Final Exam - Econ 318

Marginal Abatement Curve

reflects the cost to the society of reducing emissions by an additional unit The Marginal Abatement Curve shows that the cost of reducing pollution increases (becomes more costly) the lower the level of pollution is If firms are required to install pollution-reducing devices, the cost of reducing one extra unit of pollution will be increasing

Marginal Damage Curve

represents the cost to society of each additional unit of pollution or gas The damage to society from each additional unit of pollution is increasing

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Priorities of the Taylor Bouchard report

1 inter-culturalism (legislation, a declaration or a policy statement) and secularism 2 integration a.Recognition of immigrants' skills and diplomas b.Francization programs c.The need for more sustained efforts to regionalize immigration, and d.The need for enhanced coordination between government departments 3 inter-cultural practices and mutual understanding a. The need to further encourage community and intercommunity action programs b.The need for broader training of all government agents in public establishments, starting with the schools, because of the role they play in socialization, and 4 harmonization policy a. foster the accountability of interveners in the citizen sphere (public / private agencies) by ensuring that they have received adequate training b. government is asked to ensure that the practical knowledge acquired in institutions be recorded, promoted, and disseminated in all milieus concerned. 5 fight against inequality and discrimination a.The underrepresentation of ethnic minorities in the public service b.The urgency of combating the numerous forms of discrimination, Islamophobia, anti-Semitism, and racism to which racialized groups are subject, especially Blacks c.The support to be offered to immigrant women d.The need to increase the resources of the Commission des droits de la personne et les droits de la jeunesse, and e.The strengthening of economic and social rights in the Quebec Charter

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National Environment Policy (?)

A recent meeting of the Council of Federation showed that it is doubtful whether the provinces could agree on a "national environmental policy", given their structural differences in energy sources and environment treatment models followed. Alberta may meet 2020 target not because of policy change but because of lower production following the drop in oil prices Saskatchewan is in favour of using Carbon Capture Storage technology, a process whereby CO2 emissions are captured from large industrial facilities before being emitted to the atmosphere, transported through pipelines, and permanently stored in deep, secure underground formations Ontario and Quebec signed a pact to expand trade in electricity. Furthermore, Ontario will join the cap-and-trade scheme of Quebec with California.

Impact on the Level of Potential Provincial GDP

Ability to produce is critical, because more output means a larger tax base and this is what ultimately pays for state programs. A convenient way of thinking about how demographic (and productivity) changes will likely morph into output changes is to write the GDP identity in a way that explicitly factors productivity, hours worked, labor force participation and population: Provincial Provincial GDP = (Productivity)*(Average Hours of Work)*(Employment/Participation Rate)*(Population) Where: H is total hours worked in the economy E is the number of individuals employed, and PW is the number of individuals in the working age group (15-64) So, if we predict what we think are reasonable paths for each component of this equation, then we can see how GDP will grow. Godbout, Fortin et al, have made the following assumptions: GDP/H: On productivity, it is reasonable to assume that it will continue to increase. Note that more investment means higher productivity. Even though investment and the capital stock are not in this equation explicitly, they are here implicitly. H/E: It is hoped that the number of hours worked per employee will stabilize - it has fallen from 1845 to 1692 between 1976 and 2006. E/W: It is assumed that there will be an increase in the rate of employment, which is to say that it is envisaged a larger percentage of the relevant age group will participate in the workplace. This may come as a result of a reduced rate of unemployment, or a postponement of the average age of retirement - the average age currently is about 60, with only 54% of those aged 55-64 working. PW: As we have already seen, the long term trend for the population of working age is negative. This, therefore, will in turn reduce output, or at least the ultimate growth in output.

Population Projections:

According to projections assuming that the current trends will continue, we see that Quebec's population will continue growing, albeit at a decreasing rate, going from about 8 million in 2011 to 9 million in 2027 and 10 million in around 2061. The aging trend of the population of Quebec is expected to accelerate in the coming years, with the gradual arrival to the 65+ group of the populous generations of the baby-boomers (those born between 1946 and 1966). By the year 2021, it is estimated that the proportion of seniors will surpass the proportion of youth. The surpassing of the proportion of the youth by those of 65+ will be observed in all provinces to a varying degree. The combination of an aging group of baby-boomers reaching retirement age, along with a rate of fertility that is below the replacement rate that will lead us to higher dependency rates. Thus, the cost of maintaining health services and the existing array of other government-supplied goods and services will increase per person in the work force - even if we make relatively optimistic assumptions about the evolution of the working-age population

Latest Developments - Short-Term Economic Outlook

According to the Royal Bank's June 2015 Provincial Economic outlook Economic performance will be more balanced during the remainder of 2015 Quebec has made gains in the job market recently. Employment in Quebec increased by 22,000 in July 2015, lowering the unemployment rate by 0.3 percentage points to 7.7%. Compared with 12 months earlier, employment in the province was up by 44,000 or 1.1% (StatCan July 2015). The low oil prices, the low Canadian dollar, and the strengthening of the US economy have all been very helpful to Quebec's external trade sector. Statistics to date show that international merchandise exports continue to grow rapidly following impressive gains recorded in 2014. Real merchandise exports were up by more than 10% in the first quarter of 2015 compared to the same period a year earlier. Virtually all major export categories saw substantial increases. It is expected that foreign trade will remain a key driver of growth in 2015, with positive implications for Quebec's manufacturers. The more disappointing news has been the performance of the domestic side of the economy where household spending and construction activity—perhaps with the exception of home renovation—that demonstrated signs of greater weakness. Quebec's provincial budget (released March 26) presented the provincial government's commitment to balance its books in the current fiscal year through a strong emphasis on expenditure control. Therefore, fiscal policy will remain restrictive in the near term. However, if the government sticks to its plan and ignores the mounting protests against austerity, delivering a balanced budget after six consecutive years of deficits gradually will lift some of the policy uncertainty and set the stage for debt reduction

