U.S. holds back interest rate hike for another 18 months

By Alex Ballingall - Thursday, January 26, 2012 at 10:09 AM - 0 Comments

The U.S. Federal Reserve announced Wednesday that it will hold off on raising interest rates for another 18 months, extending the period of near-zero rates until late 2014. The move is an indication that the American central bank is reluctant to move away from policies enacted in reponse to the 2008 economic recession, when it started lowering interest rates to encourage spending, borrowing and investment. In making the statement, the Fed pointed to the country’s depressed housing sector and job scarcity. It also expressed concern over Europe’s sovereign debt crisis, which EU leaders are still grappling to address, the New York Times reported.

New York Times

Sound familiar?

By Aaron Wherry - Wednesday, January 25, 2012 at 8:30 AM - 0 Comments

Barack Obama, last night. “My message is simple.  It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.”

Jack Layton, last March.  “As prime minister, I wouldn’t use your hard earned tax dollars to reward companies that ship jobs to the States or overseas. I’ll target investment to create jobs right here at home.”

The end of the job

By Chris Sorensen - Friday, January 20, 2012 at 8:20 AM - 0 Comments

Beau Lark/Corbis

It’s just a few cents more than a large specialty coffee from Starbucks, but it turns out that $5 is still enough money to make otherwise sane-looking people do some rather odd things. The website Fiverr.com, launched in 2010 on the heels of the recession that cost nearly seven million North Americans their jobs, is built around the concept of allowing people to buy and sell services for just $5. The advertised offerings range from useful (“I will professionally review your website or blog for $5”) to the frivolous (“I will sing Happy Birthday or congratulate someone in my bubble bath for $5).

Meanwhile, on the contract-job posting site Guru.com, there is a more serious offer for someone to create ESL lesson plans. On Freelancer.com, a new bridal services company is looking for someone to design its logo, while a dental clinic is seeking someone to produce a flyer to attract new customers—just two of more than 1.3 million current postings on the site.

The sites are all part of what may be one of the most dramatic shifts in the labour market of our time: the transition to a freelance economy where work is farmed out on a piecemeal, as-needed basis (often for relatively little money). The shift started out slowly in the 1990s as Silicon Valley companies discovered how to use the Internet to outsource dull computer-coding jobs, but has been picking up speed in recent years, particularly in the wake of the Great Recession, which left companies of all stripes battered and reluctant to hire new full-time employees. Microsoft, for example, used online testers in 2009 to find bugs in its software, while a year earlier Pfizer started allowing its employees to outsource bits and pieces of their jobs—making spreadsheets and PowerPoint presentations—to freelance firms.

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What do financial markets have in store for 2012?

By Erica Alini - Thursday, January 19, 2012 at 9:10 AM - 0 Comments

Richard Drew/AP

When one of the world’s most experienced money managers talks of “paranormal” activity in today’s markets, you know these are treacherous times for average investors. “It’s as if the Earth now has two moons instead of one,” mused Bill Gross in his first investment letter of 2012. Gross, the head of a $244-billion bond fund at Pimco, one of the world’s biggest fund managers, lost $5 billion in redemptions last year, as clients pulled money out of his fund after a string of bad (but at the time seemingly rational) bets against U.S. Treasuries.

If not paranormal, 2011 was the year when volatility went viral. Bad luck played a part, with large swaths of the Japanese economy swept away by the tsunami. Mostly, though, the uncertainty that rattled investors was man-made, as bickering policy-makers in Brussels and Washington seemed to gamble with the fate of the global economic recovery. Stocks on the Standard and Poor’s 500 Index swung twice as much as they did, on average, in the last 50 years, only to close roughly where they had opened 12 months earlier, according to Bloomberg. The Dow Jones Industrial Average closed up by just six per cent, and the NASDAQ went down two per cent. Even more disappointing was the TSX, which closed the year down by 11 per cent.

