The arrogance of officialdom should be tempered and controlled, and assistance to foreign hands should be curtailed, lest Rome fall. – Cicero, 55 BC
Solving ‘Ring of Fire’ delays up to Ontario, Harper says
(CBC) Prime Minister Stephen Harper says his government is not getting involved in sorting out problems in Ontario’s mineral-rich region known as the Ring of Fire. … “The jurisdiction here is primarily provincial, and ultimately it is private companies themselves that have to make commercial decisions on the viability of projects.”
The Conservative government has made it a policy to make resource development a big part of its economic plan. The Ring of Fire is on the list of major projects frequently cited by Natural Resources Minister Joe Oliver. Rickford points out his government has invested $4.4 million to help First Nations prepare business plans for the resource activity that may come their way.
Harper Moves to Give Up More Canadian Sovereignty
How ratifying ICSID Convention will shift balance of judicial power to US government and foreign firms.
(The Tyee) International Centre for Settlement of Investment Disputes … is part of the World Bank. ICSID was created in the 1960s to allow foreign companies to sue countries, especially in the developing world. It is relevant to Canada since the Harper government recently committed Canada to ratify the ICSID Convention.
ICSID is a house for investor-state arbitration, the most powerful form of international adjudication in the world.
Investor-state arbitration allows foreign companies to bypass national courts and sue countries directly before special tribunals. The process is one-way; countries cannot bring claims against companies. Lately, investor-state awards against countries have run into billions of dollars.
Conservatives’ new surplus forecast: $3.7-billion for election year
Ottawa’s fall economic update shows the government is counting on a surplus of at least $3.7-billion in 2015-16, the year of the next federal election.
A mix of spending cuts, public sector wage control and the sale of government assets are behind the latest government numbers, which show a better bottom line than the $800-million 2015-16 surplus forecast in the March budget. There are also several conservative assumptions in the numbers, meaning the surplus could easily come in higher than currently planned.
The Conservative government’s fall economic update sets the stage for some big-ticket tax cuts ahead of the 2015 federal election. While private-sector economists aren’t hung up on the exact year the deficit is erased provided it keeps shrinking, there is a political motivation driving the Conservative government’s push to show an election-year surplus in the billions.
Conservative Convention To Debate ‘Less Progressive Tax System’
(HuffPost) A proposed amendment to the Conservatives’ policy book would “encourage the Conservative Party to move to a less progressive tax system by reducing the number of personal income tax brackets.”
The move has some progressive critics of the government worried.
“Further eroding the tax base would mean less money for new federal programs or for critical investments in infrastructure, health care, jobs training or clean energy research and development,” wrote [Sauvé Scholar alumnus] Jonathan Sas, research director at the left-leaning Broadbent Institute.
“Should the government make the tax system less progressive, one wonders what current programs Harper will put on the chopping block to cover for the lost revenue.”
But right-leaning economists dispute the idea that lower taxes at the top of the bracket increase inequality. They argue lower taxes spur economic growth, thereby helping lower-income people to find work and improve their standard of living.
That’s certainly the position of the Conservative Party of Canada. Much of the proposed tax policy amendment has already been accepted by the party’s national committee, with only the wording of the “less progressive tax system” clause to be debated.
Senate scandal a disruption to economic agenda, Flaherty says
Finance minister speaks after meeting with private-sector economists
The finance minister also told reporters the federal government is on track to balance its budget by 2015-16.
Earlier in the day, the Parliamentary Budget Office released its fall update, which predicted that Flaherty is on track to balance the federal books by 2015 as forecast, despite an expected slowdown in the economy.
While Flaherty said he was happy to see that the PBO agreed with his forecast, he said he noticed the budget watchdog did not take note of the savings he will get from the fact that “we are going to freeze the public service envelope again.”
… Conservatives gathering in Calgary on Thursday for the party’s annual convention will debate several policy resolutions including one that would see the federal government cap spending at $300 billion starting in 2016-17, the year after the budget is balanced, and for the following fours years.
Flaherty said he did not support the resolution because it’s impossible to anticipate emergency relief, the kind that was needed during the Alberta floods or following the train derailment in Lac Mégantic, Que.
Bank of Canada downgrades economy for next three years; leaves interest unchanged
The Bank of Canada is keeping its trendsetting interest rate at one per cent and signalling it will likely stay low longer than previously anticipated.
