As others have noted, last week’s Ontario budget combined modest social investments in areas requested by the NDP with austerity for overall expenditures. Ontario program spending, already the lowest per capita of any province, will be subject to ongoing cuts relative to inflation.
This paradox on the expenditure side of the ledger reflects a vacuum on the revenue side. The budget’s summary of tax measures (Table 4.1) is essentially a blank slate, particularly if one excludes measures that simply parallel federal changes.
My pre-budget presentation at Queen’s Park emphasized several easy ways to collect modestly more (Read more…)
Last week’s report from BC’s Auditor General dealt a huge blow to the credibility of carbon offsets and claims that BC had achieved a state of “carbon neutral government.” Coverage of the AG’s report was coloured by accusations from the Pacific Carbon Trust, the Crown corporation created to buy and sell BC offsets, and “experts” from the offset industry that the AG did not know what he was talking about. Letters from those vested interests were leaked to the media in a proactive attempt to discredit the AG, quash the report, or at least delay its release
. . . → Read More: The Progressive Economics Forum: Absolving our Carbon Sins: the Case of the Pacific Carbon Trust
One the most amazing things about this budget is that one of its three focuses will actually be the opposite of what it’s touting. You’ll likely hear that $14 billion will be spent on infrastructure over the next 10 years (actually you may hear much bigger numbers but they just re-announce existing programs like the gas tax transfer). What you won’t hear is that 75% of that money is going to spent on or after 2020. In fact, there will be an affective $1 billion cut to infrastructure transfers to the cities in 2014-15.
The Building Infrastructure
. . . → Read More: The Progressive Economics Forum: Austerity through infrastructure Cuts: Budget 2013
It’s hard to get excited about Thursday’s federal budget. All signs point to an “austerity” budget, even though that approach has failed so spectacularly wherever it has been tried. Austerity is one of those zombie ideas that cannot be killed, roaming rampantly across the pages and screens of the mainstream media. The 2012 federal budget already took a big step down the path of austerity with major public sector cuts, largely focused on direct federal program spending with cuts around 7% (transfers to provinces and individuals, a large part of the federal budget, have largely been spared). About 19,000 federal
. . . → Read More: The Progressive Economics Forum: Budget 2013: Time for a real action plan, not another ad campaign
These are the remarks by David MacDonald and I prepared for the press conference marking the release of the AFB 2013 in Ottawa, March 12, 2013.
Time flies and our Alternative Federal Budget is now in its 19th year. Year after year it has shown that we can have a Canada where we all do better together.
This year the AFB is more inclusive than ever with 27 chapters written by over 90 contributors each laying out progressive policy ideas ready for implementation. All policy proposals are fully costed and put within a realistic macro-economic framework to determine
. . . → Read More: The Progressive Economics Forum: The Alternative Federal Budget 2013 – Doing Better, Together
The long version is here. Apparently Mr.. Waldmann was tricked into reading Matt Yglesias on monetary policy. Waldmann’s observation goes something like this in short from:
Hey Matt you have been consistently wrong in your predictions on the power of monetary policy, if fact your predictions have been so wrong the only prediction you should make is that your predictions on the power of monetary policy will be miserably fucking wrong because your theory is miserably fucking wrong. And do not ever trick me into reading your miserably fucking wrong predictions again.
Ok so that was almost (Read more…)
If Doug Horner can’t get Alberta’s finances under control, he can always look forward to a long career as a Ricky Gervais impersonator.
Alberta is facing a bit of a budget crisis, with a deficit which, on a per capita basis, could be as big as Ontario’s. This has forced Alison Redford into making some tough choices…or, in the more likely event, building up debt.
To help with these decisions, Redford has launched a Your Choice website, letting average Albertans consider the same trade-offs government is facing. It’s actually a really neat form of citizen engagement, and is the ultimate
. . . → Read More: Calgary Grit: You Be The Finance Minister
Ok, so some of the best economists, trained at elite institutions, working for the pinnacle of the of the financial world got it wrong, very wrong. How wrong? Just go ask a Greek citizen. But, of course, we all knew that just by reading the headlines coming out of Greece over the last couple of years. We also knew this because most of the best elite trained economists thought everything was doing swimmingly back in 2006 early 2007.