Protected Persons

According to the United Nations High Commissioner for Refugees, there are currently over 8.4 million refugees within the meaning of the Convention on the Status of Refugees ("Convention refugees") that was adopted in 1951. Canada is a prime destination for those seeking refuge and asylum. Since 1959, it is estimated that Canada has accepted over 850 thousand refugees from around the world. In recent years, however, Canada has tightened its admission criteria to allow only true Convention refugees. Refugees include government-assisted refugees, privately sponsored refugees, refugees landed in Canada and dependents of refugees landed in Canada living abroad Government-assisted refugees are permanent residents in the refugee category who are selected abroad for resettlement in Canada as Convention refugees.

Variations in the Classes of Immigrants

According to the latest figures available, the proportions of immigrants under the different classes are as follows: about 26% in the family class, 63% in the economy class, 11% in the Refugee and Other immigrants class.

Externalities

An externality occurs whenever actions taken by firms or consumers impose costs or confer benefits on others that are not involved in the transaction (third party effects) without any reimbursement for the cost or a charge for the benefit involved

The Optimal Amount of Pollution Abatement

An optimal quantity of pollution occurs when the marginal cost of abatement by one additional unit of pollution equals the marginal damage of that unit Because pollution abatement requires real resources, zero environmental damage is generally not allocatively efficient The optimal amount of pollution abatement occurs at the point where the marginal cost of reducing pollution by one unit is just equal to the marginal cost to society inflicted by that unit

Proposals for the Transformation to a Competitive Social Democracy

Boyer proposes 12 changes in policies, which he calls "The 12 Works of Hercules", that need to be undertaken to enable Quebec to generate the wealth that is capable of producing. Redefine the role of the public sector or the state The state can/should decide upon what goods and services to supply, but it should use the market system to have them supplied to the degree possible. Accepting this approach may mean that the actual extent of government organizations could and should be reduced. This note is another way of saying that the provision of some goods and services could and should be contracted out to private suppliers. The current system has too many monopolies and quasi monopolies to be for the good of the population as a whole. Avoid unnecessary manipulation of signals of scarcity and relative values (market prices) Two major welfare-reducing distortions at the present time are to be found in electricity pricing and the pricing of agricultural produce. Hydro is being sold in Quebec not just below the price that could be obtained in New York or the New England states in general. By raising the price to the true opportunity cost price, aggregate well being would improve dramatically, wastage would be reduced, and additional tax revenue would be generated. Cheap hydro to specific users - e.g. aluminum smelters - is also dubious. The additional direct jobs crated as a result have been estimated to be the equivalent to almost $200,000 per year per job! Agricultural supply management policies are also costly to the consumer, even though they are practiced virtually everywhere. Farmers seem to occupy a moral high ground in the eyes of voters and are therefore entitled to special treatment. But this costs the consumer. If the agricultural sector needs support, do it with direct income subsidies. This would have the benefit of transparence. Promote the systematic reliance upon market mechanisms for the production and distribution of public and social goods/services and affirm the right of all citizens to contest and replace if needed the present producers and distributors of public and social goods/services Offer services to the citizens of Quebec at the lower possible cost, which implies breaking the monopoly of the public sector and auction the contracts to interested providers. Use benchmarking, competitive tendering to guarantee best cost/quality combination. Open tendering for state sponsored provision of goods and services should be central to the supply process. Establish methods and processes of rigorous, transparent, independent, and credible evaluations of public policies and programs The role of the bureaucracy and the role of 'political' decisions should be reduced with a refocusing upon what the state seeks to achieve - the improvement of the condition of its citizens. State expenditures should also be subject to serious cost-benefit analyses. Reform the tax system to make it inciting, cohesive, inclusive, and simple Put more emphasis on consumption taxes Reduce the cost of hiring Reduce marginal tax rates for unemployed who rejoin the job market Help low income persons to escape the dependence using direct subsidization instead of keeping artificially low prices Abolish the tax on capital to boost investments Add dynamism to the development and adaptation of our human capital through the transfer of responsibility to our schools, colleges, and universities and aggressive immigration policies In the globalized era we must constantly invest in skills and human capital development. These are necessary for any economy to be able to compete and grow in the modern world. This may necessitate reexamining the way in which institutions of learning are funded. Fight dropping out of school We should continue to be mindful of the skill level of our immigrants. Abolish the minimum wage in favor of a program of redistribution that is direct and inciting of revenues and wealth Put on a competitive context the system of work relations - establish an obligatory secret ballot for labor union accreditations and more democratic practices in the labor union movement Establish a more aggressive program for the financing of R&D, its promotion and commercialization through the provision of adequate risk capital and the development of efficient tools to create the competencies needed to face the resistance to changes incited by R&D Expand the participation of the private sector in the provision of health services It is not simply a case of applying cost-benefit analysis to supply decisions; there is also the question of how goods and services should be supplied, once the cost-benefit analysis has indicated that the supply decision is a good one. Value the environmental resources and the water in particular through the creation of markets to ensure an optimal and reasoned protection and valorization Favor the private-public partnerships in the development / maintenance of public infrastructures

A New "Quiet Revolution"

