Globe Economics

Columnist Doug Saunders writes (from his Mediterranean cruise) in today’s Globe: “It’s a little like the decision being faced by the Bank of Canada, which can print money and ease the dollar’s value downward to please Ontario’s manufacturers, or let it rise to please Alberta’s petroleum exporters – but not both.” Huh?  Petro exporters get more Canadian dollars and higher […]

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How green are BC’s climate policies?

One of the most striking contradictions in BC’s climate action plan is the oil and gas industry. Greg Amos in The Hook, quotes our “green” premier out on the campaign trail in the northeast: “Let me tell you what’s happened in the energy industry in British Columbia in the last eight years: thirteen billion dollars of investment,” Campbell told a […]

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The wrong kind of stimulus

I am a big fan of stimulus packages for our ailing economy. But my pitch has been that we need to use the occasion to retrofit our economy to be on a more sustainable footing. So it matters a great deal on what we spend those stimulus dollars. If we launch projects that take us even further away from a […]

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Following the money: the case of BC communities

It is one of those publications that few media outlets will report on, and even fewer British Columbians will read, but BC Stats just released the latest version of its Local Area Economic Dependencies, updated based on 2006 census data. This publication basically asks where the income in various BC communities comes from. In many communities the resource sector is […]

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Danny Chavez vs. NAFTA

I have generally been underwhelmed by media coverage of AbitibiBowater’s prospective NAFTA challenge of Newfoundland and Labrador’s decision to reclaim natural resources that the company previously used to operate paper mills in the province. I watched a panel discussion on Mike Duffy Live (before his Senate appointment) that focussed entirely on NAFTA’s nondiscrimination provisions. But there is no suggestion that […]

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Resource Royalties vs. Structural Deficits

Briarpatch printed my article, “Dirty Deeds Done Dirt Cheap: Saskatchewan’s Multi-billion Dollar Resource Giveaway,” in its December 2008 edition. The magazine’s editor has a knack for excellent rock-themed titles: my previous contribution on Saskatchewan’s business tax cuts was entitled “Money for Nothing, and the Sultans of Spin Get Their Tax Cuts for Free.” When I submitted the article and spoke […]

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Blakeney on Royalties, the Charter and NAFTA

Allan Blakeney, Saskatchewan’s Premier from 1971 until 1982, just published his memoirs, An Honourable Calling. Book launches are scheduled in Regina (Nov. 25), Saskatoon (Nov. 27), Moose Jaw (Dec. 2) and Ottawa (Dec. 9). A few years ago, Blakeney had me pull together some facts and figures for his chapter on oil, so I was quite interested to read the […]

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Leader-Post Debate on Oil Royalties

The Regina Leader-Post recently ran an editorial opposing my proposal for higher resource royalties. My response is printed in today’s edition: The Leader-Post’s October 28 editorial critiqued my suggestion that the government of Saskatchewan increase oil royalties. It emphasized volatile oil prices, the volume of oil production in Saskatchewan and competition with Alberta. In fact, all three issues strengthen the […]

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Whither Commodity Prices?

I recently noted that, although the price of oil has fallen by half from its summer peak, it still approximately equals last year’s average. Last year was thought to be a time of very high oil prices. Beyond observing that most commodity prices are way down from their recent peaks, it is difficult to generalize because different commodities have followed […]

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Saskatchewan’s Resource Royalties

Yesterday’s Leader-Post included the following report on my speech to the Saskatchewan Federation of Labour’s annual convention. My topic, “Is Saskatchewan getting a Fair Return on its Resources?,” may have been poorly timed given the recent crash in resource prices. However, it is important to put this crash in perspective. The current world oil price of around $70/barrel is still far […]

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Harper’s Financial Advice

In Tuesday’s CBC interview, Harper told Canadians that “there are probably some great buying opportunities out there” and specifically pointed to “oil stocks.” Since then, the Toronto Stock Exchange declined by 8% and its Energy Index fell by 14%. S&P/TSX Composite Index Tuesday’s Close = 9,829.55 Friday’s Close = 9,065.16 S&P/TSX Capped Energy Index Tuesday’s Close = 234.16 Friday’s Close […]

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Balancing on a Barrel: Canada’s Second-Quarter Current Account

In the second quarter of 2008, record oil prices outweighed the continuing manufacturing crisis, the worst services deficit ever recorded, and widening deficits in investment income and current transfers. The Surplus in Perspective The rise of Canada’s current-account surplus to $6.8 billion in the second quarter is positive news for the Canadian economy.  However, this surplus is still less than last year’s […]

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The People of Saskatchewan vs. PCS

