A lot of attention at the Carbis Bay G7 summit was focused on promoting free and fair trade in the postpandemic world. While China wasn’t mentioned by name in the final communiqué, the G7 leaders clearly had China in mind. There’s a reference to getting countries to play by World Trade Organization rules, about greater regulations on state-owned enterprises, about controlling trade-distorting subsidies, about forced labour in supply chains – all of which have a clear, albeit unstated, China focus.
All of this attention at the summit, and indeed much of the public discussion on world trade, involves governmental action, meaning treaties and trade agreements of one sort or another, whether at the WTO or at the regional level,…
Ontario’s electricity sector has struggled with rising system costs for more than a decade. The main solution governments of all stripes have come up with is to shift costs to taxpayers. These subsidies for electricity use now cost taxpayers more than what the province spends on long-term care. It’s time for some proper fixes.
The crux of the problem is the increase in the cost of electricity supply from high-cost contracts signed by the province. At the same time, Ontario has consumed less electricity than forecast by the government when it struck the contracts. With high fixed costs in contracts spread over less demand, the result has been upward pressure on prices, mitigated mainly by your tax dollars.
How can…
Governments in the advanced economies mounted a massive fiscal response to the COVID crisis. They ramped up spending, mainly on income supports to individuals and businesses, and financed it by borrowing. Central banks also responded on a massive scale. They dropped their policy interest rates close to zero, and their balance sheets ballooned as they bought securities — mainly government debt — and flooded the global financial system with liquidity.
These responses undoubtedly cushioned the COVID blow to our economies. But, more than a year later, especially in the United States and Canada, both fiscal and monetary policy are still in overdrive. It is reasonable to worry that they are going too far.
On the fiscal side, the…