“In Canada, uncertain global and domestic economic conditions are delaying the pick-up in exports and business investment, leaving the level of economic activity lower than the Bank had been expecting,” Poloz stated Wednesday. His gloomy assessment came as the bank announced it is keeping its overnight rate, which influences commercial borrowing costs, at 1 per cent.
Ottawa says it is $7 billion ahead of pace, confident of balanced budget in 2015
(Canadian Press) The federal government is reporting it is $7 billion ahead of pace in completely eliminating its deficit, likely giving the Harper Conservatives a clear path to move ahead with promised tax savings measures in advance of the next election.
Finance Minister Jim Flaherty tabled documents Tuesday showing Ottawa’s deficit for the just completed 2012-13 fiscal year was $18.9 billion, not the $25.9 billion he had projected in the March budget.
“It will be less next year,” Flaherty said. “We have another 18 months to go until the budget in 2015 … but Canadians can be assured their federal government is on track fiscally and we will balance the budget in 2015.”
BlackBerry to be sold to group led by Fairfax Financial
Deal still subject to due diligence, regulatory approval
Stephen Poloz isn’t worried about a housing bubble. Should you be?
A year ago, the housing market was suffering from new mortgage rules brought in by the government to cool things off. Now, homebuyers appear to be rushing to beat higher mortgage rates, driving up sales and prices. … Some observers, such as the Organization for Economic Co-operation and Development, have ranked Canada’s housing market as among the world’s frothiest, but Canadian economists and the Bank of Canada don’t see a problem at this point.
Even a bad survey cannot blind us to income inequality
The replacement of income data from the census by the National Household Survey (NHS), released Wednesday by Statistics Canada, leaves us largely blind to what changes in the level and distribution of income took place in Canada between 2005 and 2010. We are thus unable to answer the key questions: “Who suffered the most from the impacts of the Great Recession?” and “Did inequality get better or worse?”
The change in methodology, and the large non-response rate of 26 per cent to the NHS, which likely resulted from below-average participation by lower-income groups, means that we cannot be sure if changes in the data between 2005 and 2010 are real, or the result of changes in the survey.
When the 2006 census data were released, Statistics Canada highlighted changes in median earnings and median family incomes over time. The big story then was that middle-class earnings had been stagnating for a long time, while middle-class family incomes had been boosted by working longer hours.
Yet the subject of change over time is completely avoided by the new NHS release on incomes. It even goes so far as to exclude data on low income that are clearly considered unreliable.
See comments from Economic Justice: 2011 NHS: A few notes on the Income release “… income more than most questions illustrates the problem with having a voluntary non-Census: Simply, a disproportionate non-response for a given income group skews the distribution and renders the data meaningless. Certain groups are less interested in, and less likely to, respond. And those groups happen to belong to the two extremes of the income distribution.”
The Tories Have Some Nerve Lecturing The World On Debt
Prime Minister Stephen Harper and Finance Minister Jim Flaherty went to Russia for the G20 conference this week, and decided that this would be a good time to pressure the world into cutting government spending and implementing austerity measures.
Flaherty announced a goal for his department — to reduce total federal debt to 25 per cent of GDP by 2021 — and encouraged his fellow global leaders “to aim in the same direction.” … Flaherty’s comments urging the world to keep reducing debt levels may seem like sound fiscal advice, but the one part of the world that is engaged in a serious debate about it — Europe — has suffered greatly at the hands of ill-timed austerity measures.
Chris Ragan: What is good for a business isn’t necessarily good for the country
(Globe & Mail) I’m not opposed to capitalism or profits. And as a shareholder I am always delighted when my investments do well. But policy makers have a special responsibility. They need to recognize and defend the genuine national interest, and develop a resistance to the seductive but usually self-interested arguments coming from business leaders.
Former budget officer to shadow PBO from the University of Ottawa
The Conservative government hasn’t heard the last of Kevin Page.
The first Parliamentary Budget Officer is planning to set up a shadow PBO just blocks away from the Peace Tower at the University of Ottawa.
The ambitious goal is to create an office modelled after the Institute for Fiscal Studies in the United Kingdom that would produce analytical reports on government spending in the same style as what Mr. Page delivered during his five years on Parliament Hill. (26 July)
Global slowdown to hit Canadian economy, stock markets in 2013, economists say
(Globe & Mail) A slowing housing market and uncertainty over the shape of a deal on the U.S. “fiscal cliff” are putting a lid on projections for economic growth and stock market gains in 2013.
