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 their traditional claim to be the best “economic managers” for the country. Let’s take a deeper look at the surplus, where it came from, and what it means. [Portions of this commentary appeared in a feature for the Ottawa Citizen prepared (Read more…)
Is that all is good with our native peoples. I mean it would have to be if the government department tasked with providing services to them was able to lapse a billion dollars in budget over the past five years. Of course there is also another possibility, that the Conservatives just don’t care.
One would think that the question “How many jobs will be created by the federal budget?” when asked of the bloody finance minister who had just delivered the thing would get a better worded response than “dunno“. If jobs were the teeniest tiniest concern for this government, one would think that at least a pat answer […]
Here’s a link to the longer analysis I prepared of the federal budget, now on-line at CUPE’s website, to accompany the press release and notes we put out immediately following the budget.
The entire document may be too long to post here, so here’s the 1st two paragraphs.
The Big Picture: more tax cuts for the rich: nothing for jobs and working Canadians.
The Conservative’s 2015 federal budget demonstrates they have nothing new to offer workers and the majority of Canadians. Once again it includes tax cuts for business and the wealthy, and nothing substantial to create decent jobs or to help (Read more…)
With a document whose very timing, let alone content, was so transparently politicized and manipulative, it’s hard to even know where to start. Among the many galling, short-sighted, and ultimately destructive components of this federal budget, here are 5 that stand out in my view:
1. Timing. At a time of great economic uncertainty in Canada (arising from the sharp decrease in oil prices and growing evidence of serious economic trouble), the government chose to heighten the uncertainty by delaying its budget for several weeks. Turns out this was not because of uncertainty about oil prices. The delay was (Read more…)
Normally the Globe’s Parliament Hill coverage is pretty good. But this Bill Curry item makes the unattributed claim that seniors organizations support the trial-ballooned proposal to double the annual contribution limit to tax free savings accounts (TFSAs). Really? Which ones? The Society of Retired CEOs? Or maybe the Grey Circle at the Empire Club? It … Continue reading Seniors organizations support doubling the TFSA limit? Can we have a source please? →
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 budget that will stimulate the economy? Or will he continue with the government’s obsession of balancing the budget and further doom the Canadian economy to a recession?
The facts about the Canadian economy are not encouraging: increasing unemployment (a real unemployment rate of nine per (Read more…)
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 light of recent downgrades in world growth expectations. But did they agree to too little, too late?
There is now no doubt that the world economy, not just Canada’s, has slow downed considerably and will slow down even more unless appropriate policies are adopted soon. To date, (Read more…)
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.
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 for this debate.
Provincial governments in the oil-producing provinces face a huge fiscal risk from lower oil prices (since they rely, to varying degrees, on petroleum royalties to directly fund current public services — not exactly a wise fiscal strategy). Ottawa, in (Read more…)
Much has been made about Stephen Poloz’s decision to abandon ‘forward guidance’ in Bank of Canada rate setting announcements for the time being. Critics bemoan the loss of direction from the Bank. But Poloz’s comments yesterday were chock full of guidance on how the Bank sees Canada’s economic situation.
Having been disappointed by the failure of Canada’s export sector to resume investment or show any signs of life, researchers at the Bank investigated the performance of 2,000 product categories, and found that about 500 of those had very nearly been wiped out following the 2008 – 2009 recession. Further investigation (Read more…)
Today’s National Balance Sheet Accounts indicate that the amount of cash held by private non-financial corporations in Canada soared from $591 billion in the third quarter of 2013 to $626 billion in the fourth quarter of 2013. Corporate Canada’s accumulated stock of cash now exceeds the federal government’s accumulated deficit, which was $612 billion at the end of 2013.
Corporate Canada’s cash stash had been on track to exceed $600 billion at the start of 2013, but Statistics Canada narrowed its definition of “total currency and deposits.” Even under the new definition, this hoard of dead money surpassed (Read more…)
by: Canadian Centre for Policy Alternatives | Press Release
CCPA Alternative Budget 2014
OTTAWA — The Canadian Centre for Policy Alternatives (CCPA) warns a so-called “do-nothing” federal budget is anything but, and is likely to worsen Canada’s slowing economy.
The CCPA’s 2014 Alternative Federal Budget (AFB) shows what the federal government could do if it decided to seriously address Canadians’ largest social, economic, and environmental concerns. It delivers a plan that would lift 855,000 Canadians out of poverty, reduce income inequality, boost the economy, lower unemployment to 5.4%—and still balance the budget one year later than the federal government (Read more…)
. . . → Read More: The Canadian Progressive: Alternative Federal Budget would lift 855,000 Canadians out of poverty: Think Tank
This blog’s unofficial slogan has been “Tomorrow’s conventional wisdom, today.” After this week’s Conservative backpedaling on income splitting, we may need to change it to “Today’s conventional wisdom, seven years ago.” Or we could just stick with “You read it here first.”
