The latest release on the value of building permits for Canada's CMAs by Statistics Canada provides an interesting perspective on a slowing economy. The numbers show that there has been a downward trend in the total value of permits since late 2012.
The Mowat Centre has issued a new report on Ontario’s fiscal balance within the Federation called "Filling the Gap: Measuring Ontario's Balance within the Federation." The report finds that: “based on the latest available figures, Ontarians transfer approximately $11B on net to the rest of Canada. This transfer is equivalent to 1.9% of the province’s GDP. This can be referred to as the gap between what Ontarians contribute to the federal government and what is returned to the province in the form of transfers and spending. This gap exists despite the fact that Ontario’s fiscal capacity is below the Canadian average.” This report is the latest installment in an effort by Ontario to redress the fiscal balance. That the size of the fiscal gap is almost identical to the current size of Ontario’s deficit is a convenient juxtaposition.
Budgets are political and aspirational documents as they lay out a future course for the economy and government revenues and expenditures much as the government of the day would like them to be. Well, the 2013 federal budget is no exception as a bit of additional study of the budget numbers suggests that balancing the budget by 2015-16 and generating surpluses thereafter is probably wishful thinking.
Statistics Canada has released its most recent report on police personnel and expenditures and notes that police strength measured as officers per capita declined in 2012 by 1 percent. Moreover, there has been a slight decline in police expenditures overall with spending in 2011 totaling 12.9 billion – a decline of 0.7 percent from the previous year. However, spending and officers per capita have generally grown over the last decade and police forces and police spending are higher than they used to be. What is of more interest to me are the numbers at the CMA level and their relationship with crime rates.
What a difference just a few months can make in the world of federal government finance. Apparently, weak commodity prices and a slowing economy are playing such havoc with government finances that Thursday’s federal budget will show a downward revision of economic growth forecasts as well as a shortfall in revenue that will be addressed by extra savings that will come from limiting the growth of federal discretionary spending – direct spending on programs and services as opposed to transfers.
With the Conclave of Cardinals about to convene to choose a successor to Benedict XVI, it is worth taking a look at some statistics regarding the line of popes over the course of 2000 years. Based on the list in the Catholic Encyclopedia, Benedict XVI was the 267th pope in a line stretching back to Peter and his eight year reign was actually slightly above the average tenure for all popes but below average for those who have served more recently. Indeed, the reign of popes probably provides an interesting long-term perspective on longevity and the standard of living given that since popes usually served until death, the length of reign is likely correlated with longevity.
I’ve been doing some data exploration on public sector spending and societal outcomes and have some preliminary results that have caused me to puzzle about what they might mean. I’ve been looking at annual data for OECD countries (33 countries) over the period 2000 to 2010 and the relationship between public sector size and crime rates. Public sector size is defined as total government expenditure as a share of GDP. The crime variables were the number of homicides per 100,000 of population and the number of burglaries per 100,000 of population. The data is from the OECD and is essentially unbalanced panel data. The results for homicides did not surprise me but that for burglaries did.
Alex Usher of Higher Education Strategy Associates asked some interesting questions in his morning blog post. The world of university funding in Canada is changing – there is more money overall for universities but governments have been paying a declining share of university operating budgets with the remainder coming from tuition and assorted sources of research and contract funding. Indeed, a lot of new government money is targeted towards capital projects or new student support programs rather funding what faculty often see as core teaching and research functions of universities.
Well, Ontario has a new finance minister – Charles Sousa – and according to the Toronto Star: “Charles Sousa, the two-term Mississauga South MPP who finished fifth in last month’s leadership race, will succeed the retiring Finance Minister Dwight Duncan at the treasury. An affable former Royal Bank executive, Sousa inherits a $11.9-billion deficit that the minority Liberals hope to eliminate by 2017-18.” As far as inheritances go, I suppose I would prefer to be on the receiving end of a few thousand acres of rolling English countryside and Downton Abby rather than an 11.9 billion dollar deficit. No doubt, the new minister has been briefed on what is coming down the pipeline. The most recent Ontario quarterly finance update provides a lot for him to chew on.
Robert Gordon has argued in his recent NBER paper “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” that growth rates have slowed and we are reverting to very low historical growth rates and indeed a period of economic stagnation. However, what I find intriguing is that an examination of some long-term data for Britain provides conflicting results that quite frankly puzzle me.
In my morning newspaper, I came across a hardware store flyer advertising a great new innovation – toilet with pump! Essentially, along with your regular toilet, an additional water storage tank and pump is installed that allows you to store recycled water used from your sink, tub, or shower and then use it when you flush.
The motto that graces our national coat of arms is well known to Canadians but what is less well known is just how succinctly it encapsulates the economic vision of nineteenth Canadian business elites and the Fathers of Confederation, as well as summarizes the subsequent economic development of Canada in the half-century after Confederation.
Andrew Coyne has an excellent piece in the National Post dealing with why there are no good reasons for corporate handouts in the wake of yet another round of assistance to the automobile sector. He asks what the economic rationale for this assistance is – that is, what is the economic value? He argues that what passes for economic arguments in support of corporate assistance and bailouts really are but “pseudo-arguments”. For example, we must subsidize the auto industry because we must be in the automobile business – in essence, the auto industry is special. Or, other countries are assisting their manufacturing sectors with subsidies so we need to do so to compete.
The last few weeks has seen the death of two economists – James Buchanan and Albert O. Hirschman - whose work has influenced my intellectual development and thinking over the years. Their thoughts combined with tomorrow’s “political action” by Ontario teachers against the soon to expire McGuinty government has caused me to think about what forces are at work here. To be human is to see patterns (I can’t remember who came up with that line but I’m sure it was not me) and the dispute with Ontario teachers can certainly be framed in my mind by the concepts of Leviathan, exit and voice.