Alberta Budget Post-Mortem: Fiscal Stewards, My Great Aunt’s Arse

I was invited by the Economic Society of Northern Alberta to participate in a panel discussion providing a post-mortem analysis of the 2022 Alberta Budget. I was given 7 minutes to give comments and I reproduce them below for you. My main message is that the Alberta UCP are not the fiscal stewards they present themselves to be and this is a really disappointing budget, particularly from a fiscal and economic lens that is informed by recent thinking, learners, and evidence.

I will give some high-level comments about the budget, aspects which I think everyone probably already has a good handle on but probably with a bit of a twist. I am known for my twists!

Before I start I would like to take this opportunity to acknowledge the traditional territories of the people of the Treaty 7 region in Southern Alberta. The City of Calgary is also home to Métis Nation of Alberta, Region 3.

I boil down my main comments into four specific areas that consecutively build on the one before.

First, there is no evidence in this budget that the Alberta UCP government are savvy fiscal stewards whose actions and policies have directly led to the fiscal bottom line reported in this budget. It is well known by now that the government has booked a surplus of about $511 million, which will likely be much larger by year-end. What has changed over the dire message in previous budgets?

Resource royalties have recovered significantly, projected to be ~$12B in Budget 2022 based on $70/barrel oil (WTI, which today is trading around $110/barrel). Two years ago, OPEC+ was in a supply war, now we are in a real war, both driven by the actions of Russia. While the price of oil is currently expected to remain high for a while, if not a few years, balancing a budget on these volatile revenues is precisely the reason why Alberta has weathered boom and bust cycles directly through its budget. When oil is down, Alberta gets out its pruning sheers, when oil is up, it is Ralph Bucks for everyone. But I learned about a saying that you have here in Alberta: “Please God give me one more oil boom and I promise not to piss it away this time”. Well, sorry, but Alberta is pissing away this possibly last oil boom. There is nothing in this budget that gets the province off the resource royalty roller coaster and that means that no, the hard work has not been done. There is also nothing in the budget for abandoned oil and gas well clean-up or for the missing payments to landowners or unpaid property taxes in rural Alberta municipalities (now totally $253M).

But while that is well known, another aspect that led directly to the strong reported fiscal position in Alberta was due to fiscal transfers from the federal government of nearly $12B and additional large investment in ECE in the province, an amount that rises to nearly $1B a year over the course of the agreement. While Alberta often talks about how it does not get its fair share, we know it also left money on the table for COVID supports. Further, it was the federal government that did the real heavy lifting in terms of supporting Albertans through the pandemic, not the province.

Second, the budget presents government spending and debt in a way that suggests there is no benefit from either and that all spending that adds to debt is wholly bad. This ignores the fact that there are clear economic rationales for spreading out the cost of spending across time periods and even across generations. This is because benefits can, and often are, felt across time and generations. Imagine thinking that the COVID-19 debt and spending should only be borne by current taxpayers and not thinking about how those policies and spending have benefited those who are not yet taxpayers. Our policies were, or at least should have been, focused on saving lives and preventing long-term disabilities. Those are benefits that are shared across time and generations. So in thinking about fiscal policy from an intersectional perspective, you begin to see the real concerns with failing to appreciate where the costs and benefits accrue and how to form fiscal policy with that understanding in hand.

Third, and building on this comment is thinking about how the usual fiscal anchors and guardrails fail to truly appreciate the role of government in society. It is not that I am arguing against thinking about parameters that help guide spending and investments, it is more that the fiscal anchors and guides being employed by Alberta are the usual ones, dating back decades. This means that there is no consideration about the value of the spending. That is, the metrics lump all spending together and just assume that spending is spending is spending and that all cuts are equal. What this ignores is the marginal value of public funds. While some people seem to think this is true, public funds are not set on fire. They are used to engage in valuable projects, programs, investments, and supports. But there are programs that generate more value than others and many might be surprised to learn that some of the highest value of spending is in the field of programs that benefit children, including supports to parents of kids that have long-term intergenerational benefits. We often fail to consider the long-term stream of intergenerational benefits of specific programs, thinking all that matters is next year’s GDP growth.  

Finally, and bringing this all together, the budget is based on a view of fiscal and economic policy that is very dated, lacks inclusion, and fails to think beyond the three-year budget horizon. It fails to consider any measures of well-being in addition to the usual narrow economic metrics. The point of government, of society, is to improve well-being. Historically we have used narrow economic indicators assuming these translate into well-being but the translation is imperfect and incomplete. Without expanding our understanding and measures of well-being we continue to include the usual in our policies and continue to exclude everyone else from our policies and our economy.  

The COVID-19 pandemic has served as a watershed moment, hoisting to the top of priority lists the demand that we do better to ensure that public policy works for the many, rather than the few. We’re hopeful for not only a fair recovery, but also the chance at a bigger shift towards a more just society. We require a modernized approach to public policy to address longstanding policy failures. This budget does not reflect this, at all.

Challenging the Alberta Government’s rhetoric on Early Childhood Education and Child Care

Things are heating up in Alberta about the lack of a deal with the federal government on the billions available to support building a more comprehensive system of Early Childhood Education (this phrase matters) and child care in the province. Not only is the Minister of Children’s Services pushing out inflammatory tweets, but so are the Issues Managers (which I am told are called TheMatts). While I’ve been talking about ECE and child care for ages and ages, even before the pandemic, I caught the attention of the Jasons Kenneth and TheMatts last night. For those of you outside Alberta, TheMatts are sent out to discredit the reputation of the person tweeting facts they disagree with, not to actually discredit the facts. Yes, Alberta is a special place.

Let’s get into our TARDIS (don’t worry, it is bigger on the inside) and go back in time to Ottawa. The day is 23 September 2020. It is Speech From the Throne (SFT) day in Ottawa. Big day for anyone who follows policy. This is when the government of the day lays out its vision for the sitting. Usually these things spend a lot of time on what the government has already done and you have to really know your stuff to understand what is the new stuff. But this SFT had a section in it that made women across Canada sit up and pay attention. It is on page 13, and reads as following:

Women – and in particular low-income women – have been hit hardest by COVID-19. This crisis has been described as a she-cession.

