A guest blog post from Mario Seccareccia and Louis-Philippe Rochon. After learning that the Canada Revenue Agency is auditing  the Canadian Centre for Policy Alternatives  on the grounds that it allegedly engages in politically partisan, biased and one-sided research activity,  a number of university professors  have drawn up an open letter asking the Minister of National Revenue place a moratorium on its […]
Read moreThe basic storyline of today’s C. D. Howe Institute “E-Briefâ€, “Canada Lagging Peers in 2013 Business Investment Growth,†is that corporate tax cuts helped boost investment per worker in Canada above the OECD average. Yet corporate Canada is slipping in 2013 and apparently needs more tax cuts. However, the C. D. Howe Institute’s own graph (Figure 1 on page 3) […]
Read moreStatistics Canada reported today that inflation collapsed to just 0.4% in April. The Bank of Canada’s core inflation rate, which excludes volatile items, fell to 1.1%. Continued low inflation does not provide a rationale to raise interest rates. Perhaps for that reason, Canadian monetary hawks have shifted their rationale for higher interest rates. In 2011, the C. D. Howe Institute […]
Read moreLast week, the C. D. Howe Institute was out with an op-ed contending that Canadian household debt is not worth worrying too much about: “There does not seem to be a strong case for restrictive regulation of consumer credit products, such as tight caps on interest rates.†The C. D. Howe Institute arguing for looser financial regulation is nothing new. […]
Read moreThis morning, Statistics Canada reported zero economic growth in October. While growth had been driven by strong mining and fossil-fuel exports during the third quarter, Canadians got a lump of coal in October. This Christmas goose egg should come as a wake-up call to economic policymakers. It follows Labour Force Surveys showing two consecutive months of job losses and higher unemployment. […]
Read moreThe C. D. Howe Institute is out this morning with a press release entitled, “Raising Oil and Gas Royalties Does Not Benefit Provincial Coffers.†A complete analysis of the accompanying 30-page paper – featuring many graphs, tables and regressions – will take time. But here is my initial take. Background The Institute correctly notes that provincial oil and gas revenues […]
Read moreLess than a month ago, the C. D. Howe Institute released Michael Parkin’s paper, “Overnight Moves: The Bank of Canada Should Start to Raise Interest Rates Now.†The next day, its Monetary Policy Council called on the Bank to increase the overnight interest rate. This call was terrible. The following week, Statistics Canada reported June’s significant drop in inflation – […]
Read moreToronto’s new mayor Rob Ford and his brother/advisor Doug just announced they are planning to contract-out garbage collection for half of the City of Toronto as soon as possible as the first step to outsourcing everything we can by next year. According to Doug Ford, this will save the city millions and millions of dollars and ensure that they never […]
Read moreAndrew Jackson has engaged perhaps the strongest theoretical argument for corporate tax cuts: that they make more new investments viable by lowering the pre-tax return needed to get over an after-tax hurdle rate of return. (Indeed, I remember the C. D. Howe Institute’s Finn Poschmann lionizing Andrew Coyne for making this argument halfway through TV Ontario’s last post-budget panel.) Imagine […]
Read moreAn open letter to the world at large: “Bank shareholders rejoice. Pension funds rebound. Hark, the Globe and Mail comes bearing good news my brothers and sisters.  Yes, the drums beat steady. The heart skips irregularly. The palms sweat profusely. Because soon, soon, the big banks will engage in our society’s number one passtime. Well yes, of course, I speak […]
Read moreLinda McQuaig puts the heat on Ontario’s public-sector compensation freeze in today’s Toronto Star. Her excellent column begins by noting that the federal government has fended off proposed financial-sector taxes on the grounds that Canadian banks did not cause the global financial crisis. But Canadian public-sector workers, who are even less responsible for the crisis, are expected to make a […]
Read moreJohn Richards tells us “tough love” was the right public policy stance for governments to take in the mid 1990s. In his report released today by the C.D.Howe Institute, Reducing Lone Parent Poverty: A Canadian Success Story,Richards tells us that the tightening of access to welfare and the imposition of workfare was the kick-in-the-butt that lone parents needed to move […]
Read moreAn hilarious aspect of various inter-provincial “free trade†deals is how proponents struggle to identify the barriers they hope to remove. While there are essentially no “trade barriers†between provinces, concerns about labour mobility have a whiff of substance. This morning, the C. D. Howe Institute released a paper by Robert Knox on “Barriers to Labour Mobility in Canada.†The […]
Read moreYesterday, the C. D. Howe Institute released a brief estimating how much Canadians at various income levels would need to save, through pension plans or individually, to provide various levels of retirement income. Since the Canada Pension Plan tops out around the average industrial wage and Old Age Security is clawed back from higher incomes, those who make more money […]
