Tariffs didn't create the Great Depression, cuts and austerity did. Canada and other countries have everything they need to defend their economies if Central Banks just step up.
Fraser Institute opinion writers always call for rollbacks in provincial spending yet do not demonstrate that such cutbacks would actually return greater social and economic benefits.
For example, though millions were unemployed during the Great Depression, the federal government feared higher deficits, failed to act, and the populace was left to suffer. Yet once WWII began, massive spending was injected into the economy to fully equip and staff our military. The high public debt did not prevent a golden era of post-war prosperity when a disciplined workforce built highways, hospitals and universities, and when new social programs could be introduced.
True fiscal rectitude needs to focus not on what some ideologues think is a better statistical scorecard, but on real-world programs that improve provincial infrastructure, reduce costly social problems, and get B.C.'s 6% unemployed - 187,000 people - back into productive work.
Footnotes:
1. 1939--1945: World War II Transformed the Canadian Economy
"The government budget deficit also increased rapidly: in 1939, the budget deficit was less than 12% of GNP; in 1945, that rate rose above 42%. Nevertheless, by 1944, the Great Depression had faded into memory, and the unemployment rate was less than 1%.
By the end of the war, the economy had a more highly skilled labour force, as well as institutions that were more conducive to sustained economic growth."
"For example, in the debate over how to address the aging population, it should be obvious that the only way to address this issue is to increase future productive capacity. This involves the application of real resources now to research, infrastructure development, education (including in areas relevant to servicing an aging population), etc. So while more resources will probably be needed in the future to attend to a larger cohort of elderly people, it does not follow that if the government “saves” money now, this will somehow help to address the needs of the aging population in twenty years time, say. Indeed, why on earth would cutting spending now increase the availability of the real resources required in the future: workers, buildings, energy, or metals and plastics for joint replacements?"
With a big programme carried out at a regulated pace we can hope to keep employment good for many years to come. We shall, in fact, have built our New Jerusalem out of the labour which in our former vain folly we were keeping unused and unhappy in enforced idleness."
4. For Overspending Governments, an Alternative View on Borrowing Versus Raising Taxes
"Deficits, per se, are not disturbing," Kelton wrote in a September column for Bloomberg Opinion. "Is there a limit to how big the deficit can safely climb? Absolutely! Deficits matter. They can be too big -- risking accelerating inflation. But they can also be too small, robbing the economy of a critical source of income, sales and profits."
5. John Maynard Keynes, (1883-1946) British economist
"I do not believe that measures which truly enrich the country will injure the public credit…It is the burden of unemployment and the decline in the national income which are upsetting the Budget. Look after the unemployment, and the Budget will look after itself."
6. Chill out time: better get used to budget deficits | Bill Mitchell
"So when all these political leaders have been falling into the deficit hysteria mantra and assuring us that they would be invoking fiscal austerity strategies in the coming year – all that was telling private investors (that is, the real investors who build productive capacity) was that demand would probably deteriorate even further and so why create new productive capacity. It becomes a vicious circle – private spending declines – the automatic stabilisers drive up the public deficit – the deficit terrorists go crazy and because they have control of the media create political pressures for the government – the government runs scared and announces austerity – private spending declines further on the news – the automatic stabilisers drive up the public deficit and so on."
7. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
"The state of Victoria (Australia) held its State Election last Saturday and the Labor Party was returned to office in a landslide, with voters categorically rejecting the campaign of fear and surpluses that the conservative parties relied on to get into office.
Victoria is the “most progressive” state in Australia and ran a campaign that included ‘doubling the state’s debt’ to further build new infrastructure in health, education and transport.
There are massive public transport projects underway, which people are seeing benefit their daily lives.
The lesson is fairly clear – governments are elected to advance well-being not ‘balance’ the books.
People want governments to do things that improve their lives not attack their living standards in the name of running surpluses.
As it happens, Victoria is the fastest growing state in Australia and the tax revenue that has come with that growth has generate(d) state surpluses for the last four years."
8. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
Blustein (2008: 230) documents the findings of a plethora of research studies that have focused on the importance of work for psychological health.
1. “the loss of work has been consistently linked to problems with self- esteem, relational conflicts, substance abuse, alcoholism, and other more serious mental health concerns”.
