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Archive for April, 2009

Truth from the Fraser Institute?

Yesterday’s Financial Post featured a rather strange op-ed by the Fraser Institute’s current and former directors of fiscal studies: Most Canadians are unfortunately not aware of Canada’s 15-year track record of reducing the size of government (1992-2007). Since peaking in 1992, the size of government in Canada – best measured by total spending at all […]

GDP: Is “Less Bad” the New “Good”?

Statistics Canada has revealed that, adjusted for inflation, Gross Domestic Product (GDP) declined by 0.1% in February. This decline is on par with September and October, but far less severe than November (-0.7%), December (-1.0%), and January (-0.7%). There are grounds for hope in that a slower pace of decline is a necessary precondition for […]

BC’s economy and the Liberal platform

With my oped last week on the NDP platform making me less than popular over at NDP HQ, today the Sun published my take on the Liberals’ platform, thereby guaranteeing that the list of Christmas parties I get invited to dwindles to next to nothing. BC’s Economic Challenges and the Liberal Platform By Marc Lee […]

World Bank, IMF and Labour Rights

I’m posting below an interesting missive from Peter Bakvis, the Washington representative of the International Trade Union Confederation, on an intersting shift of position on labour rights by the IFI.s “The World Bank has issued a memorandum to its country and sector directors instructing them to stop using the “Employing Workers Indicator” (EWI) of its […]

Wage cuts, deflation and the feds

CCPA Executive Director Bruce Campbell coordinated the following letter, published at rabble.ca, from a number of progressive economists (mostly academic and private sector, not from the trade union sector) about the growing risk of deflation in general and the federal government’s attack on auto workers in particular. Government pressure to cut wages will increase the […]

BC Recession Watch: 2008 Provincial Economic Accounts

BC’s recession started in 2008. That is the upshot of today’s release of Statistics Canada’s Provincial Economic Accounts, which provides the first estimates of BC’s GDP for 2008. Unlike national data, which are provided quarterly and on a timely basis, we have to wait about four months to tally the various provincial beans. These numbers […]

What is YOUR All-in Hourly Labour Cost???

One enormous myth that has been propagated (sometimes innocently, sometimes not) in recent debates over the future of the auto industry is the false notion that auto workers “make” $75 per hour. Autoworkers don’t remotely make that much money — yet the lie has been repeated often enough, I am amazed at how many people […]

Still Worrying About Deflation, Not Inflation

A lot of people I meet these days ask about the risk of a future surge in inflation, or even a return to “hyperinflation,” as a result of government’s efforts around the world to stimulate spending and demand — in part through large deficits, and in part through very loose and unorthodox monetary policy (including, […]

EI Financing: We Told You So

On the first of this month, I appeared before the Senate’s Standing Committee on National Finance regarding the Employment Insurance (EI) provisions of the 2009 Budget Implementation Act. The Senate recently posted the transcript online. A fellow panellist was Michel Bédard, former Chief Actuary of the EI Fund. Last year, he and I appeared in […]

The Output Gap and Fiscal Policy

Media coverage of the Bank of Canada’s much anticipated Monetary Policy Report inevitably focuses on the prospect of “unconventional” measures, such as quantitative and credit easing. But the verbs in today’s headlines – “may use” , “ready to” , “lays out” , “sets stage” – reflect how little was actually announced. The Bank provided three […]

BC’s other election: STV

Back in the 2005 BC election, a proportional representation system, known as Single Transferable Vote, or STV, was put to the people. It was recommended as an alternative to the current First-Past-the-Post system that has delivered some unusual and uneven results in BC and other parts of Canada over the years. STV captured a majority […]

Better Late Than Never

For several months, it has been clear that there is no near-term threat of inflation and that the economy needs all the stimulus it can get. In this context, the Bank of Canada should cut interest rates as far as possible. Since January, I have been calling for a target interest rate of zero percent. […]

BC’s economic challenges and the NDP platform

Below is an oped of mine that was done at the request of the Vancouver Sun and that ran in today’s paper. Unfortunately, for reasons that are not entirely clear, the last two paragraphs were cut off, leaving the oped hanging. I put them back in below, and have requested that the online version be […]

Half-Hearted Stimulus

We may all be Keynesians now in terms of the public discourse,   but governments  are mainly posturing rather than delivering.  That strikes me as a fair summary of a technical and rather dismal discussion of fiscal stimulus packages by the OECD (Chapter 3 of the Interim Economic Outlook relased just before the London G20 Summit.) […]

Lower Inflation Frees Central Bank’s Hand

The Consumer Price Index decline in March confirms that deflation remains a greater risk than rising inflation. The annual inflation rate fell to 1.2% nationally and turned negative in one province, Prince Edward Island. The recent revelation of the first annual decline in American consumer prices in half a century underscores concerns about deflation. While […]

How green are BC’s climate policies?

