Canada’s debt is piling up again

Our ability to deal with the economic effects of COVID-19 is really a fiscal dividend from the actions of earlier governments

Canada’s debt is piling up againCanada was born in debt and continues to cycle back into deficit spending. According to the Parliamentary Budget Office, the 2020-21 fiscal year may see a federal deficit of over $250 billion. This follows deficits of $14 billion for 2018-19 and nearly $27 billion in 2019-20, based on the federal fall 2019 update. Given a…

Slow economic growth is the new normal

Unnaturally high growth rates were driven by post-war reconstruction, the baby boom and rising female labour force participation

Slow economic growth is the new normalThe single biggest determinant of long-term economic well-being is the rate of economic growth, but our expectations for modern growth may be misplaced. The industrial era, since the early 19th century, has seen powerful economic growth and unprecedented increases in living standards. Growth rates reached their peak in the postwar economic boom from 1945 to…

Two fiscal statements, a common debt problem

The federal and Ontario governments need to present deficit-reduction plans with a credible target dates now

Two fiscal statements, a common debt problemThe Ontario and federal governments will release their fall fiscal and economic statements this month. Despite a tendency to compartmentalize these separate events, in reality, there’s only one taxpayer. And when the fiscal debt situations of the provincial and federal government are combined, Ontario taxpayers are right to worry. According to the most recent data,…

Government debt will worsen the next recession

Governments around the world will go into the next recession with fewer economic management tools at their disposal

Government debt will worsen the next recessionGovernment deficit and debt numbers in Canada are rising due to accounting changes made to better reflect the true nature of government liabilities. Ontario recently revised its deficit and debt projections (based on advice from its auditor general) to better reflect the true costs of pension liabilities and its electricity programs. And because of the…

New trade deal increases American sway over Canada

The purpose of the USMCA is to first promote the economic and trade interests of the U.S. within North America

New trade deal increases American sway over CanadaThe great vociferous North American trade negotiations are finally over. And while the deal could still be derailed by the coming November mid-term elections in the United States, it’s very likely that the United States-Mexico-Canada Agreement (USMCA) will be the new framework for conducting trade on the continent. There has been a lot of ink…

Trade, deficit reduction and tax reform critical as recession looms

The federal government must act quickly on 3 fronts if it is to head off economic disaster

Trade, deficit reduction and tax reform critical as recession loomsWith the resumption of Parliament, Canada’s policy-makers face a turbulence. The United States and China are waging an economic Cold War armed with tariffs. And Ottawa continues negotiating with the administration of U.S. President Donald Trump over the North American Free Trade Agreement (NAFTA), with an American deadline looming on Sept. 30. Alongside all this,…

Canada needs to become more densely populated

We need a larger internal market that would create economies of scale and further economic productivity growth

Canada needs to become more densely populatedFormer prime minister William Lyon Mackenzie King once quipped, “If some countries have too much history, we have too much geography.” This has always been evidenced in Canada’s low national population density, estimated at about four people per square kilometre. Nevertheless, we’re still a highly urbanized country with more than 80 per cent of our…

Resolving Canada’s trade quagmire in the age of Trump

We must make a major concession to protect the auto sector and that may mean phasing out our farm supply management system

Resolving Canada’s trade quagmire in the age of TrumpThe North American Free Trade Agreement (NAFTA) negotiations continue to roller-coaster. The United States administration is now in senior level one-on-one NAFTA talks with Mexico. Meanwhile, President Donald Trump threatens Canada with new auto tariffs, and inflicts the silent treatment. And a Democratic governor calls on the president to cease his “childish” tweets at Prime…

Ontario needs to get cracking to clean up its finances

A variety of factors - from uncertain economic conditions to higher public spending - threaten to push Ontario further into debt

Ontario needs to get cracking to clean up its financesAs Ontario’s new government takes charge, attention has focused on the moves made on education and the management of Hydro One. However, the most important task remains: dealing with the province’s public finances. The government of Premier Doug Ford took a first step by tapping former B.C. premier Gordon Campbell to lead an inquiry into…

Concerns over household debt in Canada are overblown

The drop in interest rates has been so significant that the interest burden of servicing debt has declined as a share of income, despite growing household debt

Concerns over household debt in Canada are overblownWith headlines  about Canadian household debt hitting record levels and dire warnings from top policy-makers such as Bank of Canada governor Stephen Poloz, Canadians may think household debt is out of control. The concerns, however, often fail to properly account for the other side of the balance sheet. Yes, Canadian households have taken on more…
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