2. “the loss of work has been associated with a notable decline in the quality of neighborhoods, a decline in the quality of family relationships, and an increase in crime as well as problems in other critical aspects of contemporary life”.
3. “the loss of employment opportunities … [leads] … to a marked disintegration in the quality of life, with corresponding elevations in drug abuse, criminal activity, violence, and apathy.”
9. Labour force characteristics by province, seasonally adjusted
The thought that the Canadian commitment to peace, order and good government is what leads to the American ideals of life, liberty and the pursuit of happiness is an error on your part, Dougald.
The American "ideals" depend on individual actions assessed by individuals. They don't require any stamp of approval from any authority.
The Canadian "commitment" depends on a centralized authority defining "peace, order and good government" and then telling us if they've accomplished their goals.
That's why the US beliefs are "ideals" accessible to all, but the Canadian beliefs are "commitments" from the authorities to the governed.
As for the rest of your post, the Canadian government is spending too much of our money. In some cases, as with the multiple malfeasance at SNC Lavalin and within the famous Federal government, "Green Slush Fund," the current government is actively stealing from the public purse.
I think we should encourage the current government to stop stealing, at the very least. Surely that would return both social and economic benefits, all by itself.
Centralized authority is the basis for the rule of law - that no one is above the law.
The individual who took a $22-million bribe to steer a contract to SNC-Lavalin was Dr. Arthur Porter IV, a conservative donor and dealmaker whom Stephen Harper appointed to the chair of the the Security Intelligence Review Committee. He had to be fired from that job when it was discovered that he was secretly doing deals in Africa with Russia for hundreds of millions of dollars, before he flew off to the Bahamas to do deals with convicted billionaire rapist Peter Nygard.
The people on the board of SNC Lavalin at the time of the included Conservative Senator Hugh Segal and well known conservative Gwyn Morgan, who was also on the board of HSBC when it was shown to be laundering money (twice) for international organized crime and terrorists.
Those aren't reasons to deny seniors a decent income, or put money into health care, or create jobs, or roads, or bridges, pipelines, water treatment or ports, all of which take public money. All you're doing is vomiting up propaganda.
Centralized authority is not the basis for the rule of law, Dougald. The basis for rule of law is the concept that everyone is treated equally by the law.
In practice, this means a strong judiciary independent of central authority.
While I appreciate your information indicating that SNC Lavalin corruption extends across party lines, I was thinking about a more recent incidence of malfeasance directly relating to need for a strong judiciary independent of central authority.
I was thinking about the time the Justin Trudeau Liberals demoted Attorney General Jody Wilson-Raybould for investigating SNC Lavalin.
The basis of the rule of law is that it applies to everyone, and it is part of the central authority of the federal government. In Canada, the judiciary is a branch of the federal government, and the Chief Justice of the Supreme Court is the head of it. The independence is achieved through a division of powers.
As for Wilson-Raybould, she was not investigating SNC-Lavalin. SNC-Lavalin had already been charged and the case was proceeding to trial, and a new law had been introduced which effectively prohibited plea bargains.
Wilson Raybould was approached and asked to consider whether she would consider a plea bargain, which is something that SNC-Lavalin had asked of every single political party - the Conservatives and the NDP - to support.
The reason for a plea-bargain is related to the idea of a proportionate punishment. The alleged crimes were known to group of senior individuals in a company with thousands of employees - through to custodial staff and officer workers, and engineers - who would all suffer for their crimes and end up losing their jobs because of their bosses' wrongdoing.
Wilson-Raybould was appointed to another cabinet post, which she accepted, and at committee she testified under oath that there was nothing unlawful about anything her colleagues had done.
As for the Green Fund, if it turns out there was corruption, then there should be consequences.
The reality is that provincial governments have larger combined budgets than the feds, and far weaker oversight. The federal government has standards and laws that do not exist at all at the provincial level, and blatant corruption and conflicts of interest are legal.
At my own expense I engaged in a private prosecution against the Premier of Manitoba who sold $30-million in real estate when they were a Cabinet Minister, and didn't declare it. I succeeded in getting an independent review into why Peter Nygard had never been arrested in Manitoba, and got him charged.
I am not interested in partisan BS or arguments based in political propaganda.
The rule of law should indeed apply to everyone and the best way to insure this happy state is to secure the independence of the judiciary from the politicians.
