C.D. Howe Institute

Further Reforms to Federal Pensions Required: C.D. Howe Institute

TORONTO, - While Ottawa's proposed reforms to the pension plans of federal employees and MPs are a move in the right direction, the deep flaws in these plans require more fundamental revisions, according to a report released today by the C.D. Howe Institute. In "Federal Employee Pension Reforms: First Steps - on a Much Longer Journey," authors William B.P. Robson and Alexandre Laurin argue that more sweeping reforms are needed to achieve better funding and a more reasonable division of obligations and risks between taxpayers and public servants.

A Better Way to Pay Doctors: The Pay-per-Patient Solution

TORONTO, - Paying doctors for each patient in their care, rather than per-service-performed, would add value for money and increase access to physicians in primary care, according to a report released today by the C.D. Howe Institute. In "How to Pay Family Doctors: Why 'Pay per Patient' is Better than Fee for Service," authors Ake Blomqvist and Colin Busby make the case that primary care doctors should have incentives to promote efficiency in the system through the way they are paid. "Paying doctors per patient would give them greater incentive to keep patients healthy and add more patients to their rosters," said Blomqvist, Health Policy Scholar at the C.D. Howe Institute.

Collateral Damage: Land Transfer Tax Takes Bite Out Of Home Sales - C.D. Howe Institute

TORONTO, - Toronto's Land Transfer Tax (LTT) has had a significant impact on home sales and household mobility in the city over the longer term, according to a report released today by the C.D. Howe Institute. In "Stuck in Place: The Effect of Land Transfer Taxes on Housing Transactions," Benjamin Dachis finds the LTT has depressed sales volume by 16 percent, on average, since its introduction in 2008. "Municipalities across the country - especially those neighbouring Toronto - should beware Toronto's example, where the imposition of a land transfer tax depressed housing sales, raised relocation costs and reduced household mobility," said Dachis, a Senior Policy Analyst with the Institute.

Why Ottawa Should Issue More Inflation-Indexed Bonds: C.D. Howe Institute

TORONTO, - Ottawa should issue more real-return bonds (RRBs) to satisfy investor demand and lower its borrowing costs, among other benefits, according to a report released today by the C.D. Howe Institute. In "More RRBs Please! Why Ottawa Should Issue More Inflation-Indexed Bonds," Philippe Bergevin and William B.P. Robson argue that Canada's federal government, which began issuing RRBs in 1991, should issue more RRBs, of more types, than currently planned. "For individual savers and financial intermediaries such as pension funds, these bonds offer uniquely valuable protection against inflation. And for Ottawa, issuing more RRBs could lower debt-service costs - not just because of their typically lower yield, but also because more RRBs would underline the government's commitment to low inflation," said Mr. Robson, President and CEO of the Institute.

With regards, from James Fleming CD Howe Institute

TORONTO, - Some forms of venture capital funding for business in Canada are strongly linked to innovation, as measured by new patent applications, according to a report released today by the C.D. Howe Institute. In "Can Venture Capital Foster Innovation in Canada? Yes, but Certain Types of Venture Capital Are Better Than Others," author Tariq Fancy finds Canadian venture capital (VC) funding, overall, is more effective in stimulating innovation than business research and development investment, on a dollar-for-dollar basis.

What Really is Happening with Housing Prices? The CPI Won’t Tell You - C.D. Howe Institute

TORONTO, - The Bank of Canada needs a better inflation indicator that is more sensitive to swings in house prices than the Consumer Price Index (CPI), according to a new report from the C.D. Howe Institute. In "Housing Bubbles and the Consumer Price Index: A Proposal for a Better Inflation Indicator," Philippe Bergevin points out the CPI has not usefully reflected the rapid run-up in housing prices in recent years. He proposes a new official inflation indicator for monetary policy purposes that would better reflect the prices of houses sold in the market.

How to Reduce the Risks Lurking in Shadow Banking: C.D. Howe Institute

TORONTO, - Financial regulators should turn their attention to the potential threats to financial stability lurking in the shadow banking system, according to a report released today by the C.D. Howe Institute. In "Combatting the Dangers Lurking in the Shadows: The Macroprudential Regulation of Shadow Banking," David Longworth, former deputy governor of the Bank of Canada, argues greater regulation of the financial entities in the sector is required to mitigate the risks of another run on the shadow banking system exacerbating financial instability, as occurred in the 2008/2009 financial crisis.

