The Progressive Economics Forum

I recently had the pleasure of making a couple of presentations on public finances in Alberta. In February, I spoke at the “Remaking Alberta” conference in Edmonton. This past week, I served on an Alberta Federation of Labour (AFL) panel in Calgary with Todd Hirsch from ATB Financial and Roger Gibbins from the Canada West [...]

On Friday evening, I was in Kingston listening to a speech by western Canada’s best Premier. The following morning, I awoke to discover a far less coherent op-ed by the other three western Premiers on The Globe and Mail’s website.
They were trumpeting Friday’s unveiling of the New West Partnership. As the Saskatchewan Federation of Labour [...]

This morning, Statistics Canada provided another piece of evidence that the job market is not recovering nearly as rapidly as Gross Domestic Product. In March, total employment rose by 17,900, but full-time employment was actually down by 14,200. This divergence reflected 32,200 more part-time positions.
The modest increase in total employment kept pace with Canada’s growing [...]

Growing up in Saskatchewan, the oil and gas industry’s line was always that we had to charge lower royalties to compete with Alberta for investment. The provincial NDP government bought into that mantra and repeatedly slashed royalty rates, even as commodity prices took off during the past decade.
When Alberta’s Conservative government announced in late 2007 [...]

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, [...]

George Monbiot skewers Canada’s role in climate change, from the tar sands to the international negotiations. Some highlights (notes in original):
… Until now I believed that the nation which has done most to sabotage a new climate change agreement was the United States. I was wrong. The real villain is Canada. Unless we can stop [...]

As someone deeply focused on climate change and the vast potential for bad things to happen in the future, the idea of peak oil strikes me a blessing. For the most part I have paid little attention to the nuances of peak oil arguments on the grounds that there is still so much of the [...]

Yesterday, I appeared before the Standing Committee on Finance and Economic Affairs at Queen’s Park. The committee is reviewing the Ontario Health Premium, as required by the legislation that implemented this levy.
My assessment of the premium starts from the premise that the Government of Ontario needs more revenue not only for healthcare, but also for [...]

The 2008 OECD Survey of Canada incorporates a long and surprisingly critical overview of developments in the energy sector, with a major focus on the tar sands. (Chapter 4). It is, in many respects, far closer to the views of the Pembina Institute and the Parkland Institute in Alberta than to those of the Alberta [...]

 A fascinating tidbit from today’s Statistics Canada release on human activity and the environment (climate change):
In 2008, oilsands producers intend to invest $19.7 billion, up 23% after a 31% hike in 2007. This exceeds the total investment plans of $19.6 billion by all manufacturing industries [Chart 1.6 on page 25]. Oilsands investment has surpassed manufacturing [...]

The International Energy Agency requires member countries to maintain emergency oil reserves in case oil imports are temporarily disrupted. Canada was exempted from this requirement because we are a net oil exporter.
However, the current pipeline system and NAFTA’s energy chapter limit our ability to supply eastern Canadian consumers with western Canadian petroleum. Western Canada’s vast [...]

Alberta’s economy looks ever more like a runaway train. Climate change raises the prospect of needing to slow this train down, something that would be advisable even if rising temperatures were not reaping havoc, because the boom has made labour scarce, housing even scarcer, and created a number of other social and environmental problems. With [...]

Today’s edition of The Economist magazine includes a good article on temporary foreign workers in Canada. It extensively quotes Gil McGowan, president of the Alberta Federation of Labour.
The present regime allows employers to import workers from abroad without seriously demonstrating the unavailability of Canadian workers for the job. Once the foreign workers are in Canada, [...]

Although I generally disagree with Andrew Coyne’s take on economic issues, I enjoy his commentary because it is almost always articulate and well-informed. Last Saturday’s column, which may be his second-last at the National Post before moving to Maclean’s, was a glaring exception.  In particular, it contradicted Coyne’s own previous contentions.
When the Government of Newfoundland and [...]

Notwithstanding the usual doom and gloom from the oil industry and its cheerleaders, Premier Stelmach’s decision to increase oil and gas royalties by $1.4 billion in 2009 is an unduly timid move in the right direction. 
The provincial NDP leader summed it up as follows: “The premier has compromised yet again a report that represented [...]

