Double Blind

The Canadian Fiscal Monitor is one of the few government publications on my subscription list. It is a very good summary of the fiscal situation in Canada, albeit it is usually a couple months behind.

The July edition of the Monitor is quite revealing with respect to what has gone on in the economy. Specifically, looking at the year-to-year comparison of the Goods and Service tax collection:

From April to July 2008, there was $9.4 billion collected;
From April to July 2009, there was $7.1 billion collected.

This is a 24.4% decrease in consumer spending. Notably, July-to-July comparisons have it down 8.1%, which suggests that the downfall in consumer spending has moderated somewhat.

Corporate profits are also down about 32.3% year-to-date vs. last year. This is partially explained by the decrease in corporate tax rate, which is scheduled as follows:

19.5% effective January 1, 2008
19% effective January 1, 2009
18% effective January 1, 2010
16.5% effective January 1, 2011
15% effective January 1, 2012

Although the corporate tax rate went down by 0.5% between 2008 and 2009, adjusting for this difference leaves a 30.5% year-to-date difference.

More interesting is the July-to-July comparison, which has corporate profits down 52%.

This entry was posted on Friday, October 2nd, 2009 and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.