Double the Canada Pension Plan Benefit

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Konrad Yakabuski wrote a good final piece on Saturday to cap the interesting and informative Globe series on the pensions crisis. In it he touches on several possible policy solutions, including a universal pension plan. http://www.theglobeandmail.com/report-on-business/retirement/canadas-gathering-pension-storm/article1323513/ Unfortunately, he does not cite the Canadian Labour Congress proposal to double the CPP as part of a three pronged effort to fix pensions, […]

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Decoding Carney

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Last week, I posted about how several chartered-bank economists have been denying the Bank of Canada’s capacity to lower the Canadian dollar. While I think that the chartered banks generally prefer a high loonie, it is important to note that not all of their economists are signing from the same songbook. CIBC’s Avery Shenfeld advocates intervention by the Bank of […]

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Chartered Banks Go Loonie

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Debate is heating up about whether the Bank of Canada should or will intervene in currency markets to lower the Canadian dollar (as I have been proposing for three months). Today’s two-cent drop in the exchange rate may indicate that currency traders are anticipating this possibility. Over at Worthwhile Canadian Initiative, Stephen Gordon objected to recent comments from RBC’s Patricia Croft on […]

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Beyond the Lower Bound

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The Bank of Canada seems to have at least left the door open to taking unorthodox measures to take some of the steam out of soaring loonie. Today’s interest rate announcement – http://www.bankofcanada.ca/en/fixed-dates/2009/rate_201009.html – to be followed by a full Monetary Policy Report on Thursday – expresses concern that the strong Canadian dollar will hold back recovery… “The current strength […]

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HST Opacity

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A couple of days ago, I took part in a TV Ontario panel about sales-tax harmonization. I emphasized a couple of points that will be familiar to readers of this blog. First, harmonization is unlikely to have much effect on capital investment because many capital goods are already exempt from the existing provincial sales tax. Second, if the principle is […]

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Plutonomy?

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I put this post out for comments and discussion since this is an important question for which I don’t have an answer. A 2005 Citigroup report – apparently cited in Michael Moore’s new movie, which I have not yet seen – argues  that “plutonomy” – the extreme concentration of income and wealth in the hands of the very affluent – […]

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More Deflation

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While some prices rose slightly and others fell slightly between July, August and September, the total Consumer Price Index has remained exactly the same through these months. The annual inflation rate declined by 0.9% in September, tying July for the largest rate decline since 1953. All provinces but Saskatchewan now have negative inflation. While the main story continues to be […]

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A Second Great Depression?

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From the on line issue of the Financial Times, Sunday. A Second Great Depression Is Still Possible Copyright Thomas I. Palley Over the past year the global economy has experienced a massive contraction, the deepest since the Great Depression of the 1930s. But this spring, economists started talking of “green shoots” of recovery and that optimistic assessment quickly spread to […]

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Loonie Out of Control

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The loonie’s spectacular flight toward parity with the greenback (and likely beyond) seems to know no bounds.  It’s climbed by over 25 percent in 7 months; its flight began the same day global stock markets turned the corner back in March.  There’s no reason why this appreciation, the steepest in our history, should stop at mere parity.  Exporters, beware. Economists agree […]

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Saskatchewan’s Electricity Future

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Back in my home province, a legislative committee has begun a public inquiry on meeting future electricity demand. Written submissions and video of oral presentations are available online. Saskatchewan’s traditional reliance on coal-fired electricity is challenged by concerns about climate change and the prospect of federal charges for carbon emissions. The debate has recently been polarized between proponents of nuclear […]

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Stimulus at Work

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On Thanksgiving, Canadians can be thankful that public stimulus spending propelled a surprisingly strong labour-market rebound in September. This morning’s release shows full-time employment up and the unemployment rate down. However, the jobs picture is not as rosy as these top-line numbers imply. Stimulus Working? The improvement in Canada’s labour market should not be taken as an indication that government […]

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Steelworkers on Extended EI

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UPDATE (October 20): The transcript of the hearing described below is now available. . . . Late this afternoon, I had the pleasure of serving on a Parliamentary panel composed entirely of members of the United Steelworkers union.  My co-panellists before the Human Resources committee were Ken Georgetti, CLC President, and Rosalie Washington, a laid-off worker who would qualify for […]

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Iggy’s Deficit Wall

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I just saw Michael Ignatieff on TV warning that Canada could hit “the deficit wall.” I assume he means “debt wall.” (I would not fault a slip of the tongue, but the written text of a recent speech also incorrectly calls it “the deficit wall.”) The concept is not that a country hits the wall because a particular annual deficit […]

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Doughnut Economics

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I recently questioned whether Tim Hortons’ reorganization as a Canadian corporation would bring any additional jobs or tax revenue to Canada. Aaron Wherry since did something that journalists covering the Prime Minister’s photo-op on this issue should have done: he asked the company directly. Its response is now available on the Macleans blog. Of course, Tim Hortons hopes to expand […]

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Weaker Than You Think

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I had been girding my loins yesterday, with the release of StatsCan’s July GDP numbers, for another orgy of triumphalist headlines: “The Recovery Is Nigh! All is Good! Stop Worrying!  Nothing to See Here, Folks!  Just Go About Your Business!” After all, Chrysler’s two humongous Canadian assembly plants went back to work in July (after a 6-week shutdown as Chrysler went […]

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What’s Happening in the Job Market?

