In March 2020, the Trudeau government launched a new version of the Insured Mortgage Purchase Program (IMPP). According to CMHC’s website: “Under this program, the government will purchase up to $50 billion of insured mortgage pools through CMHC.” Here are 10 things to know: 1. Canada Mortgage and Housing Corporation (CMHC) is a federally-owned crown corporation. Many of us know […]
Read moreThe provincial election of June ended 15 years of Liberal electricity policy in Ontario. Anger over high electricity prices continued to be an election issue, contributing to the Liberal loss of power and official party status (reduced from 55 to 7 seats). The PCs have formed Government with 76 seats, while the NDP is official opposition with 40 seats, and […]
Read moreAn essential but perhaps overlooked way of looking at the economy is a sector financial balance approach. Pioneered by the late UK economist Wynne Godley, this approach starts with National Accounts data (called Financial Flow Accounts) for four broad sectors of the economy: households, corporations, government and non-residents. Here’s how it works: in any given quarter or year each sector […]
Read moreReview of Worst-Case Economics: Extreme Events in Climate and Finance by Frank Ackerman *** Long ago economics was termed “the dismal science,” but in recent years that title has arguably been passed on to climate science, with its regular and dire warnings that humanity needs to rapidly transition off of its use of fossil fuels for energy. In the face […]
Read moreMy January and April posts on the Ontario electricity sector described how decisions by different Ontario governments gave rise to excess electricity generation with an inflated cost structure, leading to higher electricity prices. Here I discuss the latest development, the Liberal Government of Ontario’s proposed financial framework for its “Fair Hydro Plan” (FHP). In election mode, the Government tabled Bill […]
Read moreA guest blog post from Larry Kazdan, publisher of the “Modern Monetary Theory in Canada” blog: https://mmtincanada.jimdo.com/contact/. Under legislation that came into effect in December 2015, e-petitions that garner at least 500 on-line signatures and that are sponsored by an MP can be tabled in Parliament. The federal government is then required to provide a written response, also posted online, within […]
Read moreThis guest blog post has been written by Louis-Philippe Rochon. You can follow him on Twitter @Lprochon – Harper’s recent incarnation as an anti-terrorist crusader has caught many Canadians by surprise. Harper is spending considerable political energy beating the drums of war against terrorists, and introducing a far-reaching, and much condemned, bill aimed at restricting free speech, and increasing police […]
Read moreWhen it comes to global warming, the Intergovernmental Panel on Climate Change notes that what matters is the total volume of greenhouse gas emissions going forward. This amounts to about 30 years of emissions at current levels – a global carbon budget that would provide the world a 66% chance of staying below 2°C. There is some debate about whether an upper limit of […]
Read moreUnder the headline “Canada Isn’t Rotten to the Coreâ€, the new editor of the Ivey Business Journal, Thomas Watson, attacked my book “Thieves of Bay Street†in his inaugural editorial. Although the book hit bookstores almost two years ago, and has faded from view, I found this assault so distorted to what “Thieves†explores I felt it warranted a response. […]
Read moreHere is a very intriguing and creative entry in our continuing series of commentaries marking the 50th Anniversary of the publication of Mel Watkins’ classic article, “A Staple Theory of Economic Growth.” We are delighted to have the participation of Alistair and Sheila Dow, two leading heterodox economists from the U.K. They argue here, in a summary of an argument […]
Read moreThe recent report of the Intergovernmental Panel on Climate Change (IPCC) should be a wake-up call for Canada. With a development model based on ever more fossil fuel extraction, Canada’s economy and financial markets are on a collision course with the urgent need for global climate action. The IPCC, for the first time, stated an upper limit on total greenhouse […]
Read moreAn oped based on my and Brock Ellis’ recent report, Canada’s Carbon Liabilities, was published in iPolitics (alas, behind a pay wall): Canada’s economic development model is on a collision course with the urgent need for global climate action. Worldwide, extreme weather events from drought to floods to powerful storms and record-breaking temperatures are making a powerful statement that climate […]
Read moreDivestment from fossil fuels is an idea whose time has come. Sparked by Bill McKibben’s Rolling Stone article last summer, “Global Warming’s Terrifying New Math”, divestment campaigns are now up and running on over 300 university campuses in the US, with 4 early victories already notched. Students in Canada have declared tomorrow (March 27) Fossil Fools Day, a national day of action, with many campuses launching […]
Read moreCanadians are now more indebted than either Americans or the Brits at the peak of their housing bubble. Statistics Canada today revised the national accounts. The result on the household debt front was that instead of Canadian households having a debt to disposable income ratio of 154, it has now been revised upwards to 166. The new data allows better […]
Read moreReaders of this blog will have hopefully read my report “The big banks big secret” which examines the $114 billion that Canada’s banks received during the 2008-09 financial crisis.  Its major finding was that at some point three of Canada’s five big banks had received support worth more than their market capitalization, or the value of all the stock, at around $20-25 […]
Read moreGlancing idly at the numbers, I find to my slight surprise that the Canadian stock market (S&P/TSX) is now down about 25% from the May, 2008 peak, whereas the US stock market (S&P 500) is down by only about 10% from its peak in May, 2007. So, since the beginning of the crisis, owners of US corporations have done significantly […]
Read moreThe CCPA today released my report: “The Big Banks Big Secret†which provides the first public estimates of the emergency funds taken by Canadian banks. The report bases its estimates on publicly available data from CMHC, the Office of the Superintendent of Financial Institutions, US Federal Reserve, the Bank of Canada, as well as quarterly reports from the banks themselves.
