David Macdonald’s Blog Posts
David Macdonald is an economist with the Canadian Centre for Policy Alternatives (http://www.policyalternatives.ca).
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. ...Read more
Tags: Economy & Economic Indicators·Federal Budget
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. ...Read more
Tags: Federal Budget·FINA·Government Finance
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. ...Read more
Tags: blackberry·business·research & development·sectoral development·telecommunications
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. ...Read more
Tags: Austerity·Federal Budget·Government Finance
Time flies and our Alternative Federal Budget is now in its 19th year. Year after year it has shown that we can have a Canada where we all do better together.
This year the AFB is more inclusive than ever with 27 chapters written by over 90 contributors each laying out progressive policy ideas ready for implementation. All policy proposals are fully costed and put within a realistic macro-economic framework to determine their impact on the deficit, debt and employment. ...Read more
Tags: Alternative Federal Budget·Government Finance
Oral health coverage for kids, particularly kids from lower-income families, is something that the CCPA and others have been advocating for. It is an area just outside of the present universal provincial health care coverage. However, when things go wrong it rapidly becomes something that health care folks and not dentists are tasked with dealing with.
A paediatrician here in Ottawa has just come out with a great overview and case for better publicly funded preventive oral care in Canada, particularly for children from low-income families. ...Read more
Tags: children·dental care·Health Care·Poverty and Income Inequality
A new report came out from the Fraser Institute today looking at income mobility. It certainly doesn’t intend to make this conclusion, but a thorough look at their data shows that the rich stay rich as everyone else fights for entrance to this exclusive club.
Plenty has already been written about growing income inequality in Canada from CCPA’s own Armine Yalnizyan and Hugh Mackenzie, among others. Their examinations show how the top 10% and top 1% of Canadians are running away with all income gains. Each year when we calculate who got a raise and by how much, most Canadians’ raises only barely match inflation with the top 10% and the top 1% giving themselves much more substantial raises. ...Read more
Tags: Economy & Economic Indicators·Poverty and Income Inequality
The federal government released its annual fall update on the country’s finances today. Despite the upbeat messaging around the “Update of Economic and Fiscal Projections” there are concerning underlying trends with the country and its finances.
For regular Canadians, there is no explosive growth expected in the job market to make up for the crash after the 2008-2009 recession. There has been no revision to the unemployment rate projections for next year which remain at 7.2%, slightly below the current rate of 7.4%. ...Read more
Tags: Economy & Economic Indicators·Employment and Labour·Federal Budget
Statistics Canada today revised the national accounts and found Canadians are now more indebted than either the Americans or the Brits were at the peak of their housing bubble. Instead of Canadian households having a debt to disposable income ratio of 154, as was previously estimated, it has now been revised upwards to 166. So, Canadians owe $1.66 for every $1 of disposable income.
The new data has disaggregated non-profits and households, which were previously lumped together. The lower debt ratios of non-profits were making the entire sector look like it had less debt—but now that households can be pulled out and examined specifically, the amount of debt they are carrying turns out to be much higher than previously thought. ...Read more
Tags: Economy & Economic Indicators·Housing
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