Who Approved that Product? Private-Sector Standards Take Lead in Global Commerce

TORONTO, - Global commerce is experiencing a rapid shift from government- to private-sector standard-setting for everything from product safety and quality to corporate behavior abroad, according to a report released today by the C.D. Howe Institute. In "The New Multilateralism: The Shift to Private Global Regulation," respected trade lawyer Lawrence Herman identifies a broad shift to rulemaking by the private sector rather than governments that has accelerated since the collapse of the World Trade Organization (WTO) negotiations.

How Long Should Your Savings Last?

TORONTO, - Retiring babyboomers are driving a shift from retirement-fund accumulation to decumulation, but they need better choices to protect against longevity risk, according to a report released today by the C.D. Howe Institute. In "Annuities and Your Nest Egg: Reforms to Promote Optimal Annuitization of Retirement Capital," the University of Calgary's Norma Nielson says to enhance retirees' options, policy reforms should level the playing field for annuity products and promote market-driven variety of choice, thus ensuring retirees have at least some funds available to them for the long haul.

Business Investment Picks Up in Canada

TORONTO, - Business investment in Canada is picking up relative to its international peers, but underlying problems remain, according to a report released by the C.D. Howe Institute. In "From Living Well to Working Well: Raising Canada's Performance in Non-residential Investment," authors Benjamin Dachis and William B.P. Robson identify widely divergent performances by provinces and a surge in the flow of funds to the residential sector away from the non-residential sector as problems to be addressed by policy reforms. "Policies that enhance competition and remove biases against non-residential investment could boost capital spending by businesses and improve Canadian workers' prospects for higher incomes," said Benjamin Dachis, Senior Policy Analyst.

Canada Must Revamp Trade and Investment Policies to Exploit Emerging Global Patterns

TORONTO, - To revitalize its flagging trade and productivity performance, Canada should adapt its international trade and investment policies to a world of global value chains, evolving trade and investment patterns, and deepening economic integration; according to a new report from the C.D. Howe Institute. In "Breaking Free: A Post-mercantilist Trade and Productivity Agenda for Canada," Research Fellow Michael Hart says to be more competitive, Canada needs to wean itself more completely from a mercantilist approach best suited to an era in which products and firms had clear national identities, which is rarely the case today. "Canada's trade and investment policies are stuck in the past. We risk being caught flat-footed and side-lined in the highly integrated global marketplace," says Professor Hart, Simon Reisman Chair in Trade Policy at the Norman Paterson School of International Affairs, Carleton University.

Better Regulation Needed for Credit Rating Agencies: C.D. Howe Institute

TORONTO, - Major reforms should be pursued to enhance the accountability and effectiveness of Credit Rating Agencies (CRAs) according to a new report from the C.D. Howe Institute. In "A Question of Credibility: Enhancing the Accountability and Effectiveness of Credit Rating Agencies," Stéphane Rousseau, Chair in Business Law, Université de Montréal, notes in the wake of the financial crisis, Credit Rating Agencies (CRAs) have been criticized for playing a significant role in the market turmoil. He critiques the regulatory responses so far by Western governments, and proposes three more effective reforms.

How Ottawa’s Renewed Drive for National Securities Regulator Could Play Out

In the wake of a setback from the Supreme Court of Canada, Ottawa is forging ahead with the idea of creating a national securities regulator using a cooperative approach that could pay off, according to a new report from the C.D. Howe Institute. In "Finding Common Cause: The Renewed Quest for a National Securities Regulator," author Jeremy Fraiberg assesses the chances of reaching federal-provincial agreement on creating a common regulator.

The Unexpected Impact of Ontario’s “Tax on the Rich”

Ontario's new "tax on the rich" will likely create more economic costs than benefits, according to a report released today by the C.D. Howe Institute. In "Ontario's Tax on the Rich: Grasping at Straw Men," Associate Director of Research Alexandre Laurin finds taxpayers' behavioural responses will reduce revenue over the long run by more than the province can expect to collect from the tax hike.

Who Likes Surprises? A Policy Framework for Avoiding Financial Crises

Canada needs a policy framework and new governance structure beyond what is in place to reduce the potential for future financial crises, according to Paul Jenkins, former Senior Deputy Governor, and Gordon Thiessen, former Governor of the Bank of Canada. In "Reducing the Potential for Future Financial Crises: A Framework for Macro-Prudential Policy in Canada," a report released today by the C.D. Howe Institute, they make the case for establishing a formal committee with a mandate to identify potential systemic risks and to act promptly before they materialize.

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.