If the Bank of Canada can successfully and sustainably return to normal rates of inflation soon, then its credibility may improve and bargaining may become easier. But if it cannot, then turbulent times for both employers and workers alike may be ahead.
Fitch expects the government deficit in the U.S. to reach 6.3 percent of GDP this year. Such public borrowing—especially during a period of strong economic performance—is not sustainable. And long-term projections paint an even bleaker picture.
Confidence in the rules laid down by governments is essential for all long-term decisions. The global economy is volatile enough. Politicians in Canada shouldn’t make matters worse.
The recent return of inflation closer to its two percent target simply means prices are rising at a more normal pace, not that affordability has improved—these challenges are going to persist for many years to come.
Canada’s central bank raised its primary policy interest rate to 5 percent, the tenth increase since early last year, when the rate was barely above zero. We’re now at levels not seen since 2001, and the speed of the increase exceeds any in over four decades.
While achieving net zero comes with a cost, it is entirely manageable. If Alberta saved just a little more of its resource revenues today, higher investment returns would more than cover the coming drop in resource revenues.
By embedding productivity concerns at the core of policymaking in Canada, we wouldn’t just be building a more competitive economy. We’d be enabling a more prosperous future for all of us.
We should take the typical coverage surrounding Canadian household debt levels with several large grains of salt. Digging deeper into the data makes clear that Canada’s debt situation may not be as ominous as it first appears.
Most talk of a new digital currency is misplaced. In almost every way that matters, it already exists. Proposals to expand access to it or to improve back-end payments systems is a far more boring—but a far more accurate and helpful—way to think about it.
What makes Alberta’s 2023 election especially interesting, though, is how so much may depend on so few. Of the roughly two million votes that may be cast, the winner could be decided by a small handful—potentially a few hundred—in just a few critical ridings.
