Can I just say how easy it is to do a gender budget analysis on tax incidence? You can follow the money. You can do “what's the impact of a tax cut like this”, given the staff to do it. Finance probably does it, but doesn't make it public—there's a good chance of that.
I don't think that's the tough one. We know that “who's the beneficiary of spending” gets a bit tougher to do.
We have really good analysis on human capital development through educational stuff. It's a straightforward cost-benefit analysis. It's done for individuals: you plunk down x amount of dollars for your post-secondary education and you see a stream of revenue for the rest of your life. That's very classic cost-benefit analysis.
We can tell that if we invest an x amount publicly, it should have a macro-impact. You can do that through input-output and forecasting modelling, all sorts of stuff. There are lots of gimmicks you can use to indicate what a dollar of expenditure on education will be. Of course, most Canadians identify access to education as the primary pathway out of poverty into opportunity for better-paid jobs.
We could probably say what the bang for the buck would be on child care; on better access to ESL, for example, in schools; and on post-secondary education. That would be pretty easy to do. And we know how to do it on public infrastructure, because we do it primarily in capital investments, with a yield curve of flows of benefits to a society, which is the only macro thing we do.
Where we can't do it is on social spending, because there are too many third-party effects. If I spend $100 billion on health care this year, how do I know what the impact of it is?
The only way you don't know is if you don't spend it. There's no control group. You'd have to have a control group and say, “This group got health care and this group didn't; let's take a look at the impact on the two.”
It's a very messy area, and I wouldn't suggest you spend a lot of time on it. We know that if you spend more on health care, people are healthier and they produce more. You don't need to twist yourself up into knots to quantify the scalar at which those public investments are good.
It's more difficult to say what the public impact of employment insurance is in actually meeting people's needs when they lose their job. But we know that it's counter-cyclical.
We've been riding this 12-year unbroken economic expansion phase. What happens when we enter a recession? We have stripped all those economic stabilizers. We know from the 1920s and 1930s that one of the ways to power through a recession is to keep people's purchasing power up. That's why you have things such as unemployment insurance.
We've conducted a social experiment whose costs we don't actually know until we hit the next recession. Right now it looks as though, if we hit a recession, it's going to be self-fulfilling; it's going to start triggering all sorts of multiplier effects because people can't spent money. You can't estimate those costs, but you know from history not to do the things we've done in the last decade.
It really isn't rocket science. We know what the macro-economic effects are. I wish we'd fix some of them, already, because we seem to have found $10 billion more a year for the military, and we've found unbelievable amounts of money for roads and bridges—not all over the country, but at the border.
If we have that kind of money and can throw away money to the tune of $191 billion on tax cuts and $37 billion on debt, can we please fix the things that we know are going to make people's lives better and smooth out the economy, should we hit that bump on the road, which looks as though it could happen in the next calendar year?
