Chapter 6: Tax Cuts Scheduled for 2007 Canada
[ http://www.tax-news.com/asp/story/story_
open.asp?storyname=26449 ]

In this article, Jim Flaherty, Canadian Minister of Finance, stated that changes were being made with the tax system in that the Fiscal policy will be put to use in a "fair" and "principled" approach. The Canadian government plans to decrease taxes to help citizens, allowing them to spend more of their own money. With the tax cuts, the Conservatives have saved $20 billion from Canadians, which is more than what the previous four budgets had altogether. One of the major tax cuts were to the GST, which went from 7% to 6%. Another one was a 2% cut in the general corporate tax while cutting the corporate surtax and federal capital tax entirely by 2008. They also plan to increase the amount of income for the lowest rate of corporate tax, which benefits small companies. The bottom rate will be decreased to 11%, a 1% cut by 2009. These tax cuts were targeted to corporate companies and to personal taxpayers.


The government is currently using the Fiscal Policy to control the money supply in our economy. They are decreasing several different types of taxes, while even doing away with some of them. This is because a decrease in tax will cause the taxpayers to have "more money", which therefore causes an increase in spending. If there's an increase in spending, there is an increase of the money supply in the system. This move by the government will be economically beneficial to the country. By increasing the money supply, it supports the growing economy of Canada. This cut in taxes also proves as an opportunity for businesses, especially smaller ones, to expand. Because the tax will be less of a burden, small businesses will be more willing to pay their taxes, which will help with the issue of “tax theft”. Of course, the increase of spending isn’t limited to just consumers. With more money, businesses can spend and increase their capital. When you add the increase of spending by taxpayers and the expansion of businesses, what do you get? A booming economy!


The only problem that may arise with the decrease of taxes may be inflation. The government needs to be careful about how low they make taxes. If spending increases to the point where inflation sky-rockets, then the taxes have gone too far low. Since our economy is already in expansion, it means that our money is under inflation. Inflation is a good thing, when it is gradual and under control. Overall, the government is doing a good job, as the tax cuts have benefited the country and inflation is still under control.

--Commented on Pauline Lee's Ch.6 blog.

Chapter 5: Unemployment rates soaring: Good or bad?[ http://workpermit.com/news/2007_03_22/canada
/british_columbia_needs_350000_workers.htm ]

The above article, an employment issue is clearly defined within British Columbia. Because of the baby boom, a large population of the working force is starting to enter retirement, leaving a mass amount of jobs without enough qualified people to fill them. The current generation that is about to enter the workforce is smaller and obviously not experienced yet-forcing employers to adjust. Some cities, such as Kamloops and Kelowna, are encouraging people to get jobs. Recruitments went as far as Edinbourgh, the Netherlands, and Germany. It's important for our province to have as many capable workers as possible to keep the strength of the economy going. Currently, British Columbia as a whole is trying to employ more and more immigrants to fill the gaps in employee-hungry industries.
There are some good points about the employment issue in British Columbia. The whole situation has led to a new low record of unemployment. In fact, it has become the opposite of a demand-deficient unemployment situation. Jobs are being easily obtained and employers have become more open to the variety of employees. It is now easier for anyone to get a job, increasing employment rates. This means that more people have jobs, meaning that it is easier to support themselves. Unemployment has always been an issue in every country because it usually means a shortage in skilled workers. It can hurt the economy and may even hinder economic growth. If companies lose profit from a lack of qualified employees, then they may have to start laying off people, which further hurts the economy. People will start to save and those fired will have less money to spend, therefore less money circulating. This decreases the GDP of the country because it is a cycle of saving. So unemployment is bad. But low unemployment rates could be a bad thing as well.

Hold on now-how could unemployment and low unemployment rates be bad things at the same time? The thing is to look at why there are low unemployment rates. Again, it's because many people are starting to retire, leaving jobs open for others. This means that more new people get employed, lowering the unemployment rate. But most of these people are unexperienced and many employers were forced to settle for them. Does this really solve the problem in British Columbia of the shortage of skilled workers?

(If you really think about it, maybe they're just employing a bunch of asian kids that don't really know what they're doing..)

Chapter 4: Harper encourages public transport[ http://www.cbc.ca/news/story/2005/12/29/ ]

"In this article, the Conservative government, currently run under Steven Harper, states that people who use public transport services may be eligible for tax credits. Public transport has become a crucial part of many Canadian lives, providing a convenient means of travel. However, a large portion of those who use public transportation services use it to get to work or school. Many people can't afford to buy and maintain a car, which is why this new system of tax credit can be appealing to citizens. For those who purchase monthly public transit passes can get tax credits of 16%. This means that approximately up to $150 can be saved in a year. Steven Harper estimated that this could increase public transit usage by 25% - 50%. In the long run, Steven Harper adds, it will help to diminish the rate of global warming and reduce pollution.