Most forecasts see Canada’s GDP expanding by only 1.8 per cent or so in 2013, down from an estimated 2.0 per cent in 2012. (1 January 2013)
Canada’s exports crucial as sluggish growth continues: IMF … the International Monetary Fund cut its GDP forecast for Canada for next year to 1.8 per cent, while CIBC trimmed its estimate to 1.7 per cent. Both had previous forecasts of 2 per cent. (19 December 2012)
Ellen Brown: Oh Canada! Imposing Austerity on the World’s Most Resource-rich Country
Even the world’s most resource-rich country has now been caught in the debt trap. Its once-proud government programs are being subjected to radical budget cuts—cuts that could have been avoided if the government had not quit borrowing from its own central bank in the 1970s.
(Web of Debt.com) Between 1939 and 1974, the government actually did borrow from its own central bank. That made its debt effectively interest-free, since the government owned the bank and got the benefit of the interest. According to figures supplied by Jack Biddell, a former government accountant, the federal debt remained very low, relatively flat, and quite sustainable during those years. (See his chart below.) The government successfully funded major public projects simply on the credit of the nation, including the production of aircraft during and after World War II, education benefits for returning soldiers, family allowances, old age pensions, the Trans-Canada Highway, the St. Lawrence Seaway project, and universal health care for all Canadians. The debt shot up only after 1974. That was when the Basel Committee was established by the central-bank Governors of the Group of Ten countries of the Bank for International Settlements (BIS), which included Canada.
Full Pundit: Everyone hates the Economic Action Plan ads
The Sun Media editorialists decide to call up the toll-free number featured in the government’s much-reviled Economic Action Plan advertisements. Result? “A polite receptionist referred us to the ministry of finance website Budget.gc.ca, explaining she didn’t have a direct phone line for the EAP, nor was she aware of the Actionplan.gc.ca website, which we told her about.”
Economic Action Plan Wrong Approach To Fight Unemployment, Report Says
The report, titled Trends, Peaks, and Troughs: National and Regional Employment Cycles in Canada, says national one-size-fits-all strategies like the Economic Action Plan don’t work, and it emphasizes that “action plans” must be targeted at a region’s specific issues.
“A nationally applied policy response will be appropriate for some regions of the country but inappropriate for others; it will be too weak a response in some areas while being too strong in others; and it will be applied too late in some regions and too soon in others,” write the authors, Ron Kneebone and Margarita Gres.
But the problem with a targeted action plan, according to the report, is that the time and political challenges it would involve raises the question of whether any such plan —tailored to specific regions in specific times — could be implemented at all.
Visa delays hurt Canada’s international students and the economy
Foreign service worker strike felt by McGill University
(CBC) “[International students are] really important to the economy and to Canada’s international landscape as a whole,” said Jonathan Champagne, national director of the Canadian Alliance of Student Associations.
According to Champagne, international students contributed $8 billion to the Canadian economy in 2010.
He’s concerned the delays will hurt Canada’s reputation.
“Across the country, Canada is world renowned for attracting international talent,” Champagne said. “Now students from around the world are potentially … having to go look at other places to study such as the UK or Australia.”
The job action by foreign service workers could also have consequences for university admissions.
If hundreds or even thousands of students defer their school year, the university will be forced to make special accommodations.
(Broadbent Institute) Upon being appointed Minister of the newly renamed “Employment and Social Development” (formerly HRSDC), Mr. Kenney tweeted his view on the Canadian labour market:
I will work hard to end the paradox of too many people without jobs in an economy that has too many jobs without people.
Coincidentally, perhaps, the most recent Statistics Canada numbers on job vacancies came out this morning. Compared to a year ago, there were 20,000 fewer job vacancies in Canada this April, and only 1.6% of all jobs were unfilled at the end of the month. Even in booming Alberta the ratio of unfilled jobs to total labour demand fell from 3.5% last April to 2.5% this April.
Using the official measure of unemployment, there were 6.1 unemployed persons in Canada for every job vacancy. As Sam Boshra points out in a recent post, Statistics Canada’s official unemployment measure leaves a significant amount of un(der) employment uncounted. Digging into the data, he finds that even Statistics Canada’s popular R8 measure is not as comprehensive as the U.S. measure of labour underutilization, U6.