Many women have bravely served on the frontlines of this crisis, in our communities or by shouldering the burden of unpaid care work at home.

We must not let the legacy of the pandemic be one of rolling back the clock on women’s participation in the workforce, nor one of backtracking on the social and political gains women and allies have fought so hard to secure.

The Government will create an Action Plan for Women in the Economy to help more women get back into the workforce and to ensure a feminist, intersectional response to this pandemic and recovery. This Plan will be guided by a task force of experts whose diverse voices will power a whole-of-government approach.

It has been nearly 50 years since the Royal Commission on the Status of Women outlined the necessity of child care services for women’s social and economic equality. We have long understood that Canada cannot succeed if half of the population is held back. Canadians need more accessible, affordable, inclusive, and high quality childcare.

Recognizing the urgency of this challenge, the Government will make a significant, long-term, sustained investment to create a Canada-wide early learning and childcare system.

The Government will build on previous investments, learn from the model that already exists in Quebec, and work with all provinces and territories to ensure that high-quality care is accessible to all.

There is broad consensus from all parts of society, including business and labour leaders, that the time is now.

The Government also remains committed to subsidizing before- and after-school program costs. With the way that this pandemic has affected parents and families, flexible care options for primary school children are more important than ever.

Here we have, in September 2020, the clear commitment to affordable, accessible, and high quality Early Childhood Education and child care that will be modeled after the program that already exists in Quebec.

Now let’s get back into our TARDIS and go forward in time to 20 November 2020. This is the date that the federal government tabled their Fall Economic Statement. Here we get even more details on pages iv-v and 76-79. This says

Investing in accessible, high-quality, affordable and inclusive child care is not only good for families, it makes good
economic sense. It gives children a good start in life and gives parents, especially mothers, the support they need to
maintain good jobs and provide for their families. In Quebec, where the provincial government has been investing
in high-quality accessible child care for over two decades, maternal labour force participation rates were 5 to 9
percentage points higher than in the rest of Canada in 2019. In particular, Quebec women with children under 3
have some of the highest employment rates in the world. Not only do good jobs help families individually, but
increased maternal labour force participation is good for economic growth and increases GDP per capita. Just as
Saskatchewan once showed Canada the way on health care and British Columbia showed Canada the way on
pricing pollution, Quebec can show us the way on child care.

There again, we have the commitment of a focus on affordable, accessible, high quality ECE and child care where Quebec shows us the way. It also notes that even further details will be laid out in Budget 2021.

Let’s get back into our TARDIS and go forward in time again to 19 April 2021. This is the day we got our budget. The commitment spans the pages of 97-105. Now a lot of details were in that budget and here they are below:

The federal government will work with provincial, territorial, and Indigenous partners to build a Canada-wide, community-based system of quality child care. This will be a transformative project on a scale with the work of previous generations of Canadians, who built a public school system and public health care. This is a legacy investment for today’s children who will not only benefit from, but also inherit this system.

Just as public school provides children with quality education in their neighbourhoods, the government’s goal is to ensure that all families have access to high-quality, affordable and flexible early learning and child care no matter
where they live. The government will also ensure that families in Canada are no longer burdened by high child care costs—with the goal of bringing fees for regulated child care down to $10 per day on average within the next five years. By the end of 2022, the government is aiming to achieve a 50 per cent reduction in average fees for regulated early learning and child care to make it more affordable for families. These targets would apply everywhere outside of Quebec, where prices are already affordable through its well-established system…

This once-in-a-generation transformation will take time and hard work from all orders of government—and that is why the next five years are focused on meaningful goals for families and setting the right foundations for success.

Up to $27.2 billion over five years, starting in 2021-22 will bring the federal government to a 50/50 share of child care costs with provincial and territorial governments, as part of initial 5-year agreements. Future objectives an distribution of funding, starting in year six, would be determined based on an understanding of need and progress achieved as part of this initial plan.

Over the next five years, the government will work with provinces and territories to make meaningful progress towards a system that works for families. The aforementioned federal funding would allow for:

A 50 per cent reduction in average fees for regulated early learning and child care in all provinces outside of Quebec, to be delivered before or by the end of 2022.

An average of $10 a day by 2025-26 for all regulated child care spaces in Canada.

Ongoing annual growth in quality affordable child care spaces across the country, building on the approximately 40,000 new spaces already created through previous federal investments.

Meaningful progress in improving and expanding before- and after-school care in order to provide more flexibility for working parents….

The next five years of the plan will also focus on building the right foundations for a community-based and truly Canada-wide system of child care. This includes:

Working with provinces and territories to support primarily not-for-profit sector child care providers to grow quality spaces across the country while ensuring that families in all licensed spaces benefit from more affordable child care.

A growing, qualified workforce—with provincial and territorial partners, the government will work to ensure that early childhood educators are at the heart of the system, by valuing their work and providing them with the training and development opportunities needed to support their growth and the growth of a quality system of child care. Over 95 per cent of child care workers are women, many of whom are making low wages, with a median wage of $19.20 per hour.

A strong basis for accountability to Canadians—the government will work with provincial and territorial partners to build a strong baseline of common, publicly available data on which to measure progress, report to Canadians,
and help continuously improve the system.

Quebec has been a pioneer of early learning and child care in Canada, with outcomes for children and families that have been studied around the world. However, the Quebec experience has also illustrated that building a system is
complex, and that phased and sustained investments are required to ensure that everyone has access to the same quality of care at affordable prices. These are valuable lessons for a pan-Canadian system. To build on the current
bilateral agreements:

Budget 2021 proposes to proceed with an asymmetrical agreement with the province of Quebec that will allow for further improvements to their system, which the people of Quebec are rightly proud of.

