Canada economy 2021-

Written by  //  November 3, 2022  //  Canada, Economy  //  No comments

Andrew Coyne The Liberals’ new era of fiscal restraint that never seems to come (paywall)
I keep reading about this new era of fiscal discipline and sober responsibility that is supposedly dawning in the federal government – why, didn’t the Finance Minister go so far as to tell her fellow ministers they would have to find 25 cents in cuts to existing spending for every dollar in new spending they proposed? – but it never seems to arrive.
Last year’s budget, which some excited commentators described as fiscally conservative, in fact increased spending to previously unheard of levels: not because of temporary pandemic-related measures, which have mostly been unwound, but years into the (presumably pandemic-free) future. At nearly $10,000 per capita, in constant 2020 dollars, it put spending on a track that was 12 per cent higher – after inflation, after population growth – than even the Liberals’ free-spending first years.
Five highlights from the government’s fall economic statement as Canada nears a recession
Ottawa published its fall economic statement on Thursday, outlining several risks to the economic outlook, including a “more aggressive” reaction to inflation from the U.S. Federal Reserve, via higher interest rates, and “widespread volatility” in markets for stocks and bonds. The trajectory for Canada’s economy is uncertain, and in turn, that’s created uncertainty for the path of public finances.
Slowing growth
The deficit
Buyback tax
Affordability
Clean tech tax credit
Freeland’s economic update warns of 2023 recession, announces new tax on corporate share buybacks
Finance Minister Chrystia Freeland delivered a fall economic update Thursday that warns of a potential recession next year, and includes plans for a tax on share buybacks, significant incentives for green energy investment, and spending on students and low-income workers.
All Canada student and apprentice loans would be interest free, at a cost of $2.7-billion over five years, and another $4-billion over six years would be automatically issued in advance payments of the Canada Workers Benefit to people who had qualified the previous year.
But the overall message that Ms. Freeland sought to deliver is that the federal government is preparing for harder times ahead.

26 October
Bank of Canada says economy will ‘stall’ amid rate hike but skirts recession call
Bank of Canada Governor Tiff Macklem said Wednesday the central bank would raise its key interest rate by half a percentage point to 3.75 per cent as it continues in its efforts to tame decades-high inflation. “There are no easy outs to restoring price stability,” he said, adding that it needs growth to slow in order to “relieve price pressures.”
His comments came after the central bank raised its key interest rate by half a percentage point on Wednesday, a smaller step than economists and markets had expected but still above the standard 25-basis-point increase.
The move marks the sixth consecutive rate hike by the central bank this year. Since March, the Bank of Canada has raised its key interest rate to 3.75 per cent from 0.25 per cent, making it more expensive for Canadians and businesses to borrow money.
The rate hike accompanied an updated Monetary Policy Report from the central bank which forecast a slower growing economy than first expected. The Bank of Canada now expects growth of roughly one per cent next year and two per cent in 2024 as the economy rebounds.

25 October
Aaron Wherry: Freeland is trying to get ahead of a recession — but EI reform might not come fast enough
In an interview with the CBC’s Power & Politics earlier this fall, former Liberal finance minister John Manley warned that “recessions lead to changes in government.”
That’s not entirely true. Manley’s maxim ignores the case of the Great Recession in 2008. But governing through an economic downturn is inherently difficult. Finance Minister Chrystia Freeland surely has that in mind as she warns Canadians that “there are still some difficult days ahead.”
In moving to get ahead of a recession — at least rhetorically — the Liberals might be trying to correct for how flat-footed they seemed this spring when global inflation refused to abate.
Canada not immune from faltering global growth, says IMF chief economist
Canadians facing high food prices, prospect of job losses
“There is a slowdown in the US that is coming. Commodity prices, energy prices are coming down. There are all the uncertainties, financial tightening and financial markets are very nervous. All of these factors are going to weigh down on on the Canadian economy next year,” Gourinchas told CBC chief political correspondent Rosemary Barton.
Recession or a coming financial crisis? Economists say the difference is vast
Don Pittis
Interest rates are creeping higher, and the word “recession” is on everyone’s lips.
But so far, only a few financial commentators are warning of something much worse that could abruptly change the rules of the game: The threat of a financial crisis.
On Wednesday, the Bank of Canada is preparing to announce what’s expected to be another large hike in interest rates, continuing its battle against stubborn inflation.
The bank’s governor, Tiff Macklem, has repeatedly and confidently said that neither the risk of a recession nor falling house prices will stop him from getting inflation down to its target range, two per cent.
Keeping inflation down is Macklem’s clearly stated priority, but if history is a guide, he and his U.S. counterpart, the Federal Reserve’s Jerome Powell, will likely be putting plans in place for an even more important duty — preventing their own and the world’s financial systems from falling into confusion.