Boyer specifies that carrying the proposed 12 changes in policies is not an easy task, but this will lead to a new "Quiet Revolution" reminiscent of the transformation of Quebec in the 1960s. The tangible effects of these changes will be as follows: Within 15 years, Quebec will reach the Canadian average GDP per capita Within 7 years, Quebec will leave the group of recipient provinces of equalization payments Within 5 years, Quebec will reach the Canadian average employment rate Within 5 years, Quebec will reach the Canadian average rate of recipients of EI benefits Within 3 years, Quebec will close the gap of private investment Within 25 years, Quebec will reach Ontario's level of per-capita debt Quebec will close the gap of commercialization of R&D, once this latter is measured Within 20 years, Quebec will close the gap of young population up to 44 years of age What is expected from the province's leadership is To have the capacity to conceive the objectives and the means that are necessary to realize the ambitions and the socio-democratic ideals To have the courage to put these at work

Canada and the kaya identity

Canada's employment in industry/production continued at a relatively high rate compared to some other economies that were switching more quickly to a "service" economy. To make such comparisons we could examine indices of industrial output across countries, or indices of "production" workers. Canada has a very large resource based sector in its economy, and the demand for these resources has been growing at an inordinately high rate given the GDP growth in India and China - the world's two most populous economies, which together account for a third of the world's population and have had growth rates near 10% per annum in the recent past. Consequently, Canada's E/GDP ratio is higher than the corresponding ratio in economies without a resource sector, and in addition it has been growing.

Incentive Mechanism 2: Corrective Taxes (Pigovian Taxes)

Corrective taxes, if set at the appropriate level, can induce an efficient pollution reduction or emission If the government established the P* as a tax on each unit of pollution, then, in deciding which level of pollution to produce, each firm would take this tax into account to find its equilibrium level with its own Marginal Abatement Cost Curve

Examples of externalities

Examples of Negative Externalities: a free market produces too much of a harmful good that is socially undesirable Automobile exhaust Cigarette smoking Barking dogs (loud pets) Loud stereos in an apartment building Dangerous driving due to alcohol consumption Examples of Positive Externalities: a free market produces too little of a useful good that is socially desirable Immunizations Restored historic buildings Research into new technologies Education

Secularism in Qc part 2

Finally, the PQ emphasized that multiculturalism that has been promoted in the 1970s is a Canadian value, not a Quebec value, since Quebec has not signed the Constitution and the Supreme Court's accommodation of the kirpan should not hold. The decision, after a six-year court battle through Quebec's Justice System and finally the Supreme Court, emphasized that Quebec's effort to take religion out of private schools infringed on religious freedoms because it alters the fundamental nature of the schools. He was backed by a Quebec pro-secular group and also complained about the presence of a crucifix and a two-foot-high statue of the Sacred Heart in the council chambers.

Variables of kaya identity and formula

GHG = Pop * (GDP/Pop) * (E/GDP) * (GHG/E) It states that total emission level can be expressed as the product of four inputs: 1 population, 2 GDP per capita, 3 energy use per unit of GDP, 4 carbon emissions per unit of energy consumed. E/GDP is the energy-intensity of output (service-based vs. manufactures-based economy GHG/E is the GHG intensity of energy consumption (are we using coal-fired or hydro-powered electricity generators?);

Pressures on Public Finance from Health Expenditures

Health expenditures will put severe pressures on the public finances. This is primarily because expenditures per person are strongly age-related. Expenditures on those aged 65-74 are two to three times higher than on those aged 45. Details are given in the Graph below. We will have many more older individuals, and it is possible that there will be greater demands placed on the public system. There will be an associated growth in the need for medical specialists and nurses, and this will necessitate more graduates in these fields. Likewise, expenditures on pharmacare will increase dramatically - they are the fastest growing component of medical expenses. And even if older people of a given age will be in better health than their current counterparts, the fact remains that they will live longer and therefore place greater demands on the system over their retired lifetime. Since 1975, expenditures on health have grown almost 3 perc. points faster than the rate of inflation, and this before we have had significant aging! This pattern explains why provincial governments have commissioned reports on their health systems in recent times (Castonguay Report) In education, while numbers requiring training may decrease, the demand for more education should continue to increase. The QPP may require a slight increase in premiums. In other sectors of gov't spending it is reasonable to suppose that expenditures will grow at the rate of the economy.

Multiculturalism

In accordance with the Canadian Multiculturalism Act, the Multiculturalism Program seeks to build an integrated, socially cohesive society; improve the responsiveness of institutions to the needs of a diverse population; and engage in discussions on multiculturalism, integration and diversity at the international level. To advance these objectives, the Multiculturalism Program provides grants and contributions to not-for-profit organizations, the private sector, non-federal public institutions, and individuals; conducts direct public outreach and promotional activities; helps federal institutions to meet their obligations under the Canadian Multiculturalism Act; supports the annual tabling in Parliament of a report on the operation of the Act; and engages non-federal public institutions seeking to respond to diversity also supports Canada's participation in international agreements and institutions.

