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  • CCPA's National Office has moved! May 11, 2018
      The week of May 1st, the Canadian Centre for Policy Alternatives' National Office moved to 141 Laurier Ave W, Suite 1000, Ottawa ON, K1P 5J2. Please note that our phone, fax and general e-mail will remain the same: Telephone: 613-563-1341 | Fax: 613-233-1458 | Email: ccpa@policyalternatives.ca  
    Canadian Centre for Policy Alternatives
  • What are Canada’s energy options in a carbon-constrained world? May 1, 2018
    Canada faces some very difficult choices in maintaining energy security while meeting emissions reduction targets.  A new study by veteran earth scientist David Hughes—published through the Corporate Mapping Project, the Canadian Centre for Policy Alternatives and the Parkland Institute—is a comprehensive assessment of Canada’s energy systems in light of the need to maintain energy security and […]
    Canadian Centre for Policy Alternatives
  • The 2018 Living Wage for Metro Vancouver April 25, 2018
    The cost of raising a family in British Columbia increased slightly from 2017 to 2018. A $20.91 hourly wage is needed to cover the costs of raising a family in Metro Vancouver, up from $20.61 per hour in 2017 due to soaring housing costs. This is the hourly wage that two working parents with two young children […]
    Canadian Centre for Policy Alternatives
  • Mobility pricing must be fair and equitable for all April 12, 2018
    As Metro Vancouver’s population has grown, so have its traffic congestion problems. Whether it’s a long wait to cross a bridge or get on a bus, everyone can relate to the additional time and stress caused by a transportation system under strain. Mobility pricing is seen as a solution to Metro Vancouver’s transportation challenges with […]
    Canadian Centre for Policy Alternatives
  • Budget 2018: The Most Disappointing Budget Ever March 14, 2018
    Premier Pallister’s Trump-esque statement that budget 2018 was going to be the “best budget ever” has fallen a bit flat. Instead of a bold plan to deal with climate change, poverty and our crumbling infrastructure, we are presented with two alarmist scenarios to justify further tax cuts and a lack of decisive action: the recent […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Prices Decline Yet Again

Statistics Canada reported today that, for a third consecutive month, consumer prices declined and the inflation rate fell below 2%. In July, the inflation rate was 1.3% and the Bank of Canada’s core rate was 1.7%.

Gasoline and natural gas prices, which have been lower this summer than last, dragged down the overall Consumer Price Index. However, there is little indication of inflationary pressure anywhere.

Even those categories with the largest price increases were in line with the Bank of Canada’s 2% target. Food prices and household expenses rose 2.1% over the past year. The inflation rate for services was 2%.

With inflation subdued, there is no pressure for the central bank to raise interest rates. Indeed, the Bank of Canada could intervene to bring the overvalued exchange rate down to more competitive levels
without stoking significant inflation.

Low interest rates and low inflation create an ideal environment for public investment. Governments can finance long-term infrastructure spending very cheaply. Such investment would contribute to economic growth and employment without imposing discernable cost pressure on the wider economy.

UPDATE (August 18): Quoted in today’s Toronto Star (page B5), Montreal Gazette (page C3), Waterloo Region Record (page D2), Victoria Times Colonist (page B5), Regina Leader-Post (page B1), Guelph Mercury (page B7), Cape Breton Post (page A9) and Truro Daily News (page A7).

Enjoy and share:

Comments

Comment from Angella MacEwen
Time: August 17, 2012, 12:06 pm

Public infrastructure spending that pays for itself in the medium term & improves private sector productivity? Affordable, accessible, quality childcare. Let’s do that.

Comment from Larry Kazdan
Time: August 17, 2012, 1:04 pm

Modern Monetary Theory – Bill Mitchell

“government spending is independent of borrowing, with the latter best thought of as coming after spending”

http://modernmoney.wordpress.com/tag/deficit-spending-101/

Comment from Thomas Bergbusch
Time: August 17, 2012, 10:07 pm

@Larry Kazdan:

Good point, but Erin wrote “Governments (plural) can finance long-term infrastructure spending very cheaply.” Clearly he talking about provincial, territorial and municipal governments as well, not just the currency issuer.

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