Economic policy

Canada’s inflation rate has been on the rise since January 2021, and it stands now at a 30-year high at 5.1 per cent. Not surprisingly, the Bank of Canada has been under increasing pressure from economists and financiers to raise the rate of interest — something the Bank finally did on March 2, increasing its key interest rate by 50 basis points. But are further interest rate increases this year the right way to fight...

The postwar period in Canada involved a widespread public consensus that Canada ought to develop a mixed economy under the auspices of Keynesian economics and the development of a comprehensive welfare state. The achievement of unemployment insurance, child benefits, public pensions, and publicly-funded healthcare and education were indicative of this more inclusive, egalitarian Canada which also invited unions to play an ongoing part in the Canadian economy. After 1980, this consensus began to fall apart...

A mini-revolution has hit North America and that mini-revolution is the wholehearted embrace of full-employment economics in Ottawa and Washington. The arrival of full-employment economics in the most recent Canadian and U.S. budgets marks the end of a forty-year reign for austerity economics. As inflation has become more of a historical memory than a present danger, the logic behind the forty-year prioritization of price stability over employment may seem something of a puzzle. However, digging...

Reducing unemployment and increasing the wages of low and moderate income earners have become the overriding economic goals of top Canadian and U.S. policy makers, guiding objectives that will shape many of the big decisions being made in Ottawa and Washington in the months ahead. The U.S. and Canada's recent willingness to run historically large deficits in order to create good-paying jobs, marks a sea change in policy circles and more broadly in economic thinking....

The pandemic has thrust governments into a more proactive role than anyone would have imagined just a few months ago. As Canada moves beyond the immediate COVID-19 health crisis, policymakers must seize the opportunity to implement bold, forward-looking reforms. These include redesigning income support programs for the unemployed, regulating the labour market in a way that encourages full-time, high wage jobs, and improving the distribution of risk and return between the public, the state, and...