http://www.progressive-economics.ca PEF home page and weblog Fri, 12 Mar 2010 15:20:00 +0000 http://backend.userland.com/rss092 en 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 ... http://www.progressive-economics.ca/2010/03/12/employment-picture-improves/ 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 ... http://www.progressive-economics.ca/2010/03/11/national-post-exposes-media-bias/ Please join us in Quebec City this May 28-30 for another round of PEF sessions at the Canadian Economics Association meetings. Here is the tentative PEF line-up for the meetings. Friday, 09:00 - 10:30 PEF I: Was Financialization Rational for Capital? Organizer: Robert Chernomas (U. of Manitoba) -Fletcher Baragar, “Why Financialization, Why Now?” -Robert ... http://www.progressive-economics.ca/2010/03/10/pef-at-the-cea-meetings-2010/ When emissions are reported for the US or Canada, there is an accounting convention that restricts the total to emissions released within the borders of that jurisdiction. This means that Canada's exports of tar sands oil are counted only to the extent that fossil fuels are used in the extraction ... http://www.progressive-economics.ca/2010/03/10/different-perspectives-on-ghg-emissions/ Like most economists, I'm big on efficiency. Even in my personal life I tend to group tasks together so that I save time, and I always feel a bit guilty if I retroactively realize I somehow failed to optimize my behaviour. In my recent work on climate change, efficiency comes up ... http://www.progressive-economics.ca/2010/03/10/efficiency-vs-resilience/ 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 ... http://www.progressive-economics.ca/2010/03/10/reverse-mortgage-on-ontario-crown-jewels/ 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 ... http://www.progressive-economics.ca/2010/03/09/open-ontario-kinsella-vs-hudak/ I've been remiss in not posting information about and links to the federal budget analysis that we did at CUPE, as Paul Tulloch had urged on this blog.   In addition to the press release we issued, there's an overview and summary that I prepared on budget day, and a dozen really good ... http://www.progressive-economics.ca/2010/03/09/cupe-federal-budget-analysis-and-video/ I was pleasantly surprised to see a report published yesterday by Don Drummond and Francis Fong at the TD Bank on the Changing Canadian Workplace.   It provides a short but decent summary of some different issues affecting labour: macro trends, educational requirements, changing composition, women, immigrants, aboriginal Canadians, older workers, widening income ... http://www.progressive-economics.ca/2010/03/09/td-bank-on-changing-cdn-workplace/ Today’s day-after-International-Women's-Day story in the New York Times by Nancy Folbre links to four indices of gender equity. http://economix.blogs.nytimes.com/2010/03/08/the-worlds-best-countries-for-women/ How is Canada doing? Canada ranks 4th in the Human Development Index (we were number one for eight years) as well as the UNDP Gender Development Index, behind Norway, Australia and Iceland. ... http://www.progressive-economics.ca/2010/03/09/from-a-womans-perspective-canadas-place-in-the-world/ Last weekend, I spoke at a community event celebrating International Women's Day in Vancouver. It got me thinking about the status of women in the Canadian economy, reflecting both on the successes over the last half century and on the areas where work is still needed to achieve gender equality. As ... http://www.progressive-economics.ca/2010/03/08/women-in-the-canadian-economy-whats-standing-in-the-way-of-equality/ 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 ... http://www.progressive-economics.ca/2010/03/08/foreign-control-canadian-mining/ 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 ... http://www.progressive-economics.ca/2010/03/07/this-is-your-economy-on-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 ... http://www.progressive-economics.ca/2010/03/06/mcguinty-super-privatization/ Analysis of the 2010 Federal Budget by David MacDonald, coordinator of the CCPA's Alternative Federal Budget: If there was any policy recalibration due to prorogation, it was on their photocopier as 94% of this budget’s spending has already been announced.  The problem when you photocopy your work is that you don’t ... http://www.progressive-economics.ca/2010/03/05/the-xerox-budget/ The Budget contains no big surprises but is still a big disappointment. Despite the fact that unemployment is and will remain very high, economic stimulus measures effectively end after this year. A few very small new investments in jobs and skills will be made, but they do not amount to ... http://www.progressive-economics.ca/2010/03/05/the-2010-federal-budget-delivers-cuts-not-jobs/ I did not make it to the federal budget lock-up, and having pored over the document I am pleased to say I missed it. There is very little in this budget that one would expect of a budget in the midst of a recession (the GDP numbers have turned up, ... http://www.progressive-economics.ca/2010/03/04/a-whimper-of-a-federal-budget/ I am pleased to announce John Loxley as the winner of the 2010 John Kenneth Galbraith Prize in Economics. John will be joining us in Quebec City during the Canadian Economics Association meetings at the end of May to give the Second Galbraith Prize lecture. Please join us if you ... http://www.progressive-economics.ca/2010/03/04/galbraith-prize-in-economics-2010/ The 2010 BC Budget was a disappointment on the climate action front. Even as Premier Campbell waxed in the Globe about the impact of climate change on the 2010 Spring Games – with its sunny days, crocuses, daffodils and by the end, cherry blossoms making it fun for people on ... http://www.progressive-economics.ca/2010/03/03/climate-inaction-and-bcs-budget/ As if there weren't already enough reasons to eliminate the egregious stock option tax loophole, a column by Eric Reguly in this month's Report on Business magazine highlights yet another.  