Canadian governments are counting on strong economic growth to reduce debt burdens that ballooned during the pandemic. But realizing that growth depends on how well Canadian businesses adapt to rapidly changing market realities.
In the near term, Canada’s economic recovery looks promising as business activity bounces back.
In the longer term, however, Canada’s economy faces strong headwinds that are not being factored into government projections. Canada’s economic challenges go beyond slowing labour force growth and modest productivity gains. Fiscal recovery forecasts do not consider the probability of more frequent and costly natural disasters or the implications of the global economic transformation to stave off the…
On Wednesday, the Bank of Canada left its target for the overnight interest rate at 25 basis points and ended its quantitative easing (QE) program, which, through purchases of government bonds, had more than quadrupled its balance sheet. This was the right call given what now seems to be persistent underlying inflation.
From now on, the Bank will only purchase government bonds to replace ones that mature. Its balance sheet will stay high compared to its pre-pandemic level but, in theory, won’t grow further. Tightening monetary policy to deal with inflation above target can now come in only one of two forms: shrinking the balance sheet by selling or not replacing maturing government bonds or, more likely, hiking the overnight…
It all seems so straightforward and evident: why not cover vulnerable “gig” workers, an often-marginalized group in the economy, who were hit so hard by the pandemic, under EI? In June, a parliamentary committee recommended that Employment and Social Development Canada conduct consultations on ways to provide self-employed persons, including those in the gig economy, with access to regular Employment Insurance benefits. ESDC has responded and formal consultations along these lines are forthcoming. They need to include a sober, detailed analysis of the problems involved.
The first item on the agenda ought to be a clear and agreed definition of gig work, which is critical to insuring potential income losses. A recent survey…