U6 counts all persons marginally attached to the labour force, not just those termed “discouraged workers”. Marginally attached workers would like a job, but aren’t looking. They may be busy with unpaid work, going back to school to improve their prospects, or unable to find a job that can accommodate an illness / disability.
Sam calculates a U6 equivalent for Canada in 2012 at 14.2%, nearly double the official unemployment rate of 7.2%. That indicates a great deal of softness in the current Canadian labour market.
Listen to Poloz: Debt is not a dirty word
(Globe & Mail) The world is drowning in debt, the Doomsday economists tell us. Public debt, personal debt and corporate debt is bound to sink us and to plunge our children into a future they will never be able to swim out of.
For right-of-centre politicians, debt, and accompanying taxes, is the filthiest dirty word, representing the most vile of social evils infecting the civilized world.
Canada’s central banker, the Bank of Canada’s new Governor Stephen Poloz, is most influential in determining how much debt is good and how much is bad. The Governor made his first policy statement on Wednesday, keeping interest rates low, signalling that he still encourages borrowing.
In his only previous public statement, Governor Poloz said that Canada’s relatively good economic fortune was largely thanks to households that took on personal debt. In the same speech he nudged businesses to get off their assets and use them to build and create, and do their part to stimulate the economy.
And with this, his first policy statement, it seems that Governor Poloz is indicating that not all debt is bad. This is also a reality that investors should bear witness to if they want to see their assets grow. Video of Power & Politics interview
Stephen Poloz’s debut: What the analysts say
The Bank of Canada pledged on Wednesday in new governor Stephen Poloz’s debut to keep its benchmark interest rate on hold as long as there is economic slack, weak inflation and households are managing debt carefully, but it also made it clear its next rate move will likely be a hike. Here’s what the analysts say:
Diplomats’ strike causing visa backlog that is hurting tourism business and education
The Conservative government is facing intense pressure to settle a two-month-old strike by diplomats that has created a visa backlog that is battering the tourism and education industries.
Highly targeted and rotating walkouts at embassies and consulates with some of the largest visa processing operations have caused a backlog that could have tourists waiting up to 90 days for visas
Canada’s universities and colleges are also feeling squeezed because international students, particularly those from China, India and Brazil, are affected. Last year nearly 105,000 foreign students came to Canada and a study done for the Department of Foreign Affairs showed they spent $7.7 billion during their stays and created 81,000 jobs.
Christine Tausig Ford, senior vice-president of the Association of University and Colleges of Canada, said students have already withdrawn from language programs and other preparatory studies because they can’t get visas on time.
Stephen Poloz, Bank Of Canada Governor: Debt-Loving Canadians Saved The Economy
Bank of Canada Governor Stephen Poloz says Canadian consumers did their part for the economy by borrowing the country through the worst recession since the Great Depression and now it is the turn of businesses to show some confidence and start spending.
In his first major speech since taking over from former governor Mark Carney earlier this month, Poloz preached the virtues of “stability and patience,” noting the central bank’s long-standing target of low, stable inflation remains “sacrosanct.”
Paul Krugman: Canadian Economy Vulnerable To ‘Shock’ Due To Debt Levels, House Prices
(HuffPost) Renowned economist Paul Krugman is worried about Canada’s economy.
The Nobel Prize winner and New York Times columnist wrote in a blog post Saturday that Canada “ought to be quite vulnerable to a big deleveraging shock despite its boring banks.”
By “ought,” he means he’s not quite sure. But he sees warning signs in the fact that a very large spread has developed between U.S. and Canadian house prices, and Canadian household debt levels are reaching levels seen in the U.S. just before that country’s own “deleveraging shock.”
Stephen Poloz officially takes reins at the Bank of Canada
Stephen Poloz is getting plenty of advice on his first day as head of the Bank of Canada, but not from the prime minister or the finance minister — publicly at least.
The 57-year-old governor was officially welcomed to the post by Prime Minister Stephen Harper at his Langevin Block office Monday, but was given no suggestion as to what the government expects of him other than work toward “growth and long-term prosperity for the Canadian people.”
