November 27, 2020 – A GST hike could be looming on the horizon if Ottawa starts down the road of permanent post-pandemic spending increases, warns a new report from the C.D. Howe Institute. The Fiscal and Tax Working Group stressed that now is not the time for permanent post-pandemic spending increases or matching tax increases. However, if Canadians want to see a significant increase in the level of ongoing program spending post-pandemic, they must be aware that it will require an increase in taxes across the income spectrum to be fiscally sustainable. The group of experts from the private sector and academia held their third and fourth meetings on October 6, 2020, and November 11, 2020. The group calculated that excluding...

October 28, 2020 – Canada’s healthcare system must learn the lessons of the first wave of COVID-19 and make the changes required to improve our capacity to tackle infectious disease outbreaks in future, says a new report from the C.D. Howe Institute. The Public Health and Emergency Measures Working Group notes as case numbers grow across Canada, insights from the first wave can be applied to better manage infection risks, while also minimizing social and economic disruption caused by public health and social distancing-related restrictions on activity. The group of health academics, professionals and business leaders is co-chaired by Janet Davidson, Chair of the Board of the Canadian Institute for Health Information and C.D. Howe...

October 22, 2020 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada keep its target for the overnight rate, its benchmark policy interest rate, at 0.25 percent at least until October of 2021. A majority of MPC members recommended that the Bank of Canada continue its quantitative easing program of Government of Canada bond purchases. The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. William Robson, the Institute’s CEO, chairs the Council. The Council’s principal recommendations are about the overnight rate target. Members make recommendations for the Bank of Canada’s upcoming interest-rate announcement...

September 22, 2020 – The COVID-19 crisis has left Ottawa’s finances vulnerable to significant downside risks, meaning little room for major post-crisis spending initiatives without tax increases across the board, says a new report from a C.D. Howe Institute Working Group. The Institute’s Fiscal and Tax Working Group, co-chaired by John Manley, former federal minister of finance; and Janice MacKinnon, former minister of finance of Saskatchewan, debated the question of whether the federal government’s fiscal trajectory is sustainable, given already announced plans. The discussion took place at the group’s second meeting on Thursday, September 17, 2020. Many members of the group of experts from the private sector and academia see...

September 14, 2020 – Ottawa must adopt a clear fiscal anchor to guide and control expenditure choices, says the C.D. Howe Institute’s Fiscal and Tax Working Group. The group of experts in both the private sector and academia is co-chaired by John Manley, former federal minister of finance; and Janice MacKinnon, former minister of finance of Saskatchewan. At their recent meeting, working group members discussed the importance of fiscal sustainability in ensuring government’s ability to provide public services, and the appropriate fiscal anchor to impose discipline over budgetary decisions. If left unanchored, public debt can eventually be monetized, as the central bank buys up government bonds, leading to higher inflation and...