Read moreThis past weekend (March 31st), Sino-Forest Corp. announced it was filing for bankruptcy protection. The Chinese-Canadian company, once the largest publicly-traded forestry firm on the TSX, collapsed under allegations it was nothing more than a sophisticated fraud and Ponzi scheme. Sino-Forest’s demise wiped out about $6-billion in shareholders’ value, making it a catastrophe on par with Bre-X Minerals back in […]
Read moreThe federal government has failed to take up an historic opportunity to lock in ultra low interest rates on long term Government of Canada bonds. Normally – as outlined in annual debt management reports – the government follows a strategy which is intended to achieve two main goals - low overall debt servicing costs, and stable and predictable bond markets. […]
Read moreFollowing up on my post on wealth and income of the top 1%, Eric Pineault wrote to add some data on financial wealth distribution for Canada. He had a research assistant comb through microdata from Statcan’s Survey of Financial Security from 2005, and notes: “the 1% richest (all households are classed according to net worth rather then income) hold 22% of […]
Read moreThe wild swings in the North American financial markets this week serve as yet another reminder of the weakness of any linkage between levels and changes in financial asset values and levels and changes in real economic variables. This is apparent for both bonds and equities. In the case of the US and Canada, the rise in government bond prices is […]
Read moreThere’s been no shortage of new content on our blog this week. But I write to highlight a couple of interesting reads from other blogs. On The Globe and Mail blog, Andrew Hepburn (formerly of Sprott Asset Management) has a very good op-ed about financial speculation in food commodities. On the CCPA’s Behind the Numbers blog, Simon Enoch lays out […]
Read more(The following was sent by ITUC Washington representative Peter Bakvis and deserves wider distribution. While this action by the World Bank might reduce food prices at the margin, it would be far preferable for them to push for regulation of speculation in food instead of joining in a destructive game.) In partnership with Wall Street investment bank JP Morgan, […]
Read moreOne concern is that this deal may undermine our ability to regulate financial markets. If the Canadian exchanges become majority owned in the UK, and if the Canada – EU deal is ratified with a Chapter 11 like investment clause, then we leave ourselves open to sanctions if and when we impose regulations which result in a loss of expected […]
Read moreThe Report of the Task Force on Financial Literacy is all that one would have expected from one co chaired by the CEO of Sun Life Financial and the Chairman of BMO Nesbitt Burns. There is hardly a whisper of criticism of financial institutions and the myriad fees, charges and interest rates they extract from ordinary Canadians. You will not […]
Read moreOne nice thing about Canada’s financial regulatory architecture is the provision that the bank act must be reviewed every 5 years. This gives us all a time to take stock of the direction that bank regulation is heading.  This is the year we are due for the Bank Act review. After a couple of years of financial crisis, it might seem […]
Read moreI’d get popcorn to watch ECB vs. the speculators, if the whole sorry story weren’t so sickening. The European Central Bank is meeting today to figure out what the bleep to do about this mess in Europe (the press conference is happening as I write). In the lead-up to the ECB announcement, non-core bonds (like Spain’s) were doing well in […]
Read moreThis is well worh a read http://www.irisheconomy.ie/index.php/2010/12/01/barry-eichengreen-on-the-irish-bailout/#more-8831
Read moreHere is a keeper – an IMF study that argues that loss of working class bargaining power is an underlying cause of financial crises, and that retoration thereof is key to reducing debt. The abstract – “The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and […]
Read moreWhat are banks for? Typically, banks are described as intermediaries that take deposits and lend them out, earning what is called net interest margin on the gap between what is paid on the savings and what is earned on loans. From where I stand, this description is wrong on three counts. First, it suggests that banks need deposits to make […]
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