The United Steelworkers union has been on strike at three Potash Corporation of Saskatchewan mines since August 7. This labour dispute raises much broader questions about the distribution of resource rents. The following op-ed, printed in today’s Regina Leader-Post, updates the op-ed printed in the Saskatoon StarPheonix before the strike. Workers, citizens miss potash profits The Leader-Post (Regina) Thursday, August 21, […]

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Attention PCS Investors

The United Steelworkers’ union has just issued the following release: SHAREHOLDER ALERT: PCS STOCK UNDERPERFORMING COMPETITOR DURING STRIKE SASKATOON, SK — United Steelworkers’ (USW) Western Canada Director Stephen Hunt said Thursday that investors should use their influence to urge Potash Corporation of Saskatchewan (PCS) management to negotiate a settlement with Steelworkers on strike at three mines near Saskatoon. “PCS stock […]

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Potash, Workers and the Public Interest

As has been widely reported in the business press, members of the United Steelworkers union employed at the Potash Corporation of Saskatchewan’s Allan, Cory and Patience Lake mines voted 96% on Monday night for a strike mandate. The three locals served strike notice on Wednesday, which will put them in a legal strike position tomorrow. The company responded by serving […]

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Profits vs. Wages in Saskatchewan and Newfoundland

Jim’s recent mini-study emphasized that profits now occupy gargantuan shares of GDP in the oil-rich provinces. He and The Jurist have noted the total disconnect between corporate profits and personal income in two of those provinces: Saskatchewan and Newfoundland. To explore this issue further, I have pulled some figures out of the recently-released 2007 Provincial and Territorial Economic Accounts (in […]

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A Telling Anecdote on CEO Greed

Today’s excellent Globe Report on Business story  on Potash Corp CEO William Doyle http://www.theglobeandmail.com/servlet/story/RTGAM.20080508.wrpotash08/BNStory/energy/home scarcely requires additional commentary.  But here goes – Apparently, his stock options are now worth $600 Million, up from $7 Million at the end of 2003.  This huge windfall reflects soaring potash prices, up from $100 to $600 per tonne over more or less the same […]

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Investment in manufacturing vs oil sands

 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 because of its rapid […]

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Trade Surplus Falls to Nine-Year Low

Today, Statistics Canada revealed that our December 2007 merchandise trade surplus was the lowest one since November 1998. This fact is yet more evidence that the rise in energy exports has been smaller than the decline in exports from manufacturing and other sectors. The conventional story about high oil prices driving-up the loonie assumes that these prices have increased our […]

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Does Canada Need a Strategic Petroleum Reserve?

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 oil exports to the […]

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Alberta, we need to talk

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 the difficulty of keeping up […]

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Investment, Oil and the State

At least 79% of the increase in Canadian non-residential investment this decade has come from the oil industry and governments. Jim and others on this blog often note that, although corporate profits have ballooned, business investment has barely increased as a share of GDP. However, this fact means that business investment has grown along with GDP and it’s worth examining […]

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We May Look Rich, But We Aren’t Rich

Statistics Canada released an interesting but utterly misleading technical paper last week on Canada’s supposed “Reversal of Fortune.”  They examined Canada-U.S. comparisons in national income (a concept that is subtly but importantly different from GDP, as I’ll explain in a minute), and decided that Canada has become the star economic performer of the continent.  Since 2002, our real national per […]

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Canada’s Un-Development and the Loonie

The Commons Finance Committee, spurred by my old debating opponent John McCallum, is holding hearings in the next two weeks on the economic and fiscal consequences of the loonie’s unsustainable flight. (I kind of miss crossing swords with John, actually: In the good old days he was the evil but friendly Bay Street banker, justifying federal spending cuts — and […]

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Saskatchewan’s Incredible Shrinking Government

During the sixteen years that the NDP governed Saskatchewan, provincial expenditures fell from just over 30% to just over 20% of Gross Domestic Product (GDP). This accomplishment is dubious for a political party committed to using government as a vehicle to redistribute wealth and finance important public programs. Why did the proportion of Saskatchewan’s economy available for these purposes decline […]

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Worst Diane Francis Column Ever

Diane Francis has written many unsubstantiated columns. On July 6, for example, she claimed that “Canada has the highest corporate taxes in the world.” However, based on the following quotes, Tuesday’s column probably takes the cake. If last week’s election upset is any indication, Saskatchewan is going to be on a roll for a few years. I have no idea […]

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Canada’s Energy Exports: The Fine Print

The relative importance of oil in Canada’s exports bears on the debate about oil prices and the exchange rate. A challenge is that the most widely-cited figures often lump oil and natural gas together. I compiled the following table from the merchandise-trade figures that Statistics Canada updated through September today: Canada’s Energy Trade, 2007 year-to-date ($ millions)   Exports % […]

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