Peter S. Spiro 

Peter S. Spiro is a lawyer and writer and researcher on topics in law and economics, and a Fellow of the Mowat Centre for Policy Innovation at the University of Toronto's School of Public Policy and Governance. 



I offer research services in the subject areas of law and economics, with a special focus on taxation and estate and trust matters. Law and economics is a growing discipline promoting the view that legislation that affects economic activity should aim as much as possible to be economically efficient.

My background in both the private and public sectors has provided me with wide experience in policy research and quantitative modeling. Some of my research has been devoted to understanding tax evasion and the underground economy, and I have published extensively on this subject in the Canadian Tax Journal and elsewhere. I am one of Canada's leading experts on the real cost of capital, and my analysis has been used for major infrastructure project evaluations, and in filings at regulatory boards.  

I completed my BA and MA in economics at the University of Toronto. Subsequently, I enrolled in the doctoral program at the University of Chicago, where I studied under Nobel Laureates Robert Lucas, Gary Becker, George Stigler, Milton Friedman and Ronald Coase, and obtained the highest grade in macroeconomics in my year. While I disagree with some of the ideology of the Chicago School, I subscribe to its tradition of challenging conventional wisdom and testing theories against the data. Supplementing my knowledge of economics, I studied law and received a JD (Juris Doctor) degree at Osgoode Hall Law School. I am licensed to practice law in the province of Ontario.

Research Expertise

Selected publications and reports:

"Class Actions in Employment Related Disputes," Canadian Class Action Review, October 2015. Class action lawsuits can fill part of the gap left by the union movement in an era when that protection for workers has declined in the private sector. The case law around the need for a common issue to achieve certification of a class action has proven to be too confining for the employment context. The criteria for certification ought to be more contextual and nuanced to achieve the proper balance. 

"Informal Employment Contracts and the Battle over Retirement Benefits," Weak economic growth and the resultant financial pressures have made post-retirement benefits a tempting target for cutbacks, in both the private and public sectors. This has been an increasingly common source of employment law disputes. This paper won the 2014 Stringer LLP Essay Prize for the best paper in Labour Law, and an updated version was published in Volume 19, No. 1, of the Canadian Labour and Employment Law Journal.

“Class Action Injustice,” Policy Options, July 2015. Letting shareholders harmed by misrepresentations sue as a class seems like a good idea, but the devil is in the details. The legislation was well intentioned, but it may not meet its objectives. The settlements often have an adverse effect on innocent long-term shareholders, while the executives who were responsible for the misrepresentation avoid paying a penalty.

"The Unexpected Benefits of Choosing Second Hand First," Huffington Post, March 2015. I participated in the first major research project looking at the impacts of second hand sales on the Canadian economy. Buying second hand goods represents re-using rather than discarding them, and reduces the pressure of waste and the need for new resources. The conclusion is that it has broad benefits for both the environment and for the standard of living.

"Canadian Mortgage Law and Prepayment Penalties," Western Journal of Legal Studies, 2015. Borrowers who need to prepay their mortgages often pay substantial penalties. This paper suggests that the law is unclear and provides little protection for consumers facing powerful financial institutions. 

"Problems of Interpreting Statutes of Limitations in Cases of Continuing Breach of Contract," Canadian Business Law Journal, December 2013. Most authorities hold that a cause of action for breach of contract crystallizes as soon as the breach has occurred. Logically, for statutes of limitations, the time will start to run from that point. This paper identifies some inconsistent applications of that principle in cases of continuing breach. It is argued that this approach is inefficient for most cases of breach of contract, and runs counter to the aim of certainty in business decision making.

"Challenges in Shifting Canadian Taxation toward Consumption," co-authored with Jonathan R. Kesselman, Canadian Tax Journal, 2014 No. 1. This paper confronts the conventional wisdom regarding the benefits versus costs of shifting the mix of revenue from income onto consumption. It suggests that the benefits have been oversold, while the consequences for income distribution have been disregarded. Middle class taxpayers would likely end up as net losers, as they do not receive the compensating credits that are given to people with low incomes. This paper won the Douglas Sherbaniuk Distinguished Writing Award from the Canadian Tax Foundation as being the "best writing undertaken for the Foundation in the previous year."

"Sectoral Analysis of Ontario's Weak Productivity Growth," International Productivity Monitor, Fall 2013. Productivity is like the weather. It's bad, everybody talks about it, and usually nobody succeeds in doing anything about it. In this paper, presented at the annual conference of the Canadian Economics Association, I examine productivity in a detailed way, looking at performance in more than 50 individual sectors. What emerges is that the average productivity figure for Ontario (zero for the past 6 years) is rather misleading. It's the random outcome of a great deal of underlying diversity. Some sectors had strong productivity growth, while others have had not low or zero growth, but actual declines in productivity. My key finding is that productivity is closely related to demand growth and economies of scale. The main reason for Ontario's dismal productivity performance over the past several years is falling exports. That is mainly due to the weak US economy and an overvalued Canadian dollar. These problems will not disappear overnight, but the prospect is brighter going forward. 