The government setting up this new system shows that in a densely populated area, government assistance and services are depended upon. Canada is a post industrialized country, with growing cities and technologies everyday. According to Wagner's law of increasing state activity, the government is spending at a faster rate than the rate of which goods and services are sold at. In this case, the government isn't necessarily putting money into the system, but rather not collecting as much tax. $150 may not sound like a huge amount to some, but at the same time, when $150 builds up over several people, the government is actually losing out on a good source of revenue. How does the government claim this amount of money back? By borrowing from others? Wouldn't that just deepen Canada's debt?

However, Harper may have other intentions. Above the world of taxation, there are other things that are more important. Issues are arising due to the increasing rate of global warming. Reducing gas emissions from cars can be a big help when trying to decrease the amount of pollution, and encouraging citizens to use the public transport system is a good way to start. The tax credits in this way are used to be consistent with economic objectives. Instead of increasing tax to limit the sales or usage of a certain product, the system is lowering tax to encourage usage of pubic transit. I believe that this decision is socially responsible. True, it may cause a loss in government profits, but at the end of the day, which is more important? Taxes or potentially, your life?

Chapter 3: Medicare Debate in Canada
[ http://cbc.ca/canada/story/2005/06/09/newscoc-health050609.html ]

"The great object of the political economy of every country is to increase the riches and power of that country. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered."
- Adam Smith

Adam Smith was a strong believer in the free market system and preached his writings through many books. He felt that the presence of government control would hinder the economic growth of not only individual companies, but the entire country as well. We see his ongoing argument for a capitalist system in the article given.

Recently, it was decided that the government of Quebec would not be allowed to restrict its citizens from buying private insurance for healthcare. The court stated that it wasn’t fair to those who wanted insurance for healthcare, since the government facilities weren’t able to provide the service in an acceptable amount of time. This issue was raised by a retired man of 73, George Zeliotis, who had waited a year for a hip replacement and was dissatisfied with the Canadian system of healthcare. He went to court to complain that it was an infringement on the charter, which states that everyone has the right to life, liberty, and security. Another man, Dr. Jacques Chaoulli, also found himself with growing concerns with the health system. After a failed attempt to open his own private hospital, he too went to court with his concerns. “The government cannot continue to raise taxes to pay for health care,” he said. “Too many Canadians are suffering.”

“Too many Canadians are suffering” has been a phrase not unfamiliar to the government recently. Canada has always been prided upon the fact that our health care system is public and is accessible by all, however, this availability for everyone has caused some problems. Because no single person is entitled higher privileges to medicare, waiting times and lists have been increasing over the years. Private sectors have been looking into setting up private hospitals, and though it would be for profit, it could benefit many people. Many citizens are concerned about their health and the service that they will be provided with should they fall ill. Private companies are claiming that they could provide better service and reduce waiting times. If this claim turns out to be true, then the stress on public healthcare is reduced. This proves to be a positive third party effect because this in turn also relieves the stress on tax dollars, which could be spent elsewhere.

The government, on the other hand, feels that they should control healthcare due to many reasons, one of them being the third party effects. Quite obviously, a healthier population is a better thing. Why? If there are less ill people, then there will be a lesser chance of those would-be ill people spreading diseases, and a less chance of those would-be ill people dying. With a higher, healthier population, more products will be consumed, producing a booming economy. With the amount of people living in poverty in Canada, the government feels that it is their responsibility to make healthcare available to those who can’t afford it to back up the higher, healthier population idea. But at what price does this come? Should the government really have full control over medicare in the country? Should individuals who have the financial support be allowed options between private and public healthcare? Sure, it’s unfair for those who can’t afford private healthcare to have such a system, but isn’t it possible for private and public hospitals to co-exist, as do private and public schools? Personally, I think that both Adam Smith and the government views are correct on different levels. The government should continue funding for public healthcare centres, while at the same time allowing private companies to provide their own service. Looking at this from another point of view, shouldn’t people who work hard for their money be allowed to pay for better service, especially for something so important that it could mean the difference between life and death?