But ours isn't that way, which is why the Trudeau government was able to force Wilson Raybould into a lesser position in government initially and out of caucus eventually.
You should read her book. It gives a substantially different account of what happened to her than you provide above.
As for the "green slush fund," there was certainly malfeasance according to most accounts and the Auditor General's report on the matter. That's also why the government department associated with the scandal (Sustainable Technology Development Canada) was shut down.
Perhaps the biggest malfeasance was the Trudeau government's refusal to turn over documents related to the scandal to the RCMP and the speaker of the House of Commons in September 2024.
If the judiciary and policing had a little more independence from the centralized Canadian government, this last piece of malfeasance might have been avoided.
If you've had such success in Manitoba Dougald, perhaps you should take on Ottawa.
I'm pleased to see provincial governments FINALLY getting rid of barriers to interprovincial trade. The amount of productivity this releases is staggering.
Agree that Canada should work to attract all the healthcare workers, scientists, professors and other experts being laid-off by the idiot techBro. And, also seek trade deals with other countries is to the benefit of Canada and them.
Really, the timing of this 'orange' assault on Canada is almost prescient as there are a number of changes already underway (demographic shift; climate/environmental events; advance toward peak oil and the need for more innovation) and this startles us out of complacency and shifts us into change gear. An effort in maturing as a country and pulling together.
There are no interprovincial trade barriers. It won’t release productivity because it’s not based on evidence or facts. It’s based on totally unjustifiable assumptions and hype.
Ummm ,, Just one example: I’m in the building industry and it’s not possible to hire an Architect or Eng from another province for a project. Both professions have a national association and provincial association. If you’re an Arch/Eng registered in Ont for example and you wish to do work across Canada, you need to register in each province. This is protectionist behavior between provinces. A carpenter on the other hand is able to become registered under the Red Seal program and work anywhere in Canada. This protectionism increases costs and complexity for no value added. To be clear, architects and engineers both learn the same skills and info. It has nothing to do with a specific province. However, if you want to work on a Federal Government project, it’s possible to hire an Arch or Eng from anywhere in Canada. I’ve had much experience with this issue and am not making assumptions. Perhaps folks refer to this barrier as something else?? There is a huge barrier to moving CND wine across the country. Many other examples …
With respect, not one of those examples is an example of economic growth. It means an architect from one province gets hired instead of another and it means you buy a bottle of wine from one producer instead of another.
That is not growth. That is not an increase in productivity.
What it would allow for smaller provinces to be picked clean while all the work is done by large national or international firms, which is what the goal is, especially for privatized government services and reducing competition.
Goodness, this is not the forum clearly. It’s much more complex than you have imagined. Large firms grabbing all the work has everything to do with policy that allows monopolies to exist and flourish. And with the wine issue, it’s easier to move products south.
Productivity is not well understood from one industry to another. Generally when something takes longer to accomplish and costs more without generating more value it’s considered less than productive.
If Ottawa prints money, its value will depreciate. If Ottawa prints a lot of money, its value will depreciate a lot.
A depreciating dollar is inflationary and inflation also acts as a tax.
The Trudeau government has inflated Canadian currency quite a bit since 2019. Maybe we should assess the results of this inflation before turning the inflationary taps back on.
Totally agree on austerity being counter-productive, the question to me is how governments should be spending. Besides programs to help those directly affected by tariffs, I think we need to reorient government spending towards investment and away from consumption, notably by reforming transfer programs so they no longer subsidize people with above-median incomes and instead are the poverty alleviation programs they should have always been. We should then pump the saving (and then some) into investments in infrastructure and R&D.
On the central bank, if I understand your argument correctly, you are recommending quantitative easing as opposed to interest rate cuts. I'm not sure I understand the difference in practice (both are stimulus). Why is QE your preference?
Canada's economy is being strangled by private debt, and it is a consequence of decades of trying to solve Canada's problems with monetary measures instead of fiscal ones.
My very first post on this substack is about the critical need for central banks to adopt new policies. Monetary stimulus is a terrible way to stimulate the economy and it has contributed to our current crisis.
Lowering interest rates means more people can borrow more money, because the loan is calculated on the basis of people's ability to service debt. It's absolutely useless for the vast majority of the population, who are expected to personally stimulate the economy by taking out larger loans that drive up the price of housing and contribute to the affordability crisis. Almost all of the monetary stimulus ends up being mortgages, which means individuals are personally on the hook for hundreds of thousands of dollars in debt they have used to purchase a non-productive asset.
