Economics professor offers grossly misleading analysis of inequality in Canada

Dalhousie economics professor Lars Osberg’s The Scandalous Rise of Inequality in Canada was published just in time to be eligible for the always hotly-contested title of worst Canadian economics book of the year.

Osberg’s central theme is that inequality in Canada has been steadily increasing and this poses a threat to economic growth, financial stability, social mobility, limiting climate change and even democracy—at times, it seems every imaginable problem is blamed on inequality. This makes it even more important to get the facts about inequality right.

The most misleading chapter in the book concerns top-income earners. Osberg claims that “the income share of the top 1 per cent… is the aspect of inequality that has changed the most in recent years.” However, the chapter on inequality at the top of the income distribution exclusively features data for its increase in the United States, driven by the outrageous success of technology firms such as Facebook, Apple, Alphabet, Microsoft and Nvidia. Nowhere is the data for Canada cited, but in fact the 1 per cent’s share of income in Canada has fallen since 2007, which probably explains why Osberg avoided it.

The real problem with Canada’s high-income earners over the last two decades is not that they’re gobbling up more income at the expense of everyone else, but that we do not have enough of them. Nor do the top 1 per cent in Canada earn nearly as much as in the U.S. Pretending that incomes in Canada are as skewed as in the U.S. is another example of importing narratives without examining whether they are applicable here. This might be forgivable for the average person, but it’s scandalous and disingenuous for a professor specializing in income distribution.

Raising taxes on the richest 1 per cent has a “populist” appeal. However, former finance minister Bill Morneau wrote in his memoire Where To From Here: A Path to Canadian Prosperity that he came to “regret supporting the idea of a tax increase on the 1 percent” because “it began a narrative that made it difficult to have a constructive dialogue with the people prepared to invest in research and development to benefit the country… our proposal’s biggest impact was to reduce business confidence in us.” Before becoming the Trudeau government’s current finance minister, Chrystia Freeland acknowledged that “many of the ultra-high net-worth individuals flourishing in today’s global economy are admirable entrepreneurs, and we would all be poorer without them.”

Another practical consideration for Morneau was that “Canada’s personal income tax rates are not competitive with the U.S. where highly skilled labour is concerned.” Finally, Morneau acknowledged that taxing the rich in Canada will not raise much money, because “the number of taxpayers affected will be quite small… the math just doesn’t work.” I calculate that confiscating all of the income the 1 per cent earn above $200,000 would fund total government spending in Canada for a paltry 44.2 days.

Besides misrepresenting the importance of Canada’s 1 per cent, Osberg twice makes the patently false claim in his book that “income from capital… is roughly half of GDP in Canada.” Just last week, Statistics Canada’s estimated labour income’s share of GDP was 51.3 per cent while corporate profits garnered 26.0 per cent (including profits reaped by government-owned businesses through their monopolies on utilities, gambling and alcohol sales). Another 12.6 per cent of GDP was mixed income earned by farmers and small businesses, which StatsCan cannot disentangle between labour and capital. The final 10.2 per cent of GDP went to government taxes on production and imports, which clearly is not a return on capital. I would expect undergraduate economic students to have a better grasp of the distribution of GDP than Osberg demonstrates.

Among the many evils generated by inequality, Osberg cites democracy as “threatened by the increasing concentration of wealth and economic power in Canada.” Osberg must believe Justin Trudeau’s decade-long tenure as prime minister reflects the choice of our economic elites. If so, they have much to answer for; besides steadily-degrading Canada’s economic performance and international standing, Trudeau attacked these same elites by raising income taxes on upper incomes, increasing the capital gains tax, and undercutting the fortunes of the oil and gas industry on which much wealth relies. If our economic elite really controls government, it seems they made an incredibly bad choice for prime minister.

Philip Cross

Senior Fellow, Fraser Institute

Related Topics:#FraserInstitute #PhilipCross InequalityInCanada LarsOsberg ScandalousRiseOfInequalityInCanada

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Michigan could be a winner as companies pull back from EVs

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Deportations causing delays in US construction industry

Automotive

Michigan could be a winner as companies pull back from EVs

Published on September 16, 2025

Todayville

From The Center Square

By Elyse S. Apel

Federal deregulation and tax credit cuts are reshaping the auto industry, as Ford Motor Co. and General Motors Co. scale back electric vehicle production and redirect billions into hybrids and traditional gas-powered cars.

Yet, the Michigan automotive industry could see increased investments from those same companies as they reallocate that funding.

While both Ford and GM previously announced ambitious targets to expand electric vehicle fleets over the next decade, they are now cutting back on electric vehicle production.

That comes in response to federal deregulation of gas-powered vehicles, tax credit cuts, and the prospect of slowing consumer demand.

In August, Ford stated it was canceling plans to build a new electric three-row SUV. Instead, it is turning its focus to hybrid vehicles, including a massive $5 billon investment into a new “affordable” hybrid truck.