23 October
Canada not immune from faltering global growth, says IMF chief economist
Canadians facing high food prices, prospect of job losses

20 October
Freeland on message: Hint, hint
Playbook has read the DPM’s three most recent speeches front to back and back to front.
Here’s how it boils down: The economy is headed to the Bad Place, but Canada with its natural bounty can be the Good Place.
Wednesday brought meh news on the economic front. Statistics Canada’s consumer price index rose 6.9 percent from a year earlier, a slightly slower pace than last month but still persistently high. Economists like TREVOR TOMBE insist prices are actually “returning closer to normal” — but opposition politicians rightly point out that grocery bills are eye-popping.
For the second time in three days, the finance minister cautioned that a serious slowdown is on the way. Shorter Freeland: “Don’t say I didn’t warn ya!”
— The good news, once more: Freeland has been using her speeches to hammer home cautious optimism. Canada has what Canada needs to get through the deep muck of a recession (though she wouldn’t dare use the r-word): minerals, energy and food that’ll benefit friendly nations everywhere.
— So far this week: Monday took Freeland to a green hydrogen project in Quebec. Wednesday brought remarks at the Auto Parts Manufacturers’ Association’s annual convention in Windsor. (An aside: Freeland gave a nod to APMA’s all-Canadian Project Arrow zero-emissions vehicle initiative.)
— Hints of a date: The minister consistently fails to end the suspense and produce a date for her all-important Fall Economic Statement, the annual exercise her staff and the bureaucracy call FES and the rest of us know as a fiscal update.

19 October
Freeland warns of ‘difficult days ahead’ as Canada’s economy shows sign of weakness
Finance minister says rising interest rates will cool economy, drive up unemployment
Finance Minister Chrystia Freeland issued a warning to Canadians Wednesday — the coming months won’t be pretty as rising interest rates slow a once red-hot economy and force some people out of their jobs.
The Bank of Canada’s recent rate hikes to tame sky-high inflation will increase borrowing costs for businesses and consumers alike, which will send shockwaves throughout the economy, Freeland said.
Speaking at an auto industry conference in Windsor, Ont., Freeland said she would be honest with Canadians about the roadblocks that lie ahead and the threat of higher unemployment and mortgage rates — developments that could hurt many households.
“Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming. Our unemployment rate will no longer be at its record low. That’s going to be the case in Canada. That will be the case in the U.S. and that will be the case in economies big and small around the world,” Freeland said.

13 October
Canada’s economy will ‘slow considerably’ in 2nd half of 2022, budget officer says
In his latest economic and fiscal outlook, budget watchdog Yves Giroux says he expects the Bank of Canada to raise its key interest rate to four per cent by the end of the year, a move which is in line with financial markets’ expectations.

24 August
Canada just missed possibly one of the greatest opportunities in its history
Canada could have been using its LNG to save an embattled Europe … and make billions in the process
(National Post) It could well represent one of the biggest missed opportunities in Canadian history: An embattled Europe is clamouring for natural gas, and one of the world’s biggest producers of the stuff can’t sell it to them.
The economic hit is overwhelming: At current prices, even just one Canadian port exporting liquid natural gas could be adding nine figures to the Canadian GDP each day. Politically, Canada could be helping to deal a body blow to Russian hegemony over Western European energy. Instead, on both fronts, Ottawa appears content to watch from the sidelines.
…Prime Minister Justin Trudeau, who said there has “never been a strong business case” for moving Canadian LNG to Europe.
Oddly, Trudeau doesn’t share the same sentiment when it comes to hydrogen. Despite hydrogen having a dramatically smaller and less-developed European market, one of the signature features of Scholz’s visit was when Trudeau took him to Stephenville, Newfoundland to visit the proposed site of a wind-to-hydrogen facility. The hydrogen project hasn’t obtained regulatory approval and it’s still not entirely clear whether it will go forward.
There isn’t a single LNG export terminal in Canada. Every single liter of natural gas that Canada manages to export all goes to the United States via pipeline.
This hasn’t been for lack of trying. Natural Resources Canada notes that in recent years it has received proposals for 18 LNG export projects, including five on the East Coast. Just one of them is under construction, while another is not quite poised to break ground.

