Statistics Canada is reporting a 0.3% increase in monthly GDP for July, on top of a (downward revised) 0.4% increase in June. This will no doubt spark Conservative politicians, and many economists, to declare that the shallow recession which Canada experienced in the first half of 2015 is already over.
As recently as last week, Finance Minister Joe Oliver was still denying the existence of the first-half recession. We can certainly debate the depth and longevity of that downturn, but there is no denying that real GDP fell for two consecutive quarters — economists’ traditional (and, until (Read more…)
There were surely more people (myself included) watching Statistics Canada’s GDP release at 8:30 am Tuesday, than any other release in recent history! This reflected the political significance of the possibility that an official recession would be confirmed by the numbers, right smack in the middle of an election campaign — all the more so given the Conservatives’ self-congratulatory rhetoric about their supposed “economic credentials.”
The data did indeed confirm a second consecutive quarter of real GDP contraction, hence a recession by the traditional definition. Of course, Conservatives and their friends immediately tried to discount the importance of (Read more…)
Canadian recession will go beyond first half of 2015
Louis-Philippe Rochon Associate Professor, Laurentian University Co-Editor, Review of Keynesian Economics
With news of economic turmoil in China and other emerging economies, repercussions for Canada will be quite “atrocious”. Expect the recession to continue beyond the second quarter of 2015.
This raises questions about the supposed recovery in the second half of 2015. Currently, Canada is in recession. Most pundits are predicting that it is a mild recession, and that Canada will fully recover in the third and fourth quarters of 2015. But those predictions are surely wrong and are based (Read more…)
The Bank of Canada today cut its benchmark interest rate two weeks ago to nearly record lows, now just 0.5%. In the face of an oil shock and other weakness, monetary policy is expected to do the heavy lifting of beating an economic funk. Today’s move reflects a poverty of economic policy from the ruling Conservatives and much of the political class.
Harper has been adamant that Canada’s downturn—now very likely a recession, about which his own Finance Minister remains in denial—is the result of global forces. There’s nothing that can be done to counteract a host (Read more…)
So, today the Bank of Canada lowered its prime lending rate to 0.5%. Supposedly, this signals that Canada is sliding into a recession.
Those of us who have been watching have long ago figured out that the minute the bubble burst on oil prices, Canada was going to slide into a recession. Arguably, if you aren’t in the oil patch, Canada has been in a recession for the last four or five years. What am I talking about here?
Jobs. Sure, the government has posted “new jobs growth” regularly, but let’s be honest with ourselves here. Most of the (Read more…)
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 my post from a month ago which set the odds at 60-40 of an “election recession.” I think I’d put the odds slightly higher today, in light of recent negative numbers on investment, exports, and building permits. On the other hand, it’s (Read more…)
Canada’s first-quarter GDP report was not just “atrocious,” as predicted by Stephen Poloz. It was downright negative: total real GDP shrank at an annualized rate of 0.6% (fastest pace of decline since the 2008-09 recession). Nominal GDP fell faster (annualized rate of 3%), as deflation took hold across the broader production economy (led, of course, by energy prices).
This sets the stage for a politically explosive second-quarter report, which will be released by Statistics Canada on September 1. The official definition of a recession is two consecutive quarters of negative real GDP growth. This (Read more…)
Is another recession on its way?
Associate Professor, Laurentian University
Co-editor, Review of Keynesian Economics
Canada’s economy shrank in the first quarter by a whopping 0.6%. Is this the beginning of a new recession?
Recessions of course are defined as two consecutive quarters of negative growth. Now we learn today that Canada’s economy shrank between January and March, the biggest decline in GDP since 2009, and the first contraction in the last four years. In fact, the economy contracted in all three months. It is even more dramatic when you think that Q4 2014 registered a (Read more…)
After years of being promised whenever the federal books got balanced, it looks like the next Harper budget is indeed going to double the contribution for Tax Free Savings Accounts. This policy has long been criticized – including by me – for being a policy that disproportionately provides advantages for the rich. Indeed, the number of people capable of putting aside over $10k in savings per year while working are fairly limited. Today in parliament, Finance Minister Joe Oliver has hit back against these criticisms, effectively pointing out that there is another big group of people who are already (Read more…)
There’s a bumper sticker line that could double for the provincial motto of Alberta: Dear God, Please Give Us One More Oil Boom and, This Time, We Promise We Won’t Piss It Away.Now, with another boom gone bust, Alberta has fallen back into a raging deficit and even the uber-Right Fraser Institute can’t bite its tongue although it can’t face facts either. Naturally, the neo-liberal Fraser Institute sees workers’ wages, especially government workers’ wages, as the culprit.
Ten years ago, before the boom started in earnest, Alberta spent $8,965 (in 2013 dollars) per person in program spending. (Read more…)
This guest blog post has been written by Louis-Philippe Rochon.
You can follow him on Twitter @Lprochon
Harper’s recent incarnation as an anti-terrorist crusader has caught many Canadians by surprise. Harper is spending considerable political energy beating the drums of war against terrorists, and introducing a far-reaching, and much condemned, bill aimed at restricting free speech, and increasing police powers. But could this move hide a more cynical purpose? Can there be an ulterior motive?
