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The Progressive Economics Forum: Flaherty’s Funny Math with the EI Surplus

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.

(Read more…)

The Progressive Economics Forum: How Harper can avoid turning a Budget Implementation Bill into a Duffy budget bill

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…)

The Progressive Economics Forum: Canada’s (not so incredible) shrinking federal government

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…)

The Progressive Economics Forum: EI Premium Freeze Leaves Unemployed Canadians in the Cold

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 Progressive Economics Forum: P3 or No Federal Funding: A Third Option for Regina Wastewater?

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…)

The Progressive Economics Forum: What’s a Point of Corporate Tax Worth?

Tom Mulcair’s recently reiterated unwillingness to raise personal tax rates puts the spotlight on corporate taxes. But how much revenue is at stake?

Three and a half years ago, I posted a fiscal breakdown of Harper’s corporate tax cuts and how much revenue could be retained by stopping or reversing them. These figures, based on Budget 2009 projections, suggested that a point of general corporate tax would be worth between $1.9 billion and $2 billion today.

Budget 2009 envisioned a sharp, V-shaped recovery balancing the federal books in the current fiscal year (2013-14). Obviously, the economy, corporate profits and (Read more…)

The Progressive Economics Forum: Regina Hosed by P3 Waste Water

Regina City Council has voted to proceed with a 30-year public-private partnership (P3) in which a private company would design, build, finance, operate and maintain the city’s new waste water treatment facility.

The municipal administration’s rationale has been that, although a P3 will be more expensive than traditional public financing, it is required to access federal money from the P3 Canada Fund.

However, Hugh Mackenzie’s recent analysis concludes that the additional costs of a P3 would actually exceed the full value of the federal grant. As my dad noted with the following letter in Saturday’s Regina Leader-Post, that means (Read more…)

The Canadian Progressive: Federal Court dismisses former PBO Kevin Page’s application

By: Obert Madondo | The Canadian Progressive: The Federal Court of Canada has dismissed a request by former Parliamentary Budget Officer, Kevin Page, to clarify the office’s mandate. In his application, Page had also sought ”judgment affirming he has the jurisdiction to seek the information” relating to the $5.2 billion in fiscal savings outlined in [...]

The post Federal Court dismisses former PBO Kevin Page’s application appeared first on The Canadian Progressive.

The Progressive Economics Forum: Austerity through infrastructure Cuts: Budget 2013

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

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The Progressive Economics Forum: Budget 2013: Time for a real action plan, not another ad campaign

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

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The Progressive Economics Forum: The Alternative Federal Budget 2013 – Doing Better, Together

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

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The Canadian Progressive: Aagh, Harper Conservatives Nuked Democratic NDP Motion On Role Of PBO

By Obert Madondo | The Canadian Progressive, Feb. 14, 2013: Showing their burgeoning disdain for accountability, transparency, financial oversight and the independence of federal watchdogs, the Harper Conservatives earlier this week nuked a progressive NDP motion on the role of the Parliamentary Budget Office (PBO). The motion, tabled by the Official Opposition’s Finance critic, Peggy Nash, sought to extend the mandate READ MORE

Canadian ProgressiveCanadian Progressive: First Nation: Bill C-45 allows tar sands industry to destroy vital waterways and treaty rights

by Athabasca Chipewyan First Nation Today the conservative government tabled a new version of Bill C-45, a 443-page bill, to implement its federal budget. The Athabasca Chipewyan First Nation (ACFN) was taken aback by the proposed amendments stating they are indicative of the further erosion of Treaty rights in Canada. ACFN leadership is particularly worried about [...]

Canadian Progressive: Radicals for our coast: New Democrat MPs and community reps (VIDEO)

A must-watch video on the ongoing fight against Enbridge’s cursed pipeline. The following New Democrat MPs visit Terrace, Kitimat and Kitamaat, British Columbia, and discuss the energy giant’s proposed Northern Gateway Pipeline: Deputy Leader and Environment critic, Megan Leslie (Halifax); House Leader, Nathan Cullen (Skeena-Bulkley Valley); Public Safety & LGBTT critic, Randall Garrison (Esquimalt–Juan de Fuca); Western Economic Diversification Canada & Deputy Fisheries critic, Fin Donnelly (New Westminster—Coquitlam); and Alex Atamanenko (BC Southern Interior). RELATED: Wanted: “Radicals” Against Enbridge’s Northern Gateway Pipeline

The Progressive Economics Forum: GDP: Austerity Bites

Canada’s economy grew by half a percent in the first quarter of 2012, staying on pace for unimpressive annual growth of two percent.

The good news is that business investment was strong, at least on a seasonally-adjusted basis. (As usually happens in the first quarter, the actual dollar value of business investment actually decreased.)

