Graph of the Week: Canadian AI VC Investments Surpass $12.5B, Led by Finance, IT, and Business Services
Graph of the Week is a new series from the C.D. Howe Institute’s Graphic Intelligence that presents valuable and easily digestible data. Each Monday we unveil one new captivating chart or graph with interesting insights, explaining it in two-to-three sentences. Dive into the data with us.Over the past six years, more than US$12.5 billion in […] Ambler, Kronick – If inflation falls again, BoC should cut interest rates 50 points
Published in the Financial Post.
It is rare for the Bank of Canada to change its policy interest rate by more than 25 basis points, either up or down. Big changes have been reserved for crises, like the beginning of the pandemic, when the Bank made three 50-basis-point cuts in a single month, or when inflation is running out of control, as it was in late 2022 when the bank raised its rate by 50 basis points. Last week’s news that inflation has returned to the bank’s two percent target does not signal a crisis but in our view it does mean a larger-than-normal cut is called for. Without an aggressive cut, the economy could tip into a needless recession.
It’s been a long road since inflation first rose above its official two…
Graph of the Week: Core Inflation Components Fall Below 3% – A Sign of Broad Softening
Graph of the Week is a new series from the C.D. Howe Institute’s Graphic Intelligence that presents valuable and easily digestible data. Each Monday we unveil one new captivating chart or graph with interesting insights, explaining it in two-to-three sentences. Dive into the data with us.Headline inflation came in right at the 2 percent target […] Laurin, Dahir – An Election Platform Suggestion for All Parties: A Revenue-Neutral Tax Reform
From: Alexandre Laurin and Nick DahirTo: Canada’s political partiesDate: September 23, 2024Re: An Election Platform Suggestion for All Parties: A Revenue-Neutral Tax Reform A change in Canada’s tax mix is a perennial idea from tax policy experts. This country is an average-tax nation overall but it relies far more on income taxes and less on consumption levies, as a share […] Robson, Laurin – Let’s Bring Back Ottawa’s Inflation-Protected Bonds
To: The Honourable Chrystia Freeland, Minister of FinanceFrom: William B.P. Robson and Alexandre LaurinDate: September 16, 2024Re: Let’s Bring Back Ottawa’s Inflation-Protected Bonds Two years ago, the federal government made a surprising decision to cease issuing Real Return Bonds (RRBs) – the government of Canada bonds that are indexed to the Consumer Price Index. It […] Jeremy M. Kronick on BNN Bloomberg – Canadian inflation slows to 2 percent annual rate in August
Inflation in Canada has dropped to its slowest annual rate since February 2021, marking the first time in over three years that it has reached the Bank of Canada’s target level. With inflation slowing and the economy showing signs of weakness, what actions might the Bank of Canada take next? Jeremy M. Kronick, Associate Vice President and Director of the Centre on Financial and Monetary Policy at the C.D. Howe Institute, joined BNN Bloomberg’s Morning Markets host Jon Erlichman to share his insights on Canada’s inflation rate slowing to 2 percent in August.
Graph of the Week: Overnight Rate and 12-Month Change in House Prices, 2018-2024 (July)
Graph of the Week is a new series from the C.D. Howe Institute’s Graphic Intelligence that presents valuable and easily digestible data. Each Monday we unveil one new captivating chart or graph with interesting insights, explaining it in two-to-three sentences. Dive into the data with us. In the ensuing months after the Bank of Canada […] Kronick, Ambler – Bank of Canada should keep cutting interest rates, whatever the U.S. Fed does
Published in The Globe and Mail.
With CPI inflation slowing to 2.5 per cent in July, the rate cut announced by the Bank of Canada on Wednesday surprised no one.
Given the dovish tone of the bank’s announcement, it would be reasonable to expect at least one and possibly two more 25-basis point cuts before the end of this year (a basis point is one-hundredth of a percentage point).
This cut widened the gap between the Bank of Canada’s overnight rate target and the top of the U.S. Federal Reserve’s band for its equivalent, the federal funds rate, from 50 basis points at the end of May to 1.25 per cent.
Should this gap worry the Bank of Canada – perhaps lead it not to cut the overnight rate again even if it…
C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Cut Overnight Rate to 4.25 Percent Next Week and to 3.00 Percent in a Year
August 29, 2024 – The C.D. Howe Institute’s Monetary Policy Council (MPC) calls for the Bank of Canada to lower its target for the overnight rate, its benchmark policy interest rate, to 4.25 percent at its next announcement on September 4th. The MPC further calls for the Bank to lower the target to 4.00 percent at the following announcement in October and to 3.00 percent by September of 2025.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. MPC co-chair, William Robson, the Institute’…
Bourque and Caracciolo – How to Improve Financial Regulation. Pruning Would Help
To: Canada’s financial regulators From: Paul C. Bourque and Gherardo Gennaro Caracciolo Date: August 27, 2024 Re: How to Improve Financial Regulation. Pruning Would Help Regulation is an important part of Canada’s financial landscape. And to ensure the rules support an efficient and effective financial regulatory framework, regulators need to be “constant gardeners.” Canada has 44 different federal and […] Gherardo Gennaro Caracciolo – What Vancouver’s empty home tax really means for Canada’s housing supply
Published in The Hub.
The Canadian housing market is in turmoil. Supply has lagged far behind demand as the population surges. This imbalance has led to soaring property prices, high rents, and increased homelessness.
The situation calls for urgent action, and while long-term solutions, like building more homes, are essential, policymakers are also deploying short-term measures—most notably, vacant property taxes. As these policies are becoming increasingly popular, the potential impact and drawbacks of such taxes call for careful examination.
My new C.D. Howe Institute publication with Enrico Miglino aims to shed further light on this matter by using Vancouver’s empty homes tax as a case study. Implemented in 2017,…
Bourque, Caracciolo – Financial regulation needs constant pruning
Published in the Financial Post
Regulation is an important part of Canada’s financial landscape. But to ensure the rules support an efficient, effective financial regulatory framework regulators need to be “constant gardeners.”
Canada has 44 different federal and provincial financial regulators and, as our recent analysis for the C.D. Howe Institute shows, the word count of their various rules and mandates continues to rise significantly year over year. The rules’ predominant focus is on risk reduction and consumer protection. Much less attention is paid to market efficiency, innovation and growth — though in the big picture they are at least as important. Our research shows that the balance is almost five-to-one: 85 per…