This reason helps to explain why we had such a booming stock market up to 2008, but little growth in ... http://www.progressive-economics.ca/2010/03/03/stock-options-the-buyback-boondoggle-and-the-crisis-of-capitalism/ [Notes from Marc and Iglika] For a document titled Building a Prosperous British Columbia, the 2010 BC Budget is underwhelming in its ambition. Budget 2010 shows a government talking a lot about the legacy of the Olympics but lacking any coherent vision of how translate upbeat sentiments into real improvements in ... http://www.progressive-economics.ca/2010/03/02/bc-budget-2010-steady-as-she-goes/ Two weeks ago I wrote a critique of a very poorly done Conference Board of Canada report on P3s (public-private partnerships).    This conference board study ignored recent major criticisms by provincial auditors general and interviewed almost exclusively P3 proponents. I'm happy to say that two business professors from B.C., Aidan Vining of SFU ... http://www.progressive-economics.ca/2010/03/01/can-p3s-work/ (I wrote the following to circulate to some European colleagues.) Apparently former Canadian Finance Minister and Prime Minister Paul Martin is being tapped by the Europeans for advice on fiscal matters. "Former prime minister Paul Martin, finance minister in the 1990s when Canada's dangerously high federal deficit was tackled and then ... http://www.progressive-economics.ca/2010/03/01/beware-the-canadian-fiscal-model/ The American scholar Alfred Crosby writes of the neo-Europes, the offshoots of Europe, the products of the settling of the New World while unsettling those whose world it already was. James Belich, an historian - who writes like an economic historian - of New Zealand now teaching in Australia, has ... http://www.progressive-economics.ca/2010/03/01/5486/ 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 ... http://www.progressive-economics.ca/2010/03/01/2010-alternative-federal-budget/ 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 ... http://www.progressive-economics.ca/2010/03/01/gdp-industrial-recovery/ Thanks to Stephen Gordon, who made a link to a new unpublished study (fourth draft, 2009), The effect of corporate taxes on investment and entrepreneurship, by Djankov, Ganser, McLiesh, Ramalho and Shleifer. Stephen claims this study settles the matter that Canada should not reverse corporate tax cuts made in recent ... http://www.progressive-economics.ca/2010/02/28/investment-and-corporate-taxes/ We've been told for years that corporate tax cuts would work like viagra to boost private sector investment and productivity, and no doubt we'll hear much more about it in next week's budget.  But it just ain't working.  Today's release by Statscan of private and public investment intentions shows just how limp private ... http://www.progressive-economics.ca/2010/02/26/private-sector-just-not-getting-it-up/ In an important series of columns in the Financial Times, economics editor Martin Wolf has been making the argument that - to avoid a relapse into recession - governments must run deficits so long as the private sector is running large surpluses of savings over spending. "Jumps in fiscal deficits are ... http://www.progressive-economics.ca/2010/02/26/government-deficits-and-the-private-sector-balance/             A year ago, as part of his 2009 crisis budget, Finance Minister Jim Flaherty created a Task Force on Financial Literacy.  The goal was to equip Canadians with more knowledge to traverse the minefields of high finance.  This week, just in time for Flaherty's next budget, the Task Force ... http://www.progressive-economics.ca/2010/02/25/financial-literacy-for-bankers/ Greece is being played in the media as a morality play in which a profligate government is brought to account by the  bond market and forced to submit to stern - but justified - austerity measures.  