Thomas Homer-Dixon: How the oil sands industry is distorting Canada’s economy
(Globe & Mail) By 2030, Canada’s output from the oil sands will reach about five million barrels a day, more than twice today’s output. Yet, by 2030, chances are also good that the world will have placed a price on carbon emissions to spur energy innovation and wean humanity off carbon-based fuels. By then, climate change’s impact on global food security will have become starkly obvious. Already, heat waves and droughts in major grain-producing regions have caused food-price shocks and political unrest around the world.
Konrad Yakabuski: Why Canada needs to develop the oil sands
… the government would be foolish not to encourage such development. It is a source of valuable foreign investment that contributes to the country’s economic prosperity. The oil sands provide employment for thousands of highly skilled engineers and tradespeople, precisely the kind of workers Canada needs more of to ensure the survival of middle-class lifestyles.
What’s more, the Conference Board of Canada has demonstrated the extent to which the wealth generated by the oil sands flows across the country through interprovincial trade. That would accelerate with the proposed reversal of Enbridge’s Line 9 and the construction of TransCanada’s proposed Energy East pipeline, which would send Alberta oil eastward, fulfilling the long-elusive goal of a national energy strategy.
Unlike many other economists (including the Economist and BCA) Canada’s Flaherty Sees No Sign of Canadian Housing Bubble
(WSJ) With Canadian housing cooling, some prominent U.S. hedge fund investors say Canadian government policy has created a bubble in the country’s housing market that’s ripe for some short-selling.
Mr. Flaherty told senators Canada’s real-estate market is softening, especially in the condominium market – which he cited last year as reason enough to tighten the country’s mortgage-financing rules – but says that isn’t a bad thing.
Canadian Housing Bubble ‘Set To Burst,’ The Economist Says
(Via HuffPost) Canada’s housing market is “especially vulnerable” to a major correction, The Economist says in its latest roundup of global real estate.
The magazine’s dire prediction comes as Canada’s mortgage brokers’ association is warning that the recent slowdown in home sales will continue and lead to large-scale job losses — though some parts of the country will continue to see growth in housing and related employment.
“A large bubble now looks set to burst,” The Economist predicts in its property markets report.
[Editor's note: See discussion of housing bubble on Wednesday Night #1627 with Peter Berezin]
Job grant program advertised by Harper government doesn’t yet exist
The trouble is, the freshly announced program is at present little more than a concept that has yet to be negotiated with provincial governments, and requires buy-in from employers as well.
Much as we admire and like Stephen Poloz, Andrew Coyne raises very valid points about the selection process
Andrew Coyne: Is Stephen Poloz hiring another sign Bank of Canada is losing its independence?
… in a mature democracy we would have the chance to quiz one or both of [the candidates] in advance, perhaps through public confirmation hearings.
But this is Canada, so instead it is left to whatever whims and urges haunt the Finance Minister’s mind. This is a particularly troubling development. Traditionally, and officially, the governor is chosen by the board of directors of the Bank, whose selection is then submitted for the Finance Minister’s approval. Of late, and most blatantly in the current round, the process has been telescoped, the choice effectively reduced to the minister’s personal prerogative.
The impression, if not the reality, is of a Bank being slowly absorbed into the Finance department, a process that arguably began with the failure to reappoint — effectively, the firing — of John Crow, and continued with the appointment of David Dodge, Paul Martin’s deputy at Finance, and of Mark Carney, also out of Finance. Bank of Canada pick Stephen Poloz ‘sends a fuzzy signal’: Moody’s Analytics — ‘The signal sent to markets is not clear, but suggests the government wants to exercise more control over policymaking,’ Mark Hopkins, a senior economist with Moody’s Analytics, says
Stephen Poloz: Man with a mission
(Globe & Mail) The next governor of the Bank of Canada didn’t say a lot, but he said enough to deduce that his tenure promises a change in focus when he takes over from Mark Carney next month.
At the press conference Finance Minister Jim Flaherty called to introduce his choice for governor, Stephen Poloz, the chief executive officer of Export Development Canada, twice made reference to his recent experience in the trenches with the country’s business managers.
Former Wednesday Nighter Stephen Poloz named next Bank of Canada governor
Many analysts had expected Tiff Macklem would succeed current chief Mark Carney
(CBC) Stephen Poloz, the head of Export Development Canada, has been named the next governor of the Bank of Canada.
