Financial security Governance Monetary policy

Is Canadian housing price inflation an intended policy outcome?


During the press conference following the Bank of Canada (BoC) July 2014 Monetary Policy Report, bank governor Stephen Poloz was asked whether the Bank was making up excuses – likely in response to his “serial disappointment” remark – to avoid raising its target rate. A lower rate benefits the federal government in a number of ways, primarily by lowering its debt servicing and public spending costs. However, the dangers of an extended period of low interest rates include excessive household debt accumulation, particularly mortgage debt.

But what if the BoC views excessive housing price inflation as a key economic driver – and that view is affecting its policy rate decision?

Employment Financial security Governance Immigration Justice Race and ethnicity

Why Canada avoids asking about race, and why that’s a problem

Making waves in his first speech after taking office in 2009, outgoing US Attorney General Eric Holder then described his country as a “nation of cowards” afraid to confront racial issues. While the US had made remarkable progress on civil rights in the latter half of the twentieth century, election of a biracial president aside, there’s evidence to suggest it has recently regressed. There are anecdotes, like recent incidents in Detroit, Michigan and Ferguson, Missouri. But there are also race-based statistics collected, compiled and published by various US government agencies, from Justice to Labor to even the Federal Reserve.

If fear of confronting race is cowardice, what does one call fear of even asking about it? Because that’s where Canada is at the moment.

Governance Health Justice Transparency

In debate over drug legalisation, it’s worth revisiting Prohibition (which actually worked)

Canada’s pot policy needs to sober up
Andre Picard, The Globe and Mail August 21, 2014

Sometimes, you catch news items a bit late. Today, that item is Globe public health reporter Andre Picard’s recent write-up on Canada’s marijuana legalisation discourse (which closely mirrors that taking place in the US).

As succinctly stated, a more sombre reflection on the possible / likely ramifications of legalisation than what’s so far passed as ‘debate’ is needed. Mr. Picard seems to pull back a bit in his August 2014 column, grouping pot as a, “recreational drug, such as tobacco and alcohol”. In an earlier (April 2014) column, the ‘recreational drug’ reference was to opioids, such as abused prescription OxyContin and heroine.

While cannabinoid and opioid are distinct, they “share several pharmacologic properties”. The science is far from settled on whether in therapeutic use the combination of the two is more beneficial or harmful. The science is far clearer on the combination’s recreational / mis-use: It’s quite harmful, and can be fatal. Since it targets similar (but not the same receptors) as opioids, cannabis can likewise be addictive (the distinction between ‘habit-formation’ and ‘addiction’ is more art than science).

Decriminalisation, or legalisation?

Cannabis use can be quite socially harmful, to individual users’ health (cognitive development, mental health), and to the greater public (motor vehicle, workplace accidents). There’s also economic harm, to individuals (criminal record implications), and to the state (enforcement, rehabilitation). The interesting debate, it would seem, is whether to simply decriminalise possession or legalise commercial trade (production, distribution, sale).

The interesting line in, and jump-off point from, Mr. Picard’s column:

But there are a lot more alcoholics than there are stoners.

Yes, there are. Now. When one can purchase alcohol at just about every convenience and grocery store. Along with a pack of smokes. For less than ten bucks. Will that still be the case when a pack of marijuana cigarettes is sold alongside the Players and duMaurier for a similar price?

One of the most disingenuous arguments put forward for marijuana legalisation is that government regulation will keep it out of children’s hands – like alcohol and tobacco. It’s a transparently absurd argument to anyone who’s attended Canadian high school any time in the past half century. Because Canadian high school kids don’t have access to alcohol and tobacco.

Similarities to Prohibition debate

Did Prohibition Really Work? Alcohol Prohibition as a Public Health Innovation
Jack S. Blocker, Jr, American Journal of Public Health February 2006

Actually, Prohibition Was a Success
Mark H. Moore, New York Times October 16, 1989


Accountability Governance Transparency

StatsCan to collect Social Insurance Numbers despite lack of authorisation, oversight

If the census test currently underway is any indication, Statistics Canada is planning to collect a critical piece of personal identification from respondents during the upcoming census. A quick ‘told ya so’ (see What’s the end game) before proceeding.

A Social Insurance Number (SIN) can be used to obtain much more than just Canada Revenue Agency tax file data. That’s why the Government of Canada advises citizens to closely guard their SIN numbers from those not authorised to collect or use them.

Who can ask for my SIN number?
Frequently Asked Questions, Office of the Privacy Commissioner May 15, 2014 (last modified)

Annex 2 – Authorized Federal Uses of the SIN
The Social Insurance Number Code of Practice, Service Canada March 4, 2014 (last modified)

The referenced Privacy Commissioner and Service Canada pages both indicate the legislated and authorised users of Canadian SIN numbers. One agency absent from the list: Statistics Canada. The advice from both the Privacy Commissioner and Service Canada is that citizens shouldn’t share their SIN numbers with unauthorised users; at this point, that includes Statistics Canada. Whether that changes remains to be seen.

Employment Financial security Governance Taxation Trade and investment

r > g: ‘Capital in the Twenty-First Century’, meet ‘Kapital’ of the nineteenth century


One can’t have an economics page without commenting on this book, apparently. Its recently published English edition, Capital in the Twenty-First Century, was a US best-seller – a remarkable feat for a hefty econ tome.

For those who haven’t read it and/or have no intention of doing so, The Economist has taken to reviewing it in parts (of which there are four) for subscribers. It’s that important. The critique of Capital‘s conclusion is noteworthy:

 If the most likely outcome of the trends Mr Piketty describes is that somewhere down the line a left-of-centre government is elected and passes higher top income-tax rates, higher estate-tax rates and pension reforms, and that defuses the crisis, well, that puts the rest of the book in perspective. If the most likely outcome is revolution, well, that does too. And while it would be absurd to expect Mr Piketty to say definitely whether one possibility or another is bound to occur, I don’t think it’s asking too much, given the ambition of the rest of the book, to think we ought to be given some sense of his view on how social and political movements generally evolve in response to widening inequality, and how that evolution tends to be reflected in policy. What good is it to suggest utopian ideas about how to fix these problems without at least gesturing toward the political mechanisms needed to bring them about?

The topic of capital and wealth distribution precludes separating the political from the economic analysis – which, ironically, is the point of contention between Capital and Kapital. As Marx succinctly put it (prior to Kapital): Although theoretically the former is superior to the latter, in actual fact politics has become the serf of financial power.

In noting that the post-World-War periods during which income inequality declined were an aberration rather than proof that capitalism (as we’ve come to know it) optimally (re)distributes wealth, Piketty effectively supports Marx’s central premise that it doesn’t.

And it’s not just Piketty who (despite not conceding the point) has recently come to the uncomfortable realisation perhaps Marx was right.

However, Piketty (among others) ignores the obvious correlation between capital ownership and political influence by suggesting policy makers can address widening inequality by simply hiking taxes on capital wealth. Bill C-23, the Canadian ‘Fair’ Elections Act, and related recent events in the US speak to the obvious omission.

Picketty also ignores capital flight, a problem his home country of France faced only a few short years ago. And that was before it elected a Socialist government and a famed French actor made it headline news.