In addition, the federal government will authorize the transfer of 2021-22 funding as soon as bilateral agreements are reached with the provinces and territories, enabled by a proposed statutory appropriation.

So there you have it. The conditions on the federal funding AND that Quebec will get an asymmetrical agreement. So the fact that Alberta is not only complaining about the conditions AND that Quebec gets a very different agreement was laid out in the Budget in detail. If they are shocked by this, well, I can only assume that they did not read the Budget or they are being melodramatic solely for political reasons.

But let’s unpack this even more. What is the rationale for government intervention in the ECE market? The big one is because of the spill over benefits to society. That is the same reason we fully fund k-12 and partially fund post-secondary education. Neither of those seem controversial. The idea, however, that something magically happens at age 5 that woudn’t happen for a child aged 4.5 is, well, looney toons. We fund public education, and yes in Alberta we also provide the highest subsidies also for private education for the k-12 group, because society accrues nearly all the benefits from doing so. This really shouldn’t be controversial. In fact, the societal benefits are even larger in the under 5 crowed because that is when most of the really important brain development happens. There are also oodles of information failures in the ECE market. Some governments, like BC, have worked hard to overcome these failures, but Alberta has not. And of course another area of inefficiency is related to parents having to engage in constrained optimization that does not allow them to allocate their human capital to their most productive and economic efficient activity. In a nutshell, the market is inefficient and demands public intervention.

We can also look at the direct (and by direct I mean actual tangible benefits, not hokey impact analysis benefits) benefits that accrue to governments through increased tax revenues. In Quebec for every $1 in ECE spending they recouped $1.04 in revenues, the federal government recouped $1.40. This is from not only parents being able to engage in paid work, but also because of the employment benefits from expanding the sector.

Despite all this evidence, Alberta is kicking sand at the idea and it is doing so based purely on social conservative ideology. It is saying there is no flexibility. That is, in fact, false. Do the federal conditions require that spots being provided at $10/day as some in Alberta have claimed? No, the federal conditions are that the price be ON AVERAGE $10/day. Can they be $0 for some and $30 for others? Yes, yes they can. How might we decide how to do this? Well, the rule of thumb in the affordability literature, you know the same literature that has affordability for shelter being 35%, is that families should spend no more than 10% of their income on ECE and child care. So is there flexibility there? Yes!

Is the fee reduction that has to be rolled out 50% for everyone? No, it is ON AVERAGE a 50% fee reduction. Can there be private provision of child care? Yes, the federal government only wants a minimum of 50% of the focus being on the non-profit sector, well known for high quality and affordable ECE. And by the way, non-profit child care is not publicly provided union employed institutional child care (words the UCP throw about). In fact, there is no unionized, publicly provided child care in Alberta….at all.

Does the federal commitment mean that Alberta can’t invest in demand-side policies? No, it just means you can’t use these federal funds to do so. The federal government under this policy is intervening on the supply side of the market. The federal government too helps on the demand side. It has the Canada Child Care Expense Deduction (CCED). It could use some tweaks but there it is. It also has the Canada Child Benefit which provides direct, non-taxable income benefits to families. Alberta also has demand side policies. Want to continue with those? Go nuts. But I would like to point out the the current child care subsidy in Alberta is actually highly regressive and this is still true of the tweaks announced last week.

Alberta is also complaining that they were late to receive the term sheet from the federal government. I mean the terms were publicly known. See above. They should have been working on proposals since they knew the key terms already. But put yourself in the place of the federal government. It had several jurisdictions ready to go on deals: BC, Yukon, PEI, NS, NL, and Quebec. Alberta though when the budget came out went whole hog on expressing condemnation for the federal plan. So if I were allocating my scarce negotiating resources, I too would focus on those deals I can get done quickly and use that to add pressure to the hold out provinces.

And of course Alberta opted to release an RFP in early July. That RFP (SWP072021) was for work on modelling a child care subsidy for the Supporting Alberta Working Parents Advisory Group. Nothing in that RFP ensured that the federal conditions would be part of this modelling AND the works was not sue until September 2021. Now I saw this RFP because I subscribe to MERX. And, as a member of the federal Task Force for Women and the Economy, I advised the gang that the RFP had been issued and was a clear signal that a deal was in no way close to being complete.

Now I and a team of national experts on tax and ECE were going to bid on this RFP, but the terms that had to be accepted where highly problematic. Bidders had to waive moral rights, copy right, and sign an NDA. Collectively, this means that bidders are not only assigning the province the right to produce, reproduce, and publish the original work product, but the bidders must waive rights of attribution and association and right of integrity (moral rights). Waiving moral rights means not only can the Province not preserve the intent and original meaning of the work, the Province can also alter in any manner the work without the bidders permission. Bidders and their work can ultimately be referred to or used in a derogatory way, and can be used to threaten the Bidders reputation. The Proponent also has no say in attribution even if the work is represented in a way that threatens the Proponents reputation.

Here is my advice to the Government of Alberta. Parents in Alberta want you to make this deal. This deal will bring billions into the province that will help expand vital infrastructure to grow our economy. Making that deal allows for sufficient supply to be created, for ECE providers to have a better work environment, and support flexibility in terms of price, private and nonprofit supply, and even nonstandard hours provisions. It also frees up funds for Alberta to double down on demand side policies if they chose to do so. The notion that the province is being constrained in terms of flexibility is complete political spin. Yes, I realize this means that the province will have to eat crow, but given that this government is already tanking in the polls, it needs to do something to shore up some support. But leaving billions on the table is not how to do that.

When Conservative Cancel Culture Comes For the Economists

Yesterday was an interesting day. It was a bit like Groundhog Day. There is a whole backstory to what happened. Let me fill you in.

