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Archive for 'GDP'

The IMF and Progressive Economics in Canada

It is interesting to note that the most recent IMF staff report on Canadian economic issues echoes some key concerns of progressive economists. I have reported these for the Broadbent Institute. As noted in this summary, the IMF report that corporate Canada’s cash hoard is the biggest in the G7 and has been mainly amassed […]

PEF Session at the House of Commons Finance Committee

The Progressive Economics Forum (PEF) normally hosts sessions at the Canadian Economics Association’s annual conference. But the House of Commons finance committee threw most of the PEF members testifying in its pre-budget consultations onto the same panel on November 21 and then moved it to a room without TV. MP Randy Hoback participated in the first […]

Black Friday GDP: Consumption Slows, But Inventories Jump

Ironically, Statistics Canada’s third-quarter GDP report on Black Friday showed the growth rate of consumption being cut in half. Final consumption expenditure grew by 0.4% in the third quarter compared to 0.8% in the second quarter. Household spending growth fell to 0.6% from 0.9%. Government consumption growth plummeted to 0.1% from 0.4%. In other words, […]

Fossil-Fueled GDP Growth

Yesterday, Statistics Canada reported that the Canadian economy had a month of fossil-fueled growth in August. Overall GDP was up by 0.3%, only half as much as in July but still a respectable monthly growth rate. By far the strongest growth of any industry was a 1.9% increase in “Mining, quarrying, and oil and gas […]

Grounding the Toronto Island Airport’s $1.9-Billion Claim

As part of its push to expand to accommodate jet flights, the Billy Bishop Toronto City Airport has been advertising that it contributes $1.9 billion to Toronto’s economy. This claim is based on a study that the airport commissioned from InterVISTAS, an airline industry consultancy. The study estimates the airport’s economic impact as of March […]

What happened to the recovery?

(The following is slightly adapted from a short piece on page 3 in the new issue of  Economy at Work, the quarterly publication I produce for CUPE, which also covers a lot of other relevant issues.)   It’s been a little over four years since Canada’s economy bottomed out in mid 2009.  While we didn’t suffer as deep […]

A Fine Balance: GDP Growth by Sector and the Impact of Austerity

The second-quarter GDP numbers confirm that Canada’s continuing “recovery,” such as it is, is still balancing very precariously on a knife-edge between expansion and contraction.  The various sources of growth vary widely in their current momentum.  The overall net balance is barely positive.  And coming austerity in the public sector could very much push the balance […]

GDP: Consumers to the Rescue

Following positive GDP numbers in April and May, Statistics Canada reported today that a sharp drop in June dragged Canada’s economic growth to a mediocre pace of 0.4% for the second quarter. June’s declines in manufacturing and resource extraction did further damage to industries that had declined in April and May. Construction also declined in […]

GDP: Resource Exports Cover for Domestic Weakness

Statistics Canada reported today that GDP grew by 0.6% in the first quarter. The volume of energy and mining exports expanded by more than 5%, offsetting lower exports of many manufactured goods as well as a weak domestic economy. Consumer spending growth slowed to 0.2% in the first quarter of 2013, its lowest rate of […]

GDP: Petro-Rebound Conceals Underlying Problems

The main story in today’s GDP numbers is that the oil, gas and mining industries rebounded sharply in April after being hobbled by temporary maintenance and production difficulties in February and March. While the upswing in fossil-fuel and mineral extraction was large enough to boost the overall economy, other key sectors showed signs of weakness. […]

Running on Fumes

StatsCan released the first-quarter GDP numbers this morning, and the deafening silence you hear is of champagne corks not popping. Quarterly growth was 0.5% (1.9% annualized): uninspiring but not disastrous.  Erin Weir has aptly pointed out the leading role of government spending cuts in dragging down growth.  Erin noted that government current consumption fell 0.4% […]

GDP: Austerity Bites

Canada’s economy grew by half a percent in the first quarter of 2012, staying on pace for unimpressive annual growth of two percent. The good news is that business investment was strong, at least on a seasonally-adjusted basis. (As usually happens in the first quarter, the actual dollar value of business investment decreased.) Unfortunately, the […]

Mining in the NWT: Who Gets What?

In a recent blog post at Northern Public Affairs, Stephanie Irlbacher-Fox looks at the issue of ‘who gets what?’ when a mine is developed in the Northwest Territories (NWT). Here is an excerpt from the post: – The resource extractor: they pay royalties (the NWT has the lowest royalties in the world), and costs of […]

Canadian Mining and Manufacturing Stumble

Statistics Canada reported today that the economy shrank in February, driven by declines in resource extraction and manufacturing. Oil and gas extraction as well as hard-rock mining decreased due to temporary shutdowns. However, the most dramatic decline was in potash production, down 19% due to mine closures in Saskatchewan. The provincial government, which is budgeting […]

McGuinty Budget Would Cut Over 100,000 Jobs

Last week, the Ontario Public Service Employees Union released an interesting report by the Centre for Spatial Economics on the economic impact of proposed provincial budget cuts. It provides a timely reminder that the public sector is a crucial component of the economy, with public spending also supporting many private-sector jobs. The Centre for Spatial Economics […]

