culture and finance where globalization and the Internet are already undermining the monopoly of traditional domestic suppliers”, Cross writes.

Cross’s definition leaves aside certain regulations, such as those covering the health and safety of workers or laws that protect the environment, because those restrictions apply equally to all businesses and don’t restrict pricing or competition.

Instead he chooses to look at regulations that affect supply or demand in an industry by significantly altering prices or the quantities of what is produced. Common examples include restricting foreign-owned firms from entering the banking or telecommunications industries or creating government-owned monopolies for utilities or postal delivery.

“Both tax expenditures and regulation allow governments to achieve policy goals without directly spending money”, Cross writes. “As such, with so many governments struggling to control their debt and deficits, there is the temptation for governments to use tax expenditures or regulations as a way to exert control over the economy while minimizing government spending”.

That would not be good news for the economy, Cross says. His report finds regulation exists mostly in the industries, such as agriculture, communications, finance, and utilities, which have a long history of government involvement.

“That the rationales for regulation in key industries are long-standing is a major problem for the future of regulation”, he says. “Justifications that were valid decades ago may no longer apply, particularly given the pace of technological change”.

Cross, a former StatsCan chief economic analyst, says the research is designed to fulfill a similar role to work previously done by Statistics Canada – which has been discontinued for more than 20 years – that measured the impact of regulation on consumer prices. He hopes it will kick-start more research that fine-tunes the results and delves further into the past to trace the impact of regulation in Canada over time.

“In the 21st century, where adaptability to rapid change is paramount, regulation increasingly seems a quaint relic of the 20th century”, Cross writes.

# # #

Philip Cross is a senior fellow with the Macdonald-Laurier Institute. He spent 36 years with Statistics Canada and in 2008 was appointed the department’s chief economic analyst.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

For more information, please contact Mark Brownlee, communications manager, at 613-482-8327 x. 105 or email at mark.brownlee@macdonaldlaurier.ca. On Twitter @MLInstitute

Blog post image courtesy of Thompson Rivers University Flickr page.

Previous Post

Nazareth in iPolitics: Weak temporary foreign worker program hurts the economy

Next Post

Cross in the Globe: Government regulation often not in the consumer’s interest

Related Posts

Photo by Clark H, via Flickr.
Foreign Policy Program

Canada must boost its security apparatus against China and Russia: Charles Burton in the Ottawa Citizen

May 26, 2022
Elites’ attacks on Pierre Poilievre only make him stronger: Aaron Wudrick in the National Post
Domestic Policy Program

Elites’ attacks on Pierre Poilievre only make him stronger: Aaron Wudrick in the National Post

May 26, 2022
An age of global realignments: The Indo-Pacific
Indo-Pacific

Modern lessons for Canada’s Indo-Pacific strategy: Andrew Erskine for Inside Policy

May 25, 2022
Next Post
Philip Cross

Cross in the Globe: Government regulation often not in the consumer’s interest

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

First Name
Last Name
Email Address

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Justice
      • Social issues
      • Social licence
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.

IDEAS CHANGE THE WORLD!Have the latest Canadian thought leadership delivered straight to your inbox.
First Name
Last Name
Email address

No thanks, I’m not interested.