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record household debt levels have left this country vulnerable to economic shocks

the Canadian banks will report a slight increase in profit for the quarter as they contend with the impact of declining consumer borrowing, moderating capital markets activity and other headwinds.

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With domestic household debt levels hovering close to where they were in the United States prior to the financial crisis, many observers are warning that Canadians need to start paying down debt if the economy is remain on level footing

anadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction

Canadian consumers continue to pile on mortgage debt despite repeated warnings that they need to crank back on borrowing if this country is to avoid a painful real estate correction

growth in the overall home loan market "is continuing to be more robust,"

Canada's fourth-largest lender on Wednesday kicked off second-quarter bank earnings season with a 7.5% increase in profit on the back of lower provisions for bad loans

One of the first items on Prime Minister Stephen Harper’s agenda when Parliament returns will be reintroduction of a $278 billion budget that includes a sprinkling of social and economic spending and a plan to slay the budget deficit in several years. And the government will continue with a $6 billion corporate income tax cut.

“The risks still lie outside the Canadian border, which as we’re well aware can have a spillover effect on Canada,” said Royal Bank chief economist Craig Wright.

“We’re seeing continued uncertainty and concerns still with respect to the Eurozone and where it’s headed,” he said. Uncertainty on economic growth is also being fanned by volatile energy markets and the questionable U.S. business rebound, Wright said.

Prospects for Canada are also complicated by expectations that spending by debt-burdened consumers could slow in 2011 and by the shut-off of the Conservatives’ two-year, $47 billion emergency stimulus program.

With government spending slowing, the Conservatives have staked a great deal on their view that the business community will pick up the slack and stimulate the economy with expansion-minded investments.

Besides phasing in corporate income tax cuts worth $14 billion by 2012, the Conservatives in recent years have provided a wide range of investment incentives for business, including easing taxes on small business and manufacturers. In all, tax cuts for business by the Conservatives total an estimated $60 billion by 2013.

both Flaherty and Bank of Canada Governor Mark Carney have pointedly talked about the urgent need for more spending on machinery and equipment by companies.

But many are not convinced, with some Canadians saying the government would be smarter to tie tax incentives directly to company investments to ensure that corporations don’t just pocket the extra profits.

Speaking of corporate tax cuts, Canadian Association of Social Workers spokesperson Fred Phelps said it would be one thing “if corporations turned around and invested those funds into the economy.” But he said that hasn’t been happening in recent years. “What really has driven us out of the recession,” he said, “is spending by households and government, not business.”

even the government’s own report shows that Canadian imports (of both goods and services) from the EU will increase by twice as much as Canadian exports to the EU, substantially widening the existing bilateral trade deficit.

exports grew less rapidly with FTA partners than with non-FTA partners, but imports grew quicker with FTA partners than with non-FTA partners. 

In the real world, free trade agreements (not surprisingly) tend to make existing trade imbalances even worse: this is true throughout economics, where deregulation generally tends to exacerbate the imbalances and unevenness of market outcomes.

Three scenarios are presented: one in which tariffs are mutually eliminated; one in which EU-Canada trade expands in line with the historical experience of Canada’s previous FTAs; and one in which tariff elimination is combined with the appreciation of Canada’s currency (versus the euro) which has been experienced in fact since the two parties launched free trade negotiations.  In every case, the bilateral trade balance worsens significantly (and in the third scenario, it worsens dramatically – since the higher Canadian dollar reduces Canadian exports, even as imports from the EU are surging).  Based on average employment intensity across 23 goods-producing industries, the simulations suggest an incremental loss of between 28,000 jobs (in the first scenario) and 150,000 jobs (in the third).  Direct losses in Canadian GDP range between 0.56 percent in the first scenario, and almost 3 percent in the third.

A free trade agreement with the EU will exacerbate Canada’s existing large bilateral deficit, at the expense of output and employment in many important sectors of the economy. 

We have to remember that Korea is a very price sensitive market and the fact that there’s no plan for Canada to have a free trade agreement.

Canada’s rate (at this moment, 27 per cent).

As Canada trimmed, the world trimmed, too: 75 countries aggressively cut corporate tax rates in the past decade. China’s corporate tax rate is 20 per cent – discounted to 15 per cent for companies that invest in strategically important industries.

combined federal-provincial statutory tax rate of 25 per cent, won’t

The “Bowles-Simpson Plan,” proposed by President Barack Obama’s commission on fiscal reform, suggests a federal rate of 28 per cent. The Wyden-Gregg Plan, proposed by Democratic and Republican legislators, suggests 24 per cent. The China-OECD Plan, advanced by the non-partisan U.S. Tax Foundation, suggests 20 per cent

These rates are federal rates and don’t include corporate rates levied by the states: nominally, on average, 6.6 per cent; in fact, on average, 4.2 per cent. Thus a U.S. federal rate of 20 per cent (the China-OECD Plan) would produce a comprehensive “America rate” of 24.2 per cent

Canada’s goal assumed an “America rate” of 39.3 per cent: a competitive advantage for Canada of 14.3 percentage points.

when you add the federal rate and the average provincial rate (19 plus 12.5), you have a “Canada rate” of 31.5 per cent – the fourth-highest rate in the world: and twice as high as China’s most competitive rate.

The Conservative government took a lot of heat for incrementally lowering Canada’s corporate tax rate.

The labour market is not going to create any further inflationary pressure, either coming from wage (gains) or the general strength in the labor markets," said Sebastien Lavoie, assistant chief economist at Laurentian Bank Securities.

The February jobless rate was unchanged at 7.8 per cent, versus the 7.7 per cent forecasts by analysts in a Reuters poll.