Minister of Finance Jim Flaherty made the announcement today at a press conference in Ottawa. …
Poloz has previous experience at the Bank of Canada — he joined the central bank in 1981 and worked there for 14 years, a statement released by the bank says.
John Ivison: New Bank of Canada Governor’s most important attribute is understanding the Harper agenda
… Mr. Poloz’s most important attribute, at least as far as Stephen Harper and Mr. Flaherty are concerned, is that he understands where the government is coming from and, crucially, where it wants to go to.
This is important because the new Governor will enter the job with the tacit, if not explicit, understanding that monetary policy will have to dovetail with a fiscal track that has already been set, if we are not to have an economic train-wreck.
Nine things about new Bank of Canada chief Poloz
Budget bill gives Harper Cabinet new powers over CBC
(Hill Times) The federal government’s latest budget bill would give Prime Minister Stephen Harper and his Cabinet the power to dictate collective bargaining and terms for other salaries and working conditions at the CBC and three other cultural or scientific Crown corporations
Harper tightening the reins on CBC, Via Rail and Canada Post
(Globe & Mail) The new hard line on Crown corporations “is part of a broader issue, which is aligning the public-service compensation and benefits to private-sector norms and expectations,” Treasury Board President Tony Clement told The Globe and Mail.
The Conservative government’s stand sets the stage for a looming confrontation with public-sector unions – at both Crown corporations and core departments – that could peak at the time of the next federal election in 2015.
Fraser Institute: Taxes consume larger share of family budgets than basic necessities of life
Canadian families are spending more money on taxes than on food, clothing, and shelter combined, reveals a new report from the Fraser Institute, an independent, non-partisan Canadian think-tank.
The Canadian Consumer Tax Index calculates that in 2012, 42.7 per cent of an average family’s income went towards taxes (including all types of taxes imposed by federal, provincial, and local governments) while 36.9 per cent was spent on food, clothing, and shelter combined.
“Taxes are far and away the largest and fastest-increasing expense in the average household budget,” said Charles Lammam, Fraser Institute associate director and co-author of the Canadian Consumer Tax Index.
“In fact, the tax bill for the average family has grown a whopping 1,787 per cent since 1961.”
This 1,787 per cent growth has outpaced increases in the cost of shelter (1,290 per cent), clothing (607 per cent), and food (578 per cent). It has also outpaced the growth in Statistics Canada’s Consumer Price Index (675 per cent), which measures the average price that consumers pay for goods and services including shelter, food, clothing, transportation, health and personal care, education, and many others.
Bank Of Canada Downgrades Economic Outlook, Keeps Rates Steady
The Bank of Canada cut its 2013 growth forecast Wednesday and said it now thinks the economy won’t get back up to full speed until mid-2015 — about six months later than predicted earlier this year.
The central bank’s announcement suggests it will need to keep interest rates in Canada at historically low levels well into 2014, if not beyond.
The Agenda with Steve Paikin: Sean Silcoff: RBC Outsourcing Controversy
The Royal Bank of Canada is facing a major backlash for outsourcing jobs to foreign workers, putting the federal government’s Temporary Foreign Worker program in the spotlight. In our Story of the Week, The Globe and Mail’s business writer Sean Silcoff explains what this program means for Canadian workers.
RBC chief ‘listening’ after foreign worker controversy
Harper will ‘bringing forward reforms’ to temporary foreign worker program
(CBC) The head of the Royal Bank of Canada says the company should have been “more sensitive” to workers affected by their outsourcing arrangements
Temporary Foreign Workers: 18 Of 50 Largest Canadian Employers Using Them
(HuffPost) … While RBC has now admitted their move was insensitive, the controversy obscures the fact that thousands of Canadian employers use temporary foreign workers.
And while the program is ostensibly designed to help employers fill positions when no Canadians can be found to do the job, the use of this program at companies like Tim Hortons and Denny’s suggests employers are using it much more broadly than originally intended. Critics of the TFW program say it’s been made all the worse by two new elements of the program: The ability of employers to pay TFWs 15 per cent below market rates; and the creation of a new “fast-track” process for approving some of the TFW applications.
Gaps in Canada’s workforce pose a threat to international trade growth
Forum for International Trade Training (FITT) today releases an innovative analysis of workforce barriers to Canada’s success in international trade and offers a national strategy for overcoming those barriers.