However, at the upper end of the wealth and income spectrum, ultra-low interest rates drives mass purchases of existing assets, like real estate and other companies for mergers and acquisitions. It directly fuels inequality, the concentration of wealth, and the debt dynamic that has been crushing the middle and working classes out of existence.
Monetized deficits would inject positive money into the economy, which is what is needed.
I take your point about housing, but isn't that as much the result of a dysfunctional housing market, where supply has been hugely restricted for decades? I still see interests rates as having a role to play in promoting business investment, which we desperately need more of to increase productivity growth. Fiscal policy has a role to play in that as well, obviously, but interest rates are a fundamental part of determining the profitability of capital investments.
And pray they take us over do we can have universal healthcare (I’ve tried it and I loved it), really tough gun laws, and genuinely considerate people.
Thank you for making the case against government cutbacks!
Letter sent to Vancouver Sun:
Re: Opinion: Finance Minister Bailey must repair B.C.’s broken finances
Ben Eisen, Joel Emes, Feb 20, 2025
https://vancouversun.com/opinion/op-ed/opinion-finance-minister-bailey-must-repair-b-c-s-broken-finances
Fraser Institute opinion writers always call for rollbacks in provincial spending yet do not demonstrate that such cutbacks would actually return greater social and economic benefits.
For example, though millions were unemployed during the Great Depression, the federal government feared higher deficits, failed to act, and the populace was left to suffer. Yet once WWII began, massive spending was injected into the economy to fully equip and staff our military. The high public debt did not prevent a golden era of post-war prosperity when a disciplined workforce built highways, hospitals and universities, and when new social programs could be introduced.
True fiscal rectitude needs to focus not on what some ideologues think is a better statistical scorecard, but on real-world programs that improve provincial infrastructure, reduce costly social problems, and get B.C.'s 6% unemployed - 187,000 people - back into productive work.
Footnotes:
1. 1939--1945: World War II Transformed the Canadian Economy
http://web.archive.org/web/20050507140447/http://canadianeconomy.gc.ca/english/economy/1939ww2.html
"The government budget deficit also increased rapidly: in 1939, the budget deficit was less than 12% of GNP; in 1945, that rate rose above 42%. Nevertheless, by 1944, the Great Depression had faded into memory, and the unemployment rate was less than 1%.
By the end of the war, the economy had a more highly skilled labour force, as well as institutions that were more conducive to sustained economic growth."
2. MMT: What it Means for Canada
http://www.progressive-economics.ca/2011/08/12/mmt-what-it-means-for-canada/
"For example, in the debate over how to address the aging population, it should be obvious that the only way to address this issue is to increase future productive capacity. This involves the application of real resources now to research, infrastructure development, education (including in areas relevant to servicing an aging population), etc. So while more resources will probably be needed in the future to attend to a larger cohort of elderly people, it does not follow that if the government “saves” money now, this will somehow help to address the needs of the aging population in twenty years time, say. Indeed, why on earth would cutting spending now increase the availability of the real resources required in the future: workers, buildings, energy, or metals and plastics for joint replacements?"
3. Anything We Can Do, We Can Afford
John Maynard Keynes, in a 1942 BBC address
https://jwmason.org/slackwire/keynes-quote-of-day-2/
"Anything we can actually do, we can afford.
***
With a big programme carried out at a regulated pace we can hope to keep employment good for many years to come. We shall, in fact, have built our New Jerusalem out of the labour which in our former vain folly we were keeping unused and unhappy in enforced idleness."
4. For Overspending Governments, an Alternative View on Borrowing Versus Raising Taxes
https://www.bloomberg.com/news/articles/2018-10-19/this-theory-has-some-u-s-politicians-thinking-big-quicktake
"Deficits, per se, are not disturbing," Kelton wrote in a September column for Bloomberg Opinion. "Is there a limit to how big the deficit can safely climb? Absolutely! Deficits matter. They can be too big -- risking accelerating inflation. But they can also be too small, robbing the economy of a critical source of income, sales and profits."
