Nine days ago, I posted some back-of-envelope math on the proposal to privatize the Liquor Control Board of Ontario (LCBO). Specifically, I noted that keeping its annual profit of $1.4 billion would be worth more than the estimated sale price of $10 billion, which would reduce provincial debt charges by no more than $0.5 billion per year. PublicValues.ca and the […]
Read moreWhile The National Post typically supports privatization, today’s lead editorial correctly characterizes Premier McGuinty’s recent musings as “a desperate government trying to unload assets during a down market.†The following paragraphs note the extreme difficulty in getting anything approaching fair value for the sale of huge, complex assets like electric power systems and the folly of trying to balance the […]
Read moreAs reported on the front page of yesterday’s Globe and Mail, the McGuinty government’s “deficit reduction” strategy involves not only cutting taxes, but also divesting revenue-generating assets. Today’s Globe comment page features three sassy letters on the contemplated privatization. But the editorial strikes a seemingly pragmatic tone, arguing that the Ontario government should sell “if the price is right.†However, […]
Read moreThis past week, Jack Mintz issued a report (PDF) praising Ontario’s last provincial budget. I like East Side Mario’s because it features both all-you-can-eat bread and all-you-can-eat salad. So, it is not surprising that a corporate tax-fighter would love a budget featuring both corporate income tax cuts and the removal of sales tax from business inputs. Queen’s Park is giving […]
Read moreDuring tonight’s Hockey Night in Canada I got to see the new ads for Canada’s Economic Action Plan (OK, I think they are new; I don’t watch TV except for hockey). Now that it is October, I find it interesting to hear the government trumpeting the plan they tabled back in … when was that again? … oh, yes, January […]
Read moreModels are often invoked when talking about climate change. Skeptics argue that the models are not sophisticated enough and are therefore wrong, which is technically true about any model, but other scientists argue that what has not been included in the models would make the outcomes in the future much worse. Still, the debate often sounds like one over how […]
Read moreFurther to my post of last week, I note that the Department of Finance Update of Economic and Fiscal Projections shows that the federal debt to GDP ratio will start falling after the next fiscal year … ie from 2011-12…. even though we will be running quite significant fiscal deficits — eg $27.4 Billion in 2011-12. While many media pundits […]
Read moreThe September BC Budget is a new look at a budget most have come to see as a fake. February’s budget was not passed through the legislature due to the May election, and up to E-Day the government maintained the fiction that it had a small-ish deficit of just under half a billion dollars. Since that time, the government has […]
Read moreIt’s the leading article in the BC section of national newspapers today: BC’s Finance Minister has finally admitted that next year’s budget deficit would be much larger than the $495 million number than our Premier swore by during the recent election campaign. Private sector economists have been saying it for a while and it was about time for the government […]
Read moreThe BC Public Accounts for 2008/09 fiscal year were released yesterday, showing that the province posted a surplus of $78 million or $28 million higher than projected in the 2008 Budget. Oh, phew, now we don’t have to worry about cabinet ministers facing the fines associated with a budget deficit under the Liberals’ balanced budget legislation (which was amended earlier […]
Read moreDuring the CEA meetings, I engaged in some provincial election talk with colleagues from Nova Scotia. I had just come off a brutal BC election campaign, in which the opposition stuck to a rather bland platform anchored in fiscal conservatism and axing the carbon tax. The NDP lost, and amid the subsequent soul-searching, leader Carole James just axed the axe […]
Read moreIn all the kerfuffle around Finance Minister Flaherty’s $50 billion deficit projection, the cost of the joint federal-Ontario support for the restructuring of GM and Chrysler has been getting a lot of attention. But while that restructuring support is an important and expensive undertaking, there’s no way it should be fingered as the major cause (or even a leading cause) […]
Read moreThree-peat. Hat trick. The media is full of jubilation for the re-election of the Campbell Liberals. But looking at the numbers, it was actually quite close: the BC Liberals got 45.7% of the popular vote, compared to 42.2% for the NDP. This slim margin validates the Angus Reid polling camp, which came closest on estimating the popular vote, compared to […]
Read moreCanadian governments should revisit planned corporate tax cuts in light of President Obama’s proposals to more fully tax American firms operating outside the US. The basic argument for lower corporate tax rates is that they will attract multinational firms to locate operations here as opposed to other jurisdictions. This argument assumes that profits are taxed only where they are generated. But […]
Read moreA lot of people I meet these days ask about the risk of a future surge in inflation, or even a return to “hyperinflation,” as a result of government’s efforts around the world to stimulate spending and demand — in part through large deficits, and in part through very loose and unorthodox monetary policy (including, in some jurisdictions, “quantitative easing”). […]
