money

Friday April 16, 2020

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday April 16, 2020

The Bank of Canada rolls the dice

Coronavirus cartoons

If desperate pandemic times demand desperate government actions, the Bank of Canada just delivered big-time. 

It’s printing money out of thin air to fund an estimated $200-billion-plus spending-spree intended to keep the nation’s economy alive. 

The best name for this historic and, frankly, alarming intervention is quantitative easing, and every Canadian should pay close attention to what amounts to a roll of the dice by their central bank.

That’s because while quantitative easing is justified under the circumstances, it’s unconventional, controversial and highly risky. Our 85-year-old central bank has never tried it before, and no wonder. It may cure what’s ailing the Canadian economy today only to infect it with new illnesses a year from now.

It all began at the end of March when the Bank of Canada announced it would spend at least $5 billion a week in the coming months to buy Government of Canada bonds on the open market. In other words, it would buy up much of the federal government’s debt.

That action was meant to ease the pressure on the federal government’s growing debt burden while injecting badly-needed cash into an economy ravaged by the COVID-19 pandemic.

And that part of quantitative easing makes sense because it works. The mind-bending part of it comes with the realization that all these billions of dollars are being created digitally. 

It’s as if Bank of Canada Governor Stephen Poloz had donned a magician’s cape, put his hand into a top hat and — poof — the Canadian economy had what it needed to buy its way out of this crisis.

What Poloz did was correct, according to experts such as former Bank of Canada governor David Dodge. At the time of Poloz’s intervention, the rapid spread of COVID-19 across Canada had already triggered government-imposed business shutdowns, huge job losses and what could become the nation’s sharpest economic downturn ever. 

The federal government was mobilizing its fiscal forces to prop up revenue-starved businesses and extend a financial lifeline to the newly unemployed, whose numbers could reach 2.8 million this month.

Other governments around the world were doing the same. And other central banks, most notably in the United States, the United Kingdom and the European Union, were also playing their part by making new money to ease the debt loads of their governments.

The Bank of Canada doubled down on that strategy this week when it expanded its bond-buying program to include purchases on the open market of the debts of provincial governments and corporations. They need help, too, but it will mean pulling another $50 billion in new, digitally-created money out of Poloz’s magic hat. 

The sheer magnitude of all this newly manufactured cash is worrisome. If countries can get everything they want by simply printing more money, why doesn’t everyone do it all the time? 

The answer is the world’s financial markets wouldn’t let them get away with it. The U.S. Fed and the European Central Bank are considered to be big and powerful enough to do what they deem necessary. 

Canada, with its much smaller economy, probably won’t be cut the same slack. The value of its currency may slide if quantitative easing lasts too long. Inflation could rise to unmanageable levels even as millions of Canadians remain unemployed and the nation’s economic engines are struggling to fire on all cylinders. 

This spring, the Bank of Canada had no choice but to experiment with quantitative easing. In short order, it must provide Canadians with a plan and timetable for getting out of it.

Canada, with its much smaller economy, probably won’t be cut the same slack. The value of its currency may slide if quantitative easing lasts too long. Inflation could rise to unmanageable levels even as millions of Canadians remain unemployed and the nation’s economic engines are struggling to fire on all cylinders. 

This spring, the Bank of Canada had no choice but to experiment with quantitative easing. In short order, it must provide Canadians with a plan and timetable for getting out of it. (Hamilton Spectator Editorial)

Saturday January 18, 2020

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday January 18, 2020

$60 payout ‘putting money back in parents’ pockets’, education minister says

May 4, 2019

The minister of education is offering parents money for childcare costs incurred during rotating teachers’ strikes.

Stephen Lecce says parents can apply for amounts from $25 to $60 per day for children under twelve.

Lecce says if all unions were to walk out, subsidies for childcare would amount to $48 million a day.    

“Just for clarity, every day that all unions withdraw services, that full withdraw saves the government $60 million dollars in salaries,” Lecce said. “So the concept here is we know that’s not our money, it’s our tax dollars, we’re using it. It’s the savings from their withdrawal of service.”

November 22, 2019

Parents of pre-schoolers at school-based child-care centres affected by the strikes will get the most money. Those with children in grades 1 through 7 will get less and parents of high school students will get nothing.

Lecce said the government’s motivation for the payout was to put money “back in the pockets of working people in Ontario.”

“At the end of the day the greatest constituency that bears the costs of this are parents and middle and low-income families who have to find childcare on short order,” he said.

As for criticisms that the payout was a bribe to parents, Lecce said he wasn’t surprised it was being spun by teachers’ unions as such.

August 29, 2019

“I think union leaders, respectfully, must accept the premise that there’s a cost when a child is staying home,” he said. “We have examples, real human examples, of individuals and low-income families and single parent families where they have to take vacation days.”

“Those will eventually add up,” Lecce said. “So it is absolutely in the interests of the taxpayer to return that money to them to make their life a little bit better and a little less difficult during this time of turmoil.”

“And it underscores our commitment to standing with families against this escalation.” (CBC) 

 

Wednesday January 8, 2020

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday January 8, 2020

The Trump We Did Not Want to See

Much of the work of H.P. Lovecraft, an American horror and science fiction writer who worked during the first decades of the 20th century, is defined by individual encounters with the incomprehensible, with sights, sounds and ideas that undermine and disturb reality as his characters understand it. Faced with things too monstrous to be real, but which exist nonetheless, Lovecraftian protagonists either reject their senses or descend into madness, unable to live with what they’ve learned.

June 25, 2019

It feels, at times, that when it comes to Donald Trump, our political class is this Lovecraftian protagonist, struggling to understand an incomprehensibly abnormal president. The reality of Donald Trump — an amoral narcissist with no capacity for reflection or personal growth — is evident from his decades in public life. But rather than face this, too many people have rejected the facts in front of them, choosing an illusion instead of the disturbing truth.

