One of my colleagues likes to say, “if you throw a rock in a barn and hear a squeal, you know you’ve hit a pig.” So it goes with a National Post column attacking my tax incidence paper. I guess my study caught their attention, though I feel like I really deserved a rebuttal from a first-line player like His […]
Read moreThe ride of the Canadian dollar is on every good policy wonk’s mind. Labour is concerned about its impact on jobs. Manufacturers are concerned about what exchange rate volatility means for their bottom lines when their sales are in one currency and costs in another. (Note: like border line-ups, exchange rate volatility is a real cost of transacting across the […]
Read moreToday’s Consumer Price Index (CPI) release reveals that inflation has dipped to 2.4% and core inflation has fallen to 1.8%, its lowest level since June 2006. These figures undermine the argument that interest rates should be maintained to slow inflation. As the National Post reports, “A weaker-than-expected rise in the inflation rate for October could give the Bank of Canada […]
Read moreDiane Francis has written many unsubstantiated columns. On July 6, for example, she claimed that “Canada has the highest corporate taxes in the world.” However, based on the following quotes, Tuesday’s column probably takes the cake. If last week’s election upset is any indication, Saskatchewan is going to be on a roll for a few years. I have no idea […]
Read moreTuesday’s Financial Post featured an op-ed by William Robson, President and CEO of the C. D. Howe Institute, arguing that “The expansion of the public sector in an economy with no slack is squeezing the private sector, driving up interest rates and the dollar in the short run, and threatening Canadian prosperity in the long run.” Today’s Financial Post includes […]
Read moreKen Rogoff gets off to a good start on the topic of inequality and the super-rich (by way of explaining the world to his 11-year-old son) in this Guardian column: The latest Forbes list of America’s wealthiest individuals showed that last year’s highest nine earners, whose ranks include New York City’s mayor, Michael Bloomberg, managed to increase their wealth by […]
Read moreHere’s a really useful commentary from the Caledon Institute on the substance of the Liberal poverty reduction plan, especially emphasising its timidity in terms of reversing the ill thought- out Conservative changes to child benefits. They share my view that we need a better poverty target.  http://www.caledoninst.org/Publications/PDF/659ENG%2Epdf
Read moreI’m a big fan of setting clear and attainable targets and timetables to eliminate poverty, and applaud last week’s Liberal Party commitment to reduce the number of those living in poverty by 30% and the numbers of children living in poverty by 50% within 5 years. http://www.liberal.ca/story_13293_e.aspx Clear targets and timetables have recently been called for by the National Council […]
Read moreHere’e a piece that I wrote with Caelie Frampton, the Campaign Coordinator of the STOP TILMA Coalition. No pick-up in the major dailies but The Tyee has promised to run it at some point: TILMA a Major Hurdle to BC Climate Action Plans By Marc Lee and Caelie Frampton Premier Gordon Campbell has positioned BC as a global leader on […]
Read moreThe relative importance of oil in Canada’s exports bears on the debate about oil prices and the exchange rate. A challenge is that the most widely-cited figures often lump oil and natural gas together. I compiled the following table from the merchandise-trade figures that Statistics Canada updated through September today: Canada’s Energy Trade, 2007 year-to-date ($ millions)  Exports % […]
Read moreThe unprecedented surge in the Canadian dollar from 85 cents US in early 2007 to as high as $1.10 in early November is deeply disturbing in terms of its implications for the health of the economy and the job market. Very rapid exchange rate appreciation is bad news for most enterprises exporting abroad, or competing with US and Asian exporters […]
Read moreThe Saskatchewan Party won 37 seats with 51% of the popular vote and the NDP won 21 seats with 37% of the vote. Obviously, the Saskatchewan Party’s victory is bad news for progressives. The provincewide figures mask significant regional variations. Outside of the main cities, the Saskatchewan Party won 27 seats with 62% of the rural vote. Two of the […]
Read moreSome of the knee-jerk commentary in response to my paper has been about what an ideal, or fair, tax system should really look like. These people question progressive taxation. To them, I quote Adam Smith from The Wealth of Nations (from Wikipedia): The necessaries of life occasion the great expense of the poor. They find it difficult to get food, […]
Read moreThe CCPA today released my paper, Eroding Tax Fairness: Tax Incidence in Canada, 1990-2005. The Toronto Star ran a front-page story on it that is quite good. This paper was a long time in the making – while it might seem fairly straightforward to calculate the share of taxes in income for different groups, there are many tricky data and […]
Read moreIn yesterday’s Ontario Farmer, the federal Minister of Agriculture, Gerry Ritz, railed against “tremendous inter-provincial trade barriers.” His example was restrictions on moving beef between provinces. My understanding is that, to the extent such restrictions exist, they arise from federal regulations rather than from provincial policy. Ritz claimed, “I have no problems with Quebec beef coming into Ontario as long […]
