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Economic Insight

Delving into the forces that shape our living standards
for Globe Unlimited subscribers

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Supply management falls butter-side down


Robert Sweet has a butter problem. He can’t get any.

Mr. Sweet is supply chain manager at Furlani’s Food Corp. of Mississauga, which makes garlic bread, crackers and bread sticks. But in the past six weeks, his key suppliers Gay Lea Foods and Parmalat have all but cut him off.

“The response I get is that they are sold out,” a frustrated Mr. Sweet said. If he can’t get more butter, the company risks losing a large contract to supply garlic toast to a major U.S. restaurant chain.

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Liberals opt for the Conservatives’ opaque tack with budget update


A mere seven months ago, the federal government was looking at a bright future of ever-expanding budget surpluses.

No longer – thanks to a worsening global economic outlook, the unexpectedly prolonged oil price slump and a bit of accounting spin.

Not only is the surplus gone, Ottawa will spend the next four years in the red, according to the new Liberal government’s more sobering assessment of the books, contained in a fiscal update released Friday by the Finance Department.

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Amid oil slump, a surprising segment leads the economic charge


In the aftermath of the oil shock, a new segment of the economy has been lifting the country on its strong shoulders and carrying it to a different growth path. And it’s not the segment that many pundits had anticipated.

When the oil slump hit late last year, most experts anticipated that, in time, there would be a rotation that would lift the economy out of its doldrums, with new leadership taking over from the energy sector to drive the next phase of growth.

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The welcome economic renaissance of Montreal


Montreal is indisputably the locomotive for the Quebec economy, making its performance vital to that of the whole province. Institut du Québec, the Conference Board of Canada’s Quebec-based research partnership with the business school HEC Montréal, has just delivered its first benchmarking report on Montreal’s economic and social performance.

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Japan's recession stirs debate over benefits of Abenomics


Japan fell into its second technical recession in two years as the world’s third-largest economy shrank in the third quarter, highlighting continuing weakness in Prime Minister Shinzo Abe’s faltering Abenomics economic revival program.

On Monday, the government announced that Japan’s gross domestic product shrank at an annualized rate of 0.8 per cent in the three months ended Sept. 30, compared with the same period last year. Economists had predicted a 0.2-per-cent contraction, but the deeper slump was a result of reduced inventories and falling business investment as Japan Inc. continued to hold back on concerns about slowing growth in China and the sluggish global economy.

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Rosenberg: China in some sort of crash landing? Hardly


As China develops its new five-year plan, much is being made of the fact that these changes are taking hold just as its economy slows to a pace not seen in eons.

Indeed, the country’s 6.9-per-cent year-over-year trend in real gross domestic product growth may have been the slowest since the opening months of 2009 but still managed to fractionally beat consensus views of 6.8 per cent (although it goes without saying that other indicators point to a softer number than that).

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Canada’s no longer the largest U.S. trading partner – but that’s okay


So China has grabbed Canada’s place as the largest trading partner of the United States.

What? For generations, that spot has belonged to us, damn it. The United States is our neighbour, not China’s. We’re the greatest trading partner of our neighbour to the south. Unless we’re not. Sigh.

China’s trade with the United States totalled $441.6-billion (U.S.) through the first nine months of this year, narrowly edging out Canada-U.S. trade of $438-billion, and more importantly, confirming a historic shift in global trading patterns.

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Q&A: Bank of Canada’s Wilkins on innovation, inflation targets and Canada’s boomers


(Globe and Mail economics reporter David Parkinson sat down with Bank of Canada senior deputy governor Carolyn Wilkins for an exclusive interview, ahead of her speech Friday laying out the central bank’s medium-term strategic plan – focusing its next three years on innovating its approach and redoubling its research focus to better address the shifting global economic, financial and technological forces affecting central banking. The following is an edited and condensed version of that interview.)

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Liberals should know that deficits don’t promote economic growth


One of the saddest outcomes of the recent federal election was the destruction of the reigning all-party consensus in favour of balanced budgets and spending discipline outside times of economic crisis. The greatest irony is that it is the Liberals, who forged that consensus, who signed its death warrant. Having promised to borrow tens of billions of dollars over the next several years, they have an undeniable mandate to pursue this policy. That does not make it a good idea.

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Trudeau’s promised ‘middle class’ tax cut excludes most Canadians


The so-called “middle class” tax cut promised by the newly elected Liberal government in the name of promoting greater fairness seems set to be quickly implemented for the 2016 tax year. Yet the distributional and revenue consequences of this measure are often misunderstood, and the proposed change merits reconsideration.

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Are boomers really blocking the careers of the generation behind them?


This is part of The Globe and Mail’s week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada’s economy in the next 15 years. Is Canada ready for the boom?

For more, visit and on Twitter at #GlobeBoomers

While we’ve written a fair bit in the past week about the economic threats from the baby-boomer generation’s drift into senior citizenship, there is a group that is quietly rubbing its palms together in anticipation: The workers coming up right behind them.

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Sun has finally set on BRICS funds


The BRICS are dead as an investment concept and their days as an influence-wielding bloc of key emerging countries may also be numbered. It’s been long overdue.

Goldman Sachs, the Wall Street powerhouse that gave the world the catchy, marketable acronym 14 years ago, has fittingly put the last nails in the coffin. Its asset-management arm quietly closed its shrinking BRIC equity fund in September and shifted the remaining assets into a broader fund covering all emerging markets.

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Time may be soon for real estate decline in key markets


Toronto and Vancouver will be the key housing markets to watch when new statistics are released this week, raising the spectre of the B word.

“For lack of a better word, I would call it a bubble. A lot of people don’t like using that word because it doesn’t sound very scientific,” economist David Madani of Capital Economics said in an interview. “But anyone who hasn’t been asleep for the past 10 or 15 years will realize that there have been bubbles in stocks, commodities and housing markets in much of the developed world.”

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A state-guaranteed basic income for all is becoming a necessity


Imagine that your employer suffered an unforeseen financial calamity and announced on Friday evening that there was no money to meet the payroll – would you turn up to work on Monday? You might hope that the crisis would blow over but in the absence of good news would you still be doing your job the following week?

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The good and the bad of Alberta’s minimum wage hike


Economics is one part science, one part art and one part blindly throwing darts at a board. The level of uncertainty in what comes next is due to the fact that humans are not, in fact, totally rational beings. There’s always a degree of murkiness and guessing.

And thus it is in Alberta where we are guessing what impact the rising minimum wage will have on the labour market. The governing NDP campaigned last spring on a platform of increasing the minimum wage from $10.20 an hour to $15 within four years. The first one dollar increase kicked in last month, and the government intends to continue with annual increases until it reaches $15.

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Steep learning curve ahead for rookie Finance Minister


When you look at Bill Morneau’s résumé, almost everything about it trumpets a man qualified to be Canada’s finance minister. He’s a successful executive, he holds master’s degrees in both economics and business administration, he has spent a career working on labour and pension issues, he has overseen one of the country’s leading public-policy think tanks.

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A road map for economic stimulus, in three phases


Although it was only lightly discussed on the campaign trail, the core challenge for fiscal policy makers will be to address Canada’s fading economic growth potential. We offer the following advice on the conduct of fiscal policy and its impact on economic growth, over three time phases – the immediate period, the business cycle (or medium term) and the longer term.

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