Tuesday, Dec. 17, 2013 5:00AM EST
A funny thing happened on the way to a post-recession recovery, and the resulting shrinking of government deficits. It seems the wealthiest Canadians have been paying a smaller proportion of the country’s taxes.
Statistics Canada’s release last week on the country’s highest-income tax filers revealed that since the recession hit, the highest 1 per cent of earners have seen their share of federal and provincial income taxes paid shrink year by year – from 23.3 per cent in 2007, before the recession, to 20.8 per cent in 2011, the most recent year for which Statscan has detailed tax-filing data. And while the median amount of taxes paid by the top 1 per cent resumed rising after bottoming in the depths of the recession, by 2001 is was still 3 per cent below the 2007 median. This despite the fact that median incomes for the top 1 per cent in 2011 were up 1 per cent from 2007.More »
Monday, Dec. 16, 2013 5:00AM EST
Central bankers have no end to excuses as to why inflation has slowed so precipitously. They may be missing the most important one: A slump in consumer inflation expectations, and the role commodity prices play in shaping those expectations.
Disinflation – a decline in the rate of increase in inflation – has become a pressing concern for investors and policy makers alike, mainly because it raises real borrowing costs for businesses and consumers, and can lead to slower economic growth. Consumer price inflation has dropped well below the targets of most developed-market central banks in the past few quarters, even prompting the European Central Bank to unexpectedly cut policy rates this fall, and the Bank of Canada to switch to a downside bias in its communiqué last week.More »
Friday, Dec. 13, 2013 3:25PM EST
ROBIN BOADWAY, SERGE COULOMBE AND JEAN-FRANÇOIS TREMBLAY
As the country’s finance ministers prepare to meet next week, one big item that was expected to be on the agenda, but will not be, is the future of federal-provincial transfer payments.
Although existing arrangements technically expire in March, 2014, this perennial topic of federal-provincial discord is evidently off the policy radar screen. Indeed, the federal government’s previous unilateral decisions, taken well in advance of the renewal deadline, have successfully pre-empted the debate.More »
Thursday, Dec. 12, 2013 5:00AM EST
If there was a way to boost global economic output by 100 per cent, we would all be all over it, right? Say that the way to do it was to move technology to strategic places around the globe, because doing so ensured that everyone was more productive. Even if that required countries to co-operate, you would think they would be happy to do it. After all, doubling the size of the world economy sounds pretty good, particularly in these days of sluggish activity and strained finances.More »
Wednesday, Dec. 11, 2013 5:00AM EST
They are tiny, uninhabited and seemingly insignificant territories. Yet the islets of the East China Sea have pushed Japan and China the closest to the brink of outright conflict since the Second World War ended.
Neither Tokyo nor Beijing has shown any signs of backing down on their claims to the Senkaku/Diaoyu islands. As Washington gets pulled ever more into taking sides in the dispute, the stakes are getting even higher for the situation to explode.More »
Tuesday, Dec. 10, 2013 5:00AM EST
The federal government has a well-deserved reputation for being strong on the economy. In general, it pushes growth-promoting policies while avoiding the opposite.
At the same time, the government frequently repeats its commitment to reducing Canada’s greenhouse-gas (GHG) emissions – by 17 per cent below 2005 levels by 2020. A few weeks ago, the environment minister reaffirmed this specific commitment.More »
Monday, Dec. 09, 2013 11:42AM EST
The wealthy’s slice of income pie holds steady
High-income Canadians’ share of the country’s total income held steady in 2011, Statistics Canada reported Monday. The highest-earning 5 per cent of all tax filers accounted for 23.8 per cent of all income, unchanged from 2010. The top 1 per cent of earners accounted for 10.6 per cent of earnings, the top 0.1 per cent generated 3.7 per cent of earnings, and the top 0.01 per cent of earners produced 1.3 per cent of all earnings, it said – all unchanged from 2010.More »
Friday, Dec. 06, 2013 4:18PM EST
SAM BOSHRA AND ANGELLA MacEWEN
Canadians and their U.S. neighbours have watched official unemployment rates drop in recent months to near pre-recession levels. Predictably, the discussion has turned to how well the official rates reflect underlying post-recession labour market dynamics.
Both the Canadian and U.S. labour survey programs produce alternative unemployment measures. While the broadest U.S. measure of unemployment has recently received a great deal of attention, its Canadian counterpart has not. In addition to being more complicated, the narrow scope of the Canadian measure significantly understates labour underutilization – defeating its intended purpose.More »
Wednesday, Dec. 04, 2013 2:34PM EST
HARRY NELSON AND NGAIO HOTTE
Canada, a country founded on its natural resources, possesses more natural wealth, per capita, than any other any other nation in the world. Our natural resources sustained our First Nations and catalyzed settlement, from east to west.