Gross wasn’t the only pro who faltered in a year when, in addition to wild volatility, market activity slowed. U.S. broker-dealer MF Global Holdings Ltd. went belly up in November after betting $6.3 billion on European sovereign bonds. Last October, Goldman Sachs posted its first quarterly loss since 2008. Eager to protect profits and reputations, some financial firms are resorting to desperate measures—Dutch Bank ABN AMRO even introduced a tool called the Rationalizer, which measures emotional arousal levels through skin sensors and advises traders to take a break or wind down their transactions if they get too elated or frustrated. All this raises a troubling question: what chance does the average investor stand? Even those who played it safe by turning to things like guaranteed investment certificates and principal-guaranteeing investment vehicles were left languishing. With interest rates at near-zero levels, baby boomers are approaching retirement with unexpectedly undersized nest eggs. Mounting resentment against financial advisers, meanwhile, had Canadians choosing to try to go it alone. The number of accounts registered with online brokerages has increased by 36 per cent since 2008, according to Investor Economics, a Canadian financial services research company.

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Nash on innovation

By Aaron Wherry - Tuesday, January 17, 2012 at 1:54 PM - 0 Comments

Late last week, Peggy Nash detailed her innovation policy, including a new Canada Innovation Fund, targeted tax credits and expanded “ pre-commercial and commercial fiscal support” through a new Canada Development Bank. She recently talked to the Georgia Straight about the economy.

She characterized Harper’s economic policy as simply getting government out of the way so that corporations are free to do whatever they want—in the flawed hope that some benefits will trickle down to the rest of the country. “Well, we’ve got the highest level of inequality in Canada since the 1920s,” Nash noted. “But a big chunk of the wealth that’s being created—about a third of new wealth created before the downturn in 2008—went to the top one percent. That’s not good fiscal policy.”

Nash, a former negotiator with the Canadian Auto Workers union, said that she favours government working with business, labour, and communities “so we’re all pulling in the same direction to create good-quality jobs”. “Specifically, we shouldn’t just be shipping raw logs or raw materials or raw bitumen out of the country,” she declared. “What we should be doing is providing good stewardship of our raw materials and processing as many of those raw materials here in Canada as we can. That’s where the good jobs are; it’s where the innovation and technology are.”

Ms. Nash’s full economic policy paper is here.

‘A fiscally responsible, economically literate, socially progressive NDP government’

By Aaron Wherry - Tuesday, January 10, 2012 at 12:03 PM - 0 Comments

The prepared text of Brian Topp’s speech to the Economic Club of Canada today.

Thank you very much. It’s wonderful to be here. I hope everyone had a good holiday break. I got a few moments sleep and a little time with my family. And that’s good, because now the sprint begins to the finish line.

The NDP leadership race is just over half way complete. And I must say it’s been very good for our party. We have an excellent team of candidates. All of whom bring huge assets to the race. But as I said last week in the press, the race will start to get just a little “boring” if we don’t start talking about where we stand on the issues. The time for introductions is over – the time for real debate about the future of our party and our country is now. And, perhaps no issue is more central to Canadian politics than the state of our economy. A question where there may be some interesting differences among the candidates for leadership. Continue…

Canadians feel like they’re on top of the world: poll

By Nicholas Köhler - Monday, December 19, 2011 at 5:00 PM - 0 Comments

For the past three weeks or so, the highest reaches of the Billboard 200, which ranks top-selling albums in the U.S. across all genres against Nielsen SoundScan sales data, has been dominated by one single, identifiable group: Canadians. In late November, the Toronto-born hip-hop artist Drake entered at No. 1 with Take Care, its 631,000 in sales making it the third-bestselling debut of 2011. Michael Bublé, of Burnaby, B.C., followed at No. 2 with his Christmas album, and Stratford, Ont., native Justin Bieber rounded out the top five with another seasonal offering—Under the Mistletoe. Billboard magazine writer Keith Caulfield noted, though, that Drake wouldn’t hold on to the top position for long, “as early forecasts from sources suggest Nickelback’s new Here and Now (released Nov. 21) may open at No. 1.” The prediction didn’t entirely carry: Bublé climbed to the top spot, and Nickelback debuted at No. 2.