While Greek economic governance before the socialists recently returned to power was not without ... http://www.progressive-economics.ca/2010/02/25/the-greek-crisis/ Following are my speaking notes for a presentation I was asked to make to labour ministers last week. I found myself much much more gloomy than my fellow panelists who think that we shall soon be experiencing labour and skills shortages. I hope they are right - but fear that ... http://www.progressive-economics.ca/2010/02/24/recession-recovery-and-the-workplace/ Here is the link to a very good paper by Pierre Habbard of the Trade Union Advisory Committee to the OECD. http://www.tuac.org/en/public/e-docs/00/00/06/7C/document_doc.phtml The IMF appears to be consulting quite widely and with some sympathy to proponents of an FTT , so we may yet get a positive report to the G20, opening ... http://www.progressive-economics.ca/2010/02/24/paper-on-financial-transactions-tax/ 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 ... http://www.progressive-economics.ca/2010/02/23/reversing-harpers-corporate-tax-cuts/ 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. http://www.progressive-economics.ca/2010/02/23/tvo-trade-panel/ Statsitics Canada has released some interesting new obscure research on what constitutes a "purchasing power parity" exchange rate for Canada.  It was summarized in an article in the December Canadian Economic Observer, and is explained more fully in an on-line technical paper by John Baldwin and Ryan Macdonald. First off, let ... http://www.progressive-economics.ca/2010/02/22/purchasing-power-parity-new-estimates/ I guess I must be a Rodney Dangerfield economist.  Because I just don't get no respect -- at least not in some quarters. It all started with an interesting CBC on-line column from the erstwhile Don Newman: http://www.cbc.ca/canada/story/2010/01/07/f-vp-newman.html He was taking Stephen Harper to task for proroguing Parliament.  Among other aguments, he ... http://www.progressive-economics.ca/2010/02/22/r-e-s-p-e-c-t/ Some puzzling comments in today's Globe story casting cold water on the notion that there is a housing bubble.  The story makes the classic anti bubble argument that national averages conceal a lot of local variation, reflecting local conditions. http://www.theglobeandmail.com/report-on-business/economy/the-home-price-puzzle/article1475073/ "Toronto-Dominion Bank economist Pascal Gauthier says the diverse nature of Canada’s real ... http://www.progressive-economics.ca/2010/02/20/housing-bubble-denial/ As the budget yak-fest approaches, the focus is on how we’re going to balance the books. People pointing out we have bigger fish to fry – like making a dent in the nation’s $125 billion infrastructure deficit, addressing growing poverty, or preparing for a massive wave of retirements – are ... http://www.progressive-economics.ca/2010/02/19/a-short-history-of-fiscal-constraint/ 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 ... http://www.progressive-economics.ca/2010/02/19/ei-runs-out/ The Conference Board of Canada published a report late last month, Dispelling the Myths, which purports to show that public-private partnerships (P3s) have delivered major efficiency gains for the public sector, a high degree of cost certainty, and greater transparency than conventional procurement. While the report maintains it provides an impartial assessment ... http://www.progressive-economics.ca/2010/02/18/the-conference-board-on-p3s-more-myths/ 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 ... http://www.progressive-economics.ca/2010/02/18/wages-lag-inflation/ Perhaps by now you have seen the TV commercials for Bell touting its much faster 3G network for web phones. Rogers is suing on the basis that Bell is basically making this up. What's interesting about it, though, is that Bell, Telus and others entering the web phone (or should ... http://www.progressive-economics.ca/2010/02/17/competition-in-the-canadian-telecom-market/ It is striking that, even while moved to concern and some action, the Bank of Canada and the Minister of Finance are still desperately afraid to admit that Canada is experiencing a housing bubble. One can go on and on about how difficult it is to spot a bubble. But, as ... http://www.progressive-economics.ca/2010/02/17/the-housing-bubble/ 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 ... http://www.progressive-economics.ca/2010/02/17/raise-my-taxes/ This morning federal finance minister Flaherty announced a number of measures ostensibly aimed at reining in speculation in the housing market.  His announcement was typically well-timed to coincide with the Vanier Institute's annual report on the state of Canadian family finances, which reports record high levels of household debt, growing inequality and ... http://www.progressive-economics.ca/2010/02/16/reining-in-speculation-in-the-housing-market/ I contribute occasionally to a web based publication, The Mark.  Today they are running my piece on the continuing crisis in the job market, and the need for governments to respond. http://themarknews.com/articles/948-still-in-recession The first few paras follow: "While the situation is not quite as daunting as in the U.S., Canada’s job ... http://www.progressive-economics.ca/2010/02/16/still-in-recession/ Who would have thunk it. Seems like there is a pretty radical rethink of monetary policy verities going on at the IMF of all places. The exchange rate rethink seems especially relevant to Canadian monetary policy and they will be aghast at the Bank of Canada on the case for ... http://www.progressive-economics.ca/2010/02/12/imf-rethink/ 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 ... http://www.progressive-economics.ca/2010/02/10/vale-striking-fourth-quarter/ 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 ... http://www.progressive-economics.ca/2010/02/10/buy-american-deal-did-we-get-hosed/