Wage and Price Controls

Summery: The government published an incomes policy, which is mainly designed to secure a lower rate of price inflation by reducing the rate of increase in labour costs. “In other words, it is a policy of wage restraint, based on the view that it is the push of labour cost which leads corporations to raise their prices”. The policy will create more unemployment, and it has come increasingly to accompany high rates of unemployment and cuts in government spending on social service to induce deflation. The incomes policy is not designed to reduce our current high rate of unemployment.

Connection: In chapter eight there is a section talks about wage and price controls. The changing of price is an important aspect of the free-market system. It can provide information that helps both buyers and sellers to make decisions. When the price of a product increase, buyers may respond by cutting back on their purchases; sellers may see price increases as a signal that more of the product should be offered to the marketplace. If there is no control of that price changing, the market is going to break the balance. This may affect the whole country

Reflection: I think Harmonized Sales Tax (HST) is a kind of price control. Actually this is the way that the government earns more money. Before this, we could only pay PST which is 7% of the product’s price. Now we need to pay 12% of the product’s price, which is HST. I guess this is the way the government controls the prices. They rise up the prices directly by published the law, so that no one can refuse it. I really don’t think HST makes the economy of British Columbia better, because if all the products’ prices increase, people will buy fewer things. Therefore the economy falls down again.
Article: http://www.connexions.org/RedMenace/Docs/RM1-Wage&Price.htm

Canada's unemployment rate hits its lowest point in 30 years!

Summery: The latest unemployment figures indicate only 6.7% of people out of work. It hits the lowest point in thirty years! “We reached this low level of unemployment only once before, in June 2000.” Most of the new jobs created last month were full-time positions, and many of them going to women and people moving from part-time to full-time employment. The strength of the construction sector is one of the engines powering this growth in employment opportunities. More than 20000 jobs are added to the economy by construction sector. “With the search for the right talent only getting hotter, there is no better time to post your resume on Monster and take advantage of the boom.”

Connection: In chapter five, it talks about five types of unemployment, which are demand-deficient unemployment, frictional unemployment, seasonal unemployment, structural unemployment and real wage unemployment. A person is certified as unemployment when he is available and willing to work but currently without work. An unemployment rate of 6.7% means every 100 people have 6.7 people currently without work. This is quite low to the economy. Since economic tsunami is not yet over, 6.7% is an exciting number to Canada’s economy.

Reflection: Many people are laid off during the hardest time of the economy. Over 50000 jobs are created shocks me. But I don't think this number is really realest “last month”. Probably the article was written in June 2009. Indeed the number was still exciting to us. The latest unemployment rate now is 6%. From the changing we can see the economy is recovering. More and more people back to their position, or find a new one. But the inflation is extremely faster than the recovering. Soon the HST comes up will affect all of us. At this point, even though the unemployment rate decreases, nothing really changes to us.
Article: http://content.monster.ca/7216_en-CA_p1.asp

Chapter7- Collecting 2010 Olympic coins

Summery: Start from February 23, 2007, seventeen commemorative coins marking the Vancouver 2010 Olympic and Paralympics games begin to circulating. About 350 million coins will be made from 2007 to 2010. “Three extra quarters will show Canadian athlete medalists that ordinary Canadians will be able to vote on in the run up to the games.” This circulation is sponsored by The Royal Canadian Mint. Also, 36 non circulating legal tender Vancouver 2010 commemorative coins are planned and will start to sell on 23 February 2007. “30000 special edition Uncalculated coin sets of the made for circulation coins, including the Vancouver 2010 quarters and loon dollars, will be produced annually“

Connection: In chapter 7, I have learned the identification of Canadian money, such as durable, portable, divisible, recognizable and readily accepted, not easily copied and face value greater than actual value. The object cannot be “money” without any of the identification above. The article says that “there will be 15 $25 face value sterling silver coins with a limited mintage of 45000 pieces of each.” The coin has a face value of twenty-five dollars, but the material of make the coin is actually greater than twenty-five dollars. Therefore, this Olympic coin is not able to be fiat money.

Reflection: Olympic coins are the witness to the winter Olympic. Indeed the coins are money, but they will not become the money we use in daily life. Also their potential appreciation is greater than normal money. For example, in the next 20 years, a $20 paper money is still worth $20. Even though the bank has published new version of paper bills, we can exchange a new 20$ with that old $20. But a face value of $25 coin might increase its price to $35 in 20 years. The witness to the history is always has a greater price than “money”.
Article: http://www.allnationsstampandcoin.com/newsletters/news90.html

Chap4-The Income Tax History of Canada

Summery: As the topic we see, the article is basically all about the income tax history of Canada. The government of Canada did not charge income tax to encourage immigration to Canada. Since 1917, Canada charged income tax, because that was World War 1 period. “In 1917, the cost of participating in World War I had become too great, and the government was forced to temporarily adopt an income tax system in order to finance the war effort.” The Minister of Finance, Sir Thomas White has processed the “war” income tax.

Connection: In chapter 4, we learn the different kinds of taxes. Income tax belong to direct tax, which is a tax imposed on the person who is intended to pay the tax. All those money is used to provide public services to Canadian citizens, such as health care and education. Canada is a federalist country, so that the central government and provincial government have jurisdiction over each citizen. But all the income tax goes to the federal government, and the federal government distributes the money to provincial and central government. That’s where our tax goes.

Reflection: As we know, Canada’s welfare is one of the best in the world; most of the public services are free, or very cheap to pay. That is because Canada’s taxes rates are also one of the highest in the world. Some high income people pay almost one third of their incomes. In addition, we need to pay tax for all the goods we purchase, no matter just a bottle of drink, or a piece of bread. People basically agree that Canada’s taxes rates are too high. Looks like all the rich people pay their money to feed the poor people, to lower the disparity of the rich and poor people. Somehow this is a good method, but we all got annoying when we are buying goods.
Website: http://www.ehow.com/about_5379709_income-tax-history-canada.html