An accurate measurement of the labour market is essential for making useful macroeconomic forecasts. Even the best models are only as good as the input data––as the saying goes, garbage in, garbage out. Statistics Canada has two programs to measure employment levels and trends: the Labour Force Survey (LFS) and the Survey of Employment, Payroll and Hours (SEPH). In the private sector, Automatic Data Processing, Inc. (ADP) publishes a report—the ADP Canada National Employment Report (NER)—that seeks to align with the SEPH. The ADP NER is relatively new to Canada and is not followed as closely as the LFS or the SEPH, but its timeliness is a plus. In contrast, the SEPH is the most delayed measure, but because of the nature of its underlying data, it provides very useful insights into short-term dynamics of the economy.
Following the release of Statistics Canada’s June 2018 Labour Force Survey (LFS), the Institute of Fiscal Studies and Democracy (IFSD) has updated its Canada JØLTS for May 2018. It has also launched its new Nowcast of the Bank of Canada’s (BoC’s) Wage Common measure of underlying wage growth.
On June 11, 2018, the federal government announced its redesigned homeless program, Reaching Home. While details remain scant, Reaching Home leaves the impression that the government is prepared to take a number of bold and promising steps forward but is willing to risk progress with one big step backwards.
Moments of major change can set a country, a policy issue, or an organization on a new course. But how do you get there? Can you force that change or is there a magical alignment of interests and forces required for a critical juncture? Not all change has to come from major shocks, sometimes change can be gradual and build up over time, creating important – albeit gradual – shifts in course and outcomes. Major change, however, tends to come from a major shock.
In its March 2018 Fiscal Monitor, the federal government stated that is deficit estimate for the 2017-18 fiscal year was “… broadly in line with a $19.4-billion deficit projected in Budget 2018 for 2017–18.” For any government, a deficit outlook in line with the recent planning expectations is always good news, being second only to an upside surprise. And, indeed, at the Institute for Fiscal Studies and Democracy (IFSD) we think there is room for the deficit in the 2017-18 fiscal year to come in slightly smaller than was anticipated in Budget 2018 and the Fiscal Monitor.
You don’t have to be a builder to appreciate the importance of a sturdy foundation. When it comes to houses, a solid foundation keeps the house dry and warm, and protects it against the natural movements of the earth around it.
No matter how you slice it, 2017 was a standout year for the Canadian economy. Real GDP growth hit 3%, the unemployment rate touched its lowest level in decades, and inflation remained below the central bank’s 2% target. Characterized as the ‘sweet spot’ by Bank of Canada Governor Stephen Poloz, this robust economic activity prompted two interest rate hikes in 2017, and another in January 2018, as central bankers adopted a cautionary, and now gradual, approach toward monetary policy normalization.
As the Canada Infrastructure Bank (CIB) takes shape, it is worth taking a look at how the organization is structured to understand the governance outcomes it may generate from both fiscal and accountability perspectives. There are infrastructure and investment banks around the world with various mandates, accountability structures, stakeholders, and sources of capital. However, the CIB’s structure appears to be somewhat novel when compared to other OECD countries. Novelty can be associated with both innovation and risk and it is worth considering how similar institutions govern themselves. To put the CIB in perspective, we will consider a subset of infrastructure and investment banks across three parameters:
On April 9, 2018, the Institute of International Finance (IIF) reported that global debt reached $US237 trillion at the end of last year, a $US21 trillion increase from the end of 2016. Narrowing this gigantic measure to countries reporting to the Bank for International Settlements (BIS), total credit extended to the non-financial sector was more than $US173 trillion in the fourth quarter of 2017. Of that “core debt,” $US22 trillion (70%) was outstanding in what are usually called “advanced economies”. Also, $US61 trillion (35%) was owed by general governments. The latter is almost double what it was just a decade ago. Since the BIS does not include insurance and pension liabilities and other accounts payable by governments in its measure of “core,” $122 trillion only represents a partial picture of public liabilities.