One of the most striking contradictions in BC’s climate action plan is the oil and gas industry. Greg Amos in The Hook, quotes our “green” premier out on the campaign trail in the northeast: “Let me tell you what’s happened in the energy industry in British Columbia in the last eight years: thirteen billion dollars […]

BC’s Carbon Tax Clash

With the BC election campaign now officially on, the carbon tax debate is back. Since the fall’s federal election, when the Prime Minister dropped in to beat up the carbon tax to solidify his support in BC, the carbon tax has dropped off the public radar, replaced by stories about the economic and financial crisis. […]

The Benefits of Public Spending

A year and a half ago I published an updated study on tax incidence in Canada. It found that the Canadian tax system is progressive up to the middle of the income distribution, then flattens out before becoming regressive at the very top. (Interestingly, a short piece on the US tax system by Citizens for […]

“Real” Unemployment Rate Passes 12%

Statistics Canada provides an “R8″ unemployment rate which adds to the unemployed: – discouraged job searchers who have dropped out of the labour force – those working part -time due to unavailability of  hours – those not looking for work because awaiting a return to work By this measure, the unemployment rate jumped from 11.7% […]

BC’s economic crash and the looming election

Just in time for a heated election campaign, the latest unemployment numbers paint a grim picture for BC. Just a year ago, BC was coasting along with an unemployment rate of just over 4%. By the end of 2008 that had crept up to 5%. And now a truly brutal first quarter that saw the […]

Today’s Job Numbers

Here’s  the quick analysis from my colleague Sylvain Schetagne. “61,300 jobs were lost in Canada in March. In fact, 79,500 full-time jobs were lost but some part-time jobs were added last month. The number of full-time jobs lost since October 2008: 386,500. Canadian workers who have lost their jobs since October 2008: 356,500.  The unemployment […]

Worsening Unemployment Calls for Better Employment Insurance

Here is my take on today’s Labour Force Survey: National Unemployment Much attention will undoubtedly focus on the unemployment rate hitting 8% in March, which Statistics Canada notes is “the highest rate in seven years.” While technically correct, this presentation understates the situation’s severity. The unemployment rate briefly reached 8% seven years ago, in December […]

Cutting versus Building

Posted below is my Globe and Mail column this week raising questions about whether troubled companies can really “cut their way to viability.” When companies face trouble, the knee-jerk response is always to cut back: close plants, reduce headcount, cut compensation.  Reflecting their shorter-term time horizon (and their consequent hunger for a faster payback), financial […]

CBC “Bottom Line” Panel: Paper & Reality

I have enjoyed being one of the three economists appearing on the occasional “Bottom Line” panel which CBC TV has been running on its National News.  My fellow panelists (Patricia Croft from RBC Securities and Mark Mullins of the Fraser Institute) are personable, informed, and for the most part non-dogmatic about things.  (I know it […]

OECD Endorses Canadian Opposition

I was out of the country but have the impression that the extremely gloomy OECD forecast and critical recommendations for Canada released just before the G20 London summit were not given the attention they deserved. http://www.oecd.org/document/59/0,3343,en_2649_33733_42234619_1_1_1_1,00.html The OECD released its intermim outlook largely to push the case for more stimulus by G20 countries, particularly those, […]

G20 Outcomes

Rather than blog furiously on this, here is an excellent substantive assesment from the international labour movement. http://www.tuac.org/en/public/e-docs/00/00/04/82/document_doc.phtml Having been on or about the fringes of the event,  I’d see the main substantive outcome as  the further  institutionalization of  global economic governance.  The IMF gets increased resources and clout.. with some very modest strings of […]

Ivison’s Non Sequiturs on Internal Trade

The Council of Canadians organized a set of news conferences across Canada on March 31, the day before TILMA came into force for local governments in Alberta and BC. I was one of four speakers at the Toronto event. There are obviously larger and more important economic issues facing Canada today than interprovincial “free trade” […]

Energy efficiency: What’s lean? What’s mean?

I’ve been thinking a lot about energy efficiency in buildings lately (in the BC context, anyway). About 11% of BC’s greenhouse gas emissions are attributed to residential and commercial buildings, so obviously efficiency has to come under the microscope as part of any GHG mitigation plan. Part of my reticence to look at this topic […]

Have the media learned anything from the crisis?

It makes my blood boil when I see headlines like this one from the Globe online: “Economic optimism boosts markets”. They are, of course, not talking about the markets that matter for most families’ day-to-day lives – those markets are still tanking. No, the Globe is talking about the stock market, as if an uptick […]

Freedom is Slavery

I cannot believe we are seeing such nonsense in this day and age. The right is now reaching deep into the 19th century for inspiration. Solving the Economic Crisis through a Free Market in Labor (Chicago) Labor will not be entirely free until it can be bought and sold, says a cutting edge new report […]