5. John Maynard Keynes, (1883-1946) British economist
http://rortybomb.wordpress.com/2012/03/06/vsp-historical-trip-also-keynes-look-after-unemployment-and-the-budget-will-look-after-itself/
"I do not believe that measures which truly enrich the country will injure the public credit…It is the burden of unemployment and the decline in the national income which are upsetting the Budget. Look after the unemployment, and the Budget will look after itself."
6. Chill out time: better get used to budget deficits | Bill Mitchell
http://bilbo.economicoutlook.net/blog/?p=8263
"So when all these political leaders have been falling into the deficit hysteria mantra and assuring us that they would be invoking fiscal austerity strategies in the coming year – all that was telling private investors (that is, the real investors who build productive capacity) was that demand would probably deteriorate even further and so why create new productive capacity. It becomes a vicious circle – private spending declines – the automatic stabilisers drive up the public deficit – the deficit terrorists go crazy and because they have control of the media create political pressures for the government – the government runs scared and announces austerity – private spending declines further on the news – the automatic stabilisers drive up the public deficit and so on."
7. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
http://bilbo.economicoutlook.net/blog/?p=40988
"The state of Victoria (Australia) held its State Election last Saturday and the Labor Party was returned to office in a landslide, with voters categorically rejecting the campaign of fear and surpluses that the conservative parties relied on to get into office.
Victoria is the “most progressive” state in Australia and ran a campaign that included ‘doubling the state’s debt’ to further build new infrastructure in health, education and transport.
There are massive public transport projects underway, which people are seeing benefit their daily lives.
The lesson is fairly clear – governments are elected to advance well-being not ‘balance’ the books.
People want governments to do things that improve their lives not attack their living standards in the name of running surpluses.
As it happens, Victoria is the fastest growing state in Australia and the tax revenue that has come with that growth has generate(d) state surpluses for the last four years."
8. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
http://bilbo.economicoutlook.net/blog/?p=34412
Blustein (2008: 230) documents the findings of a plethora of research studies that have focused on the importance of work for psychological health.
1. “the loss of work has been consistently linked to problems with self- esteem, relational conflicts, substance abuse, alcoholism, and other more serious mental health concerns”.
2. “the loss of work has been associated with a notable decline in the quality of neighborhoods, a decline in the quality of family relationships, and an increase in crime as well as problems in other critical aspects of contemporary life”.
3. “the loss of employment opportunities … [leads] … to a marked disintegration in the quality of life, with corresponding elevations in drug abuse, criminal activity, violence, and apathy.”
9. Labour force characteristics by province, seasonally adjusted
https://www150.statcan.gc.ca/n1/daily-quotidien/250207/t003a-eng.htm
British Columbia Dec '24
Jan '25
Population 4,798.3 4,805.9
Labour force 3,104.5 3,131.1
Employment 2,920.6 2,944.0
Full-time employment 2,321.7 2,341.6
Part-time employment 598.9 602.4
Unemployment 183.9 187.1
Participation rate 64.7 65.2
Unemployment rate 5.9 6.0
... ...
Employment rate 60.9 61.3
... ...
Source(s):
Table 14-10-0287-03.
--
__________________________________________
Modern Monetary Theory in Canada
http://mmtincanada.jimdo.com/
The thought that the Canadian commitment to peace, order and good government is what leads to the American ideals of life, liberty and the pursuit of happiness is an error on your part, Dougald.
The American "ideals" depend on individual actions assessed by individuals. They don't require any stamp of approval from any authority.
The Canadian "commitment" depends on a centralized authority defining "peace, order and good government" and then telling us if they've accomplished their goals.
That's why the US beliefs are "ideals" accessible to all, but the Canadian beliefs are "commitments" from the authorities to the governed.
As for the rest of your post, the Canadian government is spending too much of our money. In some cases, as with the multiple malfeasance at SNC Lavalin and within the famous Federal government, "Green Slush Fund," the current government is actively stealing from the public purse.
I think we should encourage the current government to stop stealing, at the very least. Surely that would return both social and economic benefits, all by itself.
Centralized authority is the basis for the rule of law - that no one is above the law.
The individual who took a $22-million bribe to steer a contract to SNC-Lavalin was Dr. Arthur Porter IV, a conservative donor and dealmaker whom Stephen Harper appointed to the chair of the the Security Intelligence Review Committee. He had to be fired from that job when it was discovered that he was secretly doing deals in Africa with Russia for hundreds of millions of dollars, before he flew off to the Bahamas to do deals with convicted billionaire rapist Peter Nygard.