A coincidence, likely, this preponderance of Canuck talent gathered at the top of America’s premier pop chart. It may also reflect a new Canadian swagger on the world stage, and yet another sign we’ve become a nation less timid and more muscular—no longer “punching above our weight,” as we’ve long liked to claim, but stepping into a brand new, beefier class altogether.

Fact is, Canadians have been feeling pretty terrific about themselves lately. According to an Angus Reid Public Opinion poll conducted recently in partnership with Maclean’s, we’re much more satisfied with our lives than our counterparts in the U.S. and Britain. Forty-two per cent of us think Canada’s best days lie in the future rather than the past. By contrast, only 36 per cent of Americans are that optimistic, and fully 58 per cent of Britons believe their day in the sun has been and gone. And where once a vague sense of inferiority defined us, the online Angus Reid survey now shows most Canadians—86 per cent, in fact—agree with the idea that their country is “the greatest in the world.”

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Greater equality through taxes

By Aaron Wherry - Monday, December 19, 2011 at 11:50 AM - 0 Comments

Kevin Milligan and friends consider how to deal with inequality.

Brian Topp assumes his proposed 35-per-cent federal rate would yield $3 billion in new revenues. Economists have fairly good estimates of how much revenue “slippage” we might expect for top earners, and these estimates suggest the additional revenue might slip down closer to $1.5 billion … How could this new money be used to help those who are struggling at the bottom? Cutting income tax rates in the bottom bracket doesn’t do much, since the basic exemption and other tax preferences mean that few low-income earners actually pay income tax. Instead, the right target is to enhance our system of refundable tax credits. As examples, think of the HST/GST credit, the Canada Child Tax Benefit, or the B.C. Family Bonus. These payments can be targeted by family income and delivered efficiently through direct deposits into recipients’ bank accounts.

More from Kevin and the gang here, here and here.

Econowatch: December 2011

By Colin Campbell - Wednesday, December 7, 2011 at 12:10 PM - 0 Comments

David Paul Morris/Getty Images

Feeling down about the state of the economy? You’re not alone. According to a recent global survey, nearly a quarter of the workforce, weighed down by economic uncertainty, is depressed. In Canada, a poll found that 89 per cent of workers feel overworked, up from 64 per cent two years ago. There is not a lot of positive energy going around.

Unfortunately, this could become a chronic condition, because there’s little to suggest that the economy will spring to life any time soon. Nowadays, just as things start to look up, they drop back down. U.S. third-quarter growth was recently revised downward, from 2.5 per cent to two per cent. Markets are swinging almost daily by amounts they once moved only over a period of months.

Many observers are coming to the conclusion that this go-nowhere drift is the new normal. We could be headed for a long era of disappointment, like the one the U.S. economy fell into in the ’70s, when markets were all but dead and growth stalled. Even politicians are throwing up their arms. “Our world has entered into a time of slower growth,” warned the Ontario Liberals in their recent Throne Speech, “and we expect that slower pace of growth to continue throughout the four-year mandate given to this parliament.” A stirring message: four more years of hard times.

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In conversation: Mark Carney

By Andrew Coyne - Monday, December 5, 2011 at 11:10 AM - 0 Comments

Blair Gable

He’s among the most respected voices anywhere on financial regulation and monetary policy, and the Canadian closest to the centre of efforts to solve the European debt crisis. Governor of the Bank of Canada since 2008, Mark Carney, 46, was also recently named head of the Swiss-based Financial Stability Board. He’s a leading figure in the struggle to shore up a fragile world economy.

Q: Let’s talk about Europe. You hear people saying we may be in the last days of the euro. What is the way out of this crisis?

