The Progressive Economics Forum

In the last couple of years, Relentlessly Progressive Economics delivered detailed analysis the evening after the budget by bloggers who had been in the lock-up. Last week, those of us who were in Ottawa dropped the ball. However, Marc picked it up by assessing the budget remotely from Vancouver.
My main excuse is that, after drafting [...]

The Alberta government is reversing its modest increase in conventional oil and gas royalties. Albertans will now receive an even smaller fraction of the value of their resources. The saving grace is that the provincial government did not cut royalties on the oil sands, which are projected to provide more revenue than conventional reserves going [...]

Today’s Labour Force Survey paints an appreciably improved picture of Canada’s job market. In February, full-time employment rose by 60,000 and part-time employment fell by 39,000. Employers are not only hiring more workers, but also upgrading part-time positions to full-time positions. Almost all of the part-time jobs created in January became full-time jobs in February.
Importantly, [...]

Yesterday, The Winnipeg Free Press ran a column that quoted some material from this blog and some other progressives. The National Post’s blog features the following retort:
In her reaction to Budget 2010, the Winnipeg Free Press’s Frances Russell quotes the following: Larry Brown, national secretary treasurer of the National Union of Public and General Employees; [...]

I have the following op-ed on page A19 of today’s Toronto Star. It reiterates points made before on this blog.
The only substantive difference is that I had previously low-balled the annual profits of Ontario’s Crown corporations at $4 billion. Today’s op-ed assumes $4.3 billion, the amount anticipated for the current fiscal year.
That assumption probably still [...]

Yesterday afternoon, I caught the subway down to Queen’s Park to find out whether the throne speech would shed any light on the provincial government’s privatization plans. As it turned out, the speech included only a couple of lines on Crown corporations.
But I ran into blogger extraordinaire Warren Kinsella at the legislature and note that [...]

This morning, Statistics Canada released Corporations Returns Act data for 2007:
Foreign acquisitions of Canadian-controlled firms, particularly in manufacturing and oil and gas, drove a 10.6% increase in Canadian assets under foreign control in 2007. Canadian assets under Canadian control rose 9.9%, led by the depository credit intermediation industry.
As a result of these movements, foreign-controlled firms [...]

My post on this past Monday’s Gross Domestic Product (GDP) release emphasized the disconnect between profits and investment in the corporate sector. As Andrew commented on that post, the public sector’s contribution to the recovery is also noteworthy.
That point seems especially relevant in the wake of a federal budget devoted to continuing previously announced stimulus. [...]

The front page of today’s Toronto Star reports, “The Ontario government is looking at creating a publicly held $60 billion ‘super corporation’ of assets such as the Liquor Control Board of Ontario and Hydro One and then selling a minority share to private investors.” It would also include the province’s other major Crown corporations: Ontario [...]

Last Saturday, The Financial Post completed its Chopping Block, a series profiling federal programs that could be eliminated to balance the budget. A couple of weeks ago, the C. D. Howe Institute unveiled its Shadow Federal Budget, which advocated essentially the same approach. (Terry Corcoran deserves some credit for trying to identify quite specific cuts, as [...]

Canada’s industrial engine appeared to restart in December. Gross Domestic Product (GDP) expanded by 0.6% that month, led by particularly strong growth in resource extraction, utilities, manufacturing and wholesale trade. December propelled the fourth quarter of 2009 to 1.2% growth, the fastest quarterly growth in a decade.
Canada’s Recovery in Perspective
While encouraging, the Canadian recovery has [...]

Last week, I argued that discussions about reversing tax cuts should not be limited to the GST. To advance this debate, I have crunched some numbers on corporate taxes using federal budget documents and tax expenditure reports.
Budget 2009 (see Table A2.2 on page 255) indicates that federal corporate tax cuts since 2006 will reduce annual [...]

It is not every day that two Relentlessly Progressive Economists appear on the same TV panel. But Andrew and I did exactly that on last Wednesday’s episode of The Agenda with Steve Paikin. We debated international trade with a World Bank economist, Cato Institute analyst and Canadian trade lawyer.

The number of Canadians receiving Employment Insurance (EI) benefits plummeted in December. The drop of 40,100 was the largest monthly decrease in years.
One would anticipate some decline in the number of EI recipients as the job market begins to recover. But the magnitude of December’s decline suggests that, in addition to those former recipients who found [...]

Wages had seemed to be one of the relative bright spots during the economic crisis. Despite the carnage in Canada’s job market, average hourly earnings held up fairly well.
However, comparing today’s Consumer Price Index release for January with the Labour Force Survey for that month reveals that inflation exceeded fractional wage gains over the past [...]

