The Parliamentary Budget Office has come out with a report, suggesting that the Conservatives will likely balance the budget ahead of schedule. But, and it’s a big but, if there were no EI surplus, there would be no balanced budget in 2016. And the annual surplus in the EI Operating Account is no small potatoes – it’s forecast to be at least $3.5 Billion in 2014. But this forecast is based on an EI coverage rate of 41%, and recently it’s been more like 38%, meaning the 2014 EI surplus will probably end up being over $4 Billion.
Arun here…breaking radio silence to share with you a thought-provoking piece by Larry Kazdan, a graduate of York University in sociology and history, and currently a Council Member with the World Federalist Movement-Canada, an organization that monitors developments at the United Nations and advocates for more effective global governance.
Our friend and fellow blogger Keith Newman recently wrote some words that set up Larry’s piece nicely so rather than trying to reinvent the wheel, I will let Keith introduce Larry’s work and then urge readers to read the piece in full.
****************************** The trillion dollar coin solution for the US (Read more…)
Watching Rob Ford in the recent weeks reminds me of what John Ralston Saul once wrote of Benito Mussolini and his contemporary reincarnation in Silvio Berlusconi: “He was the nascent modern Heroic leader. Mussolini combined the interests of corporatism with public relations and sport, while replacing public debate and citizen participation with false populism and the illusion of direct democracy.”
Unlike Berlusconi, who was able to harness his media empire to pump his message (Forza Italia!), Ford has been enabled by private media interests, being served up public soap boxes like talk radio shows to the one-show stint (Read more…)
Buried in the federal government’s recent Update of Economic and Fiscal Projections are figures showing the Harper government is set to squeeze federal government’s role to the smallest it has been in seventy years. (Bill Curry at the Globe also just wrote about this, but without figures further back than 1958).
Total federal government spending as a share of the economy is projected to drop to a 14% share of the economy by 2018/19. This would be the lowest since at least 1948. Because the government has tied the federal public service up in knots, actual spending will likely (Read more…)
Following last week’s troubling news about potash, the Saskatchewan government released its first-quarter financial report today. The headline seems to be “Oil Keeps Budget in Black”, with a forecast increase in oil revenue more than offsetting a forecast decline in potash and other revenues.
But the forecast West Texas Intermediate price is only up by a couple of dollars since the provincial budget. A larger difference is that the forecast exchange rate has fallen from 99 to 96 US cents.
As shown at the bottom of page 4 (3 of 5 in the PDF), the forecast US-dollar price of (Read more…)
It has recently been reported that the University of Alberta wants to “reopen two-year collective agreements” with faculty and staff “to help the university balance its budget…”
This appears to be in direct response to Alberta’s provincial government announcing in its March budget that there would be a “7% cut to operating grants to universities, colleges, and technical institutes.”
This strikes me as a curious turn of events, for several reasons.
-Alberta’s top income tax rate (i.e. the provincial share) is a mere 10%. This is the lowest of any Canadian province or territory. By contrast, (Read more…)
This week’s TED Talk features Adam Baker, founder of ManVsDebt, a blog which focuses on a simple message: The first step to living a life of passion and purpose is to remove the barriers that hold you back. It sounds like good advice to me! * ManVsDebt.com
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: 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: 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.