C.D. Howe Institute

Why the Bank of Canada should not Take Aim at Canada’s “Overvalued” Dollar

A confluence of factors promises to put pressure on the new Bank of Canada governor to direct monetary policy at fixing Canada's so-called "overvalued" currency, according to a report released today by the C.D. Howe Institute. But in "The Seductive Myth of Canada's "Overvalued" Dollar," author Christopher Ragan provides two strong arguments against doing so: the importance of the Bank's focus on inflation, and the weakness of the "overvalued" dollar argument.

How to Help University Research Boost Canada’s Economy: C.D. Howe Institute

TORONTO, - Canadian universities lag behind their US counterparts in generating technology transfer between academic research and companies, and improved policies are needed to address the problem, according to a report released today by the C.D. Howe Institute. In "From Curiosity to Wealth Creation: How University Research can Boost Economic Growth," author Peter Howitt recommends how governments can improve the incentives for universities and their researchers to pursue research lines that can eventually be commercialized.

The New “Normal” for Interest Rates in Canada

How far and how fast Canada's record-low interest rates will rise in the coming years is a vital question for consumers and businesses. In "The New "Normal" for Interest Rates in Canada: The Implications of Long-Term Shifts in Global Saving and Investment," authors Paul Beaudry and Philippe Bergevin find that the normal or "neutral" rate is likely lower than its historical average, and likely will remain at relatively lower levels over the next decade.

How Governments Maintain Monopolies – And What to Do About It

Toronto, – Governments in Canada maintain monopolies in certain sectors of the economy through regulations that advance private interests at an unreasonable cost to consumers, according to a report from the C.D. Howe Institute. In “Beer, Butter, and Barristers: How Canadian Governments Put Cartels before Consumers,” authors Robert Mysicka and Marty McKendry criticize the view, established by the courts, that regulations conflicting with competition law should be deemed to operate in the public interest.

The Dangers of an Extended Period of Low Interest Rates

After an extended period of record-low interest rates, the Bank of Canada should reverse some monetary stimulus and begin raising interest rates, according to economist Paul Masson. In "The Dangers of an Extended Period of Low Interest Rates: Why the Bank of Canada Should Start Raising Them Now," published by the C.D. Howe Institute, Masson argues there is urgency for the Bank to act in view of the economic distortions and financial risks low interest rates pose for Canada.

Cut Provincial Red Tape to Increase Apprenticeships

TORONTO, - Outdated provincial regulations are needlessly limiting the number of apprenticeship opportunities available to trades workers, according to a report today from the C.D. Howe Institute. In "Access Denied: The Effect of Apprenticeship Restrictions in Skilled Trades," authors Robbie Brydon and Benjamin Dachis say that reforming those tight regulations is crucial to meeting demand for skilled workers.

Why Canada Should Adopt an “Innovation Box” Approach to Promote Innovation

TORONTO, - Canada should consider adopting an "Innovation Box" approach to encourage business investment in innovative processes that improve productivity, growth, and incomes, according to a new report released from the C.D. Howe Institute. In "Improving the Tax Treatment of Intellectual Property Income in Canada," authors Nick Pantaleo, Finn Poschmann and Scott Wilkie say federal tax policy should complement tax-based support for research and development (R&D) spending by encouraging the adoption, commercialization and use of innovative ideas -- in short, a pull, as well as a push, into R&D activity.

How to Improve the Way We Fund Hospitals

TORONTO, - The dismal performance of Canada relative to other OECD countries on measures of wait times and access to hospitals underlines the need for rethinking the way hospitals are funded, according to a report released today by the C.D. Howe Institute. In "Paying for Hospital Services: A Hard Look at the Options," authors Jason Sutherland, R. Trafford Crump, Nadya Repin and Erik Hellsten find more use of activity-based funding (ABF), in which hospital payments are based on the volume of care provided, is a viable complement to fixed annual lump sum budgets for rebalancing the financial incentives for Canadian hospitals.

Manufacturing Clusters - No Silver Bullet for Canada’s Productivity Problem

TORONTO, - There is no strong link between the clustering of Canada's manufacturing industries and their economic performance on a sector-wide basis, according to a report released today by the C.D. Howe Institute. In "Strength in Numbers? The Weak Effect of Manufacturing Clusters on Canadian Productivity," author Kristian Behrens finds instead that increases in trade, whether imports or exports, have a stronger effect on industry productivity and should be the focus of policymakers.

Why Shotgun Marriages Aren’t the Way to Reform Ontario’s Electricity Market

TORONTO, - While provincially appointed panels have recommended that Ontario force local electricity distribution companies (LDCs) to merge into a handful of large, regional operations, it is unclear that this would be a better deal for the people of Ontario, according to a report from the C.D. Howe Institute.

