Softwood capitulation part 2

Columnist Paul Willcocks weighs in on the bad softwood lumber deal: VICTORIA – The softwood deal that David Emerson and Stephen Harper are pushing is so bad it’s hard to imagine what they’re thinking. The U.S. lumber industry wins; Canada loses. Canadian companies hand over $1 billion in to the U.S., with about half of it going directly to their […]

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WTO: not dead yet

Will this be the end of the Doha Round? I doubt it. Deadlines come and go but negotiations still manage to go on. The Uruguay Round that led to the creation of the WTO went for eight years. The Doha Round (originally framed as the Doha Development Agenda, but that has long been forgotten) seemed dead after the Cancun Ministerial […]

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Alberta’s resource royalties

Just on the heels of posting a $9 billion surplus for the last fiscal year, largely on the strength of resource royalties, comes this fascinating article in The Globe, which echoes comments about low royalty rates that the Edmonton-based Parkland Institute has been making for years: Alberta eyes greater share of oil wealth Considers changes to royalty system Alberta is […]

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Rethinking labour market “flexibility”

Jim Stanford looks at the OECD’s press for labour market “flexibility” in his Globe column: Traditional economics holds that a less regulated, more “flexible” labour market — freed from well-meaning but counterproductive government interference — will automatically find a better match between supply and demand, and hence reduce unemployment. This general view was roundly endorsed by the high priests of […]

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Canada’s softwood lumber capitulation

I don’t generally like Gary Mason’s columns, but in this one he does a good job of showing how bad the softwood lumber deal is for BC: … The agreement would allow the U.S. to keep about $1-billion of the $5-billion in penalties collected on Canadian softwood since 2002, and limit shipments to the United States if lumber prices begin […]

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Alberta’s Oil and Quebec Seperation

Rafe Mair looks back at history, then contemplates high oil prices and resulting tensions in Confederation, in his Tyee column: First some history. With the arrival of the Organization of the Petroleum Exporting Countries (OPEC) in 1965, the oil price fix has been in and we all know about the crisis in 1974 that brought about huge lineups at the […]

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Bank mergers coming soon?

With a Harper government, I had a sinking feeling that bank mergers were going to come up again. We grant chartered banks a huge privilege – the expansion of credit, or the creation of money, an essential utility-like function of a modern economy – that leads to enormous profits on the part of the banks. And yet we are repeatedly […]

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It’s Tax Freedom Day

Call me a curmudgeon, but I am not celebrating the Fraser Institute's Tax Freedom Day. This notion does not deserve any media attention, but the fact that it does suggests it is a clever and successful gimmick. That is about the nicest thing that can be said about TFD. It grossly exaggerates the amount of taxes people pay in a […]

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Is there a “Fiscal Imbalance”?

 One of the main arguments that there is a fiscal imbalance between the federal government and provincial governments (a vertical fiscal imbalance) is ongoing federal surpluses in the face of more constrained provincial finances. The latest Financial Management System data from Statistics Canada would seem to reinforce that view:  In 2005/2006, the consolidated surplus for all Canadian governments, including the […]

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The Distorted Priorities of Mainstream Economics

Writing in the Toronto Star (link lost), economists Arthur Donner and Doug Peters reflect on economics, employment and inequality: The Distorted Priorities of Mainstream Economics Arthur Donner and Douglas Peters, May 2006 There has been a monumental shift in mainstream economics over the past forty years. When we studied economics in the 1960s, economists and public officials who had an […]

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Greasing the wheels of federalism

The Globe and Mail's John Ibbitson (subscriber access only) thinks the outlines of a solution to the alleged "fiscal imbalance" has been found through a mix of more equalization plus increased program-related transfers to the provinces: The O'Brien report [aka the Expert Panel on Equalization and Territorial Formula Financing, appointed by former Finance Minister Ralph Goodale] reminds us of what […]

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Sachs sings the praises of Scandinavia