Other Immigrants

Humanitarian and compassionate cases involve permanent residents included in the other immigrant category who would not otherwise qualify in any category, in cases where there are strong humanitarian and compassionate considerations, or for public policy reasons.

allocatively efficient outcome

If the two sides to an externality — the one causing it and the one suffering it — can bargain together, they will produce the allocatively efficient outcome When transactions costs are excessive, we may - Accept the externality and learn to live with it, or -Governments may intervene on our behalf to deal with it

Life Expectancy

In 2013, life expectancy in Quebec was estimated at 82.2 (80.2 for men and 84.1 for women), whereas at the beginning of the 1990s life expectancy for men was 73.6 and for women 80.6 ye The difference in life expectancy between the two genders is gradually closing High life expectancy evidently contributes to higher numbers of individuals in the +65 age-group Quebec's life expectancy is one of the highest rates in the world

Interculturalism vs. Multiculturalism

Interculturalism is the model for cultural diversity applied in Quebec. Interculturalism and Multiculturalism are separate concepts, though they also have some overlap. Interculturalism takes for granted the centrality of francophone culture. From there it works to integrate other minorities into a common public culture, all while respecting their diversity. Its proponents believe that This model can deliver certain cohesion to a society that feels a perpetual threat of its identity Interculturalism makes certain ideas about diversity more palatable in Quebec. Multiculturalism assumes that there is no dominant culture in Canada This is not easy to be accepted in Quebec where everybody knows there is a majority francophone culture. The Parti Québécois has bluntly declared that "multiculturalism is not a Quebec value, since Quebec has nor signed the Constitution."

Socially Optimal Output

Internalizing an externality involves altering incentives so that people take into account the external effects of their actions. The government can internalize an externality in production by trying to shift the supply to either reduce or increase the equilibrium quantity to reach the socially desirable quantity. To internalize a negative externality: Impose a tax on the producer to reduce the equilibrium quantity to the socially desirable quantity To internalize a positive externality: Offer a subsidy to the producer to reduce his cost and increase the equilibrium quantity to the socially desirable quantity The government can internalize an externality in consumption by trying to shift the demand to either reduce or increase the equilibrium quantity to reach the socially desirable quantity. To internalize a negative externality: Impose stiff fines for alcohol abuse to reduce the equilibrium quantity to the socially desirable quantity To internalize a positive externality: Subsidize education through student loans, bursaries, and scholarships to increase the equilibrium quantity to the socially desirable quantity

B. Competitive Social Democracy

It is a social democracy modern, innovative, responsible, based on a new social model bent on the socio-economic analysis of organisms and efficient institutions It is a social democracy that is resolutely oriented toward the results and the objectives (to be attained by the most efficient means and economically feasible that need to be explicitly defined) It is a social democracy open to technological and organizational changes, favorable to the emergence of the power of competencies in all spheres of activity This is a social democracy that affirms continuously and in a credible way its desire to know the real and tangible contributions toward improving the social wellbeing This is a social democracy that is flexible, motivating, entrepreneurial, no tolerant to mediocrity, and opposing all kinds of pressures to public power, prerogatives, and programs that may come from special interest groups

A. Traditional Social Democracy

It is based on thoughts and political rhetoric that reflects an old model whose utility is past Many times, the sole affirmation of an objective is viewed as being sufficient for its attainment, without the need of appropriate mechanisms for evaluation, coordination, and motivation It is a social democracy devoid of its nature with an orientation toward the means, the maintenance of acquired rights, the protection of rents, corporatist interests and the preservation of sacred cows It is a social democracy that is very little motivating, no innovative, tolerant to mediocrity, locked in its past, and basking in a wooden language where the form and the container dominate the real and the content

History of Kaya Identity

It was developed by Japanese energy economist Yoichi Kaya. It is the subject of his book Environment, Energy, and Economy: strategies for sustainability co-authored with Keiichi Yokobori as the output of a conference entitled Energy, and Economic Development (1993 : Tokyo, Japan) Tokyo Conference on Global Environment.

Point system

LANGUAGE: Requiring a minimum level of language proficiency (28 points max.) EDUCATION: New Educational Credential Assessment (25 points max.) WORK EXPERIENCE: Redirecting points to other factors (15 points max.) AGE: More emphasis on younger workers (12 points max.) ARRANGED EMPLOYMENT: Streamlining the process and reducing the potential for fraudulent job offers (10 points max.) ADAPTABILITY: Changes to reflect factors that help promote integration (10 points max.)

A renovated IPAT identity

Learning actors' leverage for change along the journey to sustainability requires quantifying the component forces of environmental impact and integrating them. Population, income, consumers' behavior, and producers' efficiency jointly force impact. Here, we renovate the "Kaya Identity" to identify actors with the forces. Forcing impact I are P for population, A for income as gross domestic product (GDP) per capita, C for intensity of use as a good per GDP, and T for efficiency ratios as impact per good. The "ImPACT Identity," is redefined as Im = P * A * C * T Where the following are the forces P: Population A: Affluence (Income or GDP per capita) C: Intensity of Use of a good such as energy per /GDP T: Efficiency ratio of technology (Carbon impact per unit of good used / energy) The novelty is in the identification of the actors behind those factors (ratios) to whom is assigned the responsibility for their leverage. Thus, the actors behind the forces are Parents are responsible for Population growth Workers are responsible for Affluence (productivity) Consumers are responsible for the intensity of use of energy Producers are responsible for technology efficiency (emissions per unit of energy)

What Can Be Done to Avoid These Deficits?

Obviously we cannot continue to disregard the consequences of population aging. There are three options: We could ignore the future and keep on borrowing for a time and run up the public debt further. However, a time would arrive when this would cripple us one way or another: the financial markets might say 'enough', or/and taxpayers would find themselves paying more in taxes to cover the increased debt load of the government. A second option would be to reduce public services. This option would be inequitable for future generations and more inequitable the further into the future it might take place. The third option would be to increase taxes, or revenues from other sources (see the recommendations in the Montmarquette report). If we were to invest a given amount of taxes each year to meet future needs, how much would have to be set aside each year? The answer they arrive at is $4.5b, which would mean increasing the tax take considerably - in a province that already has one of the highest average tax rates in Canada. However, this is what the authors specify would take if we want to keep provincial gov't services intact. How else might be done? Obviously by encouraging higher fertility by taking in more migrants encouraging higher work rates among the 55-64 age group increasing productivity getting more productivity out of the health sector negotiate more federal transfers go after tax evasion and evaders more aggressively charge more for public services (e.g. higher hydro rates) and university fees.

