Before the federal government’s Fall Economic Statement last month, we often heard words like “restraint” and “prudence.” Less so afterwards. The statement’s projections confirm that every new forecast from Ottawa shows the federal government getting bigger faster, with every area of spending swelling more by the year.

The government’s last pre-COVID projections were in its 2019 fall statement. The final fiscal year in those projections was 2024/25, when federal spending was slated to hit $421 billion.

The government used the pandemic as an excuse to present no budget in 2020, an unprecedented failure for it and for Parliament as a whole. It did present a fall statement late in the year, however. To compare that statement’…

Canada’s Parliamentary Budget Office just did something important and long overdue. For the first time, the country’s official financial watchdog quantified the costs of climate change for Canada’s economy, showing that worsening climate impacts are a drag on economic growth. This is a crucial step in beginning to reduce the economic risks Canada can expect in a warming world.

There’s still a long way to go, however, and recent moves by Australia and the United Kingdom can point us in the right direction.

In Canada, our long-term economic projections are largely based on historical averages of productivity that do not account for the fact that the climate is now changing rapidly, bringing with it more…

Une euphorie postpandémique s’empare de nos politiciens en campagne électorale. On aimerait y croire, mais les baisses d’impôt promises par la Coalition avenir Québec (CAQ) et les libéraux posent problème.

Ces annonces plairont au plus grand nombre, mais elles aggraveront l’inflation, que ces partis veulent pourtant soulager. Que vaudra une réduction d’impôt, si elle entraîne des paiements hypothécaires plus élevés ?

Ce n’est pas le moment de stimuler une économie en surchauffe, alors que la Banque du Canada hausse les taux d’intérêt pour calmer le jeu.

Cette générosité soudaine provient d’une lecture avec des lunettes roses du Rapport préélectoral sur l’état des finances publiques du Québec.

Ses projections…

“Build back better!” We have heard that a lot since COVID hit — mainly from advocates for government spending, who saw pandemic-related fiscal stimulus, financed by central bank bond purchases, as suddenly making things that had seemed out of reach affordable.

The 2022 federal budget highlights their success. Ottawa’s last pre-COVID projections, in its 2019 fall update, showed federal spending at $421 billion in fiscal year 2024-25. The 2022 budget’s projections have it at $479 billion a year (adding back $2 billion in pension obligations the government stopped including meanwhile). That’s $58 billion more, long after COVID-related measures are gone. The slogan we should have been hearing is “Build back bigger!”

In 2019, a…

With inflation on the rise, the Bank of Canada kicked its tightening cycle into high gear Wednesday by announcing a 50-basis-point increase in its target for the overnight rate — the first non-25-basis-point hike in over 20 years. It also modified its stance concerning its over-sized holdings of Government of Canada bonds, which swelled its balance sheet during so-called Quantitative Easing (QE). Those days are over: it will now initiate Quantitative Tightening, or QT, by not replacing bonds on its balance sheet as they mature, thus reducing its bond holdings over time.

Some might be disappointed the bank didn’t go further on QT by announcing it would actually start selling its holdings of government bonds. Not to worry.…