Yesterday, the Premier of Alberta addressed the Empire Club in Toronto. He said some encouraging things about Our Fair Share: “We will get a fair economic rent on the development of our resources. In fact we have recently received the recommendations of the Royalty Review Panel that I established as one of my first acts [...]

Today, Statistics Canada released a very interesting study on the economic demand that is driving greenhouse-gas emissions. Between 1990 and 2002, exports outstripped Canadians’ personal expenditure as the leading source of Canada’s industrial emissions. Indeed, exports accounted for essentially all of the increase in these emissions.
Canadian Industrial Emissions (in megatons)

Final-Demand Category

1990

2002

Exports

176.4

264.4

Personal Expenditure

196.2

209.8

Other Internal Demand

112.1

99.7

Total

484.6

573.8

Of course, [...]

Last week, the Royalty Review Panel recommended that Alberta raise its oil and gas royalties. Its 100-page final report, Our Fair Share, has generated healthy debate on a critically important subject. The basic message follows:
Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share [...]

My take on today’s release follows:
Job Numbers
As Statistics Canada noted, “Employment was little changed in July.” Employment growth in Alberta and Ontario was largely offset by job losses in the other eight provinces. As a result, the Canadian labour market created 11,300 new positions in July, far fewer than in previous months.
Some commentators argue that the [...]

I am big on big investment spending.  I’ve argued for years that weak business investment undermines our job creation, our productivity, our incomes, and our competitiveness.  I’ve proposed lots of policy measures to stimulate more investment spending: public as well as private.
But what’s happening in northern Alberta is enough to nauseate even a Soviet-esque advocate [...]

The Alberta Federation of Labour reports that more people now coming into province as temporary workers than traditional immigrants. From their press release:
Alberta has become the first province in Canadian history to bring more people into its jurisdiction under the temporary foreign worker program than through Canada’s mainline immigration system.
According to new figures from the [...]

A month ago, I noted that if the Core Consumer Price Index remained unchanged from May to June 2007, the annual core-inflation rate would jump to 2.5% because this Index had fallen from May to June 2006. Today’s release from Statistics Canada reveals that this is exactly what happened. Since the monthly Index remained constant [...]

It is worth filing under the “you heard it here first” heading that both the Globe and Mail and the Toronto Star have taken editorial positions similar to those proffered by Relentlessly Progressive Economics. That is, the Bank of Canada is raising interest rates because of what is happening in Alberta, and in doing so [...]

In recent years, about one-quarter of Canada’s corporate profits and business investment have been in Alberta.  The following figures are from Statistics Canada’s Provincial Economic Accounts.
As corporate profits have ballooned in Alberta, business investment has not increased as a share of the province’s economy. More than half of this investment has been in non-residential structures [...]

http://www.theglobeandmail.com/servlet/story/RTGAM.20070711.wcomment0712/BNStory/Front/home
Asks Michael Mendelson from Caledon

Relatively high inflation in Alberta seems to be the only justification for raising Canadian interest rates. In this context, it is tremendously significant that the Government of Alberta itself opposes increasing rates.
Of course, higher interest rates imply a higher Canadian dollar. Alberta sells oil and gas, the prices of which are denominated in US dollars. [...]

More fascinating stuff from that CIBC report follows:
While many of the big names in the mining and metal processing industry have been spoken for, there are even larger capital inflows potentially still ahead in the energy sector. Thanks to the oil sands, and a still laissez-faire attitude towards ownership of those resources, Canada represents anywhere [...]

Relative to inflation, Albertans are being paid less per hour than they were a year ago. Today, Statistics Canada released Consumer Price Index figures for May 2007. Comparing these figures with the latest Labour Force Survey reveals that Canadian wages grew only 0.8% more than Canadian prices from May 2006 through May 2007.
As always, the [...]

In the Globe and Mail it is reported:
A flurry of increases in the past month has sent Canadian mortgage rates to their highest level in more than five years, and consumers shouldn’t expect a return to the low interest rates they enjoyed in the first half of the decade.
The story quotes Benjamin Tal of CIBC [...]