I have to take you back to 19 November 2020. A day I actually also blogged about. On that day, nearly every single Postmedia ‘news’paper ran a story with the headline “More than 800,000 ineligible people received CERB, at a cost of nearly $1.7B, CRA documents reveal.” The headline was false and the story was filled with false statements. The story quoted a Blacklock’s reporter as the source for the story, which I might add, had no byline and was eerily similar to a story published by said Blacklock’s reporter in their own online ‘news’ site.

While I often read news that is spun, it is actually very rare that I see such factually incorrect yet easily verifiable information in a news story. And one about tax! So I tweeted corrections to the ‘fake news’ and blogged about it as I noted above. The blog post was really popular. Like really popular. 60,000 views popular! People were very pleased that someone was correcting the record.

That was when I started getting rather questionable emails from said Blacklock’s reporter. The emails were questionable enough that their email was added to my auto file rule that sends emails from certain addresses into my *caution trigger warning for uptight conservative men that a swear word is about to appear* Asshole email folder.

I also repeatedly emailed every single editor at the newspapers where the story was published demanding that they retract the article. Some responded very quickly, some modestly, some slowly, and one never responded. The one that never responded was the Toronto Sun.

This led me to file a complaint with the National News Media Council. My complaint listed the factually incorrect information and provided official sources as to why the information was factually incorrect. The National News Media Council, on 29 January 2021, upheld my complaint, which is actually quite rare, clearly stating that it is the responsibility of news organizations to verify statements. And so I wiped my hands of the matter….except Blacklock’s didn’t. The ‘reporter(s)’ now had an axe to grind.

There were the usual tweets from the Blacklock’s reporter(s), along with some real gem’s of emails. Essentially, they now wanted to shame me. And it seems the only thing they have on me is that I *gasp, clutches pearls, finds her smelling salts” swear on twitter from time to time on my personal twitter account. One of them tweeted about how my son must be embarrassed by me (nope). That apparently was too much for their followers and it was replaced with a tweet about my husband (who, yes, does 100% support me, not that that matters).

Then on 9 March 2021 the Western Standard, a ‘news’ source I had only recently learned about as they had their banner up at one of the silly anti-lock down protests, wrote a piece title “Feds appoint Calgary economist—who has vulgarly tweeted about men—as feminist advisor.” I actually only learned about this from Erica Ifill when I was on her podcast Bad + Bitchy (oh gosh, sorry my conservative readers, I forgot the trigger warning), which tells you a lot of about the circulation the Western Standard gets. Who is the source for that piece? Blacklock’s Reporter *gasp*.

Outside of the fact that I am not a feminist advisor, I was appointed to the Task Force on Women and the Economy, the story takes a few tweets, and not in their entirety, to say I vulgarly tweet about men. Here is the evidence in the article:

  • I tweeted the image of a mug with a saying on it that included two swear words, I think it was from the always amazing Effin Birds account
  • I quote tweeted a woman who was being policed by men for her communication style and I expressed solidarity
  • I tweeted about an experience in a meeting where my input was dismissed by a dude (I think women can all relate with that)
  • I commented about Erin O’Toole’s frat boy behaviour with his silly toilet video (I was not alone)
  • I apparently called Doug Ford weak and pathetic but the article does not use quotes so who knows. I mean, he and his government are being called murder clowns so……
  • I tweeted about a horrible experience in a meeting at my place of work where two white men referred to diversity and inclusion as tokenism

Good Golly! So vulgar. Sarcasm aside, that is it. That is the sum total of their story. So of course the twitter accounts for Blacklock’s and their associate tweeted about this, but outside of them I don’t think anyone actually noticed this article, I sure didn’t.

But for unrelated reasons I had to lock my account for unrelated (?) harassment. I unlocked my account in early June. Low and behold what happened? Blacklock’s tweeted about me winning the Faculty of Arts Award in Public Engagement. A few days later, Western Standard plagiarized themselves. They essentially re-posted the March article with a new headline “U of C rewards Vulgarity-tweeting prof.”

Now many of my feminist friends thought I was actually getting an award for tweeting vulgarity and were disappointed they had not had a chance to put in their own application. I love the headline and sub-title so much that it is currently my banner on Twitter and my reaction to the re-posted article was “Hahahahahahahaha.”

It is so blatantly obvious that all of this is just Blacklock’s being vindictive about their own factually incorrect reporting and this is my penance for reporting them. It is done solely for the purpose of silencing me, as though I am that fragile. *Narrator: she is not*.

But what is also ironic is that this also happened on the same day that Blacklock’s published a story about Trevor Tombe. Now, I don’t subscribed to Blacklock’s. Never will. I have no idea what the details are. The essence is that he had a contract with the federal government to do some research (on what I don’t know). Now I do know that Trevor has this contract listed on his CV. I’ll note that many in the past say that disclosure in one place is all that is needed.

Should it have been disclosed in any article he wrote? I don’t know, because I don’t know the details and I am not going to subscribe to find out. Some are suggesting that the piece is actually just a hit piece on the CBC, other are suggesting it is a hit piece on Trevor. I don’t know, but I did tweet out the importance of have a detailed disclosure statement. That is something I stand by and urge all academics engaging in public policy commentary to have a disclosure statement. I am even working with an MPP student and Dr. Melanee Thomas on developing a smart practices evidence informed guide on disclosure.

But it is interesting on the same day two prominent economists in Canada had hit pieces written about them. It is clearly an attempt to silence us from public policy commentary. It is coming from the conservative wing, who clearly don’t like the fact that we are able to provide information and correct misinformation as it arises. And we both have a fairly robust following.

Will the attempts to cancel me work? To take away my right to have a person twitter account and provide my views? It won’t work on me and I doubt it will work on Trevor. In my case, it is an attack on free speech and freedom of expressions.

Here we are 24 hours later and I have to thank Blacklock’s and the Western Standard for the exposure. I’ve gained about 1,200 new followers and counting because of all this. My gender follower profile has tilted more in favour of women than before. And it really upped my credibility in the feminist community. Thanks boys!

The Effect of COVID-19 on Alberta’s Labour Market: The Parents are not all right!

