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Economy Lab

Delving into the forces that shape our living standards
Best Business Blog, EPPY awards, 2011 and 2012

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Russian adventurism just solidifying its economic mediocrity


Vladimir Putin’s Russia has spent the past year re-asserting its standing as a global political force. From its UN veto on sanctions in Syria, to the two-week extravaganza of the Sochi Olympics, to its regional aspirations in Crimea and eastern Ukraine, Russia appears to be trying to regain some of its past status. The only problem is that the Russian economy is slowly slipping into mediocrity and will be hard-pressed to support such adventurism.

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Only higher taxes will cure Ontario’s fiscal ills


Ontario’s Premier Kathleen Wynne has a majority mandate and four years to make some serious, difficult decisions. One of her biggest challenges will be to balance her government’s books, but doing this sensibly requires understanding the nature of Ontario’s fiscal problem.

Ontario’s budget deficit is by far the largest of all the provinces, forecast to be about $12.5-billion this fiscal year. As a share of provincial gross domestic product (GDP), it is 1.7 per cent. This is considerably smaller than Ottawa’s deficit back in the late 1980s and early 1990s, but it will still require serious effort by Ms. Wynne’s government.

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It’s time to rein in governments’ stealthy taxation by regulation


One day a man walked into the café that my wife and I owned in Halifax and asked my wife if she “lived on the premises.” After some preliminary skirmishing, she discovered that this man was on Her Majesty’s Service and he was there to determine if we were entitled to write on the café window that our baked goods were “homemade.”

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There’s little to celebrate in Canada’s economic performance


For all of the self-congratulatory rhetoric of the Harper government, the fact remains that Canada’s economic recovery has been built on a very fragile foundations. Growth has been fuelled by the growth of household and foreign debt rather than by business investment, and we have become dangerously reliant on the resource sector.

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Economy in a healthy transition to an investment-fuelled turnaround


Is the long-awaited rotation from debt-fuelled consumption to exports and investment starting to take shape in Canada? While we are not there yet in exports and investment, some interesting signs are percolating that, to quote the Bank of Canada, “constructive evolution” is under way regarding household balance sheets.

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Time is running out for a Canadian energy delivery strategy


It’s fair to say that many Canadian policy makers and business leaders are transfixed by the status of the Keystone XL pipeline. The U.S. government’s approval of the Keystone project would add 20 per cent more pipeline capacity and greatly improve Canada’s ability to supply the U.S. oil market in the near term. However, Keystone is only part of a bigger energy issue: rapidly rising U.S. oil and gas production and the threat it poses to exporters, Canada included.

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Business uncertainty a roadblock on the path to economic recovery


The Canadian economy is still mired in a tepid recovery, with real output growing at a rate well below what we saw before the recession. Canadian investment and exports are lagging far below normal levels, partly because the U.S. economy, although showing intermittent signs of life, continues to face its own recovery challenges. One crucial factor affecting both economies is widespread economic uncertainty.

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