What triggered the sharp rise in Canadian inflation in spring 2021 is still a matter of debate. And it’s a debate that matters: the relative importance of the pandemic’s disruption of supply chains, Russia’s invasion of Ukraine, “greed,” or central banks’ financing of a surge in government spending will affect our response to future events. But once inflation gets started the initial causes are less important than the process that sustains it, which is a combination, on the one hand, of rising inflation expectations and costs and, on the other, of inadequate production.
When inflation has been low and stable — say two per cent — for some time then everyone knows that everyone knows that inflation will be about two per…
Canada, with our flagrant public spending, could benefit from a debt ceiling - Globe and Mail Op-Ed
Nobody likes the U.S. debt ceiling, it seems. If the recent deal to raise it does not pass both houses of Congress, the U.S. government will soon be legally unable to borrow. Within weeks – perhaps days – it will have to slash spending. It may default on already-outstanding debt. A financial crisis and recession could follow. What’s to like?
There is one thing. The ceiling periodically brings U.S. political leaders face-to-face with their fiscal profligacy. Granted, they respond with partisanship and brinksmanship. They talk about gimmicks, such as minting a trillion-dollar coin and forcing the U.S. Federal Reserve to buy it with newly printed money.
Those leaders will not meaningfully address the chronically…
It’s easy to see what Volkswagen VWAGY and Stellantis STLA-N get out of the billions in subsidies that Canada is dangling in front of them for domestic battery plants. Such subsidies clearly improve the companies’ returns on investments enough to attract these electric-vehicle battery plants away from other jurisdictions such as the United States or Europe. It’s harder to see what the Canadian and Ontario governments get in return.
They won’t get a stake in the firms’ profits. These are subsidies, not investments. Federal and provincial governments won’t own a portion of the plants and they will not share in the financial returns. Governments may capture some corporate income tax revenues, but…
