Political Science
Canada: Comparative Politics
Canada, like any other nation suffered terribly from the effects of the global financial crisis. The economic impacts from Global Financial Crisis were resolved through Canada's political and provincial administration structures. The Great Recession further intensified such trends towards elements of the precarious unemployment across Canadian provinces such as British Columbia mostly with certain population groups. This paper intends to illustrate how the global fiscal crisis has affected provincial economies in Canada.
Global Financial Crisis Impact on Provincial economies
The goal was to establish suitable forms of welfare states that mediated on the effects of forces of the global market forces through the determination of levels of state intervention within the provincial economic marketplaces. The liberal welfare regime in Canada as compared to the conservative one in Germany and social democratic from Scandinavian countries focused less on welfare provision and citizen security. This translated into a greater commoditization and lower quality allocation of resources to critical areas of the sector (Brownsey & Howlett, 2001). Global economic events like global financial crisis affected the comfort of the citizens through associated social consequences and reduced insulation from market swings. Financial crises have tendencies of making the long-lasting economic implications and structural effects (Dunn, 2003).
The financial system deleveraging in the dramatic economic impacts is best evidenced through the northern periphery. Canada is globally perceived as a haven with minimal economic implications from the financial crisis. The decline of Canada's post-crisis GDP of was relatively timid. An average of 3.6% decrease in economic activities between 2008 and 2009 led to the recession lasting for nine months (Yeh-Yun Lin, Edvinsson, Chen & Beding, 2013). However, the impacts on the budgetary process brought about by the crisis had long-lasting and reliable records in major regions. Budget deficits among the provinces averaged at above 6% GDP in the year 2009 and reduced to around 3% in 2012.
While such deficits increased pressures on provincial governments to respond to their with more sustainable options, it was moot on whether there was desire to avoid deficits at any costs due to historical low financing government debt costs. Ontario had 1.5% for fixed-rate bonds ranging for three years and 2.8% on fixed-rate bonds for periods of 10 years. With the glaring 'social deficits' across the provinces, there were alternate courses of action aimed at addressing budget deficits mainly through revenue increases and spending cuts (Farnsworth & Irving, 2011).
Health Care
In health equity, the desirable options for addressing budget shortfalls include raising revenue through progressive taxation forms and generating additional revenue. The provincial administrations should not be deterred from raising revenues based on the anticipated responses of administering action to expenditure activities (Brownsey & Howlett, 2001). The alternative implication is the identification of over-reliance elements of spending cuts, unlike income increases. The programs are viable options in figuring out fiscal deficits. Provincial governments have ruled out revenue increments since the start of the global financial crisis.
The position is that taxes will not be increased despite individual and corporate taxes for a large corporation and high-income earners decreasing extensively in the last three decades. For instance, corporate tax rates fell from above 50% in the 1970s to around 25% in the year 2012 on combined provincial and federal rates. Similarly, the top rate of marginal tax in the Canadian provinces continues to display a downward trend from 80% in the 1970s to around 49% in 2013. One of the striking elements since 2000 is the provincial 'own source' revenues where revenues from fees and taxes collected by provincial administration as compared to federal government transfers declined by 2.4% of GDP. The concept is primarily linked to extensive cuts of provincial rates on corporate tax based on the period (Dunn, 2003). Government-initiated reports assessing the finances of provinces such as British Columbia noted that alternative fiscal scenarios have revenue collections retained to highs of 2000 while budget deficits would be corrected by 2010.
There were more funds and resources targeting social services and programs. However, the major options that were placed forth by the provincial governments include addressing financial shortfalls and cutbacks on socio-economic programs expenditure on various areas. The affected sectors include program areas and health care spending with a direct relationship to the economic development aspects. In consequence, 2012 budgets have outlined extensive allocations for program cuts between 2012 and 2015. With such progressive political oppositions, provincial governments are implementing cuts on expenditures and increasing small tax rates (surtax) among those in the bracket of high-income tax to balance the budget (Hart...
The partisan politics seen south of the border would be impossible, because the resulting inaction would be viewed unfavorably by Canadians. The financial crisis has damaged Canada economically, but it has also highlighted the value of financial conservatism. Canada's handling of the crisis has improved its standing in the world. The Canadian banking system has been lauded for its conservative nature. Further esteem has been brought to the government for
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