Op-Eds

Along with much of the world, Canada’s economy has suffered from the COVID-19 pandemic and other events in 2020, notably the shock to global oil markets. How badly? An examination of the immediate data and longer trends indicates significant damage, with a lengthy recovery period ahead. Let’s start with labour markets, where there are signs of recovery but also growing evidence of damage. The unemployment rate exploded to nearly 14 per cent from 6 per cent during the shutdown from March to May. The rate has dropped steadily since as many displaced workers have been re-engaged, but the second pandemic wave and renewed shutdowns in many provinces have meant more job losses. Employment fell by 63,000 in December, and the...
Of all the COVID-inspired clichés of 2020, “we can’t go back to how we were before” gets my vote for most trying. Taken literally, it is empty. We can’t undo the deaths, restore students’ lost instruction, give young people the first jobs they didn’t get, erase the huge debts, enjoy the travel and human contact that didn’t happen. No, we can’t go back to 2019 — which is too bad. Taken as an exhortation — “we shouldn’t go back to how we were before” — it is too often a prelude to magical thinking, a great leap to some environmental, economic or political nirvana previously out of reach. That is silly. A sick person who was never an athlete can dream of completing a triathlon. But their first task is to recover. In the same way, post-...
Une chatte n’y retrouverait pas ses petits dans le fatras de chiffres présentés dans l’énoncé économique de la ministre des Finances Chrystia Freeland, lundi dernier. À telle enseigne que la Nationale s’excusait dans une note à ses clients d’une « explication quelque peu tortueuse ». Comment y voir clair quand l’économie et les finances publiques baignent encore dans une grande incertitude en raison de la pandémie. Selon des hypothèses plus ou moins pessimistes, le déficit fédéral pour l’exercice en cours se situera quelque part entre 382 et 400 milliards de dollars. Si on s’en remet aux mots plutôt qu’aux chiffres qui donnent le tournis, il faut se rendre à l’évidence que ce choc économique et budgétaire est sans...
Le Canada déploie le plus grand effort financier de toutes les économies avancées pour lutter contre la crise, effort que permet son endettement le plus faible. Dans l’ampleur comme dans la manière, il suit à la lettre les prescriptions du Fonds monétaire international (FMI). Il y a pourtant lieu de craindre un excès de zèle à Ottawa. Le Moniteur des finances publiques, publié lors des récentes assemblées annuelles du FMI et de la Banque mondiale, tenues conjointement à Washington, permet de comparer la situation du Canada avec celle des autres pays développés. Selon le FMI, le Canada enregistrera en 2020 un déficit de 19,9 % de son PIB, le pourcentage le plus élevé des économies avancées, dont le déficit moyen sera de 14,4...
Looked at one way, the federal government’s recent musings about spending tens — even hundreds — of billions more dollars on a raft of new programs seem weird. Nobody thought we could afford such a binge before COVID hammered our economy. How is it a great idea afterward? Look at it another way, however, and the magical thinking in Ottawa is easier to understand. The crisis pushed the federal government’s revenues down and its spending up. Directionally, that is fine. But a mind-boggling two-thirds hike in program expenses this year has driven the apparent tax cost of a dollar of program spending through the floor. Federal largesse has never looked cheaper. How cheap? July’s fiscal snapshot suggested Ottawa’s revenue, excluding...