Op-Eds

Free licensed child care. It sounds like a parents’ dream. But look a little closer at the Government of Ontario’s recently announced plan to deliver free licensed child care for preschoolers, and flaws emerge. Beyond the arguably late starting age of 2½ years, this initiative could have unwelcome consequences due to its limited accessibility and its potential to create excess demand for licensed preschool care. Certainly the need for a solution is great. Gradual rises in dual-income-earner families and the employment rate of women in Ontario have led to higher needs for child care over the past few decades. But cost is probably the main barrier to access. According to the latest family survey by Statistics Canada, about 43 per...
For the first time in three years, headline inflation in Canada has moved above the Bank of Canada’s 2-per-cent target. Whether or not it will continue to increase, the fact that the bank’s three core measures of inflation averaged above 2 per cent for the first time in six years certainly suggests that it will. But the question remains, why has it been so hard to hit the 2-per-cent target? In a recent C.D. Howe Institute paper, we show that demographics – often thought of as an issue for health care or pension costs – has acted as a drag on monetary policy effectiveness and, in turn, has led to lower inflation. Much work has been done examining the issue of tepid inflation since the financial crisis. Canada has not been immune to this...
Canada is getting older. Not just us Canadians as individuals, but our population as a whole. Our fertility rate dropped below the replacement rate of 2.1 required for population stability way back in 1971. Life expectancy at birth has increased by more than nine years since then. One consequence of low fertility and increased longevity is that the number of people past what we traditionally consider working age is rising relative to the people of working age. The ratio of Canadians age 65 and older to Canadians age 18-64 rose by more than 10 percentage points over the past 40 years, and will rise by more than 10 percentage points again over the next 40. An aging population puts pressure on living standards, dampens growth of...
As it contemplates the possibility of a modernized NAFTA, Canada should seek to improve labour mobility throughout North America to address skill shortages in Canada. The narrative around the Trump regime focuses on Canada's increased advantage in attracting skilled international workers. But those same tougher U.S. immigration policies bring a threat: American employers may try to hire more Canadians who can easily cross the border to meet the demand for high skills. As a result of rapid technological changes, employers' needs for high-skilled workers grow every year. Since the North American free-trade agreement came into force more than 20 years ago, new occupations have been created. The Canadian market faces a labour...
Earlier this week, The Globe and Mail revealed internal research by government officials showing a global trend toward older normal pension ages, with most OECD countries’ target policy retirement age to be raised to at least 67 by around 2050. An eventual increase in the normal retirement age, here in Canada, appears inevitable. Despite this trend, Ottawa recently reversed course and cancelled a scheduled gradual increase in the Old Age Security (OAS) eligibility age from 65 to 67, to be fully implemented by 2030. The recent decision fails to recognize longer life expectancy since the 65-year-old benchmark was adopted, and the current marked trend towards later retirements. Projections show that by 2030, about 40 per cent of...