Read moreBelow is an oped of mine that was done at the request of the Vancouver Sun and that ran in today’s paper. Unfortunately, for reasons that are not entirely clear, the last two paragraphs were cut off, leaving the oped hanging. I put them back in below, and have requested that the online version be changed. UPDATE: The online version […]
Read moreLast week’s Ontario budget was quite momentous and challenging to digest. Budget analysis was initially overtaken by the Premier’s minimum-wage musings. The budget featured a combination of large expenditure increases and large revenue reductions. Overall, I think that it embodies the proposal from bank economists for temporary spending and permanent tax cuts. While it provides proportionally more short-term stimulus than the […]
Read moreFrom Lynne Fernandez and Errol Black, of CCPA’s Manitoba office: Budget day always presents an opportunity to contemplate the state of society, and this year in particular has most of us pondering the current economic mess we are in. How did this crisis happen? How and when will we move back to more stable times? This year’s provincial budget takes […]
Read moreNo, the West is not Alberta as everyone in Ontario seems to think (I’m from Toronto so I can say that). I mean BC, where an election is on in two months. You would not really know it walking around Vancouver, probably because the writ has not yet dropped, so we are in the calm before the storm. I’ve been […]
Read moreIn the last few months, governments here and abroad have made every effort to “turn on the taps” of credit — in Canada, we have more than half a dozen such programs (and counting) under the banner of the EFF (Extraordinary Financing Framework), including (but not limited to): the IMPP (InsuranceMortgage Purchase Program); the CSCF (Canadian Secured Credit Facility); the […]
Read moreFaced with a nasty recession at its doorstep, the BC budget is uninspiring and underwhelming in its ambition. Overall there is little that actively plans for a recession, preferring instead a steady-as-she-goes budget, perhaps aimed at cultivating the image of responsible economic managers in a time of crisis. There are no tax cuts or drastic spending cuts, thankfully, but nor […]
Read moreIn today’s Vancouver Sun, Neils Veldhuis and Milagros Palacios act as yang to my yin on the oped page. Their pre-budget oped seems strangely distant from the day-to-day reality of a recession that is unfolding in BC and elsewhere. Their response could have been written two or five years ago: the solution is to cut taxes and spending, and all […]
Read moreI have an oped in today’s Vancouver Sun, juxtaposed against the Fraser Institute, unfortunately. I’d like to think mine is much more timely and appropriate given the current economic situation (I’ll get to theirs in a subsequent post). BC Needs an Action Plan to Fight a Nasty Recession On February 17 the BC government will table the province’s first recession […]
Read moreA year after crunching the numbers and coming to the conclusion that an economic downturn spelled deficits, I got this hat tip in Maclean’s: It’s true that there was no consensus forecast, through most of last year, that saw Canada suffering a deep recession in 2009, and a return to staggering deficits in Ottawa. However, it’s false to suggest that […]
Read moreIn a column in The Tyee, former BC Socred cabinet minister Will McMartin reviews the ups and downs of BC’s three strikes at balanced budget legislation. Each time this legislation has been repealed, although when the latest BC legislation is “amended” next week it will mark the first time this has been done by the same government and premier that […]
Read moreHousing has been one of the major drivers of the BC economy in recent years. Low interest rates led to rising home prices and a psychology of “must get in before being locked out forever”; leading a housing bubble that had everyone in town swapping jaw dropping stories of bidding wars and outrageous prices paid. The economic driver was not […]
Read moreIn his latest rabble.ca column Duncan Cameron takes on a piece of the federal budget that got little play in the media: Budget 2009 and the Bay St. bailout Duncan Cameron Why did the Liberals support the Conservative budget when the analysis is clear: the Finance Minister ignored the vulnerable, punished women, did not provide a serious stimulus to a […]
Read moreNow that the federal budget is over, I’ve been girding myself for the Feb 17 BC budget. My concern to date has been bold statements from both parties that they would never run a deficit, and that therefore we were in for a rerun of last Fall’s federal election where all parties kowtowed to the alter of fiscal conservatism. BC’s […]
Read moreThis is a revised and more complete version of last night’s post: Impact on Jobs and the Economy What We Wanted The most important priority for the Budget was to stop the unemployment rate from rising to at least 8% this year and to double digit levels next year. “Fiscal stimulus†is not the same thing as running a deficit. […]
Read moreHarper “stimulus†budget falls far short  Faced with the prospect of losing their grip on power, the Harper government has made a big show of taking action to address the economic and financial crisis, but it still falls far short of what is needed to revive the economy, create jobs and protect the vulnerable. In particular, the budget fails […]
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