Inter-provincial migrations

Quebec has had net interprovincial out-migration for some decades now, which is a reflection of slower economic growth relative to the ROC and other political forces The provinces that gain from interprovincial migrations at the expense of Quebec are especially Ontario and Alberta The balance of inter-provincial migrations for 2013 was negative by 13,100 persons, the highest negative difference since 1997 In case of the interprovincial migrations, for the period 2013-2014, the average age of those leaving from and those coming to the province is 32 years.

International migrations

Since 2009, international migration has been adding a net of about 45,000 persons annually to Quebec About 52,000 international immigrants were admitted to Quebec in 2013, down from 55,050 admitted in 2012 The number of people admitted corresponds to the objective of the Plan d'immigration du Québec pour l'année 2013. The objectives for 2014 and 2015 are about the same About two-thirds (67%) of the international immigrants are classified as economic immigrants, of which 8% are entrepreneurs and 1% their accompanying family members Family reunions represent 24%, and refugees 8% Given that the only population growth in the future will be coming from immigration, it is important to know if the age distribution of prospective immigrants could have a moderating impact on the growing dependency ratio, if they are young, or not if they are old. Of the immigrants admitted between July 1, 2013 and June 30, 2014 2/3 (66%) belonged to the 20-44 age group and another 25% were less than 20 years old, and 10% were of the 45+ age group. The average age of international immigrants of slightly higher than 28 years comparesfavorably to the average age of the total population that is 41.5 years

Importance of Demographics

Since the 1970s (following the "Quiet Revolution" of the 1960s), Quebec has been undergoing a seismic demographic change, which along with the province's weak economic performance is expected to bring several challenges in the future. The question we face in this chapter is twofold: Can Quebec continue to afford the array of public services it now offers into the indefinite future? And if so, how can these supplies be secured fiscally? The answer to this question lies partly with the likely demographic trends in Quebec in the next 45 years, and the ability of Quebec to create wealth.

Taxes or Permits?

Taxes differ from permits because taxes generate revenues while permits (allocated for free to the total amount of desired pollution Q*) do not. Economists suggest that permits should be auctioned in the start-up phase Setting a tax requires knowledge of the cost and damage functions Despite the cost of monitoring and the incomplete information regarding costs of pollution, governments should act on something that is of crucial importance for future generations Direct controls may be fruitful in certain cases, while market-based tools are efficient when sufficient information is available

"entry effect" and the "assimilation effect

The "entry effect" is the amount, in percentage terms, by which the earnings of immigrants fall short of the earnings of observably similar native born Canadians; The "assimilation effect" defines how long it takes for the immigrants' earnings to catch up, given that they started with a shortfall.

The BC Carbon Tax

The B.C.'s carbon tax is revenue-neutral in the sense that its revenues are being returned to individual and corporate taxpayers in the form of tax credits or reduced rates of other taxes to the system, which makes it more palatable to the electorate A report by Sustainable Prosperity entitled BC's Carbon Tax Shift After Five Years: An Environmental Success Story suggested that the policy had been a major success. The aggregate effect of the tax shift was positive of taxpayers as a whole, in that cuts to income and other taxes exceeded carbon tax revenues by $500 million from 2008-12.

Reforms to International Immigration Policy

The Quebec government has recently announced its intentions to overhaul its international immigration policy that is in place for the last 25 years The reforms will be decided after the government conducts public consultation hearings on the subject and are expected to be presented in the form of a new law in the fall of 2015 These reforms, inspired to a certain extent by the Canadian model, will be aiming at the following: Ensuring that new immigrants have an adequate knowledge of the French language before arriving (estimated that about 43% of new arrivals do not speak a word of French) Reviewing the number of immigrants accepted annually Reviewing the selection process and favoured countries of origin of the immigrants In addition, reforms will be sought to be implemented in internal policies touching the areas of French courses offered Placing an emphasis on the economy, balancing the recruitment of new immigrants with workforce needs and finding candidates that can fill empty jobs Trying to reduce the difference in unemployment rates between immigrants and locals Recognition of training undertaken abroad Regionalization of immigrants

Secularism in Sweden

The Sweden Democrats say they are not racist, but their message is that immigration needs to be severely curtailed and that immigrants should be assimilated rather than integrated. The rise in popularity of this party in Sweden mirrors an increase in support for similar parties in other parts of Europe in such countries as the Netherlands, France, Austria, Hungary, Slovakia and Britain where anti-immigration sentiment is especially directed against muslims. Sweden has often been held up as an example of a country Canada should emulate - high taxes and plentiful social services.

The Future Face of Canada

The adoption of the point system for accepting immigrants has contributed to the diversity of immigrant population that has altered the mix of immigrants coming from developing as opposed to those coming from developed countries, in favour of the first group. In 1971, immigrants from developing countries represented 24.3% of newcomers, while the proportion of this group in 2006 was almost 80%.

Secularism, Equality, Religious Freedom, and Assimilation

The argument for accommodating an individual's difference is based on the thinking that this is a way to prevent this individual from further retreating into his/her community and deepening this difference. The argument about prohibiting religious garments because they impose inequality rules upon women is not very strong because equality of men and women still remains unresolved in all western societies where women are still earning generally less than men for equivalent work, are still more likely to suffer physical and sexual abuse than men, and are significantly underrepresented in high political and business positions. If Canada needs immigrants and, as demographic studies show, most probably we will need to accept more than the current annual numbers of 250,000, then attitudes will have to change and more efforts should be made to successfully absorb them.

