The unemployment rate is up again this month, to 7.3%, with 1.4 million workers looking for jobs in February. A loss of full-time work was partly replaced by part time positions. A disproportionate percentage of last year’s growth came from precarious self-employment. Remember those heady days when we could say that at least Canada’s unemployment rate […] . . . → Read More: The Progressive Economics Forum: February Labour Force Woes
The big issue of the week in Canada, where we worry about these things for some reason, was deficits. The new Liberal government, which promised to run a $10 billion deficit to boost the economy, is instead going to be about $30 billion in the hole. Here in the People’s Republic of Alberta, the provincial […] . . . → Read More: In This Corner: Stuff Still Happens, week 8: Deficits, drugs and death
We all knew that Budget 2015 was optimistic about medium term growth and rebounding oil prices, but the good people at the PBO have given us an indication of just how far off those projection were. They estimate that nominal GDP will be about $20B lower through 2020 ($30B lower in 2016), which also means . . . → Read More: The Progressive Economics Forum: Who’s Afraid of Deficits?
This is a guest blog post from Mario Seccareccia, Professor of Economics, University of Ottawa.
Since the October 2008 federal election, Canadian politicians have been struggling to come to terms with what to all accounts has turned out to be a “lite” version of the 1930s, whose major difference is that today we have . . . → Read More: The Progressive Economics Forum: Missing in (debate) action: macroeconomic lessons from the Great Depression
This week Stephen Harper’s Conservatives are trumpeting the announcement of a small surplus ($1.9 billion) for fiscal 2014-15. The political symbolism of this “good news” is a welcome change for them from a string of negative economic reports (most importantly, news that Canada slipped into recession in the first half of 2015) that has damaged . . . → Read More: The Progressive Economics Forum: Federal Surplus: Digging Deeper
The kiss of death?
The latest Nanos poll for CTV shows a three way split between the LPC, CPC and NDP. However, the Liberal grip on their heartland of Atlantic Canada remains firm; while the NDP has a clear majority in Quebec. The key battleground is now the biggest province, Ontario. Here’s the Nanos . . . → Read More: CuriosityCat: Battleground Ontario is moving into Liberal camp says Nanos
Here’s my current expectation of the possible seat wins around one week before the October 19 election. I’ve added an X – to mark the right hand border of my forecast – to the CBC/308 instructive Poll Tracker chart: X marks my spot for positions one week before the election on October 19
. . . → Read More: CuriosityCat: Election 2015: X marks the spot
The Second King of Austerity?
With the dog days of summer ending, and only 6 or so weeks left in the interminable campaign, one of the most interesting sites to check on every now and then is the CBC Poll Tracker, run by Éric Grenier, the founder of ThreeHundredEight.com, a website dedicated to political . . . → Read More: CuriosityCat: Election 2015: The Shift to the Liberal Party starts
“There is always a storm. There is always rain. Some experience it. Some live through it. And others are made from it.” Author Shannon L. Alder Recently NDP candidate and former Saskatchewan finance minister, Andrew Thomson, stated on Power and Politics, that cuts were inevitable, in order to balance the budget. In Saskatchewan, he . . . → Read More: Pushed to the Left and Loving It: Our Addiction to Balanced Budgets May Need an Intervention
“There is always a storm. There is always rain. Some experience it. Some live through it. And others are made from it.” Author Shannon L. Alder
Recently NDP candidate and former Saskatchewan finance minister, Andrew Thomson, stated on Power and Politics, that cuts were inevitable, in order to balance the budget.
In Saskatchewan, he cut funding to education, though it still didn’t balance the books. He had to take money from the province’s contingency fund, including almost a half million dollars for advertising, that he had balanced the books, when in fact, he had not.
Hiding deficits for politicians is not uncommon. Jim Flaherty did it in Ontario and Joe Oliver is doing it now.
But in defence of Thomson, Flaherty and Oliver; we have become the enablers of their addiction to the high of being good economic managers. They had to hide their red eyes and red ink, so they didn’t have to come before us in shame, or ruin their chance for re-election.
The question we need to be asking ourselves, is why balanced budgets are so important. Does it really matter if the federal government runs a deficit?
Political consultant and commentator, Will McMartin, discussed this recently in the Tyee. He begins with the announcement that the Conservatives would present a balanced budget. However, he implies, so what?
A closer look at the country’s finances, however, raises a simple question: why all the fuss? The budget is a thin slice of the Canadian economic pie, and interest costs on our debt are shrinking to near-giveaway size. Ottawa is just one of three government levels, and taken as a whole our government spending is very much under control.
The federal budget represents just 15% of our overall economy.
The Blame Game
There has been a lot of debate recently, over what political party is responsible for our perceived debt/deficit “mess”. Since only Conservatives and Liberals have ever formed government, it narrows the debate down to those two.