A:Let me say two things. One, there are longer-term issues that absolutely have to be addressed. They have to rework the way the monetary union functions—fundamental questions of competitiveness in these economies—which require multi-year reform programs. Those absolutely have to be done for this thing to work in the medium term—and there’s no point saving it in the short term, if it’s not going to work in the medium term. But in terms of creating the bridge so there’s time to do all of that, we have long advocated that they create a mechanism—a firewall—that ensures that all eurozone countries can fund themselves at sustainable rates for the next two, three years. And that is a requirement that is at least on the order of a trillion euros.

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Eighty and employed

By Emma Teitel - Wednesday, November 30, 2011 at 1:30 PM - 0 Comments

As the economy and markets have generally gone south over the past few years, it’s become clear to many boomers that retirement may not be quite as golden as they’d once planned. In fact, some new research suggests it may not happen at all.

According to a recent survey by U.S. bank Wells Fargo & Co., Americans think they’ll be working longer than ever before. Roughly 76 per cent of respondents (1,500 Americans, aged 26-75, were surveyed) said they would rather make a set amount of money before retiring, compared to just 20 per cent who said they’ll retire when they reach a certain age, regardless of savings. How long will it take to reach their target? A quarter of respondents say they expect to work into their 80s.

That’s a mentality not so far removed from the Canadian one: a recent Royal Bank of Canada poll shows that 72 per cent of Canadians hope to be mortgage-free by age 65, while a third of Canadians over 55 currently have 16 or more years still left on their mortgage term. “Canadians want to be mortgage-free as they approach retirement age and beyond,” says Claude DeMone, director for Home Equity Financing at RBC, “but the reality is that it takes prudent planning and the right advice to stay on track.”

The Commons: Ipso facto governance

By Aaron Wherry - Tuesday, November 22, 2011 at 7:06 PM - 0 Comments

Sean Kilpatrick/Canadian Press

The Scene. Adherents to the faith of smaller government take note, for the Harper government has successfully identified and eliminated one of the prime inefficiencies standing between us and true freedom.

“This government cannot say how many jobs were created after having spent $47 billion of Canadians’ money,” lamented the NDP’s Peter Julian this afternoon of the government’s trademarked action plan. “The program was so badly monitored that no one knows if it was effective.”

Of this, Mr. Julian can claim the authority of the auditor general, who apparently found no attempt by the government to determine precisely how many jobs it “created” (in the messianic parlance) with its billions in bridges, roads and hockey arenas.

But just because the government can’t—indeed, won’t—add, doesn’t mean Mr. Julian can’t subtract. “We now know that 72,000 full-time jobs were lost last month thanks to the policies of this government,” he asserted with his next breath. “Now that the truth is out, when will this government put aside bogus and unsubstantiated job claims and take real and immediate action to create jobs here in Canada for Canadian families?”

Jim Flaherty would at least stand to respond to this. Continue…

Is the ‘Estonian miracle’ just smart management?

By Richard Warnica - Tuesday, November 15, 2011 at 11:20 AM - 0 Comments

Miracles are always more complicated than they first appear. Even the word itself—miracle—is a kind of hedge. It’s a guard against deeper scrutiny, a way of pointing to the wonderful without probing too deeply into the details. Such is the case with the economic miracle in Estonia. The tiny tiger of the Baltic is being hailed as the anti-Greece, both for its fiscal austerity and stoic acceptance of such. But the story of how this nation of 1.3 million crawled out of the 2008 crash, gained entrance to the eurozone and set itself on the path to, fingers crossed, prosperity is both messier and more pragmatic than “miracle” implies.

Beginning in 2009, the Estonian government undertook a policy of “fiscal retrenchment”—it tanked its own economy, basically, cutting spending and raising taxes even as the rest of the West indulged in a binge of Keynesian excess. Between 2000 and 2007, Estonian GDP climbed an average of eight per cent per year. In 2009, it tumbled 14 per cent. Unemployment hit 19 per cent that year, and wages, in the private and public sectors, were slashed, in some cases by as much as 40 per cent.