Intergenerational Equity

The concept of intergenerational equity has been an important one in public economics since the work of Auerbach and Kotlikoff about 20 years ago. Instead of looking at budget balance within one year, they proposed that we should also look at the long term feasibility of a set of current fiscal expenditures. In other words, in view of predictable future developments in the economy, can the existing set of programs be sustained with the existing set of taxes? If the existing set of expenditures is to be maintained for future generations, but they will necessitate either more or less tax revenue from future cohorts of workers, then the system is not equitable in the intergenerational sense. The problem that is foreseen in Quebec is that (after making reasonable assumptions about output growth and therefore tax revenue growth, and after estimating the required future expenditures associated with our current programs) we will conclude that there will be insufficient revenue. As a result we will either have to cut future expenditures or increase taxes on future generations of workers to pay, essentially, for the health care of the current workers.

The Categories of Immigrants:

The family class Economic Immigrants Skilled workers Business immigrants Provincial and territorial nominees Live-in caregivers Canadian Experience Class Protected Persons (refugees) Other Immigrants (Humanitarian and compassionate cases)

Projections and Conclusions Regarding Future Deficits

The following conclusions can be drawn: A deficit begins to open up at some point in the period 2011-2021. And this then becomes amplified in each subsequent year. The deficit takes several years to develop because the baby boomers do not begin to retire for several years yet. As a percentage of GDP, the deficit grows to 4.5%, which is clearly not sustainable. The biggest single cause of this is obviously health expenditures: not only are they the biggest dollar component at the outset, they also experience the highest growth rate. This scenario envisages that, while health expenditures account for 35% of provincial expenditures right now, they will absorb 56% by 2051. To be noted, these calculations make relatively optimistic assumptions about revenue growth and health expenditure growth.

Positive Externalities in Production

The intersection of the demand curve and the social-cost curve determines the optimal output level. The social costs of production are less than the private cost to producers and consumers. ex: new tech spillover To internalize a positive externality: Offer a subsidy to the producer to reduce his cost and increase the equilibrium quantity to the socially desirable quantity

Negative Externalities in Production

The intersection of the demand curve and the social-cost curve determines the optimal output level. The socially optimal output level is less than the market equilibrium quantity. The social costs of production are higher than the private cost to producers and consumers. To internalize a negative externality: Impose a tax on the producer to reduce the equilibrium quantity to the socially desirable quantity

Positive Externalities in Consumption

The intersection of the social value curve and the supply curve determines the optimal output level. The social value of consumption of a good is higher than the private value to consumers. ex: education To internalize a positive externality: Subsidize education through student loans, bursaries, and scholarships to increase the equilibrium quantity to the socially desirable quantity

Negative Externalities in Consumption

The intersection of the social value curve and the supply curve determines the optimal output level. The social value of consumption of a good is lower than the private value to consumers. ex: alcohol To internalize a negative externality: Impose stiff fines for alcohol abuse to reduce the equilibrium quantity to the socially desirable quantity

Migration

The migration balance or total migration takes into consideration both international and inter-provincial migrations. Total migration balance (which excludes non-permanent immigrants) is positive, which contributes to a positive population growth for Quebec

The point system and the 4 immigrant categories

The most significant policy measure was implemented in 1967, following the development of the new philosophy in the early 1960s. This new philosophy was much influenced by the spirit of anti-discrimination of the Kennedy-Johnson years in the U.S. Henceforth, migrants would be classified into four broad groups: 1 independent/economic applicants, whose merits would be based on a points test; 2 close family members (family reunions) assisted relatives; 3 Assisted relatives are, for example, cousins of earlier migrants who take the points test, but receive extra points because they have some family already in Canada to help them with the transition. 4 refugees. The points system is primarily based upon age, language proficiency, education, and work experience

Evolution of the Point System for Independent Skilled Workers

The points system that Canada has used to evaluate potential migrants has undergone changes in the distribution of points among the different categories depending on the policy emphasis. The current focus is more on the quality and adaptability of workers rather than on their specific skills. The following are the changes brought to the point system in 2013:

Demographics Present situation:

The population of Quebec was estimated at 8,179,000 on January 1st, 2014, growing at a rate of 0.0077% (growing by about 62,900 from a year ago, or less than 1%) Quebec grows less fast than Canada, 7.7 per 1000 compared to 11.4 per 1000 in 2014 A lower that the Canadian growth rate is observed in Quebec for at least the last 20 years. Slow population growth implies a drop in Quebec's relative weight in the federation (23.1% in 2014, down from 27.9% in 1971) The increase in population from a year ago was due to natural growth (births minus deaths) accounting for 27,800 and immigration accounting for 33,285 permanent and almost 1,800 non-permanent immigrants The importance of immigration in population growth is increasing The proportions of women and men are 50.3% and 49.7% respectively. In 2014, the median age was 41.8 years In 2014, 20.9% consisted of youth, 62.0% belonged to the working age group of 20-64 years old, and 17.1% were senior citizens (65+), which gives a dependency ratio of 61.3% In this respect, Quebec looks a lot like BC, NS, NB, NFD, while Alberta seems to be the only province that has a relatively younger population.

