EI: Is No News Good News?

Today’s Employment Insurance (EI) figures for April indicate essentially no change in the number of Canadians receiving benefits or in the number filing claims. To put these flat EI numbers in context, April was the strongest month yet of labour-market recovery. Indeed, it saw the largest percentage increase in employment since August 2002. In one sense, today’s numbers confirm what […]

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CFIB on CPP: A Reality Check

On Monday, Catherine Swift of the Canadian Federation of Independent Business (CFIB) was on TV expressing outrage that doubling the Canada Pension Plan (CPP) would entail mandatory contributions equal to 20% of earnings. Her logic is that a self-employed person currently contributes 9.9% of pensionable earnings. That figure doubles to 19.8%. This argument misses a couple of points: Employees Pay Half […]

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Bending the Laffer Curve

Arthur Laffer had a boldly titled op-ed in Monday’s Wall Street Journal, “Tax Hikes and the 2011 Economic Collapse.” This piece has been invoked at least once every ten minutes on each subsequent episode of The Kudlow Report. US tax rates will rise in 2011, when the Bush tax cuts expire. Laffer argues that, to avoid these higher tax rates, Americans […]

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Liberal-NDP Merger?

Warning: The following post probably does not belong on an economics blog. Yesterday, CBC reported that Liberals and New Democrats are negotiating a possible merger of the two parties into one. It seems like everyone except Warren Kinsella has denied this report. So, how does CBC respond? It doubles down on its original report by making Kinsella the lead item […]

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Maxime Bernier Jumps the Shark

Through a series of speeches and Financial Post op-eds, former cabinet minister Maxime Bernier has been setting out an uncompromising right-wing agenda. He had Andrew Coyne applauding his proposal to freeze public spending. He had Stephen Gordon tweeting in support of his proposal to eliminate corporate taxes. But his latest proposal has already been rebuked by Gordon and is unlikely to […]

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Altucher’s Home Economics

Among TV financial pundits, I enjoy watching James Altucher. I have particularly appreciated his advocacy of no-nonsense quantitative easing by the European Central Bank, as opposed to the half measures unveiled so far. (My viewership has not been systematic enough to form an opinion of his stock tips.) I was recently pleased to discover that he is also a prolific […]

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Employment Improves, But Unemployment Persists

This morning’s Labour Force Survey might be described as showing a consolidation of the recent employment recovery. The number of new jobs was modest in May compared to April. However, there was a significant conversion of part-time employment into full-time employment and of self-employment into paid positions. Both trends are positive for Canadian workers. There were 67,300 more full-time jobs, […]

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Interest Rate Hike

This morning, the Bank of Canada raised its interest-rate target from 0.25% to 0.5%. Yesterday’s robust GDP numbers had the overwhelming majority of economic pundits arguing that it should and would do so. But just one week ago, when the stock market was plummeting due to the Euro crisis, most commentators and headlines suggested that the Bank of Canada might […]

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April’s Shower of Jobs

This morning, Statistics Canada reported that employment shot up by an incredible 108,700 in April. Although employment has been recovering for almost a year, it had lagged behind the rebound in output. But today’s job numbers show a 0.6% rise in monthly employment, double the monthly GDP growth reported last week. Total hours worked increased by 1.1% in April, confirming […]

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Vale’s Striking First Quarter

Vale, the company against which my union has been on strike since July 2009, released its first-quarter earnings this evening. The release deflates Vale’s rationale for demanding labour concessions and confirms that the strike is hurting its bottom line. The company wants to eliminate defined-benefit pensions for new employees and drastically reduce the bonus paid to workers when nickel prices […]

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Digging Deeper on the GM Loan Repayment

Last week’s announcement by GM that is has fully repaid the loans it received from the U.S., Canadian, and Ontario governments (years ahead of schedule, and with interest) was greeted in most circles as another positive sign of the auto industry’s modest recovery.  Since the dark days of last June (when Chrysler was shut down entirely), the Canadian auto assembly […]

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New West Partnership

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 and the Jurist have […]

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The Recovery Slows

In February, Canada experienced its slowest economic growth since October 2009. Of course, no one expected the initial rapid rebound out of recession to continue forever. Monthly growth of 0.3% corresponds to annual growth of 3.7%, which is quite strong by historical standards and stronger than the 3.2% US growth estimated this morning for the first quarter. Yesterday, Statistics Canada reported […]

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Taxers of the World Unite

You know that you are doing something right when the Canadian Taxpayers Federation (CTF) starts making up new pejorative terms. Last Friday’s Toronto Sun included the following op-ed on the Taxers (with a capital “T”): Calls for new and higher taxes are coming from the usual tax-hike proponents (AKA Taxers); public sector unions, lobby groups like the Canadian Centre for […]

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Where’s the Inflation Bogeyman?

