During the sixteen years that the NDP governed Saskatchewan, provincial expenditures fell from just over 30% to just over 20% of Gross Domestic Product (GDP). This accomplishment is dubious for a political party committed to using government as a vehicle to redistribute wealth and finance important public programs. Why did the proportion of Saskatchewan’s economy available for these purposes decline […]
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 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 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 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 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 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 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 moreNotwithstanding the usual doom and gloom from the oil industry and its cheerleaders, Premier Stelmach’s decision to increase oil and gas royalties by $1.4 billion in 2009 is an unduly timid move in the right direction. The provincial NDP leader summed it up as follows: “The premier has compromised yet again a report that represented a compromise in the first […]
Read moreCBC recently reported that Conrad Black was acquitted on most of the charges against him because a lone juror dug up critical evidence that his own lawyers did not present. This revelation seems to support Mark Steyn’s criticism of these lawyers.
Read moreYesterday, the C. D. Howe Institute released a Backgrounder supporting TILMA by Kathleen Macmillan and Patrick Grady. They make the most sensible case for the deal that I have read, but give short shrift to its pitfalls. They previously co-authored papers on internal trade and labour mobility for a federal conference that I attended. Days after this conference, Grady largely […]
Read moreIt seems that, having failed to lure any other provinces into TILMA, the Premiers of Alberta and BC have turned their attention northward. Whereas the understanding was that Saskatchewan would need to sign the agreement before trying to negotiate any changes or exemptions, territorial officials have apparently been invited to begin such discussions without having to make an initial commitment. […]
Read moreThree weeks ago, I wrote, “Budget 2007 used the federal spending power quite aggressively to pay provincial governments to eliminate their Corporate Capital Taxes. A similar use of the power will be needed if the Conservatives are serious about harmonizing provincial sales taxes with the GST.” The front page of Friday’s National Post reported, “The Conservatives will encourage the five […]
Read moreCanadian Press reports that tomorrow’s throne speech will include more tax cuts and some effort to eliminate supposed inter-provincial barriers. Since the Liberals agree with the Conservatives on both issues, they should not have much trouble letting the throne speech pass. More tax cuts, fewer trade barriers to come in throne speech: Finance Minister TORONTO – Canadians can expect to […]
Read moreSince becoming Liberal leader, Dion has consistently made noises about cutting corporate taxes. On Friday, he clearly and specifically committed to slash corporate taxes “deeper than the Conservatives.†A Liberal strategist quoted in the Financial Post indicated that the plan is to outflank the Conservatives on the right regarding tax policy. Also on Friday, the NDP’s new finance critic, Thomas […]
Read moreYesterday’s Ontario election was pretty crummy. Almost the entire campaign was dominated by a contrived issue. Turnout hit an all-time low, with barely more than half of eligible voters bothering to cast ballots. Despite a smaller percentage of the popular vote than in the last election, the McGuinty Liberals cruised to a huge majority. The more progressive NDP gained popular […]
Read moreDuring the provincial campaign, Dalton McGuinty seems to have changed his tune on TILMA. This change is somewhat reminiscent of the Saskatchewan Party’s “road to Damascus” conversion on the issue. Six months ago, McGuinty praised TILMA and mused about joining it. A couple of weeks ago, he wrote the following in response to a questionnaire from the Ontario Public Service […]
Read moreAs the provincial referendum on adopting Mixed Member Proportional (MMP) nears, figuring out strange scenarios in which this voting system might not work well seems to have become Ontario’s favourite indoor sport. All of this hypothesizing appears to be losing sight of the fact that MMP is clearly better (or less bad) than the existing first-past-the-post system. The referendum is […]
Read moreMy take on Statistics Canada’s release follows: The Dollar Hits Parity During the reference period for this Labour Force Survey, September 15 through 22, the Canadian dollar reached parity with the American dollar. Today’s release does not capture the consequences that have begun to play out since then. A rapidly-rising exchange rate has increased the price of Canadian-made products in […]
Read moreThe United Steelworkers have put out the following press release: Research confirms value of manufacturing to Canada’s economy TORONTO, Oct. 4 /CNW/ – An interim report on manufacturing prepared by Ottawa-based econometrics firm Informetrica shows that manufacturing plays an important role in supporting all sectors of the economy, and has been hurt by both the recent appreciation of the dollar […]
Read moreThomas Palley, formerly of the AFL-CIO, just posted a very good piece on “The New Economics of Trade” that clearly connects the dots between several themes frequently discussed on this blog.
Read moreThere have been suggestions that the Conservative government’s forthcoming Throne Speech will surrender the federal spending power. Through an op-ed in today’s Globe and Mail, Bob Rae tries to position himself, and presumably the Liberal Party, as defenders of the power. This posturing will help the Conservatives woo Quebec nationalists and help the Liberals appeal to Canadians who believe in […]
Read moreAs usual, the federal surplus has come in far larger than forecast: $14 billion for 2006/07. As legislated through the Tax Back Guarantee, all of the interest savings from this debt repayment will finance personal income tax cuts. Therefore, the 2006/07 surplus will reduce income taxes by $0.7 billion annually. This tax cut will barely put a dent in federal income […]
Read moreYesterday, the Premier of Alberta addressed the Empire Club in Toronto. He said some encouraging things about Our Fair Share: “We will get a fair economic rent on the development of our resources. In fact we have recently received the recommendations of the Royalty Review Panel that I established as one of my first acts as Premier.” I am not […]
Read moreToday, Statistics Canada released a very interesting study on the economic demand that is driving greenhouse-gas emissions. Between 1990 and 2002, exports outstripped Canadians’ personal expenditure as the leading source of Canada’s industrial emissions. Indeed, exports accounted for essentially all of the increase in these emissions. Canadian Industrial Emissions (in megatons) Final-Demand Category 1990 2002 Exports 176.4 264.4 Personal Expenditure […]
Read more