The biggest targets are Brian Mulroney and Pierre Trudeau. However, John Diefenbaker, also ran consecutive deficits, but that is not how their legacies should be judged.
Diefenbaker was a visionary, who fought for a united Canada. He gave us the Canadian Bill of Rights and stood up to the Americans, who wanted us to join their missile defence program. He may have made mistakes, but his deficits were created in part, by a new universal hospitalization program, and an enhanced Old Age Security.
Lester Pearson also left a deficit, but what defines him, are the many contributions he made. He expanded Diefenbaker’s hospitalization plan, to give us universal health care and introduced student loans and the Canada Pension Plan. He also created the Order of Canada, and moved toward abolishing capital punishment.
There’s no denying what Pierre Trudeau did to move our country forward, as he also expanded social programs, and created a more just society, with the Charter of Rights and Freedoms.
Even Brian Mulroney, whose tenure was mired in corruption, left his mark on making Canada a better country. He created eight new national parks, finalized the U.S.-Canada acid rain treaty, and brought in the Environmental Protection Act.
He is also credited with giving us NAFTA, not necessarily a good thing, but it did help Canada in the short term.
All of these men were big idea guys, who had the courage to make things happen.
Diefenbaker’s idea: a united Canada with a focus on human rights.
Pearson’s: nation building and making Canada a diplomatic player on the international stage.
Trudeau’s: nation building with a focus on rights and freedoms, and an inclusive society.
Mulroney’s:, a desire to bring Canada into the 21st century, with a focus on business and international trade.
Who cares if they left deficits when those deficits represented only 15% of our GDP? Look at what we got in return?
I know that a lot of people are critical of NAFTA. I’m one of them. Not only did it hurt our manufacturing sector, but it has forced subsequent governments to adopt programs of deregulation, to meet the terms. Unfortunately, more deregulation may be required, since we are now the country most sued, for not meeting our nefarious commitments.
Election 2015: a Psychedelic Trip to Bizzaro-land
When Thomas Mulcair was the environment minister in Quebec, and wanted to privatize water, shipping it in bulk, he said that “the environmental laws protecting water are considered barriers to trade.” (The Press, Charles Cote and Mario Clouthier, June 16, 2004 ). Mulcair helped to draft NAFTA.
Everything has become a “barrier to trade”, that will exacerbate with even more international trade deals.
But what about the barriers to helping Canadian society? We were told that these deals would lead to economic prosperity. Where is it? I guess we should have read the fine print, that said only economic prosperity for the top 1%.
During the 2008 economic crisis, the Canadian government bailed out our banks with over 100 billion of our money. They bailed out companies, and sprinkled largesse over Conservative ridings. They built libraries and indoor soccer fields for private religious schools and set up an advertising campaign called the Canada Economic Action Plan that would have rivalled Joseph Goebbels propaganda ministry. (Yes I said it).
We found money for that, by adding to our deficit and debt. Adding it to the 15% stake in our country’s GDP. So why can’t we do the same for the Canadian people?
We need a National Housing Strategy, a National Food Program, and we need to expand our healthcare to include dental and prescription drugs. We need a subsidized tuition program, help for our seniors and our veterans, and an environmental plan that works.
Those things are not drains on our economy, but a viable way to grow our economy, that will create good, full time jobs, while reducing poverty and homelessness. We will see the value for the dollars we spend.
That suggests that it’s Mr. Trudeau whose position is in sync with the majority’s mood. The Liberal Leader has refused to rule out running a deficit, arguing he’ll have to see the extent of the “mess” the Conservatives have left in the public finances.
It is the NDP, traditionally to the left of the Liberals, who have launched the most blistering attacks on Mr. Trudeau for opening the door to running a deficit. Under Mr. Mulcair, the New Democrats have sought to allay concerns about their economic policies by insisting they will balance the books, despite the slowdown in the economy.
What an odd turn of events.
I’m glad that Trudeau is bringing the Liberal Party back to its roots, that put Canadians first. Now the NDP have to find their way back to the days of Tommy Douglas.
Many people have called me a socialist, but like Will McMartin, the author of the first piece I linked, I’m a conservative. Although actually a liberal/conservative. Common sense solutions to social problems. Grow the economy and the budget will balance itself.
Or maybe I’m just a Diefenbaker, with a dollop of Pearson and a splash of Pierre Trudeau.
Not such a bad thing to be.