Shadow Budget 2013: More Belt-tightening for Ottawa; Measures to Spur Growth

TORONTO, - The C.D. Howe Institute's 2013 Shadow Budget, released today, protects Canada from near-term economic and fiscal risks by accelerating the federal government's planned return to budget surpluses, and promoting reforms that will boost longer-term economic growth. In "Prudence and Opportunity: A Shadow Federal Budget for 2013," authors Alexandre Laurin and William Robson show how Ottawa can achieve budget surplus by 2014/15, a year ahead of plan, through further belt-tightening in the government's own operations, while reshaping federal finances to support work, saving, investment, and international trade.

Breaking the Milk Marketing Deadlock

TORONTO, - Canada's controversial but politically untouchable dairy supply management system can be reformed, while addressing the concerns of wary politicians, consumers tired of overpaying for milk and cheese, and farmers worried about their future. In "Putting the Market Back in Dairy Marketing," authors Colin Busby and Daniel Schwanen call for better representation of consumer interests in milk marketing decisions, a cap on milk prices, and steps to measure efficiency and open new markets for dairy farmers.

Youth, Long-Term Unemployed Worst Off in Stronger Labour Market

TORONTO, - While the Canadian labour market has shown great resilience since the last recession and is nearly back to normal, important weaknesses remain for youth and the long-term unemployed, according to a report released today by the C.D. Howe Institute.

Making Budget Promises Matter: Canada’s 2012 Fiscal Accountability Rankings

Note: Please feel free to tweet or share the Pinocchio Index: see link below TORONTO, - Canada's senior governments have regularly missed budget spending and revenue targets during the last decade, according to a report released today by the C.D. Howe Institute. In "Canada's 2012 Fiscal Accountability Rankings," authors Colin Busby and William B.P. Robson find the combined spending overruns of federal, provincial and territorial governments have surpassed $53 billion in the last 10 years. If budget targets were met more accurately, they point out, current taxes, deficits and debt loads would be lower and more manageable.

Rolling Back “Mission Creep” at Crown Corps.

TORONTO, - After years of "mission creep" at Canada's Crown financial corporations, their activities have expanded far beyond their original mandates and need reassessment, according to a new report from the C.D. Howe Institute. In "Reining in the Risks: Rethinking the Role of Crown Financial Corporations in Canada," authors Philippe Bergevin and Finn Poschmann assess the risks posed by three major Crown financials for taxpayers and the economy and make recommendations for limiting their activities.

Healthcare for an Aging Population Confronts Ontario with a $1.4 Trillion Fiscal Glacier

TORONTO, - Ontarians carry a $1.4 trillion fiscal burden - the higher tax bill for increased healthcare costs over the next half-century - and should prepare now for the coming demographic squeeze, says a report released today from the C.D. Howe Institute. In "Managing Healthcare for an Aging Population: Does the Demographic Glacier Portend a Fiscal Ice-Age in Ontario?" authors Colin Busby and William B.P. Robson recommend that Ontario prefund selected healthcare services and benchmark against other provinces to get better health bang for their tax bucks.

Money Never Sleeps: The Real Reasons for the Cash Build-up on Corporate Balance Sheets

TORONTO, - While critics have raised alarms about the rising cash holdings on corporate balance sheets, there are broader, long-term reasons for the move to cash that go far beyond a knee-jerk reaction by business to current economic uncertainty, according to a new report from the C.D. Howe Institute.

New Impetus Needed to Complete a Canada-Caribbean Trade Deal

TORONTO, - Canada should step up efforts to wrap up a trade deal this year with the Caribbean Community (CARICOM), according to a report released by the C.D. Howe Institute. In "A Canada-CARICOM "Trade-not-Aid" Strategy: Important and Achievable," author Phil Rourke says a Canada-CARICOM trade deal could serve as a model for agreements with other low- and middle-income countries.

Deep in the Red: Federal Pension Promises Still Badly Underfunded

TORONTO, - Despite recent high-profile changes to the pension plans of federal public servants, uniformed personnel and MPs, a critical flaw remains: the contributions to these plans, even after the changes, come nowhere close to covering the rocketing cost of their promises. In "Ottawa's Pension Abyss: The Rapid Hidden Growth of Federal-Employee Retirement Liabilities," author William B.P. Robson finds the accumulated unfunded liability of these plans, using fair value accounting, stood at $267 billion at the end of March 2012, almost $118 billion worse than shown in the Public Accounts.

Where Should the Buck Stop? The Bank of Canada and Financial Stability

TORONTO, Ottawa must move carefully in deciding the best role for the Bank of Canada in preventing threats to financial stability, according to a report released today by the C.D. Howe Institute. In "Seeking Financial Stability: The Best Role for the Bank of Canada," former Bank of Canada Governor John Crow assesses how much of a role the Bank should play in this new policy front.