I think there is, and the reason is quite simple. It’s the economy. Seven years after the beginning of the crisis, and 4 years (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.
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.
click to enlarge
From Le Monde, a timely explanation of how disastrous neoliberalism continues to thrive despite an endless string of economic disasters and what it holds in store for you even as you continue to vote for those who practice it. Hint. Neoliberalism is class warfare and it’s being waged in our own Parliament against us.
Even neoliberal proponents recognize that it is a crisis-ridden system. In his popular book Why Globalisation Works, Financial Times columnist Martin Wolf writes: “Between 1945 and 1971, in what might be called the “age of financial repression”, there had been only thirty-eight (Read more…)
. . . → Read More: The Disaffected Lib: What Neoliberalism Has in Store For You
Labour market data in Canada is easily available by sex, age, and region. We spend a great deal of time talking about these factors. More recently Statistics Canada made labour market data available on CANSIM by landed immigrant status, going back to 2006. This factor is less often included in most labour market analysis, and too few know that it is even available.
But if you want to know how racialized workers or Indigenous workers (First Nations, Métis, and Inuit peoples) are doing in the labour force you basically have to rely on the census … oh, wait. And on (Read more…)
Here’s what really happened in the USA (and Canada?) over the past five or so years: good jobs disappeared and low-paying service jobs replaced them: Nearly half of the new jobs created since 2008 are low-wage jobs, while 80 percent of the jobs destroyed in the government-inflated real-estate bubble were high-wage or medium-wage jobs, according to a new report by the National Employment Law Project. In effect, almost 2 million well-paid middle-class jobs have been converted into low-wage blue-collar jobs since January 2008, through the five years of President Barack Obama’s economy, according to the report, titled “The (Read more…) . . . → Read More: CuriosityCat: The Incredible Shrinking Middle Class Jobs
Every year when International Women’s Day rolls by, I can’t help but reflect on power, how it’s shared, and how women use the power they have. This year, I am struck by women’s power to reduce inequality, and not just to help ourselves. Women are key to reducing income inequality.
It’s been dubbed the girl effect, more powerful than the Internet, science, the government, and even money.
Canada is actually a poster girl (sorry) for the truth that education and hard work can transform not just lives but societies.
Look around the world and you’ll see a tight relationship (Read more…)
(The following is slightly adapted from a short piece on page 3 in the new issue of Economy at Work, the quarterly publication I produce for CUPE, which also covers a lot of other relevant issues.)
It’s been a little over four years since Canada’s economy bottomed out in mid 2009. While we didn’t suffer as deep a recession as many other countries, growth has been slower than previous recoveries. Many are still waiting for the recovery to take hold.
Stimulus spending ensured that the downturn wasn’t as severe as it could have been and growth was stronger coming (Read more…)
Tonight is Friday and while I sit here occupying my time with readings, movies and Youtube, many of you are probably outdoors enjoying the beautiful weather with the company of friends. While outside, I hope you get a chance to look up at the amazing moon, while it isn’t a full moon tonight, it is still clear enough to give you a sense of awe at first glance.
A few weeks ago, major news outlets introduced many Canadians to the Hyperloop, a sky train that essentially utilizes magnets and air flow to travel fast, safe and comfortably. Thought of by (Read more…)
The IMF’s latest delivery of the World Economic outlook contains an interesting analysis of the current “non” recovery in terms of a divergence between fiscal and monetary policy, the first between restrictive and procyclical in nature and the second being accommodating and reinforcing a financial expansion. As argued here by the IMF economists who worked on this issue, the “great” divergence then is between a stagnating productive economy punished by austerity and a booming financial economy supported by quantitative easing and real low interest rates ? I’ve read here and there analysis of the divergence by a number of commentators, the (Read more…) and most interesting being this column by Gavin Davies in the FT,
and I’m wondering if this is what a “Financialized recovery” looks like.
I’ll be udpdating this post later with data on Canada, in the mean time here are 4 charts taken from the WEO report, . . . → Read More: The Progressive Economics Forum: Great Divergence or Financialized recovery ?
This anti-Thatcher song is “We Rule OK” by the working-class Oi! band The Last Resort. Some right-wingers try to claim this band as one of their own, but that is not accurate. The Last Resort are patriotic and pro-working class, not Conservatives or fascists. Here are the lyrics.
We Rule OK
The government policies are out of handThey ain’t got a clue how to run this landMargaret Thatcher the stupid old bitchTakes from the poor and gives to the rich
She thinks we can’t see her planTo kill the spirit of the working class manMake (Read more…)
In grade 9 or 10 French class, we had an assignment to write a page of text in French and accompany it with some graphics. I chose to write about the French Revolution, and for the picture, I cut out magazine photos of Margaret Thatcher, Ronald Reagan and Brian Mulroney and used them to represent the French aristocrats getting their heads cut off by guillotines. I learned much later that my teacher reported this to the vice-principal, concerned that I was disturbed and violent. She was way off base, and when the vice-principal contacted my parents, they told him so.
. . . → Read More: The Ranting Canadian: In grade 9 or 10 French class, we had an assignment to write a…