I have a new paper out today, co-authored with John Baker (Waterloo) and Kourtney Koebel (Toronto), two emerging scholars to watch. The paper looks at whether there were any labour market disparities created by COVID-19, and if so, for whom, and at what point in the pandemic.

What prompted this work? Well, the ruling United Conservative Party has argued that since women have recovered as well as men following the first wave of the pandemic a gender-focused plan is unwarranted. There was a heated debate in the second sitting of the fall 2020 Alberta legislature between the Minister of Culture, Multiculturalism, and Status of Women—Leela Aheer—and opposition member Rakhi Pancholi and the UCP continue to double down on an economic recovery plan that has been labelled a bro-covery plan (H/T Lise Gotell).

While this was going on, I like many parents of young kids, was currently isolating at home and supervising online school for an 8-year old while attempting to teach a course, engage with my research, do my administrative duties, and all the public engagement that I do. I was (and honestly still am) burned out and was facing impossible tradeoffs with impossible expectations. I wanted to give up, throw in the towel, take a leave of absence from work, and several of my professional mum friends did just that.

What I didn’t see in this discussion about the labour market in Alberta was the impact on parents. To me, looking all around me, I had to wonder why was no one looking at parental status. And so I reached out to some colleagues to see who could help me with my query. And that search led to teaming up with John and Kourtney to conduct this research.

We grabbed the Labour Force Survey data and started our work and lo and behold what I was living and seeing all around me was there in the data. While the gender differential we saw in the first wave indeed did not carry forward into subsequent waves, the parental differential was there, it was large, and it was ongoing. The main text of the paper I linked to above uses data up to December 2020, but if you scroll to the end we also have an addendum with data up to May 2021. Why? well we finished the paper in February, it went into peer review, we did a revise and resubmit, and the paper was accepted in May 2021 and published today. But since there was some interest last week in the data from the May 2021 release of the LFS, we did a quick update. I’ll take about those results here.

But first, the methodology! For labour market effects we looked at employment, full/part-time status, hours worked, and labour market participation. We use a difference-in-difference (DiD) framework for our results. This way we can focus solely on the total pandemic effect and not any economic differences that exist without the pandemic. Let me explain because it is important. For each group, we compare labour force statistics from February 2020 to each post COVID-19 month and to account for normal seasonal fluctuations we use data from 2019 to net out those. Eg. for March 2020 we take our labour statistic of interest, take the difference between it and February 2020, we also take the difference between March 2019 and February 2019, and then take the difference of these two differences (so really a difference-in-difference-in-difference).

In all figures below, we report trends for employment, but similar trends appear for labour force particiption and hours worked. The black squares represent the difference in employment between the included subgroups, while the light grey diamonds and circles indicate the group specific estimate. The vertical bars denote the 95 per cent confidence intervals computed using robust standard errors.

First, using proper statistical techniques, the gender impact of the first wave was not repeated in the second wave and is also not present in the third wave.

Second, the gap between parents of children under 13 and those without widens in fall 2020 and the gap becomes more severe in the third wave.

Third, while the second wave hit parents, regardless of gender, very hard, the third wave saw large emerging disparities not only between mother’s of young children compared to mothers without, but also between mothers and fathers of young children. The employment gains of fathers has stagnated, while mother’s employment has been on a downward trend since March 2021.

This is the graph for women.

This the graph for men.

All of these differences are magnified if we focus on parents whose youngest child is under 6.

These results reinforce the integration of the labour market and the economy, and vital role that access to high-quality, favorable, education, particularly early learning education, and child care plays in economic resiliency. It is high time that Alberta prioritizes Early Learning Education as an economic strategy for both recovery from the pandemic and the long-term resiliency of its economy. From this perspective, Alberta should celebrate and embrace the recent federal commitment to a Canada-wide Early Learning and Child Care plan.

Academic Institutions, Diversity, and Racism

As I’ve mentioned on twitter, myself and my research team have been working very hard to develop an Equity, Diversity, and Inclusion (EDI) research and engagement statement. It is not hard to imagine that such statements will become as ubiquitous as Teaching Philosophies, and rightfully so. Further, given that the academy, especially economics, suffers from a real lack of diversity, especially among Black and Indigenous scholars we need not only top down strategies, but bottom up action as well.

As a result, we have been expanding our reading about racism in higher education because understanding the barriers is important to being able to work to overcome these barriers as part of our own statement. We do not want a meaningless statement, we want to develop something meaningful, actionable, measurable, and rested in evidence. As part of this work, I recently came across an article that was published in Workplace. As detailed on their website:

“Workplace is a refereed, open access journal published by the Institute for Critical Education Studies (ICES) and a collective of scholars in critical university studies, or critical higher education, promoting dignity and integrity in academic work. Contributions are aimed at higher education workplace scholar-activism and dialogue on all issues of academic labor.”

The article I found is titled “Higher Racism: The Case of the University of British Columbia—On the Wrong Side of History but Right Side of Optics.” I will summarize the article here as there are some really important lessons from this case study, not only for my own purposes, but for what we are trying to achieve overall, which is increasing diversity and inclusion at academic institutions writ large. Again this is a summary of the article, but I encourage you to read it.

Before I start, I will provide a side bar on academic freedom. I am doing this because academic freedom becomes an important theme in the outcome of this case study. Many who are unfamiliar with academic freedom, which oddly includes a lot of staff who work at academic institutions, it is important to remember, as many forget, that academic freedom includes the ability to express one’s opinion about the institution, its administration, and system in which one works. This is generally outlined by the Canadian Association of University Teachers and specifically outlined at UBC. However, since that is often trampled, a work around is to publish these expressions which seems to be how this article came about.

The paper begins by outlining that academic institutions, faculties, and all department/schools/faculty members have to confront the fact that our industry is and members of it are racist. Time is over for task forces, working groups, etc and to openly critique the mismanagement that led to the lack of diversity.