Why? because they assumed rational expectations and that their models were correct. And when, after the crisis
. . . → Read More: Relentlessly Progressive Political Economy: Putting lipstick on the PIIGS: the health of modern macroeconomics
On Tuesday, November 20th, the Parti Québécois released its first budget since taking office. This budget was widely anticipated in view of the many fiscal promises the PQ had made during the campaign, most of which where fairly progressive in nature. In the end, the exercise was (aptly) described by Marc Van Audenrode, who followed [...] . . . → Read More: The Progressive Economics Forum: The PQ budget
The US federal budget is back in the spotlight now that the election is over. In one sense, not much has changed in that the Republicans continue to hold the House, the Democrats the Senate and White House. But what we are now witnessing is the culmination of budget deals going back to the first [...] . . . → Read More: The Progressive Economics Forum: Fiscal Cliff Notes
Below is a recent editorial from the New York Times that does an excellent job of summarizing the failures of austerity policies.
The NYTimes also published a very good analysis of how austerity measures have actually increased debt loads in many countries, instead of reducing them: “Despite Push for Austerity, European Debt has Soared”
I made the same point in the lead article in our new Economy at Work publication that came out last month.
The IMF’s recent World Economic Outlook published earlier this month, has interesting relevant material, particularly the section where they revise their estimates of short-term fiscal multipliers.
. . . → Read More: The Progressive Economics Forum: The Austerity Trap
Ontario careens towards an election nobody wants…
Ontario Liberals threaten election after NDP ‘breaks its word’ on budget
Ontario Premier Dalton McGuinty threatened to take Ontario to a general election Thursday if the opposition parties couldn’t agree on a deal to pass the budget.
“This is about Ontario’s economic livelihood and our ability to continue steering the province in the right direction in these challenging times,” McGuinty said in a statement.
“It’s absolutely imperative that we pass this budget. And if we cannot pass this budget, we will take it to the people in a general election.”
. . . → Read More: Calgary Grit: Why Can’t We All Just Get Along?
So many big changes are happening in Bill C-38 that some significant issues like the changes to the Federal Contractors Program (FCP) have escaped attention. Part 4 Division 42 of C-38 is very short. It merely says that subsection 42(2) of the Employment Equity Act is replaced by the following:
“The Minister is responsible for the administration of the Federal Contractors Program for Employment.”
It sounds innocuous enough until one looks that the subsection in the original Act. This section stipulates that while discharging this responsibility the Minister needs to ensure that contractors with the Federal
. . . → Read More: The Progressive Economics Forum: Budget Bill and the Federal Contractors Program
If one reads the G&M and NatPo business sections one is treated to a steady stream of largely rosy and pompous pronouncements on the structural shift in the Canadian economy towards resource extraction on the one hand, and on the other hand, to the non- tradeable service sectors. The tell is of course that the selfsame economists have had very little to say about the government’s continual expansion of the temporary Foreign workers (TFW) program which has meant that the non-tradable sectors are becoming increasing like the tradable sectors from the point of view of labour markets. This
. . . → Read More: Relentlessly Progressive Political Economy: Dutch Diseased Labour Markets
There has been a call from several mayors of municipalities here in British Columbia, Canada to legalize marijuana…the arguments for it are essentially that they are tired of fighting against a mega-tide of grow-ops and drug dealers who are far richer in resources and weapons to push back than the cities can afford to be, and they are right…
Never mind the stupid morality arguments and the dubious health ‘risks’ that don’t even begin to be as ‘risky’ as smoking tobacco or drinking alcohol, or eating too much salt or sugar…
Looking at the economic arguments alone, even the CRAPs*
. . . → Read More: Left Over: Let’s “Just Do It”
Last week, the Ontario Public Service Employees Union released an interesting report by the Centre for Spatial Economics on the economic impact of proposed provincial budget cuts. It provides a timely reminder that the public sector is a crucial component of the economy, with public spending also supporting many private-sector jobs.
The Centre for Spatial Economics concludes that the Liberal budget presented last month would subtract 0.6 from provincial GDP growth and eliminate 105,000 jobs (65,000 public and 40,000 private) in 2015. Removing over $20 billion from Ontario’s economy would in turn reduce annual provincial tax revenues by over $2 billion.