Read moreThe big news for Canadians from the OECD’s Going for Growth 2010 report was that we should privatize Canada Post. An article in the current issue of Maclean’s (pages 26 and 27), which does not (yet) seem to be available online, sheds some interesting light on that recommendation: [Yvan Guillemette was] working for the C. D. Howe Institute, the prominent business-oriented […]
Read moreLast 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 identify quite specific cuts, as opposed to the Howe’s proposal […]
Read moreI 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 noted that Canada’s economy had serious issues that […]
Read moreShould we care that the marginal effective tax rate on capital is higher in Prince Edward Island than in Serbia? Of course, this question is a joke. But the C. D. Howe Institute actually did put out a press release (PDF) last week singling out PEI for its allegedly high business taxes compared to an average of 80 countries, among […]
Read moreIt is a bit stunning to discover that Jack Mintz – former head of the CD Howe Institute and now at the University of Calgary – has been appointed research director of the federal – provincial review of pensions. http://www.vancouversun.com/business/fp/Jack+Mintz+research+director+pension+reform+task+force/1794203/story.html Even Finance Minister Flaherty should be a bit embarassed to appoint as a “researcher” someone who is so strongly on […]
Read moreI note from a CP wire story that Ottawa U economist David Gray is weighing in behind Harper’s argument that lowering eligibility for EI would be a “disaster”, and I suspect strongly he will not be the last to do so.    http://thechronicleherald.ca/Canada/1135526.html The received wisdom among mainstream neo liberal economists is that a “generous” EI program creates disincentives to […]
Read moreThe Consumer Price Index decline in March confirms that deflation remains a greater risk than rising inflation. The annual inflation rate fell to 1.2% nationally and turned negative in one province, Prince Edward Island. The recent revelation of the first annual decline in American consumer prices in half a century underscores concerns about deflation. While falling prices benefit consumers with […]
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 moreLiberals are proposing to slash Nova Scotia’s corporate income tax rate for small business from 5% to 1%. We have seen this movie before. New Brunswick announced a 1% small business rate by 2007 only to instead restore a 5% rate that year. Nova Scotians might reasonably ask why their provincial neighbour abandoned the 1% plan. Part of the story […]
Read moreThe Bank of Canada should announce a target interest rate of 0% on Tuesday. This move would match the action taken by the US Federal Reserve a month ago. Recent experience suggests that the chartered banks would not pass along the entire cut. But such a dramatic announcement by the Bank of Canada would place strong pressure on the chartered banks to noticeably […]
Read moreWilliam Robson, President of the C. D. Howe Institute, mounted a rear-guard defence of the conventional wisdom against Keynesian fiscal policy in yesterday’s Globe and Mail. He argues that we should leave the economy to central bankers and monetary policy instead of calling on governments to use fiscal policy. There are at least four problems with his op-ed: 1.) Far […]
Read moreIn November, prices fell for a second consecutive month and annual inflation fell for a third consecutive month. The Consumer Price Index declined from 3.5% in August to 3.4% in September, 2.6% in October, and 2.0% in November. A few more months of decline could turn this annual rate negative. While steadily falling prices would be a boon to individual […]
Read moreThe Bank of Canada got it right this morning in cutting the key interest rate by 0.75%. This bold action makes up for the timidity of cutting by only 0.25% last time. The central bank should be applauded for (finally) recognizing the severity of the economic crisis and going further than recommended by the C. D. Howe Institute’s conservative Monetary Policy […]
Read moreElection Conceals Deteriorating Labour Market The period covered by October’s Labour Force Survey included election day. Temporary hiring for the election increased public-sector employment by slightly more than private-sector employment declined. In particular, jobs disappeared in every goods-producing industry: manufacturing, construction, utilities, natural resources and agriculture. Since 2002, manufacturing employment fell by 350,000 largely because supply-side factors – rising energy […]
Read moreThe Bank of Canada was right to reduce its target interest rate this morning, but it did not go far enough. The labour movement has been proposing significantly lower interest rates for at least a year. Even the C. D. Howe Institute’s conservative Monetary Policy Council, which was calling for an interest rate hike only three months ago, proposed a […]
Read moreStéphane Dion has branded Jack Layton an “old-style socialist†with a “job-killing†platform. The C. D. Howe Institute’s Finn Poschmann echoes this view, arguing that corporate tax cuts are needed to keep Canada internationally competitive. (The C. D. Howe Institute is financed and governed by corporate Canada.) Of course, corporate taxes are but one of many factors that influence competitiveness. […]
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