The people on the board of SNC Lavalin at the time of the included Conservative Senator Hugh Segal and well known conservative Gwyn Morgan, who was also on the board of HSBC when it was shown to be laundering money (twice) for international organized crime and terrorists.
Those aren't reasons to deny seniors a decent income, or put money into health care, or create jobs, or roads, or bridges, pipelines, water treatment or ports, all of which take public money. All you're doing is vomiting up propaganda.
https://open.substack.com/pub/dougaldlamont/p/peter-nygard-and-arthur-porter-iv?r=9gk0j&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Centralized authority is not the basis for the rule of law, Dougald. The basis for rule of law is the concept that everyone is treated equally by the law.
In practice, this means a strong judiciary independent of central authority.
While I appreciate your information indicating that SNC Lavalin corruption extends across party lines, I was thinking about a more recent incidence of malfeasance directly relating to need for a strong judiciary independent of central authority.
I was thinking about the time the Justin Trudeau Liberals demoted Attorney General Jody Wilson-Raybould for investigating SNC Lavalin.
She wrote a book about it at https://www.amazon.ca/Indian-Cabinet-Speaking-Truth-Power/dp/1443465364,if you'd like to take a look.
I also mentioned the "green slush fund scandal." Do you have a Liberal take on that as well?
Again, you have your facts wrong.
The basis of the rule of law is that it applies to everyone, and it is part of the central authority of the federal government. In Canada, the judiciary is a branch of the federal government, and the Chief Justice of the Supreme Court is the head of it. The independence is achieved through a division of powers.
As for Wilson-Raybould, she was not investigating SNC-Lavalin. SNC-Lavalin had already been charged and the case was proceeding to trial, and a new law had been introduced which effectively prohibited plea bargains.
Wilson Raybould was approached and asked to consider whether she would consider a plea bargain, which is something that SNC-Lavalin had asked of every single political party - the Conservatives and the NDP - to support.
The reason for a plea-bargain is related to the idea of a proportionate punishment. The alleged crimes were known to group of senior individuals in a company with thousands of employees - through to custodial staff and officer workers, and engineers - who would all suffer for their crimes and end up losing their jobs because of their bosses' wrongdoing.
Wilson-Raybould was appointed to another cabinet post, which she accepted, and at committee she testified under oath that there was nothing unlawful about anything her colleagues had done.
As for the Green Fund, if it turns out there was corruption, then there should be consequences.
The reality is that provincial governments have larger combined budgets than the feds, and far weaker oversight. The federal government has standards and laws that do not exist at all at the provincial level, and blatant corruption and conflicts of interest are legal.
At my own expense I engaged in a private prosecution against the Premier of Manitoba who sold $30-million in real estate when they were a Cabinet Minister, and didn't declare it. I succeeded in getting an independent review into why Peter Nygard had never been arrested in Manitoba, and got him charged.
I am not interested in partisan BS or arguments based in political propaganda.
The rule of law should indeed apply to everyone and the best way to insure this happy state is to secure the independence of the judiciary from the politicians.
But ours isn't that way, which is why the Trudeau government was able to force Wilson Raybould into a lesser position in government initially and out of caucus eventually.
You should read her book. It gives a substantially different account of what happened to her than you provide above.
As for the "green slush fund," there was certainly malfeasance according to most accounts and the Auditor General's report on the matter. That's also why the government department associated with the scandal (Sustainable Technology Development Canada) was shut down.
Perhaps the biggest malfeasance was the Trudeau government's refusal to turn over documents related to the scandal to the RCMP and the speaker of the House of Commons in September 2024.
If the judiciary and policing had a little more independence from the centralized Canadian government, this last piece of malfeasance might have been avoided.
If you've had such success in Manitoba Dougald, perhaps you should take on Ottawa.
Love your articles! Hope Carney (or whoever) follows this path...
I'm pleased to see provincial governments FINALLY getting rid of barriers to interprovincial trade. The amount of productivity this releases is staggering.
Agree that Canada should work to attract all the healthcare workers, scientists, professors and other experts being laid-off by the idiot techBro. And, also seek trade deals with other countries is to the benefit of Canada and them.