Pollution as an Externality

The production of many goods generates pollution of some kind. This pollution imposes costs on other members of society The social marginal cost of production exceeds the private marginal cost of production Allocative efficiency requires that the price be equal to the social marginal cost. Social marginal cost exceeds private marginal cost. The producer ignores these costs When there is a negative externality, a competitive free market will produce more output than the allocatively efficient level. If the externality can be internalized (by making the firm bear the entire social cost of production), allocative efficiency can be achieved The socially optimal level of output is at the quantity where all marginal costs, private plus external, equal the marginal benefit to society

Francization Issue in Quebec

The rapidly diminishing birth rate of francophones and the accelerating rate of integration of allophones to the anglophone group has created great anxieties about the future of the French language. Three attempts have been made to settle the issue with a corresponding number of laws that each one would be more restrictive than the previous one: Bill 63 that was issued in the fall of 1969 "To promote" the French language Bill 22 that was passed in 1974 after the study of the status of the French language by the "Gendron Commission" that was appointed following the francophones' discontent with the previous law, and Bill 101 that was passed in the summer of 1977 by the first PQ government.

The low fertility rate

The synthetic or total fertility rate represents the average number of children a woman would potentially have, were she to fast-forward through all her childbearing years in a single year, under all the age-specific fertility rates for that year. In other words, this rate is the number of children a woman would have if she was subject to prevailing fertility rates at all ages from a single given year, and survives throughout all her childbearing years. The total fertility rate for Quebec has reached 1.65 children in 2013 (slightly lower than 1.67 achieved in 2012) indicating a continuous slide since the plateau of 1.73 which was reached in 2008 (about equal to the 1976 level) In 1987, Quebec reached a fertility level of 1.36, which was the lowest level in its history The Quebec fertility rate is slightly higher than the Canadian average (1.61) One reason for the low birth rate is the change in lifestyles which is the result of the massive entry of women in the labour force and the preference for delaying childbearing and producing less children than in the past. Another reason is the change in morals and an indicator of this latter is the fact that 63% of new babies in 2013 were born out of the wedlock (much higher than the 9.8% observed in 1976) which compares with 67% in Island, 56% in Metropolitan France, 55% in Norway and Sweden, 48% in UK, 41% in US, 35% in Germany, and 20% in Switzerland. The number of abortions in Quebec reached 26,248 in 2011, slightly higher than in 2010. This number underestimates the true picture of abortions by about 3% - 10%, as certain abortions made by salaried doctors are not reported. The highest number of abortions is observed among the women of 20-24 years. The abortion rate reached 30 per 100 births in 2011 in Quebec, which is about the same since 2008. The same rate was 26 in France.

C. Re-Think Social Democracy

There is a need for adopting a new approach to social democracy that is based on a maximum use of competitive mechanisms to realize the principles and ideals of social democracy Until now, the principles and ideals of social democracy have been associated with a public bureaucracy that translate into public administration, crown corporations, and direct and indirect controls of the rights of individuals and private enterprises The first and central objective that is the improvement of the wellbeing of individuals passes through the recognition of three fundamental principles: The ability of individuals to make rational decisions The social partnership defines and makes the individual There is a crucial need for mechanisms of incitement and coordination that are transparent and efficient for the optimal usage of available resources

Economic Immigrants

They are permanent residents selected for their skills and ability to contribute to Canada's economy, including the following sub-categories Skilled workers are immigrants who are able to demonstrate their ability to enter the labour market and successfully establish in Canada by meeting federal and Quebec selection criteria regarding education, English or French language abilities, and work experience ii. Business immigrants are permanent residents selected on the basis of their potential to build innovative companies that can compete on a global scale and create jobs, provided that they could get support for their start-up from a designated Canadian organization including venture capital funds, angels, and incubators. The old programs of immigrant investors were eliminated as of June 19, 2014. Provincial and territorial nominees are permanent residents designated by provinces and territories who will meet their local needs, who are not subject to the skilled worker selection grid for eligibility. iv. Live-in caregivers are temporary foreign workers who are qualified to provide care for children, sick or elderly people, or persons with a disability. They are granted temporary resident status and a work permit and, after two years, are eligible to apply for permanent resident status Canadian Experience Class covers temporary foreign workers or foreign students who have graduated in Canada and have the qualities to make a successful transition from temporary to permanent residence, since they are familiar with the Canadian society, they have knowledge of English or French and qualifying work experience, and can contribute to the Canadian economy

The family class

This is comprised of foreign nationals sponsored by close relatives or family members in Canada and includes spouses, partners, dependent children, parents, grandparents, and other close relatives, within the goal to facilitate the reunification of families. Sponsors must demonstrate the ability to take financial responsibility for their family members with a sponsorship undertaking for a specified time period. In 2009, CIC initiated the process to make regulatory changes to refuse cases of suspected marriage fraud.

Unequal Marginal Abatement Cost Curves for Different Polluters

To attain a target level of pollution at a minimum resource cost, the marginal abatement cost of each polluter should be the same. Therefore, controls that impose same emission limits on all firms may not be the least costly manner of achieving a target level of pollution

Incentive Mechanism 1: Pollution Permits

Tradable pollution permits can attain a pollution target in an efficient manner A system of tradable permits, frequently called "cap and trade" system because it limits or caps the total permissible emissions, while at the same time it allows a market in permits to develop If the government grants pollution permits to each firm to emit up to a specific amount, (a fraction of the total pollution Q*) and then the firms are allowed to trade these permits, then it should be possible for all firms to gain from the trade

Secularism in France

Under a ban, effective from April 11, 2011 It is illegal to wear full-face veil in public, except at public places of worship Law breaker will face fine of $216(150 euros) and/or a citizenship course Any person forcing a woman to wear the veil will face a fine of $43,383 criticize the policy that "Violates the women's freedom of expression, instead of protecting the rights of one of France's most vulnerable groups". "There is a groundswell of opinion in many European countries that Islam is alright and Muslims are OK so long as they are not too visible. This attitude is generating human rights violations and needs to be challenged," Amnesty International said.

