Big Ideas for Little Economies

Returning Households to their place as the central building block of the economy.

Imagine if, instead of being taxed for working harder, you were rewarded for it.

Picture a world where fixing up your home, hiring a local tradesperson, or investing in your community didn’t just improve your quality of life—it actually put money back in your pocket.

That’s the promise of a Labor-Based Household Tax Credit—a simple but powerful way to boost small economies, encourage real work, and make life more affordable for regular people.

Right now, governments hand out tax breaks for big corporations, real estate speculators, and industries with the best lobbyists. Meanwhile, everyday people—homeowners, renters, local businesses—struggle under rising costs, stagnant wages, and overcomplicated rules that make everything harder than it needs to be. But what if there were a tax credit designed specifically to benefit you?

This idea is simple: when you spend money on skilled labor for home repairs, renovations, or community improvements, you get a tax credit. Hire a plumber? Get a break. Pay a carpenter to fix your porch? Save on taxes. Bring in a local crew to weatherproof your house? More money in your pocket.

The result? More jobs for local trades, more money circulating in small towns and neighborhoods, and a tax system that rewards effort instead of punishing it.

This essay dives deep into how this tax credit could work, why it makes sense, and how it could reshape small economies across Canada. It’s a big idea for little economies—and it’s time to make it happen.

Katrina Cottage, New Orleans

The Book of Ecclesiastes tells us that there is nothing new under the sun. And the Byrds paraphrased it in their hit song Turn Turn Turn and it all surely must be true - even when it comes to economics and taxes.

I've been concerning myself with the notion of LABOUR-BASED TAX CREDITS as a rural region economic development tool since early 1995. In fact, that's pretty much been my only idea. But it's proven to be a solid one so I've stuck with it. You can read about my work on the Nova Scotia Film Tax Credit in the Notes below.

About 4 years ago after a stint at LSE, I came to a foundational conclusion:

Households are the basic building block of economies.

I know it seems like government and corporations are the real machinery of the economy but it's just not true. Government and corporations work only in service of households. When they fail to serve households - that is when economies fail.

Today we suffer from a kind of fast food economics. The simplest way to describe it is growth without prosperity. Empty calorie economics. The problem is people are told by government, media, and corporations so often that everything is jobs jobs jobs and growth growth growth that they don't even have the vocabulary to describe  their problem. They just say they are 'worried'. But they try to explain. In a typical CBC survey people described it as best they could as being concerned about the "cost of living".

Growth without Prosperity

I've written about this problem a lot. In particular, many new economists are concerned that even the way we measure and talk about economic performance - namely the GDP or Gross National Product - creates this upside down world where government and corporations are more important than households.

The problem is the GDP just does not count what really matters. Robert Kennedy, in the weeks before he was killed said, "the gross national product does not allow for the health of our children, the quality of their education or the joy of their play.  It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. 

We're now in a place where I think only the accountants can save us. They have to start counting what counts.

The good news is there's a lot of new writers out there working on the subject in a really interesting and accessible way generally under the genre of Feminist Economics

Who Cooked Adam Smith's Dinner? by Katrine Marcel

Double Entry - by Jane Gleeson-White

Doughnut Economics by Kate Raworth

Are all great places to start.

A few years ago I took a deep dive into political possibilities and came out with one big idea - the notion of a labour-based household tax credit. It's a big and very different idea about economic development than the way we've been looking at things since WWII. The idea is to return the household to the centre of economics. I got the idea from studies and work done at Columbia and the Chicago School in the 1960's by  Jacob Mincer and Gary Becker

Katrina Cottage , New Orleans

Their work got caught up in the times and bogged down by issues like "what is a household?" That wouldn't concern us now as we are more free to define it as any arrangement of household affairs. 

But it got me going and I worked my best on introducing the notion of a New Home Economics - a labour based household tax credit in Nova Scotia.

It did not go well.

The Liberal government of the day not only did not want to hear the idea, within months they announced they would cut the Film Tax Credit I had worked to develop and went to some lengths to say that Tax Credits were the worst. This line of talk petered out because they actually support many tax credits. Then I tried to get it up to the plate as an election issue and failed... well... totally.