Really, the timing of this 'orange' assault on Canada is almost prescient as there are a number of changes already underway (demographic shift; climate/environmental events; advance toward peak oil and the need for more innovation) and this startles us out of complacency and shifts us into change gear. An effort in maturing as a country and pulling together.
There are no interprovincial trade barriers. It won’t release productivity because it’s not based on evidence or facts. It’s based on totally unjustifiable assumptions and hype.
Ummm ,, Just one example: I’m in the building industry and it’s not possible to hire an Architect or Eng from another province for a project. Both professions have a national association and provincial association. If you’re an Arch/Eng registered in Ont for example and you wish to do work across Canada, you need to register in each province. This is protectionist behavior between provinces. A carpenter on the other hand is able to become registered under the Red Seal program and work anywhere in Canada. This protectionism increases costs and complexity for no value added. To be clear, architects and engineers both learn the same skills and info. It has nothing to do with a specific province. However, if you want to work on a Federal Government project, it’s possible to hire an Arch or Eng from anywhere in Canada. I’ve had much experience with this issue and am not making assumptions. Perhaps folks refer to this barrier as something else?? There is a huge barrier to moving CND wine across the country. Many other examples …
With respect, not one of those examples is an example of economic growth. It means an architect from one province gets hired instead of another and it means you buy a bottle of wine from one producer instead of another.
That is not growth. That is not an increase in productivity.
What it would allow for smaller provinces to be picked clean while all the work is done by large national or international firms, which is what the goal is, especially for privatized government services and reducing competition.
Goodness, this is not the forum clearly. It’s much more complex than you have imagined. Large firms grabbing all the work has everything to do with policy that allows monopolies to exist and flourish. And with the wine issue, it’s easier to move products south.
Productivity is not well understood from one industry to another. Generally when something takes longer to accomplish and costs more without generating more value it’s considered less than productive.
If Ottawa prints money, its value will depreciate. If Ottawa prints a lot of money, its value will depreciate a lot.
A depreciating dollar is inflationary and inflation also acts as a tax.
The Trudeau government has inflated Canadian currency quite a bit since 2019. Maybe we should assess the results of this inflation before turning the inflationary taps back on.
That is not how money works and you are relying on myths about the economy that are not supported by facts or evidence.
So, inflation is a myth?
Totally agree on austerity being counter-productive, the question to me is how governments should be spending. Besides programs to help those directly affected by tariffs, I think we need to reorient government spending towards investment and away from consumption, notably by reforming transfer programs so they no longer subsidize people with above-median incomes and instead are the poverty alleviation programs they should have always been. We should then pump the saving (and then some) into investments in infrastructure and R&D.
On the central bank, if I understand your argument correctly, you are recommending quantitative easing as opposed to interest rate cuts. I'm not sure I understand the difference in practice (both are stimulus). Why is QE your preference?
Canada's economy is being strangled by private debt, and it is a consequence of decades of trying to solve Canada's problems with monetary measures instead of fiscal ones.
My very first post on this substack is about the critical need for central banks to adopt new policies. Monetary stimulus is a terrible way to stimulate the economy and it has contributed to our current crisis.
Lowering interest rates means more people can borrow more money, because the loan is calculated on the basis of people's ability to service debt. It's absolutely useless for the vast majority of the population, who are expected to personally stimulate the economy by taking out larger loans that drive up the price of housing and contribute to the affordability crisis. Almost all of the monetary stimulus ends up being mortgages, which means individuals are personally on the hook for hundreds of thousands of dollars in debt they have used to purchase a non-productive asset.
However, at the upper end of the wealth and income spectrum, ultra-low interest rates drives mass purchases of existing assets, like real estate and other companies for mergers and acquisitions. It directly fuels inequality, the concentration of wealth, and the debt dynamic that has been crushing the middle and working classes out of existence.
Monetized deficits would inject positive money into the economy, which is what is needed.
I take your point about housing, but isn't that as much the result of a dysfunctional housing market, where supply has been hugely restricted for decades? I still see interests rates as having a role to play in promoting business investment, which we desperately need more of to increase productivity growth. Fiscal policy has a role to play in that as well, obviously, but interest rates are a fundamental part of determining the profitability of capital investments.
And pray they take us over do we can have universal healthcare (I’ve tried it and I loved it), really tough gun laws, and genuinely considerate people.