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There’s a bit of a mystery in the stats Erin and I have been puzzling over. According to the Labour Force Survey,  the number of employees in Canada fell by 79,000 in July. According to the Survey of Employment, Earnings and Hours, the number of employees rose by 74,000 in the same  month.  The methodology of the surveys is quite […]

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L-Shaped Recovery?

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Flat Gross Domestic Product (GDP) figures for July provide a sobering reminder that the technical end of a recession may not imply a rapid recovery. Output appears to have stopped shrinking, but this morning’s release suggests stabilization rather than growth. Rounding to the nearest billion, all-industry GDP has been $1,184 billion for three months. It had peaked at $1,241 billion […]

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Canada’s Dirty Old Deal

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Last week the United Nations Environment Programme (UNEP) published an update for the G20 Summit on its call from earlier this year for a Global Green New Deal.  This update showed that Canada is close to the bottom in the stimulus funds it is committing to green economic areas. According to the UNEP, only 8% of Canada’s stimulus spending is […]

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Harper’s Mystery Chart

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The first chart in today’s Third Report on the Economic Action Plan (Chart 1.1, page 8 ) appears to show that Canada is tied with Japan for the largest stimulus package in the G-7. Exactly the same bar graph appeared in the Second Report back in June (Chart 1.2, page 12). While this seemingly impressive chart has been promoted to […]

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EI Benefits by City

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UPDATE (September 29): Quoted by The Globe and Mail, National Post, Toronto Star, and Canadian Press . . . A recent inquiry for a NOW Magazine article has inspired me to use the July Employment Insurance (EI) figures, released this morning, to examine how this program serves Canadian cities. However, I begin with a national overview of the numbers and […]

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What Happened at Pittsburgh?

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Summary The main result of the Pittsburgh summit was to institutionalize and modestly extend the global economic governance role of the G-20 which arose as a necessary response to the global economic crisis. There is talk of medium-term co-ordination of national macro-economic policies, and a “re-balancing” of the global economy. However, while this is welcome, there is little of real […]

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The Opposite of a Buy Canadian Policy

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Last week, the Minister of Finance announced his aspiration to unilaterally eliminate Canada’s few remaining tariffs on imported machinery and equipment. Saturday’s Globe and Mail quoted me doubting this proposal given the severity of Canada’s offshore trade deficit in that area. I elaborate my case in the following op-ed, which is printed in today’s Financial Post with Terry Corcoran making […]

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Affordability Gap

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The Canadian Centre for Policy Alternatives released a new study today comparing the expenditures of rich and poor Canadians. This approach is interesting because inequality is typically measured in terms of income or wealth. Conservatives sometimes claim that, while temporary fluctuations in income or asset values create the appearance of massive inequality at any given point in time, consumption (and […]

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Droppin’ some HST

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The province-wide revolt over BC’s looming Harmonized Sales Tax is reminiscent of protests a generation ago when the HST’s federal parent, the Goods and Services Tax, was born. The rationale for that shift was similar to that of the HST: to switch from an invisible tax paid by producers (the Manufacturers’ Sales Tax) that was passed on to consumers to […]

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Taxing Tim Hortons

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Yesterday, the Prime Minister’s office put out a press release trumpeting Tim Hortons’ reorganization as a Canadian company as validation of deep federal corporate tax cuts. There was no real news: shareholders predictably ratified a decision that had been extensively reported back in June, when Tim Hortons management described it as “a pretty bland corporate announcement.” Nevertheless, far too many journalists […]

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Canada Breaks Rank on Banker Bonuses

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Canada likes to think of itself as the country that emerged from the financial crisis squeaky clean. Too bad it is abdicating a leadership role in creating a safer financial system going forward. The issue is bonuses paid to top executives in the financial sector. It looks like the Europeans and Americans have hammered out an agreement to put some […]

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Jack Layton on Employment Insurance

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Some pundits have blasted the NDP for voting with the Conservatives in exchange for “a bone,” “crumbs” or “a peanut” on Employment Insurance (EI).  Others have convincingly countered that forcing an election right now would not advance EI reform or other progressive causes. Nevertheless, the decision to temporarily support the government deserves further analysis in terms of the EI proposal […]

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