Public Policy towards Pollution

When externalities are significant and private solutions are not found, government may attempt to control pollution through . . . A. Command-and-Control Policies Usually take the form of regulations: Forbid certain behaviors (ban throwing untreated sewage in the river) Require certain behaviors (requirement that all students be immunized) B. Market-Based Policies Government uses taxes and subsidies to align private incentives with social efficiency. In the case of pollution, the government can Place a price on the pollution through Pigovian taxes Taxes enacted to correct the effects of a negative externality. Place a limit on the amount of pollution through issuing tradable pollution permits and allow the voluntary transfer of the right to pollute from one firm to another. A market for these permits will eventually develop. A firm that can reduce pollution at a low cost may prefer to sell its permit to a firm that can reduce pollution only at a high cost.

Secularism in Canada

While applying for citizenship in 2013, Ishaq, an immigrant from Pakistan, had agreed to unveil herself to an official before taking the citizenship test. She objected to removing her niqab at the public swearing-in ceremony and refused to take part in a citizenship ceremony because she would have to show her face. On June 19, 2015, - exactly one hour and 15 minutes before the House of Commons rose for the last time before the election, the Minister of State for Multiculturalism, tabled Bill C-75, the Oath of Citizenship Act, where under the proposed legislation, in order to take the public oath of citizenship one's face must be uncovered.

age distribution

age distribution is somewhat favourable to Canada's needs. To the degree that the age distribution is younger, Canada gains because it means that the majority of immigrants will contribute for many years to the nation's economy. Destination-wise, immigrants tend to settle in urban areas, and in areas where there already exist communities of immigrants Consequently, Ontario, British Colombia and Quebec attract most of the immigrants, together accounting for more than 80% of permanent residents However, the importance of Ontario and British Columbia has been decreasing in favour of Alberta, Manitoba, and Saskatchewan. Quebec accounts for about one-fifth of the annual immigrant flow 70% of new permanent residents in 2014 were established in Toronto, Montreal, Vancouver, Calgary and Edmonton

The Kaya identity (wiki)

an equation relating factors that determine the level of human impact on climate, in the form of emissions of the greenhouse gas carbon dioxide. This identity states that total emission level can be expressed as the product of four inputs: human population, GDP per capita, energy intensity (per unit of GDP), and carbon intensity (emissions per unit of energy consumed).[1] This equation is both simple and tricky, as it can be reduced to only two terms, but it is developed so that the carbon emission calculation becomes easy, as per the available data, or generally in which format the data is available.

Secularism in Quebec

two issues still dominate Quebec's debate over the place of religion in the public domain. First is the question of the mandatory course on ethics and religious cultures in Quebec schools as well as the use of religious language and symbols in subsidized daycares The other debate that has received considerable attention involves the right of Quebec civil servants to wear a hijab or other religious symbols. This debate is largely hypothetical because of the near absence of such women employed by the provincial government.

The Quebec-California Agreement

uebec has concluded an agreement with California to adopt a linked cap-and-trade system. California has committed to reducing its emissions to 1990 levels by 2020 while Québec has committed to reducing emissions 20% below 1990 levels in the same time period, to come into effect in Jan. 2015 The cap-and-trade systems of California and Québec operate under guidelines of the Western Climate Initiative (WCI), a voluntary sub-national inter-governmental organization initiated in 2007. There is hope that, if the linked cap-and-trade system is cost-effective, other states/provinces will commit to the WCI and provide a blueprint for a federal or continental carbon pricing scheme. California and Québec differ significantly in terms of emissions by sector. Transport is the largest source of emissions in both jurisdictions, Electricity generation is the second largest source of emissions in California while it is almost insignificant in Québec, thanks to large hydroelectric resources Industrial gases account for a larger share of emissions in Québec than in California, largely due to the significant contribution of Québec's aluminum industry. Each jurisdiction's cap-and-trade program, is divided into three commitment periods. During the first commitment period, from 2013-2014, the emissions cap will address only emissions in the energy and industrial sectors—accounting for approximately 36% and 29% of total emissions in California and Québec, respectively. From 2013 through 2014, the cap decreases by about 2% annually in both jurisdictions. At the beginning of the second compliance period, coverage expands to include the transport sector in 2015, at which point approximately 87% and 77% of emissions will be covered in each respective jurisdiction. Between 2015 and 2020, the cap reduces at a rate of approximately 3% and 4% per year in California and Québec, respectively. The auctioning of allowances is an important step in revealing a carbon price but also in generating revenue from the cap-and-trade system. Allowances can be bid upon and held by emitters who are subject to the cap but also by other market participants who may not have any emissions. This category essentially refers to those financial firms in California or Québec who are permitted to trade in the system, in an effort to provide liquidity in the market. By 2007-2008, the Quebec government concluded that the Canadian federal government would not establish a cap-and-trade system or that, if a federal system was established, it would not be in Québec's interests. Canadian federal plans are complicated by concessions that were required for the oil and gas industries. Québec interprets this as implying that the manufacturing sector in Canada - highly concentrated in Ontario and Québec - would be responsible for the majority of reductions. Conclusion: federal climate policy would not be in Québec's interests Therefore, Québec should find alternative partners to establish an emissions trading system. Additionally, the lack of meaningful federal action was also a factor. The federal government actually played the role of a foil, galvanizing disparate political actors in Québec against each federal government climate policy proposal. In the end, Québec decided to develop its own cap-and-trade system where Québec "would control the rules of the game" in order to retain its autonomy.