And for all this, the government was praised. There were no mass protests, no legislative walkouts, no rioters tearing up the cobblestones in the streets of Tallinn. “If you look at what the [polls] said in spring of 2009, before they made the cuts, and what they were in October, November, they actually went up,” says Ringa Raudla, a senior researcher in public administration at the Tallinn University of Technology. In March 2011, the same parties that implemented the austerity plan were re-elected to another term. “People actually supported cutting the budget rather than taking out loans,” Raudla says. Continue…

The Canadian hired to save the world

By John Geddes - Monday, November 14, 2011 at 9:40 AM - 0 Comments

Sean Kilpatrick/CP

Upbeat stories to spin were in short supply at last week’s G20 summit at Cannes. The host, French President Nicolas Sarkozy, narrowly avoided disaster on his home turf when the destabilizing prospect of a Greek referendum on the country’s debt crisis faded. U.S. President Barack Obama remarked on how European decision-making in the face of economic calamity struck him as “laborious” and “time-consuming,” before heading back to Washington, where laborious, time-consuming efforts to cope with America’s deficit continue. Prime Minister Stephen Harper, though, claimed bragging rights on the Riviera thanks to the naming of Mark Carney, the governor of the Bank of Canada, to head an increasingly powerful body called the Financial Stability Board. “His appointment,” Harper said, “is both a tribute to his personal qualities and a reflection on Canada’s superior performance in monetary, fiscal and financial-sector policy areas.”

Carney’s emergence as the international poster boy for everything admirable about the Canadian economy is among the more improbable stories of the Harper era in Ottawa. It’s not that he’s Ottawa’s first appointed public servant to outshine the elected politicians. Former auditor general Sheila Fraser, after her 2004 report on the sponsorship affair that rocked the then-ruling Liberals, became the face of honesty in government. Retired general Rick Hillier’s outspoken pride in Canadian troops made him, as chief of defence staff, the voice of patriotism. But Carney offers nothing like Fraser’s down-to-earth quality or Hillier’s entertaining populism. He’s a Ph.D. economist and former investment banker, and seems like one. His star quality counts for more in elite circles than among Canadians in general. Still, during this prolonged stretch of anxiety over when the next recession might hit, a figure who embodies sophisticated economic leadership is an invaluable political commodity.

As Harper’s comments in Cannes confirmed, Carney’s skills and Canada’s strengths are now being sold as a combo pack. And Carney is highly marketable. At just 46, he’s unusually young for a central banker, and cuts an athletic figure. (He ran the Ottawa marathon in three hours and 48 minutes last spring.) His bio comes complete with a Canadiana prologue any political mythmaker might envy. Born in the Northwest Territories, where his father was school principal in remote Fort Smith, he’s said one of his earliest childhood memories is the smell of the furs his mother bought for making parkas.

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Mark Carney: A central banker for a volatile age

By Andrew Coyne - Monday, November 14, 2011 at 9:40 AM - 0 Comments

Chris Wattie/Reuters

At 46, Mark Carney manages to look both younger and older than his years. This is fitting, as his approach to the economy combines a commitment to old-fashioned central bankerly verities—sound money, prudent risks—with a modish flexibility as to how these are to be secured.

That has been an unavoidable necessity in what we should perhaps now refer to as his day job, as governor of the Bank of Canada. Gone are the days when central bankers could simply focus on keeping the so-called monetary aggregates—M1, M2, all the gang—to a fixed annual growth rate, as monetarists had advised. While this approach had succeeded in reining in the Great Inflation of the 1970s and ’80s, it eventually fell victim to Goodhart’s law, named for a former adviser to the Bank of England: namely, that the moment you target any particular measure of the money supply it loses its usefulness—because people in financial markets find ways to innovate around the constraint. Central bankers have since had to steer by a variety of other measures, even as the overall objective—stable prices—has remained unchanged.