17-18 August
Is anyone going to believe the Bank of Canada anymore?
David Parkinson
Tiff Macklem spent much of the second half of 2021 trying to convince Canadians that rising inflation numbers were not all they were cracked up to be. He now finds himself making a similar argument in the opposite direction – as the dampener of enthusiasm for inflation’s downward turn.
The Governor of the Bank of Canada set to work raining on the parade within hours of Tuesday’s consumer price index (CPI) report, which showed July’s inflation rate falling to 7.6 per cent from 8.1 per cent in June – the first decline in 13 months. His message: “Inflation in Canada has come down a little, but it remains far too high.”
‘Our job is not done yet’: Tiff Macklem says Bank of Canada has more to do to tame inflation
July numbers ‘a bit of a relief,’ says governor, but still a long way from where we need to be
Macklem was responding to the latest release of Statistics Canada’s consumer price index, which increased 7.6 per cent in July from a year earlier, compared with 8.1 per cent the previous month, representing the first year-over-year decrease since June 2021.
However, the slowdown was almost entirely the result of lower gasoline prices, which have an outsized influence on the headline number. There was evidence in the report that inflation actually broadened across the economy, as more than 60 per cent of the items in Statistics Canada’s price basket posted annual increases of more than three per cent, according to Royal Bank of Canada economist Claire Fan.

17 August
Quebec pension fund manager Caisse loses $33.6-billion in first half of 2022
The roiling world markets have taken their toll on Caisse de dépôt et placement du Québec, as the pension giant lost $33.6-billion in the first six months of 2022 – including a controversial US$150-million wipeout in a major cryptocurrency investment.
Charles Emond, chief executive officer of the Caisse, said Wednesday that the pension fund would completely write off its US$150-million investment in Celsius Network Ltd., which filed for bankruptcy in July. It was one of a number of cryptocurrency companies that imploded in a sector-wide reversal.

22-26 June
Cost of living concerns must be balanced with fiscal restraint, Chrystia Freeland says
Finance minister says she’s well aware of inflation, public frustration
Finance Minister Chrystia Freeland says she must strike a balance between helping Canadians suffering from the effects of inflation and pursuing a policy of fiscal restraint — or risk making the cost of living problem worse.
… Freeland…said she was open to further action on affordability issues but that she believes measures already underway — worth $8.9 billion — would help alleviate the impact on Canadians.
Inflation keeps rising, will recession follow? Experts say ‘batten down the hatches’
(Global) The Bank of Canada’s efforts to tamp down on persistent inflation are increasing the odds of pushing the economy into a recession in the next year, according to some economists.
Consumers should start preparing for a contraction now, experts say, as the threat of layoffs and leaner days looms on the horizon.
Armine Yalnizyan, economist and fellow with the Atkinson Institute, tells Global News that the odds of a recession “are nearing more than 50 per cent in the next six to 12 months.”
With Statistics Canada reporting that the annual rate of inflation soared to 7.7 per cent in May, the central bank will be pressured to act swiftly and show Canadians that it will take the necessary steps needed to stifle inflation, Orlando says.
Soaring food inflation has 72% of families with kids worried, Ipsos poll finds
As Canadian price rises hit 7.7%, could inflation be reaching its peak?
After hitting a 40-year high, there’s hope that rising prices will wane
Should Canada join other countries and take a gas tax holiday?
Canada could soon be only G7 country without a major break or subsidy at the pumps

1-3 June
Campbell Clark: Bill Morneau’s complaints speak for economic pragmatists that Justin Trudeau’s politics have left behind
(Globe & Mail) On Wednesday night, Mr. Morneau delivered a speech that lamented that Mr. Trudeau’s Liberal government has spent its effort on redistributing wealth without doing much to create it – that it has done little, or little that was effective, to grow the economy.
That’s a remarkable thing to hear from the person who served as finance minister for the first five years of that government. But it came with another underlying message: that there is so much partisan point-scoring and wedge politics that there is little interest in or room for practical work on economic matters. That will strike a chord with many.
It’s not just the Bay Street Liberals that Mr. Morneau supposedly represented in Mr. Trudeau’s cabinet who will feel that way. Folks who care about serious pragmatic economics, who worry what stagnant GDP per capita means for Canadians’ quality of life – these people can see that working through the details of those things are not Mr. Trudeau’s first concern. Frustrated business leaders, but others, too.
Former finance minister Bill Morneau criticizes Liberals’ economic policies in first public speech since leaving political life
Mr. Morneau highlighted research by the Organization for Economic Co-operation and Development that forecast growth in Canada’s gross domestic product over the next four decades will significantly lag expansion in the U.S., Australia and comparable European economies.
“There is no real sense of urgency in Ottawa about our lack of competitiveness,” said Mr. Morneau. “It’s not that this is one of the big problems facing Canada’s economy, it’s that this is our fundamental problem. Nothing else is solvable if we don’t put this issue first.”