While Canada has changed considerably since its early days, natural resources still drive our economy. Yet, some suggest that by providing raw resources to the global economy, Canadians are pursuing lower-value, less-innovative and less-sophisticated activities, and that we should be shifting toward a more modern, knowledge-based economy.More »
Wednesday, Dec. 04, 2013 5:00AM EST
Canada’s inability to move its oil beyond North American markets cost oil producers an estimated $24-billion in 2012, and deprived federal and provincial governments of $8-billion in royalties and corporate tax revenue. The price discount on all Western Canadian oil versus international benchmarks has emerged from rising production and stagnant demand in North America, which has produced a glut of oil in the interior of the continent.More »
Tuesday, Dec. 03, 2013 5:00AM EST
In October, 2011, two leading U.S. economists, Nobel prize-winner Paul Krugman and Lawrence Summers, squared off in Toronto in the high-profile Munk Debates. At issue was the question of whether North America faced a Japan-style era of prolonged economic stagnation.
Mr. Summers, former Treasury secretary under president Bill Clinton, a key White House economic adviser in President Barack Obama’s first term, former president of Harvard University, and for a time a highly paid adviser to a leading hedge fund, is as close to an establishment economist as one can get. He was widely reported to be President Obama’s personal choice to replace Ben Bernanke as chairman of the Federal Reserve Board, and probably would have been nominated if not for strong opposition from the many Democratic senators who saw him as too close to Wall Street.More »
Monday, Dec. 02, 2013 2:35PM EST
Sometimes the Canadian debate about greenhouse gas (GHG) emissions generates more heat than light. Between climate change deniers and climate change hysterics, it is hard to get a fix on what is actually going on.
Recently, Environment Canada came to the rescue with the release of its 2013 Emissions Trends Report (ETR). Helpfully, the report tells us what emissions were in 2005, what they are now (at least in 2011, the latest year for which data are available), and how they are expected to change between now and 2020 – our target year for emissions reductions under the Copenhagen Accord. What we see is that some sectors of the economy and provinces such as Ontario, Quebec and British Columbia have done a lot, while others have done very little to contribute to meeting our 2020 target.More »
Monday, Dec. 02, 2013 5:00AM EST
Economists are famous for lifting concepts from scientific theory and applying them to issues in their field. In that spirit, I propose adding one more – “kludge” – because it goes a long way to explaining sluggish economic growth and poor business productivity, in Canada and beyond.
To “kludge” (rhymes with nudge), the Oxford English dictionary tells us, is “[to] improvise or put together from an ill-assorted collection of parts.” In essence, kludging is a quick fix that keeps a system running, rather than a long-term solution to an ongoing problem. It is a process used extensively in computer software coding and engineering. Anyone with a smartphone or tablet has encountered kludges, otherwise known as app updates to “fix bugs” in the code.More »
Friday, Nov. 29, 2013 12:38PM EST
George Washington’s cure for income inequality: Profit sharing
One of the big frustrations about income inequality is that when corporate profits grow, they aren’t shared equally – typical employee sees very little from it, while the people at the top, and big investors, reap most of the rewards. Executive compensation keeps growing way out of proportion to average salaries, and labour’s share of the economy’s total wealth is shrinking. One solution? Give average workers direct ownership in the company and its profits.More »
Thursday, Nov. 28, 2013 5:00AM EST
I view with a more than jaded eye every report that suggests that we have to, no matter what, provide something to kids in school. We have to have an hour a day of gym or some kind of movement, we have to have music education, we have to have field trips or longer nutrition breaks so kids can chew slower, or we have to have smaller classrooms or else it is too hard to learn.More »
Wednesday, Nov. 27, 2013 2:31PM EST
The problem with poor people is they don’t have enough money, someone once said. With the recent attention on income inequality in The Globe and Mail and The Economist, it is important to shift the conversation from problems to solutions.
Some have focused on the 1 per cent at the top, so successfully highlighted by the Occupy movement. Proposals range from moderating extreme CEO pay packages, to taxing high incomes, to urging the rich toward robust philanthropy. Defenders of the rich in right-wing think tanks point out, accurately, that the results would be modest.More »
Wednesday, Nov. 27, 2013 5:00AM EST
When trade ministers meet in Bali, Indonesia, next week, the elephant in the room will be whether the World Trade Organization (WTO) can function as a negotiating forum.