Lockouts Almost Derail GDP Growth

Statistics Canada reported today that economic growth dropped to a bare 0.1% in January. The New Year began with Rio Tinto locking out former Alcan employees at Alma, Quebec, and Caterpillar locking out former Electro Motive employees at London, Ontario. Closing these major facilities contributed to cutting growth in durable-goods manufacturing from 1.5% in December […]

Santa Claus Delivers a Positive Quarter Despite Corporate Scrooges

The Month: Christmas Gift Canada’s economy was buoyed by Christmas cheer as a December bounce more than offset slight declines in October and November to turn the fourth quarter positive. Unfortunately, one month does not make a trend. The key question is whether December’s strength continued into the New Year or whether economic activity reverted […]

GDP Turns Negative

Statistics Canada reported today that the economy shrank in November for the first time in six months. This decline was driven by reduced energy production, which partly reflected maintenance shutdowns in the oil patch and unusually mild weather. While those factors may not affect future economic growth, their ability to turn it negative in November […]

Canada Goose Egg

This morning, Statistics Canada reported zero economic growth in October. While growth had been driven by strong mining and fossil-fuel exports during the third quarter, Canadians got a lump of coal in October. This Christmas goose egg should come as a wake-up call to economic policymakers. It follows Labour Force Surveys showing two consecutive months of […]

Canada’s Petro-Recovery

Statsitics Canada released the third quarter GDP numbers today, and on the surface they seem pretty upbeat, considering all the doom and gloom lately.  Headline real GDP grew at an annualized 3.5% rate.  I predicted a few weeks back that there was no chance that the 3Q number would be negative (thus sparing us a […]

No Technical Recession, Not That It Matters

Today’s GDP numbers (a sprightly gain of 0.3% at basic prices in July) ensure that there will not be a so-called “technical recession” in Canada — at least, not yet. Economists have a perverted definition of “recession”, whereby it’s considered official only if real GDP declines 2 quarters in a row.  That’s hilariously arbitrary.  And […]

GDP Report: Awfully Weak Tea Leaves

Finance Minister Jim Flaherty was unusually blunt on CTV’s Question Period yesterday, saying he was worried about the possibility of another recession.  (Finance Ministers are usually very cautious about using the “r”-word, for fear that might worry consumers an dbring about a self-fulfilling prophecy.)  Maybe he had already seen today’s quarterly GDP numbers from Statistics […]

NDP’s “Balanced Budget” Platform

Jack Layton unveiled the NDP’s policy platform today.  Among other things, it promises to eliminate the deficit (i.e. balance the federal budget) within four years.  I’m not sure it should. Several years back, I had the opportunity to take a directed reading course from John Smithin.  In addition to being a long-time member of the […]

OECD Corporate Tax Rates: Does Size Matter?

Advocates of corporate tax cuts like comparing Canada to an unweighted average of Organisation for Economic Co-operation and Development members. Since the OECD keeps admitting more microscopic economies with very low corporate tax rates, this average keeps falling regardless of whether any country actually lowers its rate. Last year’s admission of Estonia, Israel and Slovenia […]

Halo Came Off Canadian Recovery as 2010 Drew to a Close

Canada’s recovery from the 2008-09 recession ground to a painful halt during the second half of 2010.  The economy created no net new jobs from the summer onward, economic growth slowed to a crawl, and the nation’s current account deficit reached a record size.  And all of that was while federal-provincial stimulus efforts (said to […]

Taxes and Economic Growth

The term “Austrian economists” usually refers to the likes of Hayek, Menger and von Mises. But I recently met some rather different economists from the Austrian Chamber of Labour. Austrian law requires that union members pay dues to the Chamber of Labour, so it is very well-funded for a progressive think tank. Similarly, all Austrian […]

We told you so: HST introduction a factor behind GDP drop in July

Among the concerns about the HST that we at the CCPA have raised was the poor timing of the tax change. From my pre-budget piece last September: If British Columbians respond to the HST by reducing their consumer spending, the timing of the HST introduction may actually slow down the economic recovery, which should be […]

In Defence of Tuesday’s GDP Numbers

Jim and I responded somewhat differently to Tuesday’s GDP release. Jim’s Globe and Mail column suggested that it was especially bad: “We’re clearly heading for stagnation at best, and quite possibly another ‘double dip’ downturn.” I perceived a ray or two of hope and told The Toronto Star: “I’m not predicting a double dip.” While […]

Capitalism, Upside Down

Yesterday’s GDP numbers were worse than they seemed.  And they highlighted a curious feature of modern capitalism.  Nowadays, non-financial businesses have become major net lenders to the rest of the economy.  Instead of borrowing money (in various forms: debt, equity, etc.) from other sectors to finance real investment, non-financial businesses are not even reinvesting their […]

GDP: Canada Gets Its Head Above Water

UPDATE (September 1): Quoted in The Toronto Star. Canadian Gross Domestic Product (GDP) grew modestly in the second quarter, but that modest growth returned GDP to a level not seen since before the economic crisis. Recent Developments: The Second Quarter Canada’s output expanded at a quarterly rate of 0.5%, which corresponds to an annual rate […]