With rising inequality and the well-being of children in even the most affluent countries at serious risk, we can no longer confuse the health of a country's economy with the health of its people. The failure of GDP to capture the well-being of people - including children - necessitates a new way of thinking.
We've seen this story before in the mid-1990s, when out-of-control deficits and an impending sovereign debt crisis led to painful spending cuts and tax increases. The government is wrong to make the return to budget balance conditional on strong economic growth. Population aging is already taking its toll on long-term projections, and too many unforeseen events can derail the fiscal path. Only tight fiscal discipline can balance the budget within a reasonable timeframe, protecting Canadians' standards of living from future large tax increases and cuts to government services.
This problem is also a Canadian concern. A May 2015 survey of high-impact Canadian firms revealed that "finding employees to expand and scale their business ranks as one of the top challenges identified by entrepreneurs." Lower and less progressive taxation would help attract and retain highly specialized labour.
"There are lies, damned lies and statistics" is the well-worn phrase, but nothing better sums up the recent Fraser Institute scare mongering about taxes being the single largest budget item of Canadian households -- as catchy as the headlines may be, it is alarmist spin. Such biased economic exercises raise a fundamental question: Just what indicators should we be using to keep score on Canada's economic performance?