It then outlines in detail that UBC, despite having plan after plan on diversity, ended up reappointing a number of non-racially diverse Deans without attention to representation, working against the plan to achieve the results in the many plans that existed. The paper includes a screen shot of the leadership of UBC which was an announcement of the new Deans, demonstrating that lack of diversity in the decanal ranks at UBC despite, again, plans to the contrary.

Feeling that this was contrary to all the existing plans (or paying lip service) working to achieve diversity, the paper details internal actions taken by faculty at UBC to challenge this outcome to no avail, except to appoint a Senior Advisor to the Provost on Racialized faculty. These actions then turned external (see note on academic freedom). When criticism went external, UBC managers became very hostile to faculty using their rights under academic freedom, and began to exercise both direct and indirect forms of censorship, including hiding under the guise of “respect in the workplace.”

The paper concludes by noting this case study shows the way in which the higher racism of managers works to maintain individual and systemic racism and how managers shield themselves from criticism.

This is a really interesting case study in how bottom up action to push the University to meaningfully move on meeting its EDI statements lead to the managers using other policies to attempt to curtail academic freedom being able to challenge the institution, the leadership of the institution, and the managers therein on meeting EDI objectives. It is also very concerning to see staff at a university to use the notion of respect in the workplace as trumping academic freedom, especially on such an important topic as EDI.

I would certainly be interested in hearing views on this case study, the issues raised, and the outcome of this case, given that those of us at other academic institutions could face similar actions in the face of pushing for diversity and inclusion in very non-diverse disciplines, departments, faculties, and institutions.

Addendum: In picking away further at this, I found a blog post that also resonates: “As a serving member of the UBC Board of Governors I observed how power was deployed through the fulcrum of civility. Public ‘niceness’ hid what could best be called backroom verbal brawls and artful displays of institutional power. When those of us elected dissidents spoke out in public the push back was intense. But, it was not framed around what was said, only how it was said.  Our tone, our gender, our assertiveness was called out. The acts of dismissal, overt and explicit subterfuge of management was ignored. We have arrived at a moment in time were the form of communication displaces the value of content. I hasten to add I am all for civility, but there are moments when academic freedom does trump niceness. The problem is when management and their allies control what is nice, dissidents will almost always lose.”

On Conflict of Interest in Public Policy

In academia, disclosing information related to potential conflicts of the authors in written work is fairly well accepted practice, particularly sources of funding along with any paid or unpaid positions with relevant organizations. All reputable journals have rules require that such information must be disclosed in all papers published in the journal itself.

But what about in any official public commentary? What should be disclosed on your website? Your bio? A priori in an interview with a journalist? In a written op-ed? Testimony to public bodies? In any case where you are presenting yourself as an informed and unbiased expert on a topic?

This is such an important question that myself, Melanee Thomas (Ucalgary, Poli Sci), and Kayla Doody (MPP Candidate) have been actively engaging in research in this area. The purpose of our research is to provide a clear framework professional ethical framework to guide all of those engage in policy work. I am disappointed that our research expertise and knowledge has been so far dismissed by some people and entities engaged in public policy commentary who purport to support independent, unbiased, evidence-based, policy relevant research.

Our research has shown us that there are actually some generally understood expectations in this area, expectations that have grown over the last 10 years. First, anyone and everyone who engages in commentary should have a pre-prepared public disclosure statement available for anyone to review and anytime. Second, all media outlets need to require that all policy commentators to publicly and pro-actively disclose any potential conflicts. In interviews this would require a formal statement at the beginning of any interview of the nature “Do you have any conflicts to disclose” and in any written policy commentary would require a written disclosure in the article itself similar to that which occurs for published research. A number of highly reputable media outlets already engage in these activities, including The Conversation.

Further we have found clear guidance from some organizations. The American Economic Association provide members with professional ethical guidance that it is expected that they apply similar principles to op-eds, columns, any testimony, and any interviews with journalists. The University of British Columbia appears to have to the most detailed and comprehensive policies and guidance on this for academics, including covering conflict of community. Government legislation also provides relevant material for our work, further demonstrating that the issue of conflict of interest is well known and the matter of disclosure clearly used as a method for ensuring transparency. Further, academic research has also provided important guidance related to the important of communicating non-financial or community conflict of interest. For example, the need to your involvement in a political party when commenting on policy or activities of said political party.

As Kayla as expertly summarized “Disclosing financial and non-financial conflicts appropriately and accurately raises the standards [for public policy commentary in Canada and]…. allows readers and listeners to confidently and accurately assess the information presented to them.” When policy academic and commentators fail to provide disclosure, it provides readers and listeners a false sense of trust and accuracy of the statements being made. It is long past time to allow this continue and it is time that the policy field is brought in line with other academics and research areas of conflict of interest disclosure and understanding. I would hope that many of our Canadian governing bodies like the Canadian Economics Association, the Canadian Political Science Association, the Canadian Association of Programs in Public Administration, Institute of Public Administration Canada, Canadian Association of Journalists, and related pay attention to this important issue and incorporate their own rules related to conflict disclosure.

Tax Conspiracy Theories: BC Home Owner Grant Edition

A recent article in the Vancouver Sun was drawn to my attention today. Here is the link. It is about an administrative change to the Home Owner Grant (HOG) in B.C. with quite a bit of gnashing of the teeth and biting of the nails about this being a signal for some nefarious change. While this tax economist can only dream that the HOG will some day be slain, it tells me, yet again, how little people in BC understand the eligibility criteria for the Home Owner Grant.

Now I know quite a bit about the Home Owner Grant. As loyal readers know, I lived in BC for 10 years (*whisper* I was also born in BC in a quaint town called Victoria). I was also one of the lucky few to be able to afford a home in Victoria, BC. The luck of having equity from selling a house in Toronto and then again in Winnipeg (a rolling stone, my friend, a rolling stone). I was also the Chair (yes, I was the Chair, not Paul Ramsey as originally reported in the Vancouver Sun article) of the MSP Task Force. We were tasked with finding ways to replace the revenues from the MSP premiums which the BC government was, rightfully, eliminating. While our work was derailed, long story that includes a tale of ICBC dividends, our final report made recommendations related to the HOG.

