The Economics of Subsidies in Ontario ’ s Automotive Industry

@inproceedings{Shiell2008TheEO,
  title={The Economics of Subsidies in Ontario ’ s Automotive Industry},
  author={Leslie Shiell and Justin Stuart},
  year={2008}
}
  • Leslie Shiell, Justin Stuart
  • Published 2008
We compare the choice between granting subsidies to the automotive industry and using the funds instead to implement a permanent reduction in the sales tax on capital goods, one of Ontario’s most distortionary taxes. Our results depend critically upon how workers respond to the withdrawal of subsidies. Either workers agree to reduce their wages to offset… CONTINUE READING