10 May
Federal budget delivers long-overdue policy changes for Canada’s charities
By Iryna Khovrenkov, Associate Professor, Johnson Shoyama Graduate School of Public Policy, University of Regina
After a two-year struggle to remain afloat, charities and non-profits continue to endure financial and capacity challenges, leaving their daily existence in question.
(The Conversation) Charities and non-profits in Canada will finally get a break as the 2022 federal budget implements long-needed regulations to support the charitable sector. Two new amendments will take effect.
As part of the first amendment, charity funders with investment assets exceeding $1 million will be required to increase their annual funding to five per cent from 3.5 per cent. Taking effect on Jan. 1, 2023, this rate increase will translate into an additional $2.5 billion in annual funding.
Foundations with investment assets below $1 million and above $25,000 will continue to grant at 3.5 per cent, with the rest remaining fully exempt from granting obligations.
Some background from August 2020:
COVID-19 has exposed the limits of philanthropy
Against the backdrop of the WE Charity scandal — and revelations of political nepotism and charitable shell corporations — Canadian philanthropic foundations have quietly distributed more than $100 million in emergency funds to support communities most impacted by COVID-19.
In the process, however, philanthropy has revealed its limits as a mechanism for addressing the societal inequalities magnified by the pandemic.

9 May
Competition Bureau files court applications to block Rogers-Shaw merger
Bureau says it wants to protect Canadians from higher prices, worse service
The federal regulator is seeking to block Rogers Communications Inc.’s proposed $26-billion acquisition of Shaw Communications Inc, asking the Competition Tribunal to prevent the deal from proceeding and is seeking an injunction to stop the two companies from closing the deal until the bureau’s application can be heard.
The merger will lead to “higher prices, poorer service quality and fewer choices,” the bureau said, particularly in the wireless sector, where Rogers, Bell and Telus Corp. currently serve about 87 per cent of Canadian subscribers.
The bureau’s investigation into the March 2021 deal determined the proposed acquisition will eliminate “an established, independent and low-priced” competitor in Shaw-owned Freedom Mobile. It would also prevent existing competition in wireless services in Ontario, Alberta and British Columbia and suppress further competition in areas like 5G.
… The Innovation, Science and Economic Development Canada, which has yet to approve the deal, could also block the transaction from moving forward, though the [CRTC] signed off on it earlier this year

20 April
Canada’s inflation rate jumps to new 31-year high of 6.7%
Largest annual increase in cost of living since GST was created
Canada’s inflation rate rose to 6.7 per cent in March, far more than economists were expecting and a full percentage point higher than February’s already 30-year high.
Statistics Canada reported Wednesday that all eight categories of the economy that the data agency tracks rose, from food and energy to shelter costs and transportation.
While the cost of just about everything is going up fast, transportation costs are leading the way, up 11.2 per cent in the past year. A big reason for that increase is the 39.8 per cent rise in gasoline costs since March of last year.
Gasoline prices rocketed higher in March mostly due to Russia’s invasion of Ukraine throwing global supplies into chaos. Although they have since come down a little, at one point last month numerous Canadian cities saw their average price for a litre of gasoline hit $2 for the first time ever.

19 April
Paul Wells: A new newsletter! And a $15 billion mystery
The biggest item in Chrystia Freeland’s budget raises more questions than it answers.
After all the dust settled from Chrystia Freeland’s latest federal budget, I still had questions about the Canada Growth Fund.
Described (on Page 60 of the budget document) as a means “to attract substantial private sector investment” to “help meet important national economic policy goals,” the Canada Growth Fund was announced as something that would be “initially capitalized at $15 billion over the next five years.”
Fifteen billion is big. The budget’s entire chapter on housing, for instance, allocates a total of $10.1 billion in new spending over five years. The military gets a total of $9.4 billion in new spending. Health care, $7.1 billion. But the Canada Growth Fund (let’s just call it the Fund) is bigger than all of those. And for each dollar of the $15 billion it will spend, it will “aim to attract at least three dollars of private capital.”

7 April
Budget 2022
A Plan to Grow Our Economy and Make Life More Affordable

The Government of Canada’s plan for targeted and responsible investments to create jobs and prosperity today, and build a stronger economic future for all Canadians.
Budget 2022: Feds eye growth with $31B in net new spending
(Global) The federal Liberals have more than $85 billion in new spending room from a booming economic rebound and plan to spend some of the windfall on a series of measures aimed at keeping the good growth going.
The 2022 budget released Thursday includes more than $31 billion in net new spending over the next five years.
It’s targeted at speeding the flow of goods through the country’s supply chains, boosting housing supply and jolting businesses out of an anemic period of investment.

