C.D. Howe Institute

Time to Spotlight Disputed “Grey Zones” in Healthcare

Greater clarity is needed in the controversial "grey zones" of the Canada Health Act to contribute to the quality of public debate and advance healthcare reform, according to a new report from the C.D. Howe Institute. In "Grey Zones: Emerging Issues at the Boundaries of the Canada Health Act," author Gerard Boychuk examines four hot-button issues in the national debate over healthcare reform and recommends the federal government clarify the Act and remove a significant barrier to possible healthcare reforms.

Defined-Benefit Public Sector Pension Plans: Who Wins and Who Loses?

The payout formulas for defined-benefit (DB) pension plans, such as those typically provided to government employees across Canada, produce little-acknowledged yet striking inequities, according to a report from the C.D. Howe Institute. In "Winners and Losers: The Inequities within Government-Sector, Defined-Benefit Pension Plans," Geoffrey Young shows how plan formulas can produce redistribution of retirement income among members and recommends potential reforms.

Consumer Credit Reaches Record Levels - Cause for Concern, Not Panic

Canadian households are saddled with unprecedented amounts of debt through bank loans, credit cards and lines of credit, according to a report released today by the C.D. Howe Institute. In The Rise in Consumer Credit and Bankruptcy: Cause for Concern?, author James MacGee finds that debt levels associated with consumer credit are higher than at any point in recent history, and are now higher than those of American households. This raises concerns about the sustainability of household finances, the risks to the broader economy and the merits of government intervention, he says. "At present, there is no cause for panic," says MacGee, "but there are warning signs in the numbers that are reason for concern, and merit close watching."

Later Retirement by Babyboomers to Ease Economic Pain of Population Aging

Over the coming two decades people are likely to stay in the workforce much longer - by about five years - according to a report from the C.D. Howe Institute. In "Later Retirement: The Win-Win Solution," author Peter Hicks finds there will be a strong trend towards later retirement by babyboomers as a result of social and economic pressures, without any policy action by government to raise retirement levels. Delaying work-retirement transitions by five years would have large, positive economic and fiscal effects, the author reports, reducing pressures on growth, government finances and pension funding. Other gains in social well-being appear likely, if harder to quantify.

Rolling Back Spending, Spurring Growth: A Shadow Budget for 2012

March 21, 2012 - Canada is in the happy position of being able to address its fiscal challenges not just through eliminating deficits, but also by promoting growth in the economy and the tax base, according to a report released today by the C.D. Howe Institute. In "Achieving Balance, Spurring Growth: A Shadow Federal Budget for 2012," authors Alexandre Laurin and William B.P. Robson present, first, an accelerated plan to achieve budgetary surplus in three years; and second, a series of low-cost initiatives designed to foster economic growth.

Set Charities Free to Raise More Business Income

Canadian law should permit charities to raise some funds for their missions through business income from both related and unrelated businesses, according to a report released today by the C.D. Howe Institute. In "At the Crossroads: New Ideas for Charity Finance in Canada," authors Adam Aptowitzer and Benjamin Dachis find that, in the face of financing challenges, charities need the flexibility to finance their non-profit activities through businesses governed by separate, arm's-length Boards.

Why Canada Should Take a Seat at Trans-Pacific Table

Toronto, - Canada needs a seat at negotiations toward a new Trans-Pacific Partnership on trade to reap the full benefits of doing business with the emerging powerhouse economies of East Asia, according to a report released today by the C.D. Howe Institute. In "Can Canada Join the Trans-Pacific Partnership? Why wanting it is not enough," trade expert Dr. Laura Dawson notes the new trade pact could eventually account for half of global output and 40 percent of world trade. "Membership would position Canada to build trade ties with Asia's rising economic powers, whose double-digit growth rates far outshine those in the West," notes Dr. Dawson. "Canada is coming late to the talks. The question now is whether Canada can join the action."

MPs Must Lead by Example on Pension Reform: C.D. Howe Institute

Toronto, Jan. 19 - Fixing rich, underfunded MP pensions is a key step in pension reform, according to a report released today by the C.D. Howe Institute. In "Fixing MP Pensions: Parliamentarians Must Lead Canada's Move to Fairer, and Better-Funded Retirements," author William B.P. Robson argues that the Pension Plan for Members of Parliament (MPs), which covers members of the House of Commons and the Senate, is the most problematic of federal employee pension plans.

How to Make EI Fairer for All Canadians

Toronto, - The federal Employment Insurance (EI) program plays favorites among Canada's regions and sustains costly, long-lasting pockets of high unemployment, say the authors of a new report from the C.D. Howe Institute. In "Mending Canada's Employment Insurance Quilt: The Case for Restoring Equity," Senior Policy Analyst Colin Busby and Professor David Gray say the EI program should be simplified, with nation-wide standards for the number of hours of work needed to qualify for benefits, and for how long benefits should be received.

Tax Rules Prevent Many Canadians from Saving Enough for Retirement

Toronto, Oct. 27 – Federal tax rules are preventing many Canadians – especially in the private sector – from saving enough for retirement, according to a report released today by the C.D. Howe Institute. Workers relying on RRSPs cannot accumulate even half the retirement wealth of career members of defined-benefit (DB) pension plans, says the report, “Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit,” by James Pierlot with Faisal Siddiqi.