I was out of town and away from the blogosphere during the recent controversy about TD Bank CEO Ed Clark’s “raise my taxes” comment.
As Terry Corcoran pointed out, CEOs are not actually proposing higher taxes on executive incomes or corporate profits. They are instead proposing to hike the GST, a tax that exempts all income in [...]

Vale, the company against which my union has been on strike since July of last year, released its fourth-quarter earnings this evening. This release deflates the company’s rationale for demanding labour concessions and confirms that the strike is hurting its bottom line.
Vale wants to eliminate defined-benefit pensions for new employees and drastically reduce the bonus [...]

I was going to comment on Jim’s post, but ended up writing enough to warrant a new post.
Jim correctly argues that Buy American provisions are tiny in the grand scheme of Canada-US trade. Similarly, whatever potential procurement preferences Canada bargained away would also have been tiny by this standard. The overall economic effect of last [...]

Last Monday, I testified twice to the Ontario legislature’s finance committee: as an “expert witness” and then on behalf of the United Steelworkers.
I emphasized the provincial deficit’s manageability, the folly of trying to reduce it through cutbacks or privatization, the importance of maintaining tax rates to bolster future revenues, and the advantage of targeted measures [...]

In January, Canada gained 43,000 jobs, almost all of them part-time. Any employment increase is certainly good news and some part-time positions might eventually become full-time positions.
The obvious limitation of part-time jobs is that they provide fewer hours of paid work and hence less income. Statistics Canada’s R-8 unemployment rate, which includes discouraged workers and [...]

Ontario’s pre-budget consultations include a session for which each party caucus selects an “expert witness.” This year, the Liberals invited Warren Jestin from Scotiabank, the Conservatives invited Catherine Swift from the Canadian Federation of Independent Business (CFIB) and the NDP invited me.
In general, my role was not to engage with the other witnesses. The Conservatives [...]

Advocates of the Harmonized Sales Tax often suggest that it will support Ontario’s beleaguered manufacturing sector. They emphasize that the current Provincial Sales Tax applies not only to finished products purchased by consumers, but also to some inputs purchased by businesses. As one business sells components to another, sales tax could be paid repeatedly along [...]

Today’s Gross Domestic Product (GDP) release paints a significantly improved picture of the Canadian economy. GDP rose by 0.4% in November.
Statistics Canada also revised upward its previously released figures. GDP grew by 0.3% instead of 0.2% in October and 0.5% instead of 0.4% in September. While these figures are encouraging, they imply a slower annual growth [...]

The number of Canadians receiving regular Employment Insurance (EI) benefits declined by 7,300 in November. As always, we do not know whether these workers found jobs or simply ran out of benefits. The Labour Force Survey indicated higher employment and slightly lower unemployment that month, which supports a positive interpretation.
Following these declines in [...]

The obvious headline from today’s Statistics Canada release is inflation rising to 1.3% in December, its highest level in almost a year. However, the Consumer Price Index actually decreased between November and December. The overall price level was down 0.3% in absolute terms and 0.1% on a seasonally-adjusted basis.
The annual inflation rate rose only due [...]

Straight Goods contacted me last week for an article about what the federal Conservatives might cut to balance the budget. This concern is understandable given the previous Liberal government’s slash-and-burn approach to deficits. At a minimum, the Conservatives may use the deficit as cover to remove funding from particular programs or organizations that they dislike.
However, [...]

Both employment and unemployment edged down between November and December, reflecting a smaller total labour force. This news raises concern that some jobless workers are leaving the labour force altogether. However, the labour-force decrease was only 9,000, far smaller than the previous monthly increase.
Overall employment changed so little because private-sector payrolls stabilized. While stability is [...]

Nine days ago, I posted some back-of-envelope math on the proposal to privatize the Liquor Control Board of Ontario (LCBO).
Specifically, I noted that keeping its annual profit of $1.4 billion would be worth more than the estimated sale price of $10 billion, which would reduce provincial debt charges by no more than $0.5 billion per [...]

My commentary on Tuesday morning’s Employment Insurance release mentioned the simultaneous Survey of Employment, Payrolls and Hours (SEPH) release.
The SEPH indicated that, from October 2008 through October 2009, average weekly earnings edged up 1.6% across all Canadian payrolls. Earnings fell in forestry, construction, manufacturing, and a few service industries.
But no one reported the most striking [...]

In October, Canada’s inflation-adjusted Gross Domestic Product (GDP) expanded by 0.16%, which rounds up to 0.2%. While a second consecutive month of growth is unambiguously good news, we should be concerned about the amount and type of growth.
Amount of Growth
Real GDP (in chained 2002 dollars) dropped from a peak of $1,241 billion in July 2008 [...]