6 January
Riches for top CEOs come at a cost to everyone else
‘It’s hard to reconcile a world in which Ontario nurses putting their lives on the line daily are limited to pay raises of one per cent a year while executives haul it home in truckloads.’
(The Star editorial) The upside of the perennial big pay days for Canada’s most richly compensated executives is that it provides recurring opportunities for economist David Macdonald to perfect his work.
Macdonald’s report for the Canadian Centre for Policy Alternatives in August last year – which outlined how dozens of CEOs had bonus provisions tweaked to ensure they took home more money in 2020 even in the face of so-called salary cuts – was titled “Boundless Bonuses.”
Very nice. But no match for Macdonald’s latest report, released this week. This one is called “Another Year in Paradise.” Which it certainly seems to have been for the country’s corporate elite.
4 January
Another year in paradise: CEO pay in 2020
By David Macdonald
(Canadian Centre for Policy Alternatives) The country’s 100 highest-paid CEOs from the S&P/TSX Composite recorded their second best year ever for compensation in 2020, according to the report.
These executives got paid an average of $10.9 million in 2020. They now make 191 times more than the average worker wage in Canada.
Among the richest 100 CEOs: 30 CEOs headed companies that received the Canada Emergency Wage Subsidy, 14 saw their bonuses changed to protect them from the impact of COVID-19, and five experienced both.

2021

 

Highlights of budget 2021

OECD Canada Economic Snapshot
Economic Forecast Summary (December 2021)
Supply-chain disruptions have slowed but not arrested Canada’s economic recovery. With a fourth wave of infections receding, output is projected to surpass pre-pandemic levels by the end of 2021 and grow faster than trend at 3.9% in 2022 and 2.8% in 2023. Inflation is projected to moderate as production bottlenecks clear, before strengthening again as unemployment falls. More persistent supply constraints could, however, mean that inflation stays higher for longer and delay a projected acceleration in trade and consumer spending.

24 November
Inflation is about to get way worse in 2022—and nearly everyone in Canada will feel the pinch
Canada is headed for an economic inflation that won’t rival the double digits of the 1970s, but the experts say you’ll definitely feel it
By Jason Markusoff
(Maclean’s) Across Canada, household costs in 2021 went on an upward ride unlike anything seen in nearly a generation. The countrywide inflation rate in September hit 4.4 per cent, the highest since 2003 (in P.E.I., it reached a blistering 6.3 per cent). And the turbulent climb seems nowhere near done. The Bank of Canada forecasted inflation worsening in late 2021 to around 4.8 per cent—a three-decade high—and continuing above target levels well into the new year.
The result will be an economic chain reaction affecting nearly everyone in the country. Families will spend more to stock their refrigerators and heat their homes; faced with rising costs, workers will demand higher wages from employers who are shelling out more for rent, supplies and merchandise. But if the central bank moves to tame these effects by hiking interest rates, mortgage costs will rise—sharply, for many—and businesses will pay more to borrow money, blunting any relief from the lower relative prices

16 November
B.C. storm aftermath latest blow to supply chain issues
In an emailed statement to CTVNews.ca, a spokesperson for the Port of Vancouver said flooding had severely affected their operations.
“Vessel delays and heightened anchorage demand are expected due to disruptions to terminal operations,” the statement said. “We are working closely with our terminal operators, railways, and all levels of government to understand the impacts of these delays on terminal operations and to develop a recovery plan.”
The Port of Vancouver moves crucial goods to Canada’s industries, like lumber, fertilizers, electronics, coal, textiles, animal feed, canola, machinery, jet fuel, chemicals, minerals, meat, fish and poultry.
A September report from the Port of Vancouver said more than 14 million tonnes of goods had been imported and more than 62 million tonnes of cargo had been exported in June of this year.
The statement said all rail service coming to and from the Port of Vancouver was halted because of flooding in the B.C. interior, and that no rail traffic is possible between Kamloops and Vancouver.
Railway service disrupted by B.C.’s heavy rains, mudslides
The track outages are hampering the movement of goods to and from the country’s largest port in Vancouver, at the same time as global supply chains are facing challenges that have led to shortages.