The agenda includes only a small set of issues to be harvested from the Doha Round of multilateral trade negotiations, and the prognosis is grim, according to director-general Roberto Azevedo. Achieving an agreement on the border management issues known as “Trade Facilitation” would be especially valuable for the world economy. But what’s most important for the multilateral process is that the ministers simply secure a deal – any deal – that would finally get the stalled Doha Round moving forward again.More »
Tuesday, Nov. 26, 2013 2:00PM EST
A dwindling proportion of men are members of labour groups, a shift that’s driving declines in Canada’s unionization rate in recent decades as rates for women have held steady.
The country’s rate of unionization (the proportion of workers who are union members) was 30 per cent last year, down from 38 per cent in 1981. Most of that decline happened in the 1980s and 1990s, Statistics Canada analysis shows, with rates stabilizing in the past decade.More »
Tuesday, Nov. 26, 2013 12:13PM EST
ROBERT HOWSE, JOANNA LANGILLE AND KATIE SYKES
The World Trade Organization panel decision on the European Union seal products ban, released Monday, is a landmark vindication of the right to protect animal welfare under international trade law. The panel found flaws in the way the exceptions to the EU ban are administered or defined, but confirmed that the overall ban on seal products can be justified as a reflection of European ethical and moral concerns. No wonder the Canadian government (while declaring the panel’s ruling to be a victory for Canadian seal hunters) immediately announced its intention to appeal the decision. Canada has, in fact, suffered a resounding defeat.More »
Tuesday, Nov. 26, 2013 5:00AM EST
Economists see the world differently than business people and politicians. This is never more evident than in discussions about the benefits of freer trade.
Here’s a suggestion for an educational evening: Invite an economist, a businessman and a politician for dinner and ask them if Canada would benefit by unilaterally reducing its tariffs on imported cheese or automobiles or hundreds of other products. The businessman will likely say it is pointless unless it improves Canadian business prospects. The politician will say that Canada shouldn’t make such a “concession” without other countries doing the same.More »
Monday, Nov. 25, 2013 2:02PM EST
Brighter job prospects in Alberta and more challenging ones in the eastern side of the country are altering the country’s population flows.
Alberta saw another year of above-average population growth in 2012-13, driven by record levels of net international migration and interprovincial migration, Monday’s preliminary population estimate from Statistics Canada shows.More »
Monday, Nov. 25, 2013 5:00AM EST
My recent Globe and Mail commentary sought to address and dispel a common misconception about the financing side of proposals to expand the Canada Pension Plan: That higher CPP premiums would be a job-killing payroll tax. Apparently, the benefits side of such proposals is equally subject to misconceptions, as evidenced by William Robson’s subsequent Globe commentary.More »
Friday, Nov. 22, 2013 4:28PM EST
Baby you’re a rich man
The economic gap between women and men may be gradually closing in the world, but when it comes to being stinking rich, there’s still a huge chasm.
Spear’s, the British wealth magazine, reports that only 10 per cent of the world’s multimillionaires are female. Its worldwide survey, conducted along with high-net-worth research firm WealthInsight, also found that Canada is slightly behind the global norm: Just 9.2 per cent of Canadian multimillionaires are women.More »
Thursday, Nov. 21, 2013 5:40PM EST
If Canadians are increasingly skeptical about whether their consumer price index (CPI) actually measures current consumer inflation, they have good reason to be. It doesn’t, and wasn’t designed to.
“The CPI” is a bit of a misnomer. There are actually several CPI measures. Statistics Canada’s all-items CPI (the latest monthly update of which is being released Friday morning) and the Bank of Canada’s CPIX are the most widely used. Both refer to changes in the price of an average household basket composed of 12 broad categories of goods and services. The CPI basket weights are mostly based on Statscan’s Survey of Household Spending (SHS).More »
Sheryl is an independent macroeconomic strategist with over 20-years experience in the international financial industry and central banking.
Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.
Clément Gignac is senior vice-president and chief economist at Industrial Alliance Inc., and chair of the World Economic Forum Council on Competitiveness and member of the Forum’s Sustainable Competitiveness Advisory Board.
Andrew Jackson is the Packer Professor of Social Justice at York University and Senior Policy Adviser to the Broadbent Institute.
Christopher Ragan teaches economics at McGill University; during 2009 and 2010 he was the Clifford Clark Visiting Economist at the federal Department of Finance in Ottawa.
Globe's Economics Team
Brian Milner is a senior economics writer and global markets columnist. In a long career at The Globe and Mail, he has covered diverse business beats, including international trade, the automotive industry, media, debt markets, banking and the business side of sports.