Here is my take on today’s Labour Force Survey: National Unemployment Much attention will undoubtedly focus on the unemployment rate hitting 8% in March, which Statistics Canada notes is “the highest rate in seven years.” While technically correct, this presentation understates the situation’s severity. The unemployment rate briefly reached 8% seven years ago, in December 2001 and January 2002. However, […]
Read moreThe Council of Canadians organized a set of news conferences across Canada on March 31, the day before TILMA came into force for local governments in Alberta and BC. I was one of four speakers at the Toronto event. There are obviously larger and more important economic issues facing Canada today than interprovincial “free trade” deals. However, the free-market approach […]
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 moreYesterday’s Ontario budget lauded the announced minimum wage increase to $10.25 per hour on March 31, 2010. Today, media reports indicate that, “following a meeting with business leaders in Ottawa,” Ontario’s Premier is reconsidering this increase. The argument seems to be that, given hard economic times, we may not be able to afford a higher minimum wage. However, if the […]
Read moreThe increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three provinces actually posted negative inflation rates in January, all posted positive inflation rates in February. Today’s Bloomberg report begins by noting that this data “may ease pressure on […]
Read moreOnce in a while, I come across a blog post that is so on-point I cannot add much more than a link to it. With CBC broadcasting this year’s edition of Canada’s Next Great Prime Minister tonight, I highly recommend this post on the contest’s boneheaded entry requirement. The rule is as follows: “It is a condition of entry and […]
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 morePreliminary reports on this morning’s Labour Force Survey emphasize that the unemployment rate reached its highest level since 2003. However, the situation is far worse in absolute terms. The number of officially unemployed Canadians rose by 106,000 in February, pushing the total over 1.4 million. In other words, the ranks of Canada’s unemployed swelled to their highest level since February […]
Read moreAmid speculation that the Government of Ontario may harmonize its provincial sales tax with the GST, today’s Toronto Star reports, “The government has offered no analysis to determine how much of a benefit or a drain harmonization would be on the provincial treasury.” I have seen at least one estimate from outside government. Michael Smart and Richard Bird wrote a […]
Read moreAndrew Coyne takes on public pensions in the current edition of Maclean’s (which does not yet seem to be available online). He not only criticizes the Caisse de Dépôt’s lousy investments, but calls for doing away with the Canada and Quebec Pension Plans (CPP and QPP). Coyne’s secondary headline (and primary argument) is, “Compulsory plans like the CPP expose older […]
Read moreKudos to the Bank of Canada for significantly reducing its target interest rate from 1% to 0.5%. A month ago, it took the position that already-announced monetary and fiscal stimulus was sufficient to propel a swift economic recovery later this year. Today, in both word and deed, it acknowledged worsening economic conditions and the need for more stimulus. Why Not […]
Read moreNumbers Worse than Official Expectations Real GDP dropped by 1% in December 2008, as large a monthly decline as in the August 2003 blackout. The difference is that, whereas August 2003 was an aberration, December 2008 continues a worsening trend. During 2008 as a whole, the economy eked out 0.5% growth, which falls short of the 0.7% forecast by both […]
Read moreJeffrey Simpson has a good assessment in today’s Globe: Mr. Obama’s budget – hugely consequential for the United States and of importance to Canada, too – represents a U-turn from the disastrous policies of the Bush administration and of the Republican political revolution that began decades ago. Imagine a U.S. budget that simultaneously offends rich farmers, everyone making $250,000 a […]
Read moreInitial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade surplus was not large enough […]
Read moreThe main message in Statistics Canada’s release of 2009 investment intentions is that modestly higher public investment will partly offset sharply lower private investment. The glass-half-full perspective is that things would look far worse without the increase in public investment. The glass-half-empty perspective is that this increase will not be nearly enough to fully offset the loss of private investment. […]
Read moreThe deal, unveiled yesterday by the Premiers of Nova Scotia and New Brunswick, is not actually called PEAR, but PARE: Partnership Agreement on Regulation and the Economy. Like TILMA, it was signed pursuant to Article 1800 of the existing Agreement on Internal Trade to further “liberalize trade, investment and workforce mobility.” Unlike TILMA, it does not establish an enforcement mechanism […]