31 August
Canada suffers shock economic contraction, casting shadow over recovery
The Canadian economy suffered an unexpected contraction in the second quarter, casting a shadow over the country’s efforts to recover from the effects of the pandemic.
Real gross domestic product fell 0.3 per cent, Statistics Canada reported Tuesday. It was an annualized drop of 1.1 per cent, and Canada’s first quarterly decline in output since the second quarter of 2020, when the first wave of COVID-19 ravaged the economy.
Exports were the biggest drag, tumbling at a 15-per-cent annualized rate. Vehicle exports were especially hard hit by supply chain disruptions, Statscan said in its report.
Throughout the world, in many different industries, key materials have been difficult to source and costs have risen rapidly during the pandemic. Freight rates have surged to record highs, and container ships now wait days to unload at ports, leading to incessant headaches for companies.
Let’s not forget about precarious work in this federal election — and beyond
Wayne Simpson, Professor, Department of Economics, and Research Fellow, University of Calgary School of Public Policy, University of Manitoba
(The Conversation) The pandemic is the backdrop to the ongoing federal election, and its attendant lockdowns have shone light on health and economic issues. Not the least of these is how job insecurity and low pay are inextricably linked to a wide spectrum of jobs and small businesses.
Unprecedented income support from the federal government temporarily cushioned the unanticipated losses of earnings for these unprotected workers. But the crisis has exposed just how vulnerable a significant portion of the work force can be to sudden shifts in economic circumstances.
Is precarious work an emerging problem that needs to be addressed beyond the pandemic?

2 August
British Columbia Christmas tree growers say intense heat singes prized trees, kills seedlings
(Globe & Mail) Sally Aitken, who teaches forestry at the University of British Columbia and is an expert on the effects of drought and heat on trees and plants, said the heat dome could have immediate and long-term effects for Christmas tree growers.
Trees the farmers have been tending for up to seven years could now be damaged and seedlings for future crops have also been decimated because of the heat, she said.
Up in smoke: How wildfires are tainting grapes and threatening the wine industry
(The Conversation) Fires can destroy vines and other vineyard infrastructure, such as the vine posts or irrigation systems, but even distant fires pose a risk to wine grapes, due to a phenomenon known as smoke taint. Smoke taint refers to the undesirable ashy, smoky aroma of wines produced from grapes exposed to wildfire smoke while ripening.

18 July
What Canada can learn from Sweden about creating middle-class retail jobs
Sean O’Brady, Assistant Professor, Labour Relations, McMaster University
Grocery-store cashiers and other frontline retail workers have helped get us through the pandemic, but do we value them? Why are retail jobs middle-class in Sweden, but low-wage work in Canada?
These were some of the questions I tried to answer over several years of published research on grocery-store workers in different countries.
My research has shown that in the late 1970s, Canadian grocery-store jobs were middle-class union jobs. Full-time hours were common, and Canada’s grocery store-workers were well paid by global standards for the industry.
The opening of discount chains like Super Carnaval in Québec in 1982 and megastores like the Real Canadian Superstore in 1979 forced traditional grocers to rethink their human resources strategies. In addition to making profit margins narrow, many of these new discounters — like Walmart which entered Canada in 1994 — were non-union.
The chains demanded that the unions work with them to lower labour costs and prevent them from losing money. Fearing what would happen to their members’ jobs if the chains went bankrupt (and some did), most of the unions worked with major grocers to cut wages and erode other key conditions set in collective agreements.
The result was a drastic reduction in the real wages of unionized workers from 1980 to 2016. Today, unionized retailers start at the minimum wage, or just above it.

12 May
Andrew Caddell: The 2021 budget: a disaster unlike any we have known
The experts at Finance must be tearing their hair out, even if they know this budget is designed to get the Trudeau Liberals re-elected. So much for the ‘wisdom’ of minority governments
(The Hill Times) … the recent federal budget. It is the antithesis of everything I ever learned, and mocks the fiscal prudence of Chrétien and Martin. It is understandable the government had to support the economy in a crisis, but we now know Canadians saved $200-billion during the pandemic, and wealthy hedge fund managers benefited from the $100-billion Canada Emergency Wage Subsidy program meant for struggling businesses. There is no need for further government spending.

26 April
Canadians unmoved by new federal budget as Liberals continue strong support: poll
(Global) …the high level of apathy for this year’s budget suggests Canadians aren’t focused on the country’s long-term financial outlook amid the COVID-19 pandemic, Ipsos public affairs CEO Darrell Bricker says. “An awful lot of (what Canadians are focused on) has to do almost exclusively with getting people access to vaccines and getting our lives back to normal. The budget didn’t really speak directly to those questions.”