Why Canada Needs a Trade Deal with the European Union: C.D. Howe Institute

Toronto – Canada should set ambitious goals in trade talks with the European Union (EU), which resume next week, since it has much to gain from a comprehensive trade accord, according to a report released today by the C.D. Howe Institute. In “Go Big or Go Home: Priorities for the Canada-EU Economic and Trade Agreement,” Daniel Schwanen, Associate Vice President, International and Trade Policy, says a comprehensive economic and trade agreement (CETA) between Canada and the EU is both desirable and possible.

Core CPI? Don’t Bank On It to Predict Inflation: C.D. Howe Institute

Toronto, – The Bank of Canada should place less emphasis on the “core” Consumer Price Index (CPI) in explaining its policy choices, according to a report released today by the C.D. Howe Institute. In, “Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation,” authors Philippe Bergevin and Colin Busby say that core CPI, an inflation measure which strips out from the consumer price basket some of the most volatile items and which the Bank uses as an operational guide, has diverged from total CPI and may give misleading signals about future inflation.

Why Reforms of the Asset-Backed Securities Market Should Include a Role for Third-Party Investors

Toronto, – Regulators considering reforms to the asset-backed securities (ABS) market should look beyond transparency requirements in their efforts to improve investor comfort in the ABS market, says a report from the C.D. Howe Institute.

Understanding the Links Between Financial Crises and the Rest of the Economy

TORONTO, Aug. 16, 2011 - Our understanding of the links between the financial sector and the rest of the economy needs to improve, concludes a new report from the C.D. Howe Institute. In When Nightmares Become Real: Modelling Linkages between the Financial Sector and the Real Economy in the Aftermath of the Financial Crisis, authors Philippe Bergevin, Pierre Duguay and Paul Jenkins say that the complexity of these linkages have been neglected in the models typically used to guide monetary policy - the question is how to remedy deficiencies in policymakers’ economic models of the world, so that they can be used with confidence in guiding policy.

Defining “Neutral” Level for Interest Rates a Smoke and Mirrors Game: C.D. Howe Institute

TORONTO, While the Bank of Canada expects the Canadian economy to return to full employment by the middle of 2012, its critics have stressed the need to raise interest rates to a "neutral" value by then to keep inflation stable. But defining this neutral level, normally associated with full employment, is a bit of a smoke and mirrors game, according to a report from the C.D. Howe Institute.

BC Has it Right on the HST: C.D. Howe Institute

TORONTO, - British Columbia is on the right track with its controversial move to a harmonized sales tax (HST), according to a C.D. Howe Institute report released today. In "The Time is Still Right for BC's HST," authors Finn Poschmann and Alexandre Laurin say the shift to a value-added taxes mirrors patterns in most of the developed world, and helped move the province from being a high tax, investment-unfriendly jurisdiction, to one which is domestically and internationally competitive - a more attractive home for investment and jobs.

Winners, Losers Emerge in Productivity Race among Provinces: C.D. Howe Institute

TORONTO, In the race to improve productivity and household incomes, winners and losers emerge among the Canadian provinces, according to a report from the C.D. Howe Institute. In Lagging Behind: Productivity and the Good Fortune of Canadian Provinces author Serge Coulombe says growing labour productivity is the most important determinant of future economic welfare and, on that measure, Canada is falling behind its major trading partners.

Why Low-Income Families Face High Tax Rates

The marginal effective tax rate on personal income has declined for most Canadians over the past decade, but has risen for many low-to-middle-income families with young children, which reduces their gains from earning more income, according to a report from the C.D. Howe Institute. In “What’s My METR? Marginal Effective Tax Rates Are Down – But Not for Everyone: The Ontario Case,” authors Alexandre Laurin and Finn Poschmann say Ontario is a case in point, with marginal effective tax rates over 50 percent for many low-to-middle-income families with children, and the share has risen in 2011 compared to 2000.

Fix the Faulty CPI

Toronto, March 8 – Fixing measurement errors in the Consumer Price Index is a small idea that offers big payoffs to Canadians and the government, according to an e-brief released today by the C.D. Howe Institute. In “Fixing Canada’s CPI: A Simple and Sensible Policy Change for Minister Flaherty,” economist Christopher Ragan, who is David Dodge Chair in Monetary Policy at the Institute, says if the upcoming federal budget devoted the resources needed to improve Statistics Canada’s measurement of the Consumer Price Index, Canadians would have a truer sense of changes in the cost of living, monetary policy would be guided by a more accurate measure of inflation, and Minister Flaherty would more easily achieve the government’s commitment to balance the federal budget by 2015/16.

Rethink Pervasive Government Role in Mortgage Markets: C.D. Howe Institute

Toronto, – The federal government’s role in mortgage markets is pervasive and should be scaled back, while encouraging more competition in the mortgage insurance business, according to a study released today by the C.D. Howe Institute. In “What Governments Should Do in Mortgage Markets,” author Finn Poschmann, Vice President, Research, at the Institute, notes that the mortgage insurance book of Canada Mortgage and Housing Corporation, CMHC, which is a Crown agency, now backstops mortgage lending equivalent to more than 30 percent of gross domestic product. While the net exposure is less than this, the arrangement subjects Canadian taxpayers to large, ill-defined risks. Poschmann suggests several steps to manage these risks better.