. . . → Read More: Pushed to the Left and Loving It: Our Addiction to Balanced Budgets May Need an Intervention
PHOTOS: Former premier Ralph Klein, now elevated to sainthood by the neoliberal cargo cult, celebrating the retirement of Alberta’s debt in 2004, never mind the mess the infrastructure was in. Below: Alberta Finance Minister Joe Ceci, Canadian economist Jim Stanford and Wildrose Finance Critic Derek Fildebrandt, with, bottom, his old debt-trailer. Anyone remember Ralph Klein’s . . . → Read More: Alberta Politics: Give a thought to Alberta’s approaching budget day: there’s little to gain and plenty to lose from ‘debt free’ government
Harper-economics lead to a Harper-recession and now to a Harper-deficit
Louis-Philippe Rochon Associate Professor, Laurentian University Co-Editor, Review of Keynesian Economics
Confirmation federal government finances have fallen back into deficit raises more questions about Harper’s image, now more myth than reality, as a sound economic manager.
A deficit of course was inevitable once you accept . . . → Read More: The Progressive Economics Forum: Harper economics lead to a Harper deficit
Evidence continues to mount regarding Canada’s lousy economic trajectory, and there is now a pretty broad consensus among Canadian economists that the economy was likely in recession in the first half of the year. That’s not a sure thing, of course: we won’t know until September 1 if second quarter GDP grew or shrank.
Here’s . . . → Read More: The Progressive Economics Forum: The Deficit Battle and the Economic War
Associate Professor, Laurentian University
Co-Editor, Review of Keynesian Economics
With the tabling of a new federal budget on April 21, the Conservatives are trying to reinvent themselves as good economic managers, stalwart of sound finance. But after almost nine years in office, the data simply does not confirm this story. Mr. Harper’s . . . → Read More: The Progressive Economics Forum: The Conservatives, sound finance and the facts of recent history
Balanced budget legislation will be disastrous for Canada
Associate Professor of Economics, Laurentian University
Co-Editor, Review of Keynesian Economics
Finance Minister Joe Oliver’s latest muses about introducing balanced budget legislation is the worst policy for Canada, and will doom us to European-style crises and rob future generations of prosperity.
While . . . → Read More: The Progressive Economics Forum: ROCHON on balanced budgets
THE FEDERAL BUDGET AND CANADA’S ANNUS HORRIBILIS
See Original post here for the CBC.
Canada’s Finance Minister Joe Oliver announced a new – and long overdue – federal budget for April 21. With the Canadian economy doing so badly, this budget will be crucial.
Will the minister do the right thing and give Canadians a . . . → Read More: The Progressive Economics Forum: ROCHON on the upcoming federal budget (April 2015)
The Fredericton Daily Gleaner published an op-ed I wrote about how the province doesn’t have a structural deficit, despite the government claiming it does. The commentary piece is behind a pay wall so I’ve copied it below.
Last month, CUPE New Brunswick also published a paper I wrote on this issue, Deficit Déjà Voodoo: is . . . → Read More: The Progressive Economics Forum: Deficit Déjà Voodoo again in New Brunswick
Here is an extract from my column on balanced budgets in the Globe ROB today.
“When it comes to balancing the books, the Harper government is seemingly more Catholic than the Pope. Even the International Monetary Fund (IMF), hardly big fans of high government spending, argue in their latest Country Report released in January that . . . → Read More: The Progressive Economics Forum: Harper Conservatives vs the IMF on Deficits
Posted earlier as an opinion piece for CBC. See original post here (this post slightly modified from original)
By Louis-Philippe Rochon
Follow him on Twitter @Lprochon
Much was at stake earlier this week when finance ministers from G20 countries met in Istanbul to discuss Greece and the state of the world economy in . . . → Read More: The Progressive Economics Forum: G20 meeting of world finance ministers too little too late
In a recent CBC blog post, Louis-Philippe Rochon assesses the current state of the Canadian economy.
The link to the blog post is here.
Follow him on Twitter @Lprochon.
Over at the blog of the Institute for New Economic Thinking, Ottawa U professor Mario Seccareccia has given an interview titled “Greece Shows the Limits of Austerity in the Eurozone. What Now?”
The interview can be read here.
Acres of newsprint have been devoted in recent weeks to the possibility that lower oil prices might push the federal budget back into a deficit position. As I argue in my column in today’s Globe and Mail, this drama is mostly political theatre — and progressives should be cautious about accidentally accepting the Conservative frame . . . → Read More: The Progressive Economics Forum: Don’t Play Tories’ Game on “Risk” of Deficit
What follows are comments from a roundtable discussion held at the University of Ottawa on February 28, organized by Mario Seccareccia, and which featured participation from Marc Lavoie, Louis-Philippe Rochon, Mario Seccareccia, Slim Thabet and Bernard Vallageas.
This is Part 4 of 5 sequential blog entries.
Bernard Vallageas Vice-président de l’Association pour le Développement . . . → Read More: The Progressive Economics Forum: What Have we Learned From the Financial Crisis? Part 4: Bernard Vallageas