(Mercer Canada) Canada is beginning to experience gaps between what global commerce requires for success and what the country’s workforce can supply, according to the study International Trade Workforce Strategy – Report of the FITT Human Resources International Trade Sector Study spearheaded by FITT. One gap is a shortfall of the number of people in many occupations that are core to international trade. The other is a gap between the demand for, and availability of, new competencies that are critical to successful global trade. The report, supported by Human Resources and Skills Development Canada and created in collaboration with Mercer, a global leader in HR consulting, also recommends specific actions for Canadian business leaders, the educational community, and government policymakers to take to close these gaps. The full report is available at fitt.ca/en/strategy.
Massive data leak exposes offshore financial secrets
(CBC) Worldwide, the Tax Justice Network estimates that between $21 trillion and $32 trillion of private wealth is held offshore, out of reach of national treasuries (a more conservative estimate by the Boston Consulting Group puts the figure at $8 trillion). The international organization says that translates to up to $280 billion a year in lost taxes — twice what the world’s richest countries spend combined on foreign aid.
Canada’s share of that, assuming it’s the same as the country’s proportion of global GDP, would be about $7 billion, or a quarter of the federal government’s projected 2012 budget deficit.
Hundreds of Canadians named in tax-haven records shared exclusively in Canada with CBC News
In last month’s federal budget, Finance Minister Jim Flaherty promised to set up a system for tipsters to report offshore tax cheats. Informants would get 15 per cent of the recouped tax in cases where the Canada Revenue Agency recovers more than $100,000. The government estimates it could recover hundreds of million in revenue. But the Tories also cut $47 million a year from the budget of the Canada Revenue Agency.
Conrad Black: Raising Canada up, while beating inflation down
Our own budget will be balanced if we tax optional spending adequately to produce the necessary revenue — particularly if savings and investment are encouraged by realistic interest rates and minimal capital-gains taxes. While I sympathize completely with the motives for it, I think it was a mistake for this government to lower the GST-HST almost across the board rather than just on some categories of spending, while not cutting personal and corporate income taxes. And he offers a number of other good ideas, but it’s hard to believe anyone in THIS government will listen.
Canadian politics just got turned upside down
Fundamental to our understanding of democratic politics across the developed world is that conservative parties stand for relatively low levels of government spending, while those on the left of the political spectrum are prone to higher spending. A new study, released yesterday by the Montreal Economic Institute (MEI), blows a hole through that conventional wisdom
“When you look at the behaviours of various parties over long periods of time in different governments, the pattern is that there is no pattern,” said MEI’s president and chief executive officer, Michel Kelly-Gagnon in an interview with me yesterday. “The parties that are supposed to be more in favour of big government end up spending less than we might expect. And the parties that are supposed to be fiscally conservative sometimes end up being spendthrifts.”
Andrew Coyne on decoding the budget: What Jim Flaherty didn’t want you to know
(National Post) … It isn’t just the many significant details it omits — for example, the content of the government’s spending plans. It’s that what is included is so maddeningly misleading, not to say vexingly vague.
The sheer emptiness of the budget, indeed, led many reporters to assume there was nothing in it. We should have known. This government has a peculiar gift for understatement. When it wants to claim credit for something, it is careful to call attention to it in the best way it knows how: by leaking it to a member of the press. But when it has something controversial to announce, it whispers it in Swahili at the bottom of a well.
Here, then, are some of the subtler cryptograms in the budget, together with their probable meanings:
Bob Rae does not like the budget
Why I’m Opposing Canada’s Economic (In)Action Plan
We are facing many challenges, with high youth unemployment, hundreds of thousands of unfilled jobs placing a serious strain on economic growth. In yesterday’s budget there was no new or increased funding for skills training, infrastructure projects or Aboriginal education, an area that is particularly important for Canada’s future prosperity.
On job creation, despite asserting that fixing labour shortages is the most important issue facing the country, this Conservative government did nothing to address the issue. They simply repackaged existing programs under new names, as is the case with the “Jobs Grant.” This program will not be up and running for another five years, and will require cash-strapped provinces to come up with funding they don’t have to help pay for the program. At the same time, the budget freezes skills training funding at 2007 pre-recession levels, which when factoring in inflation, actually represents a 10% cut to training dollars for provinces and territories. The skills shortage is a real problem and the government needs to step up with a real investment.
