A key to economic recovery after the COVID-19 pandemic will be targeted measures to address the possible long-term effects of this crisis on the labour market.
Bouncing back to employment from lockdown layoffs is becoming more challenging for many unemployed people as there is no job to return to, at least in the short term, or they lack sufficient or relevant skills to find employment. This has led to exceptionally high long-term unemployment rates that will need to be mitigated with labour market and skills development strategies.
Long-term unemployment (the number of unemployed people for six months or more) increased by 207 per cent to 462,100 Canadians between March, 2020, and February, 2021. This has boosted the…
The housing market is hot, and has been for several years, especially in Canada’s largest cities. Many policy attempts and proposals have been made to slow it down, with the focus almost always on trying to reduce demand. The most recent proposal along these lines is a capital gains tax on principal residences.
The argument for taxing capital gains on the sale of owner-occupied principal residences is twofold. First, the argument goes, the tax will decrease demand for houses and condos, putting a stopper on illogical price appreciations. Second, governments are starved for tax revenues, and taxing these gains would help fill that gap.
In practice, however, neither of these is likely to play out as expected.
In some…
On March 23, the Bank of Canada announced the upcoming suspension of some of its major asset-purchase programs. This is good news. Financial stresses at the beginning of the pandemic a year ago led the bank to buy the debt of provincial governments and private companies. Those stresses are now in the past and Canadians should welcome the bank’s retreat from a role fraught with economic and political risks.
The programs covered by the announcement include the Commercial Paper Purchase Program, the Provincial Bond Purchase Program, and the Corporate Bond Purchase Program. The Bank established these programs when liquidity in the markets for these securities dried up a year ago. The programs were very successful:…