Mark Carney saw a bogeyman on Tuesday morning. He was spooked into removing his conditional commitment to hold interest rates, which would otherwise have expired at the end of June. By signalling that it might raise interest rates ahead of schedule, the central bank drove the Canadian dollar from 98 US cents on Monday to 100 US cents on Tuesday. […]

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Stingy EI Benefits

This morning, Statistics Canada released Employment Insurance (EI) figures for February. These figures show slightly more recipients nationally, but somewhat fewer recipients among provinces. Statistics Canada confirms that this apparent discrepancy reflects the fact that each province is seasonally adjusted separately from the national total. When seasonal adjustment is tipping the balance between an increase and a decrease, one must […]

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Canada-US Income Tax

This blog’s readers will not be surprised at me questioning Neil Reynolds (although my last post on him was somewhat complimentary.) However, his latest Globe and Mail column was organized around an especially odd claim: The average Canadian household, for example, spends $14,800 (Canadian) a year on personal income taxes, the most expensive purchase – 20 per cent of income […]

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Uneven Job Numbers

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 labour force, but barely […]

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Western Canada’s Royalty Giveaway

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 that it would raise […]

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Great Minds Think Alike

Serge Coulombe, an economics professor at the University of Ottawa, has a great op-ed in today’s Financial Post: The Fraser report looks at the change in the contribution of government expenditures to the GDP growth between the second and the third quarters, and the third and the fourth quarters, of 2009. This approach is problematic since it focuses on the […]

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Stand Up for Harper

When conflict erupts between Conservative politicians and the Fraser Institute, I am inclined to react as Henry Kissinger did to the Iran-Iraq War: “It’s too bad they can’t both lose.” But in the recent spat over stimulus, it was easy to choose sides. However grudging the Harper government’s decision and however inadequate its execution, it did the right thing by […]

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KPMG on Corporate Taxes

Yesterday, I appeared on CBC’s Lang & O’Leary Exchange regarding corporate taxes in response to Ignatieff’s announcement and KPMG’s 2010 Competitive Alternatives report. (To watch the video, search for “lang”, click “Most recent”, select March 31, and go 13 minutes in.) My co-panellist, John Risley, seemed more interested in talking about the “dinosauric” nature of unions and the need to […]

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Mercurial Productivity

Here is some of what Terry Corcoran wrote in today’s Financial Post about Bank of Canada Governor Mark “Carney’s suggestion that Canadian business has so far ‘disappointed’ because it has failed to revive Canada’s lagging productivity”: Central bankers appear to know many things, and have big fancy computer systems and economic models to tell them what’s happening in an economy […]

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Ontario Budget

Today’s provincial budget continues previously announced stimulus in the short term and projects severe, but largely unspecified, spending restraint in the long term. The most surprising new measure, a lower electricity rate for northern Ontario industry, is of little fiscal significance (costing just 0.1% of the budget). A less surprising measure of potentially greater fiscal significance is the attempt to […]

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Fraser Institute on Stimulus: Take Two

Iglika makes several cogent, high-level criticisms of the Fraser Institute’s “analysis” of how much government stimulus has contributed to Canada’s economic recovery. However, I think that it is guilty of a far more basic flaw. To determine how much government purchases and investment contributed to economic growth, one would compare the increase in government purchases and investment with the increase […]

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Incredible Shrinking EI Benefits

The number of Canadians receiving regular Employment Insurance (EI) benefits dropped by 47,700 in January, the largest monthly decline in years. As usual, the key unanswered question is whether these workers are no longer on EI because they found jobs or simply ran out of benefits. The Labour Force Survey indicates that employment rose by 43,000 in January, so it […]

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Congress Passes Healthcare – I Told You So

This evening, the U.S. House of Representatives passed Obama’s healthcare bill. Two months ago, I was the odd man out on a Business News Network panel (watch video). The day after the Massachusetts by-election, I was talking about Democrats redoubling their efforts and being more aggressive in putting forward a progressive agenda. By contrast, one of my co-panellists said, “The […]

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Federal Budget Redux

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 USW’s press release, I […]

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