Read moreIn an op-ed printed today, John Mortimer of LabourWatch applauds an Ontario court’s decision not to enforce the Public Service Alliance of Canada’s fines against members who crossed picket lines. One wonders how his inane rhetoric about “human rights” slipped past the Financial Post’s editors. To an economist, this issue is a classic “free rider problem.” Collectively, the workers benefit […]
Read moreYay, we’re winning the war on poverty, says Margaret Wente. Her recent column is based around the fact that the poverty rate has fallen in recent years. Wente uses this to go on a latte-fuelled SUV romp over the bodies of people who work with (and give a shit about) the poorest in our society. The sum total of statistics […]
Read moreHeather Scoffield had an interesting little “how-to” guide in Saturday’s Globe and Mail on the macroeconomic effects of the improvement in Canada’s terms of trade (the result of soaring global prices for the resources which Canada increasingly exports). The terms of trade, for the blissfully uninitiated, is the ratio of a country’s export prices to its import prices. You can […]
Read moreThe whole idea of the free-market is that the relentless pursuit of self-interest leads people to do greedy things that ultimately benefit all of us. That’s what makes it so humorous to see that appeals to voluntarism have become one of Finance Minister Jim Flaherty’s major policy tools. At least there was a bit of poetic justice in his phony, […]
Read moreIntroduction The Canadian Labour Congress, the Ontario Federation of Labour, the Quebec Federation of Labour (FTQ) and the United Steelworkers recently commissioned a major, technical report on the manufacturing sector from the economic consulting firm Informetrica. (The study “Economic Effects of Structural Changes in Manufacturing: A Retrospective View†is available from http://www.informetrica.com/IL_ManReport1_Final.pdf). The study confirms a great deal of what […]
Read moreLike other disciplines, economics tends to organize material into narratives. It is worth scrutinizing the “stylized facts” that underlie these narratives, as page B15 of Saturday’s Globe endeavoured to do. One piece of conventional wisdom is that the Canadian dollar’s value is driven by the skyrocketing price of oil. David Wolf argued, and Heather Scoffield reported, that the loonie is probably […]
Read moreWhile reading a recent issue of l’Aut’ Journal, I came accross a story claiming that the Montréal municipal police offers privately some of its services (e.g. bodyguards). Well, a rapid visit on the website of the municipal police verified that claim. In fact, there is a whole brochure on the site which details all the services that can be privately […]
Read moreAs Andrew, Bruce, Marc, Ish and others have correctly argued, last week’s Economic Statement wastes money that could otherwise have financed vital public programs. Two tables in the Statement are critical to this case. Table 2.2 (page 45) estimates the costs of newly-announced tax cuts. Table 3.1 (page 73) estimates the costs of all tax cuts adopted since the Conservatives came to power. The […]
Read moreMy take on this morning’s Labour Force Survey follows: Goods-Producing Industries Cut Jobs Canada’s beleaguered manufacturing sector lost a further 3,500 jobs in October. Employment also fell by 1,900 in natural resources, 1,900 in agriculture, and 700 in construction. Saskatchewan Bucks the Western Trend Although more part-time jobs increased total employment, western Canada lost full-time jobs in October. Specifically, British […]
Read moreToday’s Survey of Employment, Payroll and Hours doesn’t seem to support the rosy view that our labour market is turning out better jobs and higher wages. Of the 285,000 payroll jobs created over the past year (August 06 to August 07, seasonally adjusted), almost half (46% or 130,000) were in the two lowest-paid broad industrial sectors, retail trade (85,000 net […]
Read moreAlthough I generally disagree with Andrew Coyne’s take on economic issues, I enjoy his commentary because it is almost always articulate and well-informed. Last Saturday’s column, which may be his second-last at the National Post before moving to Maclean’s, was a glaring exception. In particular, it contradicted Coyne’s own previous contentions. When the Government of Newfoundland and Labrador took an equity […]
Read moreThe Globe and Mail’s mini-budget coverage was such that, even after Marc’s thoughtful and thorough critique, a couple of important criticisms remain to be made. It identified Bruce Campbell as “executive director of the left-wing Canadian Centre for Policy Alternatives” (page A5). In addition to several economists from banks and finance companies, it quoted representatives of the C. D. Howe Institute, […]
Read moreI spoke to a senior Department of Finance official who tells me that the $6.1 Billion annual revenue loss number for 2012-13 when the rate moves to 15% is calculated relative to the already announced reduction in the rate to 18.5% in 2011-12, NOT relative to the current rate of 22%. To my mind this means that the “real” annual […]
Read moreToday’s Globe features nothing but gushing praise for the Tory tax cuts, and complete antipathy towards obvious social spending measures that would actually improve people’s lives. This cave-in to the self-interested perspective of corporate Canada is really quite scary (I was going to say alarming or troubling, but hey, it’s Halloween). Those who favour tax cuts are fortunate to have […]
Read moreIt’s not often that you can detect even a nuance of difference between Finance and the Bank on key economic issues, but do I detect a hint of greater alarm on the part of the former over the recent super-rapid appreciation of the Canadian Dollar? In yesterday’s Economic Statement (Chapter 1, p.19) “If the Canadian dollar were to remain close […]
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