Thankfully the federal budget has started to fill in some of the details of its latest round of cuts. In particular, it now estimates 19,200 positions lost due to its latest round of cuts (Federal Budget 2012, pg 221). Although it is nice to have an initial estimate, this hardly show the full picture as it excludes the other two rounds of cuts that overlap on the 2012 version. See Table 1 for the full cut details
Table 1: All Cuts ($mil) 2011-12 2012-13 2013-14 2014-15 2007 Strategic Reviews
. . . → Read More: The Progressive Economics Forum: Federal Job Cuts…the Real Numbers
Last week’s provincial budget promised a mining sector review “to ensure Ontario receives fair compensation for its non-renewable resources,” a proposal advanced by this blog and the United Steelworkers before appearing as a Drummond recommendation.
The relevant budget section begins with the following observation: “Ontario has the highest value of mineral production of any province or territory in Canada.” Similarly, this blog had noted: “Ontario has the most valuable mineral production of any Canadian province or territory.”
It also noted that Ontario’s budget typically lumps the Mining Tax together with “Other Taxes.” Last week’s budget at least
. . . → Read More: The Progressive Economics Forum: Ontario to Mine for More Revenue
Announcing a bad policy 10 years in advance doesn’t make it a good policy.
So the fact that the Harper government is giving people at least 10 years to prepare for 2 years of life without an important source of income, hardly makes it OK — as so many media commentators have tritely implied. In fact, in this case it makes the policy even more unfair.
Likewise, the fact that many young Canadians seem to have (wrongly) resigned themselves to the fact that public pensions won’t be there for them when they retire, hardly eases the pain of this
. . . → Read More: The Progressive Economics Forum: How Much Will YOU Lose from OAS Deferral??
Here’s the budget analysis I prepared for CUPE’s website.
Despite its size and the hundreds of measures it details, Harper’s 2012 budget demonstrates just how small-minded their vision is. Canada faces major challenges, with 1.4 million unemployed, stagnant productivity growth, a crisis in retirement security and growing inequality.
Instead of addressing these challenges, what this budget provides is more of their failed economic policies, deep job-killing budget cuts, cuts to public pensions and a highlight: getting rid of the penny.
Not only is Harper using his new majority power to reduce the size and scope of the
. . . → Read More: The Progressive Economics Forum: Conservatives’ small-minded budget kills jobs and fails Canadians
First off, the 2012 federal budget that makes no upfront claim to be a budget. Indeed, the cover states only “Economic Action Plan 2012: Jobs, Growth and Long-Term Prosperity.” While we have been accustomed in recent years to budgets with their own titles, this one does not actually say “Budget” anywhere. This frames it more a framework economic document that includes gutting of environmental assessment in the name of the economy.
This is a colonial vision of the economy as a quarry for foreign interests. Instead of ensuring development of resources in a manner consistent with real long-term needs
. . . → Read More: The Progressive Economics Forum: A budget that screws the planet for short-term profits
Perhaps the most striking feature of today’s Ontario budget is how close it comes to last month’s Drummond report. Drummond’s recommendation for 2017-18 was $134.7 billion of provincial revenue, $117.5 billion of program spending and $15.3 billion of interest payments.
By comparison, today’s budget envisions $135.9 billion of revenue, $118.9 billion of program spending and $15.4 billion of interest payments (Table 2.24). In other words, the McGuinty government aims to come within one per cent of Drummond’s proposals. It would do so through a similar combination of unduly pessimistic revenue projections,
. . . → Read More: The Progressive Economics Forum: Ontario Budget Emulates Drummond
Statistics Canada reported today that 12,400 more Canadians received Employment Insurance (EI) regular benefits in January. The increase in recipients reflected higher unemployment.
Indeed, the proportion of jobless workers receiving benefits remained 39% (i.e. 561,060 beneficiaries out of 1,421,200 officially unemployed Canadians.) Only 28% of unemployed Ontarians received EI benefits in January (i.e. 163,570 beneficiaries out of 593,400 unemployed), an issue almost certain to be raised in next week’s provincial budget.
Today’s reported increase in EI recipients provides further confirmation that the job market is deteriorating. The upcoming federal budget should improve the accessibility and duration