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BRIAN LEE CROWLEY
Thursday, Feb. 19, 2015 5:00AM EST
The Harper government claim to be paragons of fiscal virtue. They have pledged to balance the federal budget this year, notwithstanding a slowing economy, and are likely set to announce details of the balanced budget legislation promised in the 2013 Speech from the Throne.
The promised legislation will disallow annual deficits in “normal economic times” (whatever they are) and “set concrete targets for returning to balance in the event of an economic crisis.”More »
Wednesday, Feb. 18, 2015 5:00AM EST
The Organization for Economic Co-operation and Development published last week a report entitled “Economic Policy Reforms 2015: Going for Growth,” which acts as an update on the implementation of what it deems are much-needed reforms across developed countries.
Among this year’s conclusions in the report, we find that Nordic countries (including Canada), which were less hard hit by the financial crisis, are slow in their progress to reform some important aspects of their respective economies.More »
Friday, Feb. 13, 2015 5:00AM EST
“You’re an idiot!” the anonymous e-mail shouted at me. “Oil prices could never go that high. If they did, the entire global economy would collapse!”
The terse, crudely-worded note popped into my inbox about a decade ago. It was in response to comments I had made on the radio. The talk show host asked me: “Will oil ever hit $50 a barrel?” At the time, oil prices were marching higher... $40, $42, $45 ... to what seemed like dizzying heights. I had responded that yes, oil will probably reach $50 at some point.More »
Wednesday, Feb. 11, 2015 8:00AM EST
Many observers of monetary policy are once again accusing the Governor of the Bank of Canada of favouring a weaker Canadian dollar as a way to promote our exports. Once again, both Stephen Poloz and the workings of monetary policy are being misunderstood.
Mr. Poloz has been thinking about monetary policy since his student days. His PhD thesis was about the determinants of money demand, a central topic for any central bank. He then spent 14 years at the Bank of Canada, thinking through the many details of monetary policy, including inflation targeting, labour market hysteresis, measures of inflation and the role of commodity prices.More »
Wednesday, Feb. 11, 2015 5:00AM EST
Private sector investment has become the lagging edge of the Canadian outlook – rather than being on the cutting edge. Years of feeble business investment growth, combined with the current investment pullback in the oil patch, are bringing private investment growth to a standstill.
Indeed, it may be even worse than that. The Conference Board of Canada expects that private investment actually contracted in 2014, due to the depreciating currency. A lower dollar raised the cost of importing new machinery and equipment, thus crowding out any nominal growth in investment spending by businesses. Moreover, Canadian firms continue to sit on a mountain of cash that had climbed to more than $480-billion in the third quarter of 2014, even though interest rates and investment earnings are exceptionally low.More »
Tuesday, Feb. 10, 2015 5:00AM EST
BRIAN LEE CROWLEY
During my time working for the UN in the Congo (or Zaire as it then was), I became good friends with a successful Ismaili businessman who had built a lovely home in the hills overlooking a mist-covered lake in the east of the country.
One day a Zairean army general drove up to the house and looked around appreciatively at the view, the grounds and the house. He knocked on the door and said to my friend, “You have a beautiful home here. You have 24 hours to get out. It’s mine now.”More »
Thursday, Feb. 05, 2015 5:00AM EST
In the runup to the delayed federal budget, there is a strange disconnect between fiscal policy and our changing economic circumstances. Balancing the budget seems to remain the key political priority, as if nothing had changed.
But the collapse of oil and other resource prices has changed a lot. Most notably, the Bank of Canada has, unexpectedly, cut interest rates to take out “insurance” against a serious slump in our resource-dependent economy. Toronto-Dominion Bank forecasts slow growth of just 2 per cent this year, and has projected that unemployment will rise by 0.2 percentage points in the next few months.More »