Read moreObama’s speech to Congress laid out an excellent agenda: substantial investments in renewable electricity, healthcare reform without delay, increased education spending, enforced limits on carbon emissions and the end of Bush tax cuts for Americans making more than $250,000. However, there was one bug, which I fear the President may have caught on his recent visit to Canada: “creating tax-free universal […]
Read moreWhile the GM and Chrysler bailouts have prompted discussion of governments taking equity stakes in those companies, Business Week reports that Ford’s effort to restructure without government loans may make the United Auto Workers its largest shareholder. Henry Ford famously said, “Failure is simply the opportunity to begin again, this time more intelligently.†It seems unlikely that worker ownership is […]
Read moreJim’s posting of his excellent Globe column prompts me to review Canadian labour op-eds, and responses to them, on the “Buy America” controversy. The CAW’s Ken Lewenza was first out of the gate, writing in The Financial Post (Feb. 3) that Canada should mirror Buy America with its own “Buy Canadian” policy. My National Post op-ed (Feb. 5) argued that such […]
Read moreConsumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious distinction of a negative inflation rate. This decline mainly reflected falling gasoline prices. Lower fuel costs were partly offset by higher mortgage-interest costs due to higher real-estate prices than […]
Read moreAs has been widely reported, Ron Bloom from my union’s Pittsburgh headquarters will serve on President Obama’s Task Force on Autos. One might ask why a Steelworker is involved in crafting the automotive bailout. There are at least three reasons. First, during his previous career as a financier, Bloom developed significant personal expertise on the auto industry. Second, while working […]
Read moreThis afternoon’s news that the American stimulus bill passed without a single Republican vote in the US House of Representatives seems to validate Paul Krugman’s skepticism of bipartisanship. The Democratic effort to compromise with Republicans limited the amount of stimulus spending (as opposed to questionable tax cuts) in the package. If this constrained package proves insufficient, the Republicans will be able […]
Read moreI just returned from the Steelworker Mecca of Hamilton-Burlington, where the Michael Coren Show is taped. It will be broadcast at 8pm tonight through the Crossroads Television System (CTS) on cable in Ontario and Alberta, and on satellite across Canada. Sarah Blackstock of the Income Security Advocacy Centre and I squared off with two Kevins, one from the Canadian Taxpayers […]
Read moreA standard objection to the Buy Canadian policy proposed yesterday by Canada’s largest industrial unions was that Canada enjoys a trade surplus. Such a policy would allegedly prompt foreign retaliation, erasing our current trade surplus and its contribution to aggregate demand in Canada. This morning, Statistics Canada reported that we actually ran a merchandise trade deficit in December, the first […]
Read moreCanadian airlines are squealing that MP Jim Maloway’s proposed “Air passenger bill of rights” would “send airfares soaring and throw flights into chaos.” What strikes me is that American airlines already provide much of what Maloway suggests. They frequently over-book flights, but always offer free flights to induce passengers to volunteer to be bumped. In these cases and other instances […]
Read moreThe heads of Canada’s largest industrial unions just presented the following appeal to use government procurement policy to maintain and create Canadian jobs. UPDATE: It seems that Peggy Nash (from CAW) and I (from USW) will be taking calls about Buy America and Buy Canadian policies on CP24, a Toronto news TV station, between 9pm and 10pm on Wednesday. UPDATE (Feb. […]
Read moreInternational Trade Minister Stockwell Day is claiming credit for an amendment to the US stimulus bill affirming that its Buy America provisions will be “applied in a manner consistent with US obligations under international agreements.” Canada tops the list of countries to which the US has such obligations. However, Day and his colleagues demanded the complete removal of Buy America […]
Read moreI admit to not keeping up with all of the progressive reaction to the new Liberal-Conservative coalition. But among mainstream political pundits, there seem to be two main explanations for Igantieff’s decision to not substantively amend the budget. First, he was unwilling to go through with the progressive coalition or risk an election, so he tried to sound tough without proposing […]
Read moreAlarmist media reports on “Buy America” rules for steel used in US public infrastructure projects have emphasized the value of Canadian steel exports allegedly threatened, but have largely ignored the similar value of American steel imported by Canada. In fact, in the most recent month for which data is available (November 2008), Canada bought more steel from the US than […]
Read moreFigures released by Statistics Canada this morning reveal that Canada’s real GDP dropped by 0.7% in November 2008, its largest monthly decline since a 1.0% drop because of the August 2003 power outage. With the exception of that unique event, November’s decline was the largest since at least February 1997, the oldest month for which precisely comparable figures are available. […]
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