Budget 2013 will hurt Canada’s already weakened economy, and the EI premium hikes contained therein will cost Canadians. The job market still hasn’t recovered from the recession, and with 220,000 more unemployed Canadians than before the recession hit, it’s even more difficult for young Canadians to find a job. But all the government is offering up is a $19 million advertising campaign, an initiative that will translate into zero new jobs or improved skills for our youth.
And neither do a lot of others … Canada Budget 2013 Reaction: Politicians, Interest Groups Sound Off
Federal Budget 2013: Government Stays The Course On Cuts, 2015 Balanced Budget
(HuffPost/Canadian Press) Stephen Harper’s finance minister is banking that all the torque in his eighth federal budget, delivered Thursday, will propel the Canadian economy forward in a burst sometime next year.
It’s all geared to a fall 2015 election date, when Prime Minister Stephen Harper hopes to woo Canadian voters with the first balanced federal budget since 2008. …
Total spending, including debt-servicing charges, will rise to $282.6 billion this year, up less than one per cent on the 2012-13 spending envelope of $280.1 billion. That’s effectively a cut after inflation and population growth are factored in.
… The centrepiece of the document is a revamped plan for skills training to better align the Canadian workforce with employer needs. … The plan won’t kick in until April 2014 and is contingent on negotiations with the provinces, who are expected to foot the bill for a third of each $15,000 training grant, with Ottawa and the employer also chipping in $5,000 each. (CBC) Highlights from the 2013 federal budget — Deficit grows in the short-term but on track to balanced budget, says Flaherty
Federal budget signals major public service workforce overhaul on the way
(Ottawa Citizen) Finance Minister Jim Flaherty signalled plans in his budget Thursday for a major review of the way the federal government pays and manages its $43-billion-a-year workforce to make overall compensation “affordable” and bring it more in line with the private sector.
The review will examine policies, practices and laws governing the management of the public service, including pensioner benefits and the way it negotiates with the 18 unions representing Canada’s bureaucrats. …
Canada’s economic ranking improves, but only because of crises in other countries
Norway and Australia are the top economic performers with both countries scoring “A” grades
The Conference Board of Canada says the country has retained its “B” grade and improved its ranking from 11th since its last report card in pre-recession 2008, adding that part of the reason the surge is because some European countries going through tough times.
The board says with the exception of inflation and employment growth, Canada ranks far below the highest-ranked countries on other economic indicators such as productivity and attracting global investment.
Federal budget to be delivered March 21, same day budget officer takes government to court
Flaherty, who announced the budget date Thursday in Ottawa, has indicated the budget [aka Economic Action Plan 2013] will project modest growth in the short-term, close tax loopholes and look to secure better results for the government’s billions of dollars in job-training funding.
(Hill Times) Say goodbye to effective Parliamentary Budget Office, feds about to destroy it, says outgoing PBO Page
Feds name Parliamentary Librarian Sonia L’Heureux as interim PBO, and Kevin Page says the PBO will soon be an institution of the past.
Canada’s economic indicators point to ‘weak growth’: OECD
(RCI) Canada’s leading economic indicators suggest continued weak growth according to the Organisation for Economic Co-operation and Development (OECD). OECD press release – here
Why Canada’s economy is in trouble
(Sober Look) Analysts are beginning to raise concerns about Canada’s near-term economic growth. The nation’s central bank is holding the overnight rate at 1% and will likely maintain this level for some time to come. … A number of somewhat related factors are driving this weakness in Canada’s growth. Here are some of them:
A disgrace and an insult to Parliament’: Ex-Finance officials launch scathing critique of Tory budget secrecy
(National Post) In a biting critique of the government to be published in Inside Policy magazine, former bureaucrats Scott Clark and Peter DeVries outline a troubling pattern of actions taken by the governing Conservatives since they took office several years ago.
They blast Prime Minister Stephen Harper’s government for keeping internal budget records secret, for designing a system that means MPs don’t know what they are approving when they vote on billions in spending, for engaging in a useless war with the parliamentary budget officer, and for acting disgracefully through its omnibus budget bills.
Canada moving to better economic mix: Carney
(Toronto Star) Bank of Canada governor Mark Carney says Canada’s economy is in the midst of what he believes will be a successful transition from over-dependence on borrowing to production that will include a softer housing market but stronger exports.