Behind the Numbers

David Macdonald’s Blog Posts

David Macdonald is an economist with the Canadian Centre for Policy Alternatives (

EI is Not Actually Helping the Poor

July 14th, 2014 · David Macdonald · 6 Comments · Employment and Labour, Employment Insurance, Income Inequality

Who does employment insurance help? It seems like an obvious question. One would assume that EI is for Canadians who’ve lost their jobs and are therefore going to be low income. EI is meant to support them through hard times as they hopefully get another job and get back on their feet.

But…. what if we look at what income quintile EI recipients formerly found themselves? Were they low-income, middle class, or rich before they got laid off? I did some digging and I was surprised by the result.

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Temporary Foreign Workers: A Progressive Solution

June 26th, 2014 · David Macdonald · 3 Comments · Employment and Labour

The Temporary Foreign Workers (TFW) program has become such a mess that its complete elimination for low-skilled occupations is now an active possibility. Business, for its part, is screaming bloody murder that the cancellation will force the shutdown of entire sectors. They claim even offering $100/hour or $180,000/year to serve coffee at Tim Hortons will be inadequate to attract applicants. To boot, there is clear evidence that hiring TFWs instead of, say, Canadian youth is bad for Canadians looking for work.

As a progressive, I’ve wrestled with what to do with this mess. Should the whole program just be cancelled? If so, what happens to the actual Temporary Foreign Workers and, as a progressive, should I even care?

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Wealth Inequality: Going from bad to (net) worth

February 26th, 2014 · David Macdonald · 3 Comments · Economy & Economic Indicators, Income Inequality, Poverty and Income Inequality

Yesterday, Statistics Canada released its 2012 wealth survey (Survey of Financial Security). Two previous wealth surveys were published in 2005 and 1999 with a similar methodology.

We often talk about income inequality, which examines what middle class and rich Canadians make in a year. However, wealth inequality examines middle class and rich Canadians’ net worth, including their house, RRSPs, savings, car, etc. If income inequality—where the top 20% of families get 43% of the income— is concerning, then wealth inequality should be downright shocking. The top 20% of families in Canada own 67% of all net wealth (although this is down slightly from the high of 69% of all wealth in 2005).

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Budget 2014: Let stagnation reign

February 11th, 2014 · David Macdonald · No Comments · Alternative Federal Budget, Federal Budget

As Canada slogs through its anaemic recovery, the federal government again appears to be happy to drive down growth.  In fact since the last budget, economic growth for 2014 was revised down by a full point.  The future two years out looks rosy until we get there and then—surprise!—stagnant growth continues to be the norm.

The labour market, despite a whole booklet on it in the budget documents, is in much worse shape than advertised. Of the decline in the unemployment rate since the worst of 2009, 20% was due to Canadians finding jobs, obviously a positive thing, but 80% was due to Canadians giving up their search.  In fact the situation is much worse for youth where 100% of the drop in their unemployment rate was due to young people giving up their search.

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Alternative Federal Budget 2014: Striking a better balance

February 5th, 2014 · David Macdonald · No Comments · Alternative Federal Budget, Economy & Economic Indicators, Federal Budget, Income Inequality

The following remarks are excerpted from the 2014 Alternative Federal Budget press conference, featuring Armine Yalnizyan, David Macdonald and Bruce Campbell (February 5th, Parliament Hill).

This year is our 19th Alternative Federal Budget (AFB).

From the beginning, we’ve developed a rigorous economic and fiscal framework for our Budget; and we have acquired an enviable reputation for more accurately forecasting fiscal balances than the  Department of Finance. Organizers of a recent international conference in Berlin recently called our alternative budget the leading example of its kind in the world. Former parliamentary budget officer Kevin Page has praised it, as have many academic economists.

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What’s a province to do on CPP expansion?

December 18th, 2013 · David Macdonald · No Comments · Economy & Economic Indicators, Ontario, Pensions, Poverty and Income Inequality

It appears that a Canada-wide deal on CPP expansion is a bust, as Ottawa was the only objector and Ontario is now vowing to go it alone. It doesn’t appear that the Ontario government has a concrete proposal as of yet, but they will develop one in the coming months. It is truly unfortunate that a countrywide deal was not possible at this point. What does this mean for Canadians? It means that if they move around the country throughout their career they will receive varying amounts of post-retirement support, given the different provincial pension schemes. This will certainly make it much more difficult to plan for retirement. However, given Ottawa’s recalcitrance, expansions by the provinces is better than nothing for middle class Canadians.

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Balanced budget come hell or service cuts or asset fire sales

November 13th, 2013 · David Macdonald · No Comments · Economy & Economic Indicators, Federal Budget

The Minister of Finance on Tuesday announced the fall update to the country’s finances. There was a surprise in the works for Canadians, instead of the $3.8 billion surplus in 2015-16 from the 2013 Budget, Finance is now projecting a $6.7 billion surplus—or nearly twice as much money. In both cases, the published projections include a randomly selected subtraction $3 billion “risk adjustment” meaning the published surpluses are projected at $0.8 billion (2013 Budget) and $3.7 billion (Fall Update).

So where did the surprise cash come from to balance the budget in time for the election? Stupendous economic growth, substantial new employment? Hardly.

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What the feds should be focusing on

November 8th, 2013 · David Macdonald · No Comments · Economy & Economic Indicators, Federal Budget, Household Debt

I was asked on Tuesday to present to the federal Finance Committee and comment on the government’s latest budget. I thought I’d share my remarks with readers:

I’d like to thank the committee for their invitation on this important and ongoing issue of “fiscal sustainability and economic growth” in Canada.  It is unfortunate that 5 years after the recession we are still talking about economic growth and the lack of a full recovery in either GDP growth or the labour market.

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Blackberry and what’s wrong with sectoral development

September 24th, 2013 · David Macdonald · 1 Comment · Capitalism

Another year, another dead Canadian tech giant. Blackberry was sold yesterday for scrap to the Toronto private equity firm Fairfax. The purchase price of $4.7 billion is essentially valued at its cash of $2.6 billion and the value of its patents. Blackberry’s active businesses are essentially being valued at nothing.  If Fairfax can stop the incredible burn rate of $1 billion a quarter and make Blackberry’s enterprise encryption business sustainable then there is probably money to be made.  Best of luck to Fairfax in trying to recover some value from this slow motion train wreck.

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Austerity Through Infrastructure Cuts: Budget 2013

March 21st, 2013 · David Macdonald · 1 Comment · Economy & Economic Indicators, Federal Budget

One of the most amazing things about this budget is that one of its three focuses is actually the opposite of what it’s touting. You’ll likely hear that $14 billion will be spent on infrastructure over the next 10 years (actually, you may hear much bigger numbers, but they’re just re-announcing existing programs like the gas tax transfer). What you won’t hear is that 75% of that money is going to be spent in or after 2020. In fact, there will be an effective $1 billion cut to infrastructure transfers to the cities in 2014-15.

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