For those of you not aware, and here I will quote my own report:

“The HOG is a provincial grant that offsets property taxes on the principal residence of most homeowners in B.C. The basic HOG amount is $570. An additional amount of $200 is available everywhere in the province except Capital Regional District, Metro Vancouver, and the Fraser Valley Regional District. There is a further additional amount of $275 for seniors and additional grants for veterans and persons with, or living with a person with, a disability.”

The HOG is intended to reduce the School Tax portion of the property tax bill which is a provincial tax levied on the annual property tax bill. A homeowner qualifies for this grant if their property is assessed below a threshold [currently $1.625M] AND you meet the eligibility requirements which are that you must: 1. be the registered owner 2. occupy the residence as your principal residence 3. be a Canadian citizen or permanent resident of Canada.

Until this year, home owners applied for the grant through their municipality despite the grant being a provincial grant being applied against a provincial revenue source. Quoting again from my own report: “As a result of the mismatch of administration with the impact of the tax, municipalities have little or no incentive to audit HOG applications and to ensure that applicants are in fact entitled to the grant. Information sharing arrangements being implemented with the B.C. Assessment Authority will allow for better enforcement of eligibility criteria in future, but there is an expectation at present that many people receive the HOG who are not eligible, an efficiency and fairness concern.”

Starting this year, home owners now apply for the grant directly through the province, the entity giving the grant for the tax being levied. Makes perfect sense actually. And to apply, you will obviously need to know your property information and, gasp, horror of horrors, you will need your social insurance number. Why, oh why, would you need that, the pearl clutchers ask? To verify your eligibility, my friend. See look above. You can’t just be a home owner. You have to be a Canadian citizen or permanent resident of Canada. How is that easily verified? By your SIN number. But the municipalities didn’t ask for that information? Correct, that was a problem as it was known that the grant was going to people that were not eligible. See above. But you can’t just willy nilly ask for my SIN number! Correct. That is why moving the application to the province and, poignantly, to the Ministry of Finance, who is responsible for the tax and the grant, is important since that Ministry already has the authority to ask for your SIN number.

Now, as someone who has now twice recommended changes to the HOG, not only as part of the MSP Task Force, but also as part of the BC Basic Income Expert Panel I’d be more than happy if this administrative change signals something more. But as someone who knows a lot about tax, tax policy, tax administration, and politics, I highly doubt the HOG is going anywhere. The HOG is bad policy, we can do better, much better, and get better bang for our buck, but man, home owners like their cookies and politicians are too scared not to bake this one up every year for them.

No, 800,000 ineligible Canadians did not receive the CERB.

Today, the National Post published a piece in their Canadian Politics section with the factually incorrect headline “More than 800,000 ineligible people received CERB, as a cost of nearly $1.7B, CRA documents reveal.” (UPDATE: NP changed their headline after this piece went viral–see end of post. ANOTHER UPDATE: NP has now deleted the whole article–see end of post) What is worse is that the second paragraph of the story tells you why that headline is factually incorrect. All you need to a soupcon of tax knowledge to know that. If you don’t have that soupcon of tax knowledge then you should interview tax experts before publishing such drivel. The National Post should be embarrassed at how its bias leads to such disgusting errors.

My loyal Dead for Tax Reasons readers always enjoy a good tax take down, so let’s go!

Here is the first paragraph:

“A Conservative MP says Canada Revenue Agency has some explaining to do after more than 800,000 ineligible people got Canada emergency response benefit cheques.”

National Post

Well first of all, the CERB was a program was administered by Services Canada, not CRA (UPDATE: for all those bitching to the contrary, please see Part II of Bill C-13 that defines the Minister as the Minister of Employment and Social Development). While you could also apply for the CERB through your CRA My Account, that was simply an application option. The main application portal was through the usual Services Canada portal.

The CERB was also delivered on a trust then verify process. The verification process has been ongoing, but has already heated up and will continue in earnest through the upcoming tax filing season. CRA will be one of the entities doing verification. The CERB was intentionally designed that way. To ensure speedy delivery. You know, in the time of an unprecedented economic shock. One that has and continues to hit women, low wage workers, and racialized Canadians more than anyone.

But wait, there is more. Let’s move on to the second paragraph:

CRA’s own records — filed in an inquiry of ministry tabled in the House of Commons — show 823,850 people who didn’t file a tax return in the past year received $2,000 monthly CERB cheques at a cost to taxpayers of nearly $1.7 billion, according to Blacklock’s Reporter.

National Post

I mean holy hell with a tidge of knowledge about the CERB benefit you know this is just clickbait. Was tax filing an eligibility criteria for the CERB? No. Let’s go through this one step by step.

Is tax filing a general legal requirement? Nope, not at all. While there are various corner cases, the most important aspect to tax filing is that only people with a with tax payable to CRA are required to file a tax return. What you say? Yes. Legally, filing is required if you have tax payable. It is not required if you do not. So anyone with a refund owing is NOT required to file. The fact people do file is more because most people (2/3) are owed a refund and really want it or because they actually do not know the rules or want access to tax benefits like the Canada Child Benefit (CCB).

Was tax filing an eligibility requirement for the CERB? No. The eligibility requirement was

You earned a minimum of $5,000 (before taxes) in the last 12 months, or in 2019…

Government of Canada

Yah, guess what, you could have earned $0 in 2019 yet have earned $5,000 in 2020 and be eligible for the CERB. And guess what, WE HAVE NOT FILED 2020 TAX THIS YEAR! The filing deadline for 2020 taxes is currently set for April 30, 2021.