But I did get to pitch the idea and write about it at length.

Here's the best synopsis of the idea I could write in June 2017.

The notion is we’ve struggled for a long time with political parties that ask us to choose between Big Government and Big Corporations to fuel the economic engine.

I believe there’s a third way.

A New Home Economics

The big idea is that it's a labour based tax credit that helps households. It returns them to the central role in the economy and future proofs them for the future of work where households themselves will look more like - and have all the rights and benefits - of corporate businesses. In other words, let's give regular households all the perks enjoyed by the richest and most corporate players in the economy.

I believe the result will be to: speed up the pace of the rural economy, and keep capital and economic activity in the rural region longer, creating more wealth and focusing economic effort on the things we care about most - our families, homes, and regional environment.

I've continued to write and research about the idea.

The early discussion of a Green New Deal (now gone off the rails) that reminded people of the best of Progressive Economics and how economies can be geared toward environmental rebuilding as easiliy as they have been focused on environmental destruction has also helped focus the New Home Economics idea.

The Finnish Model

I've found a major breakthrough in the Finnish Tax Code.

This is why I say there's nothing new under the sun - even in economics and taxes.

Finland has a Tax Credit For Household Expenses well established with clear rules and results.

https://www.vero.fi/en/individuals/tax-cards-and-tax-returns/income-and-deductions/Tax-credit-for-household-expenses/

The rules and regulations are simple, tried, and proven.

With this system so completely and clearly worked out and federal and provincial elections coming up I'm genuinely thrilled to start writing talking and lobbying for the idea again.

If you're interested, would like to hear more, or want to help, send me a note.

Quebec City

Notes: The Nova Scotia Film Tax Credit - a labour-based industrial tax credit system that changed the way film financing works globally.

The Nova Scotia Film Tax Credit, established in 1995, was a pioneering initiative that transformed the landscape of film financing and brought a new level of progress and prosperity to film and TV jobs in Nova Scotia. At a time when most film funding models were dependent on government grants or unpredictable private investment, Nova Scotia created a system that was both innovative and self-regulating. This credit provided a stable, predictable, and YES, even literally bankable financial framework for the burgeoning local film industry. By tying funding directly to production Nova Scotian Labour in the province (meaning people who lived and paid taxes in Nova Scotia), the program ensured that investment directly benefited the local economy—paying crew wages, supporting local businesses, and creating jobs—while fostering a vibrant creative industry.

What set the Nova Scotia Film Tax Credit apart was its removal of subjective judgments about the artistic merit of a project from the funding process. Unlike traditional arts funding models, where decisions could hinge on opaque or politicized criteria, often running out of money or having short application windows, the tax credit was purely transactional - any time a film or TV show was commissioned, the Tax Credit could be used to complete the financing or support future growth.

The new system drastically reduced the red tape, waiting time, administrative cost, deadlines, application windows, complexity, empty funds, discouraging competition between creative producers, and vagaries of traditional arts funding.

It was designed with built-in checks and balances that ensured producers could access funding only by meeting clear, measurable criteria, such as hiring local workers or spending a certain percentage of their budgets in Nova Scotia - and always carefully reporting, reviewing, and auditing the results to ensure everything was working as it should. This made the system uniquely attractive to both producers and financiers, as it offered predictable results with careful controls and oversight. Banks and other financial institutions, confident in the integrity of the system, quickly began "interim financing" the tax credits upfront, allowing filmmakers to secure funding to cash flow even the largest and most complex projects. By creating an efficient, industry-first labour-based approach to cultural development, Nova Scotia led the world in demonstrating how the creative industries could be both a cultural and economic powerhouse. In doing so, the province established a competitive advantage and talent base that is still returning capital and dividends almost 30 years later.

This 30-year proof of concept seems to me to be a solid, well-proven foundation on which to build a new tax credit system for other sectors of the creative economy that deserve it, and would benefit from it, just as much as the film and TV sector.