If you listen to the Fraser Institute or like-minded think-tanks on the right, high taxes kill incentives to work and invest. They argue that Canada needs to lower its taxes in order to produce higher rates of economic growth. By their logic, the Scandinavian countries, all of whom have levels of taxes relative to GDP substantially higher than Canada’s, ought […]

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Adam Smith the moralist

A new book on Adam Smith by James Buchan deepens the case that he did not wear an Adam Smith necktie. Commented on by Bloomberg columnist Matthew Lynn: Most people these days regard Smith as the founder of free- market economics. He’s the hero of the get-the-government-off- our-backs crowd. He’s the pin-up boy of the flat-taxers and the business-knows-best crew. […]

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What policies lead to economic growth?

Matthew McCartney, also writing in the Post-Autistic Economics Review, probes why economists know so little about economic growth when it comes to empirical research, and comes away skeptical about the merits of cross-country growth regressions:  This paper is concerned with how economic growth is analysed by economists.  Over the last fifteen years an extremely common method has been through cross-country […]

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A Critique of Foreign Investment

Kevin P.Gallagher and Lyuba Zarsk, writing in Post-Autistic Economics Review, are skeptical of foreign investment policies. Their focus is on developing countries, but similar considerations could be made in the case of Canada given the intensity of investment in the resource sector and the federal government’s contention that Canada must maintain its share of global FDI because of its purported, […]

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Industrial capacity and inflation

Statistics Canada reports on industrial capacity, an important data point for the Bank of Canada, ever watchful for inflation: Industrial capacity utilization rates First quarter of 2006 Capacity use among Canadian industries edged down in the first three months of 2006 in the wake of the rising loonie and a decline in foreign demand for some manufactured goods. Industries operated […]

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Bubble bubble toil and trouble?

UCLA's Edward Leamer sees a slowdown for the US in 2006, as the real estate party comes to an end. He sets the context well: The discovery of the Internet set off a mad dash for the Web, and that powered the U.S. economy forward at breakneck speed from 1997 to 2000. Every business in America had to have a […]

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Foreign ownership in the Canadian economy

Statscan reports the latest numbers on foreign ownership: Foreign-controlled corporations accounted for 21.9% of assets held in Canada, and 30.0% of operating revenues. Despite the odd fluctuation, these shares have remained fairly stable ever since the post-recessionary period of the mid-1990s. Assets of foreign-controlled corporations rose a healthy 8.3% to $1.1 trillion in 2004, while those of Canadian-controlled corporations jumped […]

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Equalization – A Family History

Dalhousie's Lars Osberg reflects on his family in relation to the equalization program. This piece was published in the Halifax Mail-Star and Chronicle Herald Op-Ed, April 6, 2005 and merits a reprint here in the context of much bickering among the premiers: When my parents were growing up in Alberta in the 1930s, it was a poor province – their […]

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Unemployment is low

The latest Labour Force Survey, released today, has national unemployment down 0.3 percentage points to 6.1%, the lowest monthly rate since December 1974. So low that the Daily adds the following note on comparability: Comparing current Labour Force Survey estimates to those prior to 1976 In recent months, the Labour Force Survey (LFS) has been reporting very low unemployment rates. […]

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Walkom puts Brian Day under the knife

Thomas Walkom peers more closely at the dubious arguments of Dr. Brian Day, the private health care guru on the verge of heading the Canadian Medical Association.   I went off to hear Brian Day again this week. … As always, Day was roguishly charming. A veteran of Vancouver’s scrappy media culture, he rarely bothers with building a logical argument […]

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Alberta, Equalization and a Little Irony

http://thetyee.ca/Views/2006/06/07/AlbertaEffect/ Over the years, Alberta Premier Ralph Klein has rarely missed an opportunity to poke a finger at the equalization program and to re-assert that Canada better keep its hands off Alberta's resource wealth. For King Ralph, it makes for great theatre and even better politics. Klein recently threatened to pull out of the equalization program if necessary in order […]

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