Unfortunately, the other major components of GDP weakened. Government spending on goods and services fell by 0.4%, its largest quarterly decline since 1997. Fiscal austerity is starting to take a bite out of Canadian economic growth.

Consumer spending grew by an anaemic 0.2%,

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The Progressive Economics Forum: Energy McCarthyism 2: Hoback Attack

Saskatchewan conservatives are getting cranky. At last night’s Finance Committee meeting on the omnibus bill, MP Randy Hoback exposed me as being a New Democrat who writes “garbage” (as this blog’s readers already know).

Full video of the meeting is available here, with my presentation starting two hours in.

The Progressive Economics Forum: Tightening the Screws on the Unemployed

The significant changes to the Employment Insurance (EI) program which are to be quickly implemented through Budget 2012 with very little consultation have not received enough critical attention.

First, a word on what is not in the Budget. It is disappointing, to say the least, that the government is failing to respond to the fact that less than 40% of unemployed Canadians are now qualifying for EI, well below the already low pre-recession rate. And, for all of the talk about skills shortages in Canada, it is notable that there is NO increased investment at all in EI supported

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Art Threat: One Month Later – How the 2012 Federal Budget Impacts the Arts

With the release of the 2012 federal budget one month behind us you’ve likely captured the gist of the budget – cuts to the CBC and none to the Canada Council for the Arts. Here’s a full breakdown of how the cuts (and non cuts) affect arts and culture in Canada over the next three years, including an amalgamation of quotes and information from press releases and articles from cultural organizations over the last month. While some people indicated with a mix of relief and skepticism that the cuts were not as deep as they had anticipated, others called the

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The Progressive Economics Forum: The Federal Budget and Women

(The following is from my colleague Angella McEwen.)

The only mention of either men or women in the 400-odd page 2012 Budget Implementation Bill is with regards to the appropriate use of donated sperm and ova.

In analysis and discussions of the proposed omnibus bill, differential impacts for women, Aboriginals, racialized persons, newcomers, and *the poor* are frequently left out. It’s hard to blame anyone, there’s a lot to talk about in this whopper.

Still, it’s important to take a moment to ask not only what are the costs and benefits, but who benefits, and who pays the costs.

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The Progressive Economics Forum: PBO Strikes Again

I wanted to tip my hat to the hard working folks at the PBO for a particularly revealing Economic and Fiscal Outlook that was published today. While the PBO has more than once eaten my lunch on various issue they’ve done a superb job of looking at Canada’s economic and fiscal position.

I’d point readers of this blog particularly to page 2 where the impact of budget cutbacks, both federally and provincially, are aggregated, not only in their real GDP impact, but also in their employment impact. That is to say that when governments cut spending, jobs are lost as

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The Progressive Economics Forum: Katimavik

I am sure readers of this blog are not unsympathetic to the case for a government supported program which, at a time of very high youth unemployment, annually enables some 1500 young people to volunteer to work in not for profit sponsored community development projects across the country. Participants- aged 17 to 21 – are usually engaged in two projects outside their home community over six months.

The government claims that the program is too costly. But Katimavik’s numbers show that their $16 Million annual budget generates some $14 Million per year in community benefits, and that is before taking

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The Progressive Economics Forum: Federal Job Cuts…the Real Numbers

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



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The Progressive Economics Forum: The Federal Budget Impact on Jobs

The Budget estimate that a new round of cuts will eliminate up to 19,200 jobs has been widely cited as fact, but it cannot be taken at face value as argued in an analysis released by the Public Service Alliance of Canada. An extract follows:


The government claims the $5.2 billion in spending cuts will mean the loss of 19,200 public service jobs. It says 7,000 of those will be dealt with through attrition. But how does the government know how many people will actually retire? Given the high household debt levels and uncertainty felt by most public

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The Progressive Economics Forum: OAS, the Budget and the Baby Boomers

The Budget justifies raising the age of eligibility for OAS and GIS on the grounds that the long-term fiscal sustainability of the program is being undermined by rising life expectancy.

No estimates of savings are provided. They will be very modest.

Given that average life expectancy at age 65 is 20 years, raising the eligibility age by two years could only save a maximum of 10% of projected spending on future retirees if implemented immediately.

However, the government proposes to phase in the increased eligibility age between 2023 and 2029 which will hugely reduce any savings relative to current projections.

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The Progressive Economics Forum: Budget 2012: Pennywise But Pound Foolish

Marc, Andrew and Toby have posted substantial analyses of yesterday’s federal budget, but here are my two cents about its economic forecasts.

Table 2.1 envisions a 7.5% unemployment rate this year, slightly above last year’s rate of 7.4%. That seems like an admission of failure from a budget ostensibly about job creation.

This table also projects real GDP growth rates of 2.3% in Canada versus 2.6% in the U.S. over the next five years. The higher American figure may well be realistic given that the U.S. economy is starting to bounce back from

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