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Archive for August, 2009

Small Business and Jobs

A key justification for small-business tax breaks is that small enterprises are supposedly engines of job creation. The Canadian Federation of Independent Business’ (CFIB) oft-repeated claim that “small- and medium-size businesses employ more than half the workforce” (PDF) cites Statistics Canada’s Survey of Employment, Payrolls and Hours. A closer examination of that Survey casts doubt […]

Canada’s Second Quarter: Worst in the G-7

This morning’s Gross Domestic Product figures put the lie to Prime Minister Harper’s claim that “we will come out of this faster than anyone.” While many other advanced economies grew or stabilized during the second quarter of 2009, the Canadian economy shrank by 0.9%. During this period, three G7 countries – Japan, Germany and France […]

Globe Economics

Columnist Doug Saunders writes (from his Mediterranean cruise) in today’s Globe: “It’s a little like the decision being faced by the Bank of Canada, which can print money and ease the dollar’s value downward to please Ontario’s manufacturers, or let it rise to please Alberta’s petroleum exporters – but not both.” Huh?  Petro exporters get […]

EI: A Tale of Two Provinces

UPDATE (August 26): Quoted by Canadian Press, Canwest, The Toronto Star and Hamilton Spectator It was the best of times, it was the worst of times… It would be welcome news if the number of Canadians receiving Employment Insurance (EI) benefits increased because of a proactive policy decision to expand this program to combat the recession. […]

What Happened in Halifax

I missed the Globe and Mail letters on Thursday (because Jack Mintz’s op-ed prompted me to instead read The National Post that day.) Among them was the following letter from Bruce Hyer, the key advocate of not taxing “small business” profits: Yes, there was a vote I read with interest your editorial The Tax-Cutting Left? […]

Naming the Party

Here’s my modest contribution to the debate on re-naming the NDP. Ed Broadbent and others have made the excellent point that “NDP” is a solid brand that stands for something – namely belief in social democracy,  a revitalized, new democracy. However, I don’t buy the argument that “New” qualifies “Democratic” in the same way that […]

Mintz Hits a Triple

I had been fiddling with my last post in spare moments since the federal NDP convention. I fiddled long enough that Jack Mintz beat me to the punch in critiquing the proposal to eliminate corporate tax on small-business profits. His op-ed appeared in yesterday’s Financial Post. His priority is to slash the general corporate tax […]

Worst Idea at NDP Convention 2009

Strangely, neither of the two most hyped issues at last weekend’s federal NDP convention reached the floor for debate. I have nothing to add to the discussion about changing the party’s name. However, the proposal to not tax small-business profits compels me to elaborate the case I made when Nova Scotia Liberals promised to slash […]

Short Duration Unemployment?

Benjamin Tal over at CIBC thinks there is good news to be found in the fact that the average duration of unemployment is not rising much despite the fact that unemployment is rising rapidly. As reported in a green shoots kind of good news story by the Globe and Mail In dramatic contrast to past […]

Deflation Deepens

In July, the Consumer Price Index posted an annual decline of 0.9%, the most negative inflation rate since July of 1953. This decline is troubling not only because it is larger than last month’s decline, but also because it is more widespread. Recent decreases in inflation have mainly been driven by lower gasoline prices in […]

Trading on Insider Political Information

There are some really wonderful new young economists out of Canada. I just had to let folks know of a fabulous study “Coups, Corporations and Classified Information”(find it via this list) done by one of them: Suresh Naidu (one of our own) and his colleagues Arindrajit Dube and Ethan Kaplan. (In the interest of full […]

Bubblenomics is Alive and Well in Canada

Here is a guest post from BC union (Steelworker) researcher Kim Pollock. By Kim Pollock There is growing evidence that a new stock-market bubble is growing daily, right before our very eyes. But while stock-market prices and market capitalization grow, there are still few signs of real economic recovery. In Canada for instance, real gross […]

Harmonization’s False Premise

Advocates of harmonizing provincial sales taxes with the federal GST almost always argue from the premise that, whereas the GST only covers consumer purchases, provincial sales taxes apply to all business inputs. Harmonization is then presented as a means of removing the sales tax from business purchases of machinery and equipment to promote new investment. […]

Yes, Prime Minister (home renovation episode)

Thank you, Jim Flaherty and Stephen Harper. I just finished the first leg of a long-contemplated kitchen renovation that got pushed over the top by February’s federal budget tax credit for home renovations. This year only! Act now before it is too late! The credit is worth a maximum of $1,350 per family if you […]

Hidden Unemployment

Today’s Labour Force Survey indicates that employers paid 79,000 fewer Canadians in July. However, a surge of workers declaring self-employment or abandoning the workforce altogether left 9,000 fewer Canadians officially unemployed. Self-Employment Many Canadians are turning to self-employment due to a lack of jobs. Self-employment rose by 35,000 in July, reaching another all-time high. As […]

Recession Far From Over

Today’s job numbers are a clear sign that, far from entering a recovery, the Canadian economy is still in free-fall. This was the first month of the third quarter, the quarter in which the Bank of Canada expects positive GDP growth to resume .  But, over the past two months, the number of employees has […]

Jack Mintz, Research and Pensions

It is a bit stunning to discover that Jack Mintz – former head of the CD Howe Institute and now at the University of Calgary – has been appointed research director of the federal – provincial review of pensions. http://www.vancouversun.com/business/fp/Jack+Mintz+research+director+pension+reform+task+force/1794203/story.html Even Finance Minister Flaherty should be a bit embarassed to appoint as a “researcher” someone […]

EI, Economists and Unemployment

I note from a CP wire story  that Ottawa U economist David Gray is weighing in behind Harper’s argument that lowering eligibility for EI would be a “disaster”, and I suspect strongly he will not be the last to do so.      http://thechronicleherald.ca/Canada/1135526.html The received wisdom among mainstream neo liberal economists is that a “generous” […]

Clipping the Loonie’s Wings

Comments in the Bank of Canada’s last two interest-rate announcements and by its Governor have fuelled speculation that it might intervene in currency markets to moderate the overvalued Canadian dollar. Of course, these remarks may be garnering undue and unintended attention. With the Bank conditionally committed to no interest-rate changes for a year, comments on […]