The past week has been a prime example of this phenomenon. On Thursday night, the United States killed Maj. Gen. Qassim Suleimani of Iran leader of the Islamic Republic’s Quds Force and one of the most powerful military leaders in the region. The strike was sudden and unexpected. The White House notified Congress only after the fact, with a brief, classified document.

May 11, 2018

The assassination of Suleimani was tantamount to a declaration of war and has escalated tensions between the United States and Iran. Tehran has already promised “harsh revenge” against the United States, while Trump said he would  “HIT VERY FAST AND VERY HARD” if Iran made good on its threat, vowing an attack on “52 Iranian sites” including locations “important to Iran & the Iranian culture.”

This standoff, which in its latest incarnation saw Iranian missiles sailing toward bases in western Iraq on Tuesday night, is so consequential that it’s been hard not to impute some logic to the president’s actions, even as many observers acknowledge the lies and dysfunction surrounding the attack. It’s only natural. As humans, we want to impose order on what we see. As Americans, we want to believe our leaders understand the gravity of war. Traditional news outlets published detailed descriptions of the president’s decision-making process. Sympathetic observers, like Matthew Continetti of the Washington Free Beacon, hailed the strike as a “stunning blow to international terrorism and a reassertion of American might.” Cable news analysts spoke as if this was part of a considered plan for challenging the Iranian government. (Continued: New York Times) 

 

Tuesday May 14, 2019 

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday May 14, 2019 

Nearly two-thirds of Canadians oppose provincial governments spending taxpayers’ dollars to battle federal carbon tax, poll says

Nearly two-thirds of Canadians oppose provincial governments spending taxpayers’ dollars to battle the federal carbon tax, says a new poll released Monday as the Ontario government launched a new television ad slamming the levy.

April 30, 2019

About 64 per cent of respondents said it is unacceptable for provinces to opt out of the federal effort to combat climate change, including the carbon tax, according to a survey done by Nanos Research for The Globe and Mail. As well, 64 per cent of respondents said they oppose provincial governments spending public money to fight the tax.

Ontario, Saskatchewan, Manitoba and New Brunswick are pursuing legal challenges to the levy, which the Liberal government imposed in those provinces that do not have a carbon pricing system of their own, as part of Ottawa’s overall effort to meet its international commitment to reduce the greenhouse gas emissions that cause climate change.

April 17, 2019

Alberta Premier Jason Kenney is expected to unveil legislation on May 22 to rescind the provincial carbon tax adopted by the former New Democratic Party government. Mr. Kenney said he, too, will launch a legal challenge if, as promised, the federal government imposed its carbon tax in place of the provincial one that is to be cancelled.

Ontario Premier Doug Ford and his ministers have launched a multipronged opposition campaign that includes the court challenge in which a decision is expected soon; frequent ministerial photo ops highlighting the cost of the levy; a move to require gas stations to post stickers detailing the cost, and paid advertising. In a spot to air Monday, an Ontario government ad says the carbon tax will cost the average family $648 a year in 2022. Like the rest of the provincial material, the Ontario ad does not include any mention of the fact that the federal legislation requires all revenue raised to be returned to the province, with 80 per cent of families expected to receive more through a rebate delivered on their income tax return than they paid out in tax.

April 15, 2015

“It’s pretty clear that Canadians don’t like the idea of provinces opting out with the exception of Canadians in the Prairie provinces,” pollster Nik Nanos said. “While the carbon tax and the rebate is not a big political winner [for the federal Liberals], people definitely don’t like using provincial tax dollars to fight the federal carbon tax.”

The survey – which has a margin of error of three percentage points – polled 1,000 Canadians by phone and online between April 25 and 28. (Globe & Mail) 

 

Tuesday December 11, 2018

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday December 11, 2018

Environmentalists fear provincial changes mean Greenbelt is open for development

Environmentalists and critics are accusing Premier Doug Ford of breaking a promise to protect the two-million-acre Greenbelt from development with changes they say endanger wildlife and drinking water, setting Ontario’s environmental protections back 40 years.

May 3, 2018

The Progressive Conservative government’s proposed changes to the planning act will undermine the province’s anti-sprawl smart growth plan, the Greenbelt Act, the Great Lakes and Lake Simcoe Protection acts and the Oak Ridges Moraine Conservation Act, said Environmental Defence executive director Tim Gray.

The changes were announced Thursday as part of Bill 66, the Restoring Ontario’s Competitiveness Act.

It would allow municipalities to obtain provincial approval to use a new open-for-business zoning bylaw that would bypass some of the existing development requirements. The bylaw would only be available if the municipality could prove a development would create 50 jobs for places with populations under 250,000 or 100 jobs in larger municipalities. Of eight Ontario municipalities with more than 250,000 people, five are in the Toronto region.

“The aim is to have all provincial approvals in place within one year so qualifying businesses can begin construction,” said an emailed statement from a spokesperson of Municipal Affairs and Housing Minister Steve Clark.

March 9, 2005

Conditions would remain on the building, material and other design elements of the employment projects but municipalities would not be required to provide advance notice of the bylaw’s adoption.

The new tool is the kind of opening environmentalists have feared since Doug Ford was caught on video during the election campaign telling developers he would open up the Greenbelt if he became premier. He walked back the remarks after the video was released.

“There is no longer any rational approach to land designation so all areas that we’ve carefully considered being worthy of protection no longer have that protection. Anyone with a property just has to convince Queen’s Park to give them an exemption and (that’s) all it (needs) to go forward for development,” Gray said.

While the bill is driven by job creation, retail and residential components can be part of the projects which qualify for the bylaw’s use, he said. (Source: Toronto Star)