19-24 April
NP View: Chrystia Freeland’s shortsighted, selfish budget
(National Post) By continuing to spend well beyond our means post-pandemic, the Liberals are ensuring that today’s youth will have to pay once again, when the bills come due
Monday’s budget was an exercise in fantasy. Finance Minister Chrystia Freeland doled out billions for longtime Liberal priorities under the ridiculous pretext of jumpstarting an economy that is already revving up. The minister should have ensured that the pandemic-related hit to our finances would be short-lived, but instead she used this as an “opportunity” to spend large sums of cash into the foreseeable future. This is extremely shortsighted and selfish. The debt we incur today will be a liability for future generations.
Andrew Coyne: Federal budget gives money to all, without a path to real economic growth
Whatever else it may be, this budget is certainly long: at 739 pages and 232,903 words, by far the longest in Canadian history. The previous record was 528 pages, in 2015.
The great Paul Martin budget of 1995 took only 197 pages to rescue Canada’s finances from disaster, while the landmark tax reform budgets of the late 1980s averaged less than 120. By comparison, this budget takes more than 200 pages just to describe its impact on gender equality, inclusion and other “quality of life” measures.
Perhaps some further statistical analysis will help. The word “support” appears nearly 1,000 times in the budget; “benefit” or “benefits” more than 1,300; “gender,” 740, “Indigenous,” 831. By comparison, the word “growth” appears just 280 times; “productivity,” 39, “competitiveness,” 13.
So you begin to get a broad picture of the government’s priorities, or rather the lack of them.

John Ivison: Budget gamble shows Liberals eyeing a September election (video)
Budget 2021 Misses the Opportunity to #TaxtheRich
Shreya Kalra & Katrina Miller
(Broadbent Institute) Despite promises it made in its 2020 Throne Speech, the federal government failed to “tax extreme wealth inequality” in the 2021 budget – the first federal budget to be tabled in two years. Instead, relatively minor measures to increase taxes on foreign digital sales and luxury goods tax, small movements towards closing the stock options loophole and reducing tax evasion, make up the scant package of tax reforms Trudeau’s Liberal minority government wants to move forward to help Canada recover from the largest economic setback in decades.
Federal Budget 2021: Ten key takeaways for the innovation economy
For innovation, the budget includes the most significant outlay of dollars since the 2017 edition with major expansions of innovation programs and cleantech incentives
(Financial Post) It is the first budget for Freeland and deputy finance minister Michael Sabia, who assumed their new roles late last year amid the pandemic. It includes programs designed to encourage employers to hire historically marginalized workers, and to get businesses to adopt new technology and spend on R&D — all longstanding drags on productivity in Canada. For the innovation economy, it also includes the most significant outlay of dollars since the 2017 edition, when the Liberals launched many of their flagship R&D, commercialization and venture capital programs.
Monday’s budget lays out $101 billion in new spending over three years, plus billions more in the years following. Finance Canada has projected a deficit of $154.7 billion for the 2021–2022 fiscal year. “I really believe that the greater danger today is not to invest in a strong recovery from the COVID recession, and not to invest in stronger, more robust, long-term growth for Canada,” Finance Minister Chrystia Freeland told reporters before tabling the budget in the House of Commons. The government is positioning its billions in spending as an effort to reverse decades of declining growth in real GDP.

Budget 2021: Address by the Deputy Prime Minister and Minister of Finance

Highlights of budget 2021:
Billions for green economic growth, healthier Indigenous communities
Budget vows to build ‘for the long term’ as it promises child care cash, projects massive deficits
The first federal budget document in two years is enormous and staggering in scope.
(CBC) Federal spending plan includes more than $101B to kickstart post-pandemic economy
“This budget is about finishing the fight against COVID. It’s about healing the economic wounds left by the COVID recession. And it’s about creating more jobs and prosperity for Canadians in the days and decades to come,” Freeland said in prepared remarks from her budget speech to be read in the House of Commons today.
“It’s about meeting the urgent needs of today and about building for the long term. It’s a budget focused on middle class Canadians and on pulling more Canadians up into the middle class. It’s a plan that embraces this moment of global transformation to a green, clean economy.”
It reveals that, over the past year, Canada ran up a deficit of $354.2 billion and plans to follow that up next year with a reduced deficit of $154.7 billion that is supposed to gradually decline to $30.7 billion in 2025-26.
Federal budget 2021: Liberals bet big that we can spend our way out of deficit problems
(Globe & Mail) In plotting a path for containing Canada’s post-pandemic debt and deficits, the federal Liberal government has embraced the route over which it has the least control. It might ultimately prove to be a wise course. But it’s certainly not a low-risk one.
… Economists have been saying for years that Canada needs to unlock productivity and expand its labour force if it is going to get out of a low-growth rut that looks likely to only get deeper as the country’s population ages. That growth is essential if governments of all levels are going to maintain services without descending into a debt spiral. Ultimately, a more robust economy may be the only true path to the country’s long-term fiscal sustainability.
Nevertheless, this is a major departure from our traditional approaches to fiscal management. We’re stepping into an abyss.