The lesson of that experience, that policy does not consist in simply issuing a set of rules, but rather exists as a continuing process of interaction between the regulators and the regulated, appears to inform Carney’s views on the causes of the financial crisis, and how to prevent another—a subject that will be his focus in his new, part-time job as chairman of the Financial Stability Board, the international body tasked with coordinating and overseeing the reform of global banking regulations. In speeches and interviews the governor has given, a number of related themes and concerns emerge. Among them:

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Resolutely flexible

By Aaron Wherry - Tuesday, November 8, 2011 at 3:50 PM - 0 Comments

The prepared text of the Finance Minister’s remarks is here.

Countries, just like individuals, do not stumble into prosperity. They set out a plan and stick to it, so that they are fully capable of seizing opportunity when misfortune hits, instead of merely being overwhelmed by it. 

That’s not to say, of course, that our Government believes an inflexible approach for every conceivable scenario is anything to admire.

For those of you scoring at home, six references are made to flexibility against ten references to stability.

The full economic update is available here. More from the Globe and Canadian Press.

‘Increasing the adjustment for risk’

By Aaron Wherry - Tuesday, November 8, 2011 at 3:13 PM - 0 Comments

In March, the Harper government announced that it would return the federal books to balance in the 2015-2016 fiscal year. Seventeen days later, the Conservatives changed their minds and promised instead to return to balance in 2014-2015. Seven months to the day after that, the Harper government has decided it can’t fulfill April’s promise and is going back to March’s projection (at the earliest).

Depending on how you count these things, this is either the third or fifth return-to-balance projection the government has offered in the last three years (first 2013-2014, then 2014-2015, then 2015-2016, then back to 2014-2015 and now back to 2015-2016).

Including Mr. Harper’s vow in 2008 that a government led by him would “never” go into deficit, this is the second time in three years that the Conservatives have made a balanced-budget promise during an election campaign only to abandon it after being reelected.

An opportunity to show real leadership

By Aaron Wherry - Friday, November 4, 2011 at 10:30 AM - 0 Comments

Scott Clark and Peter DeVries lay out what the Harper government should do with its fall economic update.

The current commitment to eliminate the deficit in 2014-15 would be discarded. It is neither realistic nor necessary to eliminate the deficit in 2014-15. Eliminating the deficit two or three years later would be more realistic and acceptable in the current economic environment…

A commitment to reallocate these savings from the program expenditure reviews to new initiatives to support research, investment, innovation and infrastructure in a federal-provincial partnership … A commitment to begin the difficult but necessary process of tax simplification and reform to support efficiency, economic growth and job creation. The government would commit to use the savings (which would be substantial) to lower both personal and corporate income taxes, thereby supporting economic growth and job creation.

The recovery: Gone in a flash recession

By Chris Sorensen - Monday, October 31, 2011 at 8:00 AM - 0 Comments

If you have a tough time telling the difference between the plodding U.S. economic recovery under way and the dark days of 2009—you’re not alone.

Tom Porcelli, chief U.S. economist at RBC Capital Markets, recently coined the term “flash recession” to describe brief periods like last August, when the sputtering U.S. economy appeared to completely go off the rails. “You had essentially zero job growth and you had virtually no consumer spending—that’s a recession,” Porcelli said during an interview earlier this month with Yahoo! Finance. While Porcelli acknowledged one month of negative economic growth doesn’t meet the traditional definition of a recession, he argued that the current recovery is being driven more than usual by rising and falling consumer sentiment, while longer-term indicators like unemployment, stuck at around 9.1 per cent in the U.S., refuse to budge.

That would also explain September’s sudden spike in positive data—rebounding auto and chain store sales—as a flash recovery. And if Porcelli is correct, gauging the health of the U.S. economy just got a lot tougher. That’s because it now requires figuring out what’s going on inside the heads of millions of jittery U.S. consumers at any given moment.

‘These are not easy times for leaders’

By Aaron Wherry - Tuesday, October 25, 2011 at 10:39 AM - 6 Comments

The Prime Minister talks to Postmedia about the global economy.

