François Vaillancourt

The Incidence of Payroll Taxes in Ontario and Quebec; Evidence from Collective Agreements for 1985-2007

This study uses an original data set, combining information for all collective agreements covering more than 500 employees signed in Quebec or Ontario from 1985 to 2007 and information on payroll taxes and other variables, to measure the incidence of an increase in payroll tax. The results of this model show that that after one year, a one percentage point increase in the general payroll tax reduces wages growth by 1/2 of a percentage point in Quebec and 3/10 of a point in Ontario. Cette etude utilise une base de donnees originale regroupant les conventions collectives couvrant plus de 500 employes signees au Quebec ou en Ontario de 1985 `a 2007 et des informations sur les taxes sur la masse salariale et dautres variables, afin de mesurer leffet dune augmentation de taxe sur la masse salariale. Les resultats de ce modele indiquent quapres un an, une augmentation dun point de pourcentage des taxes generales sur la masse salariale fait diminuer la croissance des salaires de 1/2 point de pourcentage au Quebec et 3/10 de point de pourcentage en Ontario.

Does a Specific Union Impact on Wage Increases? Evidence from Canada, 1985-2007

The purpose of this note is to examine the effect of belonging to a specific union on negotiated wage increases, given unionisation status. The data consist of all collective agreements with more than 500 employees, which were signed in Quebec (N=632) or Ontario (N=1349) during the 1985-2007 period. The model used is a standard wage equation with the negotiated rate of increase of base wages, annualized as the dependent variable and four dichotomous variables for a specific union, the CPI and the unemployment rate two quarters before the collective agreements, the presence or not of a cost of living agreements in the collective agreement and eighteen industrial dichotomous variables. We find with one exception no evidence that one union is better than another in obtaining higher wage growth. Lobjectif de ce cahier est dexaminer limpact dune affiliation syndicale specifique sur laugmentation des salaires negocies, etant donne la syndicalisation. Les donnees sont lensemble des conventions collectives de 500 employes et plus qui ont ete signees au Quebec (N=632) et en Ontario (N=1349) durant la periode 1985-2007. Le modele utilise est une equation salariale typique avec le taux daugmentation salariale annualise comme variable dependante et quatre variables dichotomiques pour les syndicats specifiques, lIPC et le taux de chomage retardee de deux periodes par rapport a la signature, la presence ou non dune clause dajustement au cout de la vie et 18 variables de secteur industriel. Nous ne trouvons sauf pour une exception aucun resultat indiquant quun syndicat obtient des augmentations plus elevees quun autre.

The Economic Consequences of Quebec Sovereignty@@@Parting as Friends: The Economic Consequences for Quebec

This paper reviews the issues that would arise if Quebec were to separate from Canada. It also presents quantitative estimates of the likely orders of magnitude of their economic impact both on Quebec and the Rest of Canada. Its overall conclusion is that Quebec would be much harder hit than the rest of Canada if Quebec separates. Real output in Quebec could easily be depressed in the short run by as much as 10 percent and in the long run by 5 percent. In the short run, the output loss would be triggered by a crisis of confidence resulting from separation. In the long run, output loss would be caused by the required transfer of resources to the foreign sector (necessitated by the elimination of the existing fiscal gain in transactions with the federal government), by the emigration of anglophones, and by higher public debt charges resulting from the increased debt burden. The transfer would be made more difficult by the need to ad just in the soft and dairy sectors and by the probable loss of Churchill Fallss power, but it could be facilitated by increased taxes. For the rest of Canada, the economic costs, which can be quantified, would be substantially lower than for Quebec. And for Canada there also would be some offsetting economic gains. The net short-run costs would only be about one to two percent of GDP and would result mainly from the short-run loss of confidence caused by the separation of Quebec. The long-run quantifiable costs would be small – probably less than the quantifiable benefits.