23 April
Sold over asking: Why homes are being sold for far more than their listing price
Willingness of some buyers to outspend everyone else imply homes in high-demand markets will sell at prices much higher than what they are listed for
Murtaza Haider and Stephen Moranis, Special to Financial Post

6 April
IMF upgrades Canada’s 2021 growth outlook by most among advanced economies
(BNN Bloomberg) In its World Economic Outlook published on Tuesday, the IMF said it now expects the Canadian economy to grow five per cent over the course of 2021, 1.4 percentage points higher than its previous forecast. That’s even more optimistic than the Bank of Canada’s expectation for four per cent economic growth this year, though the central bank’s last official estimate was made in January as COVID vaccines were just beginning to be administered.

3 March
Canada’s $100B question: Can you go too big?
(Politico) The Liberals show no sign of veering from Freeland’s mantra that spending too little would be far worse than spending too much on the Covid-19 recovery. And they’re hardly alone. Last month, U.S. Treasury Secretary Janet Yellen told her G20 counterparts it was time to “go big” with stimulus spending. Still, here at home, there’s a big question facing Freeland: how much stimulus does Canada actually need?
In her fall economic statement, Freeland promised up to C$100 billion in stimulus spending over three years, and the coming budget will set out how that money will be spent. Government sources told Reuters’ Fergal Smith and Steve Scherer last week they’re sticking with the stimulus plan, and that without it, “we run the risk of a lost generation of young people, or women who are not able to get fully back into the workforce.”
— In an op-ed for the Globe and Mail, a trio from the Institute of Fiscal Studies and Democracy at the University of Ottawa cautioned against permanent new spending and suggested focusing stimulus in such areas as infrastructure and R&D. Prime Minister Justin Trudeau’s recent mandate letter to Freeland also instructs her to “avoid creating new permanent spending,” but some have pointed out that Trudeau has since announced a new public transit fund that’s to be, well, permanent.

2 March
After worst year on record, Canadian economy enters 2021 with double digit growth
Jordan Press and Craig Wong
(The Canadian Press) The Canadian economy sprinted to the finish line of 2020 with nearly double-digit growth in the fourth quarter, ending its worst year on record on a strong note that has continued into the start of 2021.
The economy grew at an annualized rate of 9.6 per cent over the last three months of 2020, Statistics Canada reported Tuesday, down from an annualized growth rate of 40.6 per cent in the third quarter when the country fully emerged from the near-shutdown last spring.
Gross domestic product, income and expenditure, fourth quarter 2020

26 February
Federal deficit hits $248.2 billion for first nine months of 2020-21 fiscal year
The result for the April-to-December period compared with a deficit of $11 billion in the same period a year earlier.
The government says in its fiscal monitor that the unprecedented shift in the government’s financial results reflects the severe deterioration in the economy and the government’s response plan to the COVID-19 pandemic.

17 February
2021 budget the time to keep promises, act on COVID-19 recovery: MPs
The upcoming 2021 federal budget is going to be critical to setting in motion Canada’s post-pandemic recovery efforts and it’s time the government act on a series of promises the government has made, say MPs.
The House of Commons Finance Committee tabled a pre-budget consultation report on Tuesday, and it focuses on suggestions for how to keep up pandemic aid as well as supporting rebuilding the economy and key sectors, post COVID-19. It also calls on the government to make good on a series of commitments, such as national child care and pharmacare programs, while not setting the country on an unsustainable spending path.
The committee is recommending that in the 2021 budget the federal government takes action on child care by increasing funding, establishing national standards, or creating a nationalized system; put new money towards improving care in long-term care homes and other congregate living settings; and to move forward on enacting a national universal pharmacare program.

27 January
Politico Canada:
Liberals have a budget to prepare, for which Finance Minister Chrystia Freeland launched public consultations on Monday. This budget is presumably going to have to do many things: contend with the ongoing fallout of the pandemic, make good on promises from the fall economic statement (little things like a national child-care system), set out how the government is going to spend up to C$100 billion in planned stimulus, and make some mention of fiscal anchors or guardrails or wobbly banisters or something.

15 January
Deputy Prime Minister and Minister of Finance Supplementary Mandate Letter
Even as we continue to distribute vaccines across Canada, bold action continues to be required to fight this pandemic, save lives, support people and businesses throughout the remainder of this crisis and build back better. We need to work together to protect and create jobs, and to rebuild our country in a way that will create long-term competitiveness through clean growth. As articulated in the Speech from the Throne 2020 and Fall Economic Statement 2020, our four main priorities for making tangible progress for Canadians continue to be: protecting public health; ensuring a strong economic recovery; promoting a cleaner environment; and standing up for fairness and equality.

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