In this chapter, I set out an approach for evaluating or assessing tax expenditures as part of an expenditure management system. I also make some recommendations on how tax expenditures should be included in one-off spending-control initiatives, and I discuss the merits of selected Canadian...

Small business has a well-deserved reputation as the driver of job growth and as a key contributor to innovation. In the 12 years ending in 2013, small and medium-sized enterprises (SMEs) accounted for about 90% of private sector job growth in Canada. What is less well-recognized, however, is...

The Canadian federal government has a surprisingly small number of business income tax measures that are intended to promote economic development. Nevertheless, the amount of tax revenue forgone is substantial, likely amounting to about $8 billion in 2016. Provincial governments have implemented...

The federal government implemented a new expenditure management system in 2007. Under the new system, departments are required to review programs on a four-year cycle to determine if they are aligned with federal responsibilities and priorities, if they are efficiently delivered and if they are...

The global economic lockdown implemented to contain the COVID-19 virus has caused the most severe economic downturn in Canada since the Great Depression in the 1930s. However, while production plummeted, the overall income of Canadians fell much less because of the federal government’s...

Special supports for small businesses are a hallmark of both federal and provincial tax policy. There are two major federal programs: the Small Business Deduction (SBD), which provides small business a special lower income tax rate, and the enhanced Scientific Research and Experimental...

There is a sound public policy case for subsidizing R&D. When firms perform R&D, they create knowledge that allows them to introduce new products, improve existing goods and services or reduce production costs. However, some of the knowledge created inevitably leaks out or spills over to other...

The knowledge created by private spending on research and development (R&D) generates benefits for society as well as for the firm performing the research, so there is a strong case for government intervention to encourage R&D. But intervening in the market has costs, and these costs may exceed...