Chapter 2: Emerging Markets Pushing Cellphone Growth
[ http://www.physorg.com/news5335.html ]

"Mobile phones could go on to be the most common consumer electronics devices on the planet."
- Ben Wood

The article chosen talks about the growing popularity of cellular phones. They acknowledge that cell phones are quite possibly the best market that's been out there for ages, seeing as how phone sales rates are expected to increase by 16 percent to 779 million units in one year (2005). The source focuses on pinpointing which countries are selling the most mobile phones by comparing them. Because of population size, it's interesting that the site says that India is currently overcoming China as the largest market for cellphones. The fact that China was the biggest market over other countries such as America or Canada was surprising, but again may be the population factor. The article also talks about Latin America sales. The company did amazing research and found out that the percentage of people using cellphones increased from 0.3 percent in 1991 to approximately 20 percent as of 2005, which is a big jump in just a little over ten years. Obviously this is a market that had lots of potential and is still rising.

Demand and supply are simple when you think about them. If there is a demand, there will be people who will supply. Most companies around the world are constantly trying to guess which products will become the next "fad" and hitch a ride on the supply side. However, there are often many hit-and-misses. When the innovational idea of small cellular phones flooded the market, demand was a little slow to begin with. With technology, there are tons of people who are always interested in trying the latest gadget; however there are only a limited amount of those types of people. A larger, more cautious group exists: the buyer who waits for good reviews about a certain item before purchasing. When cellphones began to get more common, more and more people realized the usefulness of the little gadget and demand began to rise sharply after that. Marketers quickly noticed the increase in demand and the big boom of mobile phone popularity exploded. Cellphones didn't just demand themselves however. The entire world had an inclining interest in technology, period. Currently, there is a huge market for unique cellphone designs, due to consumer taste and preferences. In recent years, there have been significant changes to the cellphone as well, such as phone cases and coverings, downloadable ringtones and games, etc., which are all complimentary products. Cellphone popularity, usefulness, and demands have staggered so high that many people consider their cellphone a must have at all times. Imagine, a product so ingenious that people revolve a large part of their lives around it, using it as an organiser, phone, address book, mp3 player, and so on.

Chapter 1: Water: A Necessity Yet Scarce
[ http://earthtrends.wri.org/updates/node/73 ]

"The amount of water in the world is finite. The number of us is growing fast and our water use is growing even faster. Over a third of the world's population lives in water-stressed countries now. There is more than enough water available, in total, for everyone's basic needs. " - Alex Kirby, BBC News

"Water scarcity is partly due to the uneven geographic distribution of water, as determined by the Earth's climate system. It is also a result of regional variations in population size."

In the article found above, the main issue addressed is the overstressed usage of water and uneven distribution throughout the earth. As little as 15 percent of the world's population can live without worrying about water. But what about the other 85 percent? According to the article, there are about 3.5 billion people at risk for diseases due to bad water conditions. The source has an chart which compares the layout of how water is used in different parts of the world. In almost every case, water is used the most for agricultural purposes. An interesting thing to note on the graph is that North America and Europe, highly developed continents with a large access to clean water, use water more primarily for industrial uses over agricultural. The article also compares a picture of Lake Chad from thirty years ago and a more recent picture. The water has been drained and currently lacks the presence of a large body of water.

Unfortunately, water scarcity has been a major problem in the past several decades. In many areas of the world, this problem hangs over the lives of billions. As stated in the article, an estimated 40% of the world's population lives under "water-stressed" conditions, which means that they don't have the high water quality standards found in developed countries. Depending on the situation, this could mean that the water prices are high, quality is poor, access is limited, and/or just has a complete lack of water altogether. Government officials of these countries and areas are forced to come up with ways to help the people, which usually results in more tax money being spent on water issues and less money being spent elsewhere, such as health care and education. This is a large potential factor for slowing down an entire economical system, because if, for example, the current and future work force should succumb to any sicknesses or don't have enough proper training and education to get decent jobs, then the economy takes a huge blow. Taking the work force out of the equation basically stops all economic activity, since no one will be working and no one will have the financial sustainability to buy anything.

Although we may not notice it, since living in North America offers us access to clean cheap water, water scarcity ultimately affects everyone because systems are interconnected throughout the world. If countries run out of water, they may be forced to take harsh actions, such as purchasing water filtering plants. These plants are likely to add to pollution to the already foggy atmosphere. Opening plants will stir economic activity as it creates jobs, which leads to more consumption which again also sidetracks to more pollution. All the smog and harmful chemicals in the air will damage the Earth's atmosphere, burning holes in the ozone layer, which affects everyone in the world. With this in mind, we wonder how people can continue living the lifestyles they do. The solution to water scarcity does not have to include environmentally harmful options, however. If everyone became a global citizen and shared our water, would the world become a better place?