And guess what, you could have earned $5,000 in 2019 and not have filed and be eligible for the CERB. As noted above, tax filing was not a required eligibility criteria. And you can legally not have filed taxes for 2019 and still be eligible. And, you know what, CRA can determine all of this because of third party reporting. What you say? Yes! Hold onto your seats for this one!

CRA uses third-party information reported separately to CRA and matching techniques to verify the information.  Third-party reporting, or matching, is a tax policy concept according to which a third party (i.e., neither the individual nor the tax authority) provides an impartial verification of income. For example, all employers are required to report to the tax authority on a T4 information slip the wage income of their employees, on or before the last day of February of the year following that to which the income information applies. While not all income is subject to such reporting, a significant amount is. This means that CRA actually already knows a fair amount about much, if not all, of the income earned by a significant number of tax payers. So yah, you can not file your taxes and CRA can still assess your eligibility for the CERB. It is almost like it is 2020.

The article also uses the sentence:

The CRA didn’t explain how non-tax filers could have claimed the benefit.

National Post

Probably because people at CRA thought the question must be a joke. I mean, seriously, this is pretty straightforward from all the public information and a tick of knowledge. UPDATE: They’ve since responded, see the end of the post for their response.

The NP article also tries to use the notion that people with high incomes claimed the CERB but did not need and should not have gotten it. The CERB was not means tested. CERB was replacing lost income as the result of the pandemic. THAT WAS INTENTIONAL! Did they lose income? I bet they did. In fact, lots of self-employed people were hit pretty hard a few months in to the pandemic. Contracts were suddenly cancelled, invoices not paid, it was a serious disruption. To suggest such people should not have claimed a benefit they were eligible for while going through a dramatic income shock would also be suggesting that those hit pretty hard by the Oil shock, but who earned a lot money before that, should have been able to sustain themselves. I would hope the CPC MP cited in this article does not think such things. Then again Kelly McCauley is from Edmonton so maybe he does not really understand the Oil shock, after all I am told by the UCP most people in Edmonton are out of touch.

UPDATE: I’ve received two, no wait three (UPDATE: FOUR), emails from Tom Korski from Blacklocks, whose seems a bit befuddled by all this, and seems like a bit of a jerk TBH. Let’s look at the order paper that started all this, happily provided to me by another more reputable (fact checking on tax details) journalist. The question asked was:

With regard to recipients of the Canada Emergency Response Benefit what is the number of recipients based on 2019 income, broken down by federal income tax bracket?

Government of Canada

Now, Tom is all perplexed because if CRA didn’t administer the CERB then why did CRA respond to this question, why were the data tabled in the House by CRA. *Pinches Bridge of Nose* because the question wanted to know the recipients by income. Only CRA has information on people’s income IF they filed their taxes.

Who else then would answer this question? Services Canada does not know your income, they do know your employment income if you had a job loss AND your employer issued an ROE, but that is not complete information about income. But to be eligible for the CERB you simply had to have reduced hours, or lost self-employment income, or reduce provincial benefit income or a job loss. I.e. you did not have to lose a job to qualify for CERB. So the question asked was answered by CRA because they are the only ones who could answer the question. I mean if you asked the same question about GIS, CRA would respond despite GIS being administered by Services Canada.

Tom then asks how would CRA verify $5,000 in employment income is not thru [sic] tax filings. Well see above. It is called third-party reporting. I mean our whole system while it is based on self-assessment it is also based on verification and third-party reporting is the main pillar of verification. CRA actually knows everything about a significant portion of Canadians that for them self-assessment is not needed and we, like many countries, can move to auto filing. What you say? Yes, and if you are interested you should watch the Canadian Tax Journal as a whole policy forum will be dedicated to this!

Tom then doubles down and asks “What is the mystery class of more than 800,000 workers with “employment income” who don’t file taxes?” And he asked this after I sent him a link to my blog. I mean, what is not exactly clear? I don’t know, but if you want to read more see my co-authored piece of tax filing, or Jen Robson and Saul Schwartz’s piece in CPP, or a similar piece in the McGill Law Journal.

Tom, incensed as I did not immediately respond to the aforementioned email, emailed me again with this

Dear Dr. Tedds: no answer, but I won’t hector you further. Knowing your keen expertise in tax issues, you may find it interesting to observe CRA filings indicating, for instance, 1 in 4 Yukoners claimed CERB benefits. That’s 25% of the total population: school-age children, people at the remand centre, hermits, infants, you name it.

In BC claimants outnumbered jobless five to one. I suspect these people may be part of the invisible army of “workers” with “employment income” who operate outside the tax system. I know MPs in all parties who keenly await an audit of this program. We’ll be sure to contact you for comment at the time.

Regards

Well, Tom again wants to believe you had to be JOBLESS to to claim the CERB. No, nope, nadda, not true. I mean, here are the eligibility criteria. The eligibility criteria is related to income loss. Yes it includes job loss, but that is not the sole distinction.

Do we have fraud with the CERB? Yes, see for example this. Do we have errors with the CERB? Yes. The eligibility criteria changed nearly daily before and after it was rolled out. Personally, I am following this case to see what happens. Did some idiot apply for CERB in the name of his horse? IDK, but if he did that would be fraud since you needed to meet the eligibility criteria and the horse clearly does not.

I”ll assume that Tom signed off his email as a form of a threat. But whatever, my writings and opinions on this matter are pretty clear and shared by the likes to Tammy Schirle and Jen Robson, so I am in very good company. In the meantime, Tom goes into the email folder called “Assholes.”

UPDATE 2: CRA provides a response

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UPDATE 3: After this blog was posted, the National post changed the headline of its article

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UPDATE 4: The National Post silently removes the article

UPDATE 5: I scanned all the Postmedia newspaper sites and sent emails to every editor of a Postmedia newspaper site that contains the story about 800,000 Canadians being ineligible for the CERB based on factually incorrect information. I have also submitted two complaints with the the National News Media Council, one related to PostMedia and one related to Blacklock’s. I encourage you all to do the same: https://www.mediacouncil.ca/complaint/