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The Progressive Economics Forum

Archive for June, 2006

Charest says give me more money (no strings attached, please)

Quebec wants big, new equalization dollars from Ottawa. Why equalization? Because it is not conditional – Charest could use new money for tax cuts or any way he wants. Did I mention a Quebec election is coming up next year? The Globe reports: Quebec maintains the key to solving the so-called fiscal imbalance between the […]

Alberta’s Oil and Quebec Seperation

Rafe Mair looks back at history, then contemplates high oil prices and resulting tensions in Confederation, in his Tyee column: First some history. With the arrival of the Organization of the Petroleum Exporting Countries (OPEC) in 1965, the oil price fix has been in and we all know about the crisis in 1974 that brought […]

Bank mergers coming soon?

With a Harper government, I had a sinking feeling that bank mergers were going to come up again. We grant chartered banks a huge privilege – the expansion of credit, or the creation of money, an essential utility-like function of a modern economy – that leads to enormous profits on the part of the banks. […]

Conservatives look to undermine Canada Pension Plan

The Globe and Mail reports that the Conservatives are planning to cut CPP premiums that were raised under the Liberals in order ensure that the program would be sustainable over the long term. In the interim they will use surpluses to fill the gap. But what happens if those surpluses disappear? This looks like a […]

It’s Tax Freedom Day

Call me a curmudgeon, but I am not celebrating the Fraser Institute's Tax Freedom Day. This notion does not deserve any media attention, but the fact that it does suggests it is a clever and successful gimmick. That is about the nicest thing that can be said about TFD. It grossly exaggerates the amount of […]

Is there a “Fiscal Imbalance”?

 One of the main arguments that there is a fiscal imbalance between the federal government and provincial governments (a vertical fiscal imbalance) is ongoing federal surpluses in the face of more constrained provincial finances. The latest Financial Management System data from Statistics Canada would seem to reinforce that view:  In 2005/2006, the consolidated surplus for […]

The Distorted Priorities of Mainstream Economics

Writing in the Toronto Star (link lost), economists Arthur Donner and Doug Peters reflect on economics, employment and inequality: The Distorted Priorities of Mainstream Economics Arthur Donner and Douglas Peters, May 2006 There has been a monumental shift in mainstream economics over the past forty years. When we studied economics in the 1960s, economists and […]

Greasing the wheels of federalism

The Globe and Mail's John Ibbitson (subscriber access only) thinks the outlines of a solution to the alleged "fiscal imbalance" has been found through a mix of more equalization plus increased program-related transfers to the provinces: The O'Brien report [aka the Expert Panel on Equalization and Territorial Formula Financing, appointed by former Finance Minister Ralph […]

Sachs sings the praises of Scandinavia

If you listen to the Fraser Institute or like-minded think-tanks on the right, high taxes kill incentives to work and invest. They argue that Canada needs to lower its taxes in order to produce higher rates of economic growth. By their logic, the Scandinavian countries, all of whom have levels of taxes relative to GDP […]

Adam Smith the moralist

A new book on Adam Smith by James Buchan deepens the case that he did not wear an Adam Smith necktie. Commented on by Bloomberg columnist Matthew Lynn: Most people these days regard Smith as the founder of free- market economics. He’s the hero of the get-the-government-off- our-backs crowd. He’s the pin-up boy of the […]

What policies lead to economic growth?

Matthew McCartney, also writing in the Post-Autistic Economics Review, probes why economists know so little about economic growth when it comes to empirical research, and comes away skeptical about the merits of cross-country growth regressions:  This paper is concerned with how economic growth is analysed by economists.  Over the last fifteen years an extremely common […]

A Critique of Foreign Investment

Kevin P.Gallagher and Lyuba Zarsk, writing in Post-Autistic Economics Review, are skeptical of foreign investment policies. Their focus is on developing countries, but similar considerations could be made in the case of Canada given the intensity of investment in the resource sector and the federal government’s contention that Canada must maintain its share of global […]

Industrial capacity and inflation

Statistics Canada reports on industrial capacity, an important data point for the Bank of Canada, ever watchful for inflation: Industrial capacity utilization rates First quarter of 2006 Capacity use among Canadian industries edged down in the first three months of 2006 in the wake of the rising loonie and a decline in foreign demand for […]

Bubble bubble toil and trouble?

UCLA's Edward Leamer sees a slowdown for the US in 2006, as the real estate party comes to an end. He sets the context well: The discovery of the Internet set off a mad dash for the Web, and that powered the U.S. economy forward at breakneck speed from 1997 to 2000. Every business in […]

Adam Smith did not wear an Adam Smith necktie

OK, so this is not about the Canadian economy. But I woke up this morning with that phrase about Adam Smith ties in my head and had to track it down – the Adam Smith tie being the burkha of free market fundamentalists, and as a result, a fitting gift to guest speakers at Fraser […]

Foreign ownership in the Canadian economy

Statscan reports the latest numbers on foreign ownership: Foreign-controlled corporations accounted for 21.9% of assets held in Canada, and 30.0% of operating revenues. Despite the odd fluctuation, these shares have remained fairly stable ever since the post-recessionary period of the mid-1990s. Assets of foreign-controlled corporations rose a healthy 8.3% to $1.1 trillion in 2004, while […]

Equalization – A Family History

Dalhousie's Lars Osberg reflects on his family in relation to the equalization program. This piece was published in the Halifax Mail-Star and Chronicle Herald Op-Ed, April 6, 2005 and merits a reprint here in the context of much bickering among the premiers: When my parents were growing up in Alberta in the 1930s, it was […]

Unemployment is low

The latest Labour Force Survey, released today, has national unemployment down 0.3 percentage points to 6.1%, the lowest monthly rate since December 1974. So low that the Daily adds the following note on comparability: Comparing current Labour Force Survey estimates to those prior to 1976 In recent months, the Labour Force Survey (LFS) has been […]

Walkom puts Brian Day under the knife

Thomas Walkom peers more closely at the dubious arguments of Dr. Brian Day, the private health care guru on the verge of heading the Canadian Medical Association.   I went off to hear Brian Day again this week. … As always, Day was roguishly charming. A veteran of Vancouver’s scrappy media culture, he rarely bothers […]

Alberta, Equalization and a Little Irony

http://thetyee.ca/Views/2006/06/07/AlbertaEffect/ Over the years, Alberta Premier Ralph Klein has rarely missed an opportunity to poke a finger at the equalization program and to re-assert that Canada better keep its hands off Alberta's resource wealth. For King Ralph, it makes for great theatre and even better politics. Klein recently threatened to pull out of the equalization […]

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The PEF is a Canadian network of progressive economists from academia, research institutes, trade unions and beyond. This site is a forum for members, with a focus on the Canadian economy and public policy with reseach and analysis as it happens. Stay tuned!