GM announced similar plans earlier this month. It will be cutting back electric vehicle production at Kansas and Tennessee plants, anticipating a decline in demand once federal tax credits end Sept. 30.

This all could have a real impact on the electric vehicle industry across the nation and experts are already anticipating that.

A new forecast by Ernst & Young Global Limited now predicts a five-year delay in electric vehicles making up 50% of the new car marketshare. While previous forecasts predicted America would reach that mark by 2034, the new forecast pushed that back to 2039.

“The U.S. faces policy uncertainty, high costs, and infrastructure gaps,” said Constantin M. Gall, the company’s global aerospace defense and mobility leader.

Clean energy advocacy groups are decrying this move away from electric vehicle initiatives, largely blaming the Trump administration.

“The transition to electric vehicles now faces significant roadblocks,” said Ecology Center in an April report. “The Trump administration has rolled back key policies supporting clean transportation.”

It also pointed to a nationwide deregulation of the gas-powered vehicle industry for allowing those to remain “dominant” over electric vehicles.

“These actions prioritize fossil fuels over clean energy, threatening progress toward a sustainable transportation future,” the report stated.

While bad news for electric vehicle supporters, the Michigan automotive industry could be a winner as companies re-shift focus back to gas-powered and hybrid vehicles.

With billions of dollars previously allocated to federal pollution fines and electric vehicle costs now available for investment, GM now plans to increase production at a Detroit-area plant by 2027.

The Michigan-based company also recently announced plans to invest billions into another Michigan plant in Lake Orion Township.

For similar reasons, Ford’s CEO Jim Farley told analysts that the company anticipates monetary savings “has the potential to unlock a multibillion-dollar opportunity over the next two years.”

While Gov. Gretchen Whitmer has long been a proponent for the electric vehicle industry, she did recently emphasize her support for all Michigan-based manufacturing, no matter the type.

“We don’t care what you drive – gas, diesel, hybrid, or electric – as long as it’s made in Michigan,” she said following the GM Orion announcement. “Together, let’s keep bringing manufacturing home, growing the middle class, and making more stuff in Michigan.”

Elyse Apel is a reporter for The Center Square covering Colorado and Michigan. A graduate of Hillsdale College, Elyse’s writing has been published in a wide variety of national publications from the Washington Examiner to The American Spectator and The Daily Wire.

Elyse S. Apel

Business

Deportations causing delays in US construction industry

Published on September 16, 2025

Todayville

From The Center Square

By Andrew Rice

The Trump administration’s immigration policies are leading to worker shortages and delayed projects across the construction industry, according to a new report.

A survey conducted in July and August by the Associated Contractors of America and the National Center for Construction Education and Research found more than one in four respondents said their firms were affected by increased immigration enforcement in the past six months.

Respondents said increased immigration enforcement is making it more difficult for firms to recruit workers. Ten percent of firms reported using the H-2B visa program, which is used for recruiting nonagricultural foreign workers, to recruit salaried and hourly workers.

Congress set the cap for H-2B visa allowances at 66,000 in fiscal year 2026. The program offers temporary work for the first and second halves of the year to foreign employees.

Jordan Fischetti, an immigration policy fellow with Americans for Prosperity, said government allowances for visa programs do not meet the demand of the current workforce.

“Immigration for a long time has been centrally planned, so there’s just not a very strong appetite for letting the market do its work,” Fischetti said.

The report found 83% of firms with craft worker openings reported that positions are hard to fill or harder to fill than one year ago. Eighty-four percent of firms with openings for salaried workers also reported it was hard or harder to fill positions than one year ago.

Five percent of respondents reported their jobsites or work sites were visited by immigration agents and 10% said workers did not report or quit due to rumored immigration enforcement allegations.

Contractors in Georgia, Virginia, Alabama, Nebraska and South Carolina were more likely to be impacted by immigration enforcement, according to the report.

The report found worker shortages were the most commonly listed reason for project delays. Two-thirds of firms reported at least one project in the last six months was postponed, canceled or scaled back. The survey took into account more than 1,300 individuals across various contracting and construction firms.

Michele Waslin, assistant director of the University of Minnesota’s immigration history research center, said the construction and agricultural industries have been deeply affected by the Trump administration’s immigration policies.

“Some businesses really do have a labor shortage, and they’re unable to hire American workers, and they want to hire foreign workers and it’s not that easy to do in many cases,” Waslin said.

A separate poll commissioned by The Center Square found 85% of registered voters think it is either somewhat or very important to create legal pathways for construction workers to live and work in the United States.

The poll, conducted by RMG Research in conjunction with Neapolitan News Service, surveyed 1,000 registered voters in August and found vast agreement across partisan lines, age and race in its support for legal pathways in construction.

Fischetti said both employers and the American public have expressed interest in allowing more flexibility in the immigration system and he wants to see Congress modernize in response.

“We really need to work on providing pathways,” Fischetti said. “I don’t just mean pathways to legalization, pathways to certainty.”