My first-ever blog post, Income Splitting Redux, argued that this tax policy “would benefit an affluent minority at the expense of important public programs and create a disincentive for women to engage in paid employment.” I made the same case in an opinion editorial published in The Ottawa Citizen seven years ago this month (Read more…)
Yesterday’s federal budget was a non-event. Indeed, the no-surprises budget was itself no surprise: the Conservatives have long done their fiscal policy dirty work in omnibus bills and other dark corners scattered throughout the legislature, Crown corporations and federal agencies. This leaves the media circus of budget day a very stereotypically Canadian mix of polite and boring. Canada’s is a slow-motion austerity and the current budget is a continuation.
To be sure, there were big-ticket announcements: a few bridges for cities, some internet for rural areas, internships for the young, factories for auto makers… The government, after all, still does (Read more…)
Recessions are always harder on young workers, but we are nearly five years out from the end of the last recession and there is still no recovery in sight for young workers.
Between October 2008 and January 2014, there was an increase of 100,000 unemployed young workers (15-29), so that there are now 540,000 unemployed young workers. Even more startling, over 350,000 young workers left the labour force over that period. It has been estimated that between 150,000 and 300,000 young workers participate in unpaid internships each year in Canada.
The paid internships announced in this budget (some of which (Read more…)
Here’s the first section of the budget summary and analysis I’ve prepared for CUPE.
The full version is on-line on CUPE’s website at http://cupe.ca/economics/missing-action-federal-budget-2014 together with CUPE’s press release at: http://cupe.ca/economics/federal-budget-2014-help-hurt-canadian
Missing In Action: Federal Budget 2014 CUPE Federal Budget 2014 Summary and Response
Conservatives ignore pressing economic needs with a Do-little budget
Using more of their doublespeak, the Harper government calls the 2014 federal budget “The Road to Balance: Creating Jobs and Opportunities.” Little could be further from the truth. Instead it’s a budget that glosses over the problems facing Canadian workers and continues to (Read more…)
Statement by 70 Canadian Economists Against Austerity
We, the undersigned, strongly urge the federal government to stop implementing fiscal austerity measures just to achieve its political goal of budgetary balance by 2015.
Since the mid-1990s, we have witnessed an era during which, under the influence of the same economists who had also advised the deregulation of the financial sector in the US, Canada, and other G20 countries, government policies brought the international economy to the edge of economic meltdown in 2008. After initially implementing a series of necessary fiscal stimulus measures to prevent the Canadian economy from slumping into depression, (Read more…)
This is quite interesting. If you read the short section from the recent IMF Staff Report on Canada under point 16, it is quite clear that the IMF Staff think that, with growth significantly under potential, the federal Budget should be brought back to balance more slowly than is now the plan. It strikes me as unusual that they flag up a difference of view with Department of Finance officials.
The staff report goes a bit further than the resulting IMF recommendation that expansionary fiscal policy be used if the economic situation should significantly deteriorate.
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.
On November 25th, I made the following submission to the House of Commons Standing Committee on Finance regarding Bill C-4, Economic Action Plan 2013 Act No. 2, on behalf of the Canadian Centre for Policy Alternatives.
1. Introduction and Context
Thank you for the invitation to appear before the Committee, as Members of Parliament review the second budget implementation bill for the budget of 2013.
It is a particular honour to appear as a witness, since this committee will only hear eight hours of testimony from witnesses — including one hour from the Finance Minister — over (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…)
Today, finance minister Jim Flaherty announced a three-year freeze on Employment Insurance (EI) premiums, ostensibly because a stronger job market has alleviated the need for additional premium revenue.
Under the current policy, employee premiums were rising each year by 5 cents per $100 earned. Flaherty had announced this policy on September 30, 2010, when 1.5 million Canadians were officially unemployed. Since then, that figure has edged down to 1.4 million, hardly a breathtaking reduction in unemployment.
The number of Canadians receiving regular EI benefits has declined more sharply, from 709,990 to 512,280 between September 2010 and June (Read more…)
The Queen City’s water debate has boiled over since I last blogged about it. City Council decided to build a new wastewater-treatment facility as a public-private partnership (P3), but a group of concerned citizens gathered 24,000 signatures to force a referendum on whether to “publicly finance, operate and maintain the new wastewater treatment plant for Regina.”
There has been much debate about the City’s anti-democratic tactics as well as the substance of the P3 proposal. The City Clerk overstepped Saskatchewan’s Cities Act in a desperate attempt to invalidate the petition. Since Council conceded that it would hold a referendum, (Read more…)