"Clarifying the Rules for Piercing of the Corporate Veil" The principle of corporate limited liability emerged in the early 19th century in the United States. It was a major legal and economic innovation that facilitated the growth of large scale enterprise, without which the modern economy would not be possible. Courts quickly became aware that the corporate form could be abused for fraudulent purposes. Equity will not countenance fraud, and judicial discretion was applied to pierce the corporate veil. Unfortunately, its application is inconsistent and unpredictable. It is most frequently applied against small, closely held corporations, and creates uncertainty for these business owners. This paper suggests some amendments to the Business Corporations Act to create a statutory basis for curtailing limited liability where appropriate. This reform would lead to more consistency and predictability.

"Weak competitiveness hurts productivity – not the other way around," Globe and Mail Economy Lab, June 11, 2013. An overvalued dollar hurts the most efficient sectors of the economy, and this is largely responsible for the widely lamented low productivity growth of the last several years. By contrast (and contrary to popular myth), when the dollar was low in the 1990s, exporters did not use it as a crutch. Manufacturing productivity increased 50% over the course of that decade.

"Can a Dividend Tax Credit Be Justified in a Small Open Economy?" Many economists have pointed out that our tax system is riddled with tax credits, many of which fail to achieve their objectives. Eliminating them and using the revenue to lower the overall tax rate would likely be beneficial. This paper looks at Canada's dividend tax credit, and argues that in a world of highly mobile capital it is probably obsolete.

"Was your mortgage made in Bangladesh?" The linkages between Canada and developing Asia are far reaching. We depend on them not only for cheap goods, but ironically also to fund our borrowing. There is a serious global imbalance due to the rapid industrialization and unequal distribution of income in those countries. They are trying to sell more to the developed world than they are willing to buy. This global savings glut has been rightly identified by Ben Bernanke as the root cause of the developed countries' economic malaise.

"More Stability, Please." The central thesis of this paper is that a freely floating exchange rate is too much at the mercy of speculative fads. History has demonstrated over and over that unregulated financial markets do not produce optimal outcomes, and the events of the last several years are just a particularly unpleasant example. The exchange rate is the single most important price signal affecting the real economy. Its fluctuations have been particularly hard on Ontario, which is the part of Canada most dependent on non-commodity exports. The surge in the exchange rate to far above its fundamental value has undermined investment, productivity and employment in Ontario, and caused a severe setback in growth in the standard of living. A central bank can always keep a cap on the value of its own currency, as the Swiss National Bank has successfully shown in the last few years.

"The Mystery of Cash." This contribution to the Globe and Mail's Economy Lab looks at recent growth in cash in circulation in the Canadian economy. Based on increasing use of debit card and credit cards, one would expect the use of currency in Canada to be on a declining trend. In fact, it has remained quite robust, perhaps because of the popularity of cash transactions in the underground economy.

"Petrodollar really a loonie bubble," Financial Post,  2012.  In this article, I suggested that the Canadian dollar was overvalued at that time. The high correlation between the dollar and oil prices was not justified by fundamentals. (Original title: "The Canadian Dollar and Oil Prices: A Case of the Tail Wagging the Dog.")

"Evidence on inflation expectations from Canadian real return bonds," 2003. This article confronts the common view that the difference between the yields on nominal versus real return bonds precisely reflects the market's forecast of inflation. I find that this is not the case, and the two types of interest rate are influenced by different factors.

"The Differential between Canadian and U.S. Long-Term Bond Yields." Canadian Business Economics, 1994. In this article I confronted the view argued by the Bank of Canada, that their policy only affects short-term interest rates. The evidence shows that longer-term bond yields are in fact quite sensitive to expectations about short-term monetary policy. 

"Taxes, Deficits and the Underground Economy," in O. Lippert and M. Walker, eds., The Underground Economy: Global Evidence of its Size and Impact (Fraser Institute, Vancouver, 1997.) This article looks at some of the global evidence of the size of the underground economy, and some of the sociological factors surrounding the public acceptance of taxation. It argues that the political handling of the introduction of the GST increased the public's antipathy towards the tax, and worsened the evasion problem. By contrast, the introduction of a similar tax in Switzerland was approved in a referendum. 

"Estimating the Underground Economy: A Critical Evaluation of the Monetary Approach."  Canadian Tax Journal, 1994. This econometric study found that tax rates were a significant factor determining the demand for currency in circulation (cash money). Cash is used by participants in the underground economy because it is anonymous and enables them to hide their activity from tax collectors. This linkage enables us to infer growth in the size of the underground economy from changes in the stock of currency.

Some additional papers can be found at my SSRN page here.

Some case comments I have written can be found at,