The world is hardly a reasonable place these days. All sorts of lamentable, preventable catastrophes wreak havoc, at home and abroad: self-dealing, dishonest wars, tax loopholes, deaths from needless disease, a climate that’s going bananas. Most offensive of all are the unprincipled politicians who deny these things even happen.

But just one day a year, could we pretend that some sort of natural justice might prevail on the planet (or at least in its economic sphere)?

Here’s my short list of the utterly reasonable economic developments Canadians might hope for in 2007.

Companies making huge profits in Canada will reinvest in Canada.

  • There’s never been a better time for corporate Canada. Profits in 2006 will exceed $200-billion (a record share of GDP). And corporate-friendly tax cuts (rate reductions, the elimination of capital taxes, and the trust loophole) supercharge the after-tax impact.

    Despite profits raining like manna from heaven, companies aren’t cranking up their business. Barely 50-cents of every new dollar in after-tax corporate profits since 2000 went into new capital spending here. With companies reinvesting a shrinking share of cash flow in new projects, they are sitting on a growing mountain of idle cash (up another $70-billion last year). Maybe someone else should put that money to work?

Unemployed workers will get employment insurance.

  • Employment Insurance is an essential $15-billion social program. And despite premium cuts, the program still turns a hefty annual profit (adding up to $50-billion in accumulated surpluses).

    So, workers thrown onto the street in Canada’s current industrial shake-out can be sure that EI will be there for them, right? Wrong. Fewer than 45 per cent of Canada’s 1.1-million unemployed (a number that will probably balloon this year) qualify for EI benefits.

Poor seniors will benefit from new tax breaks.

  • Give federal Finance Minister Jim Flaherty a Bâe” for his squishy move to rein in the income trust boondoggle. It’s a half-effort, but better than the Liberals ever managed. But then he tried to sugarcoat the whole thing with an outrageous set of tax “reforms,” purportedly aimed at the seniors who mythically depend on trust distributions to heat their homes in winter.

    In a change that harkens back to when women’s wages were considered “pin money,” Mr. Flaherty will allow private pension income to be split between spouses. This is worthless to the 30 per cent of seniors who live alone (most of them women), and to the many retired couples with no private pensions. Even increasing the age credit is worth nothing to the 40 per cent of seniors who pay no income tax (since their incomes are too low). These “reforms” will cost $1-billion per year, but seniors who really worry about heating their homes won’t get a cent.

Canada will actually sell something to China.

  • China’s GDP more than doubled in the past decade, adding a trillion dollars to world demand. A 400-per-cent increase in Chinese exports to Canada (creating a $25-billion trade deficit for us) contributed to that success.

    China’s exports come mostly from foreign-owned factories attracted by low labour costs. The companies that run those factories aren’t interested in stuff from Canada — other than a few necessary raw materials. Meanwhile, China’s government (unlike our own) makes sure that domestic demand is channelled to support strategic domestic industries. As a result, the enormous spending power represented by China’s expansion bypasses Canada, and our deficit gets worse every year.

Incredibly wealthy people will be grateful for what they have.

  • According to Canadian Business magazine, there are 46 billionaires in Canada (a record), worth a collective $120-billion. Those 46 people possess more net worth than the bottom 14-million Canadians.

    I’m sure that individually, each of these hard-working but lucky people is thankful for their good fortune. But collectively, the ultra-rich and their lobbyists sound like whiners: gimme bigger capital gains, gimme more tax cuts, gimme higher profits, gimme deregulation.

    Will there ever come a day when the rich and powerful actually admit they’ve got enough?

I know, I know. It’s one thing to be hopeful, quite another to be desperately deluded. But as I write this, it’s New Year’s Day. Just give me 24 hours to pretend that the economy might actually operate according to basic principles of reciprocity and fairness. By tomorrow my hangover will have disappeared, and I’ll be back to my usual, cynical self.

Jim Stanford

Jim Stanford is economist and director of the Centre for Future Work, and divides his time between Vancouver and Sydney. He has a PhD in economics from the New School for Social Research in New York,...