In the case of financial-sector reform, as you know, substantial progress has already been made. Obviously, there are some in the financial sector who don’t necessarily like the proposals, and there are some legitimate complaints, and in Canada, we pay attention to what the financial sector says. But that said, one of the things we know is the financial sector can’t just write its own rules. The crash of 2008 made very clear that there must be credible regulatory systems on the financial sector or it can lead us in a position where we don’t want to be. That is being done, that has to be done.

So is that a no?

By Aaron Wherry - Friday, October 21, 2011 at 12:32 PM - 17 Comments

I’ve noted Bob Rae’s persistence in this regard before, but here, from yesterday’s QP, is the interim Liberal leader asking the Prime Minister again about tax relief.

Rae: Mr. Speaker, the small business federation has been clear about the fact that taxes on employment kill jobs. I have a simple question for the Prime Minister: in light of the current difficult economic situation in Europe and in the United States—we are seeing signs of a recession—why not freeze taxes on employment now and ensure that people are not contributing to killing jobs in Canada?

Harper: Mr. Speaker, I am surprised by this question from the leader of the Liberal Party because that party voted against tax cuts for small and medium-sized enterprises in Canada. This government has a clear objective: to keep taxes low. Obviously, it is an essential aspect of our plan for the Canadian economy, a plan that continues to create jobs. Continue…

Why Ontario is poised to become Canada’s Greece

By the editors - Monday, October 17, 2011 at 8:50 AM - 99 Comments

Frank Gunn/CP

October has been an unusually busy month for provincial politics.

Prince Edward Island, the Northwest Territories, Manitoba, Ontario, Newfoundland and Labrador, and the Yukon have all had elections in the past two weeks. Alberta’s ruling Progressive Conservatives recently picked a new premier in Alison Redford. And next month Saskatchewan will head to the polls. While every election is important, one in particular should give all Canadians pause for thought.

Ontario Premier Dalton McGuinty’s re-election last week, albeit with a minority, was an impressive display of campaigning. And yet what makes McGuinty’s return significant is not his politicking skill but his responsibility for Ontario’s ever-expanding debt. Traditionally known as the engine that drives Canada, Ontario is in danger of becoming the Greece of Confederation—if Greece happened to account for more than a third of Europe’s economy.

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Stephen Harper lectures the world

By Aaron Wherry - Thursday, October 13, 2011 at 2:50 PM - 13 Comments

The Prime Minister calls on Europe and the G20 to get their respective and collective houses in order.

Events in the summer of 2011 have made it clear that global economic challenges are by no means behind us. What started as a sovereign debt crisis in smaller countries in Europe has now spread, causing extreme stress in the European financial sector and threatening global growth. Unfortunately, this time, the policy response to our shared challenges has not been as strong and co-ordinated as it needs to be. This slow response has resulted in missed opportunities, with each missed opportunity increasing the cost and difficulty of resolving the crisis.

We cannot afford any more missed opportunities.

Last month, Scott Clark and Peter DeVries noted that Mr. Harper was among those leaders calling on “surplus” countries “to increase their expansion of domestic demand” and thus wondered whether the Prime Minister was willing to participate in a global stimulus package (to the tune of $41 billion).

Harper and Flaherty call for urgent action on European debt crisis

By macleans.ca - Thursday, October 13, 2011 at 2:48 PM - 1 Comment

In an open letter published in Thursday’s edition of The Globe and Mail, Prime Minister Stephen Harper urges the world’s leading economies to take “decisive action” to quell market fears about the state of the global economy. Allowed to fester, the sovreign debt crisis in Europe has grown to unwieldy proportions, the PM, but it’s not to late to halt the financial panic. “A slow response to the recent crisis has allowed it to spread, but political will, decisiveness and a clear plan can resolve it, if we act now.”

Finance Minister Jim Flaherty echoed Harper’s concerns about Europe’s response to the debt crisis at news conference ahead of a meeting of G20 finance ministers in Paris. “It is critical that Europe deliver on a comprehensive package of measures that will address their sovereign debt and banking issue,” Flaherty told reporters in Ottawa.

The Globe and Mail

Financial Post