In further signs of slowing, Canada's labour report said the economy shed 24,000 full-time positions in February, partially offset by the addition of 39,000 part-time jobs. The number of self-employed workers rose, while the number working in the private sector edged lower.

The average hourly wage of permanent employees — which is closely watched by the Bank of Canada for inflation pressures — rose 2.5 per cent from February 2010, up from 2.3 per cent year-on-year rate in both January and December.

"It probably lowers the probability of any near term tightening by the Bank of Canada and as a result (will) probably weigh on the Canadian dollar," said Paul Ferley, assistant chief economist at the Royal Bank of Canada.

we must recognize that public policy should be designed to benefit all Canadians, rather than a few large retailers. The currencies of resource exporters such as Australia, Canada and Brazil have appreciated sharply in recent years. We should all enjoy the higher standard of living the strong dollar entails, rather than allowing retailers to monopolize these benefits.

Therefore, we must embrace, rather than reject, the economic forces that drive the new U.S. thinking on this issue. Matching the $1,000 exemption would help Canadians realize greater gains from trade, while allowing CBSA to focus on its core mission.

less equal societies almost always have more violence, more disease, more mental health problems, higher infant mortality rates, reduced life expectancies, as well as less social cohesion.

people in less equal societies have reduced social mobility.

evidence linking extreme inequality with serious economic problems. The level of inequality reached in 2008 was virtually identical to that of 1929, suggesting that large concentrations of wealth at the top create a dynamic leading to reckless financial speculation and Wall Street crashes

average CEO was making about 25 times the average worker in the late 1970s, today’s average CEO makes roughly 250 times the average worker.

the top-earning 1 per cent of Canadians almost doubled their share of national income, from 7.7 per cent to 13.8 per cent, over the past three decades.

House of Commons committee on poverty released a report proposing a guaranteed basic income for Canadians with disabilities, on the model already available to seniors. The Senate released a similar report this spring calling for a study of how it would work for all low-income Canadians.

Within a year, working with counsellors who helped them with their plans and purchases, nine of the 15 participants were moving to some form of housing. The results were not perfect: A couple of people moved back out of housing again, and at least one was imprisoned. But most spent far less than the money available to them, mostly on clothing, food and rent. On the other hand, one person who chose to remain on the street asked for music lessons, and that was all right too.

Economists continue to bounce the idea around. Two years ago, Canadian researchers started their own chapter of the Basic Income Earth Network (a group founded in Belgium in 1986) to co-ordinate an ongoing discussion. Some say it might actually accomplish what political rhetoric has been promising for years: the eradication of poverty.

In Britain, an experiment was recently conducted with a small group of people who had been living on the streets for more than five years. They were given a budget that they could spend however they wished. The idea was to see whether the “personalized budgets” Britain gives to seniors and people with disabilities to pay for care (which include some conditions) would work for the very poor as well.

In Quebec, a government task force went further, recommending a minimum guaranteed income starting at $12,000 for everyone in the province.

The idea of a guaranteed annual income has been tested before in Canada – in the mid-1970s, in Dauphin, Man., a farming town with then about 10,000 residents. In the only experiment of its kind in North America, every household in Dauphin was given access to a guaranteed annual budget, subject to their income level. For a family of five, payments equalled about $18,000 a year in today's dollars. Politicians primarily wanted to see if people would stop working. While the project was pre-empted by a change in government, a second look by researchers has found that there was only a slight decline in work – mostly among mothers, who chose to stay home with their children, and teenaged boys, who stayed in school longer.

“Very often, services are about getting people off the streets, come what may,” says Joe Batty, who managed the program. “This is about normalizing people.” The program was considered so successful, he says, that the city of London is now providing financial support to expand it.

Evelyn Forget, a researcher in medicine at the University of Manitoba, reports that Dauphin also experienced a 10-per-cent drop in hospital admissions and fewer doctor visits, especially for mental-health issues.

But a guaranteed-annual-income program would be expensive. In developing nations, a small amount of money can bring about big changes. In a country like Canada, the basic income needed to pull everyone out of poverty would have to be larger, balanced against higher taxes.

cost analysis of the Quebec proposal estimated it could run the province as much as $2-billion, including the cost in lost taxes if minimum-wage workers did the math and left those jobs.

Other experts argue that poverty reduction needs to be tailored to individual circumstances, especially in cases involving mental health and addiction.

Conservative Senator Hugh Segal, one of the more vocal proponents of no-strings-attached aid for the poor, points out that the guaranteed-income program for seniors has greatly reduced poverty, especially among women. “There's a bias that when given the chance people will be lazy,” he says. “That's not my sense of reality.” Mr. Segal argues that giving money with no conditions removes the stigma and shame around poverty, allowing people to focus instead on how to improve their lot.

Requiring the poor to prove continually that they are deserving of assistance or threatening to pull help away without notice only discourages the risk-taking and confidence required to get out of poverty.

“If you think of the core premise of charity, it is not to treat people as lesser,” Mr. Segal says. “[It] is to give people a leg-up so they can have some measure of independence and can make some of their own choices.”

To do that effectively, he argues, we need to let them decide the steps they take to get there. Or – as Ms. Gray in Victoria puts it, saying she would go back to school for more training if she could count on covering rent and daycare – give some autonomy back to “people who are trying to be somebody in this world.”

corporate tax cuts are not creating jobs or investments, and they are not helping Canadians recover from the global recession

CAODC said it expects activity over the last three quarters of 2011 to increase by 24 per cent over its October estimate, with 200 rigs to be drilling in the second quarter, up from the 160 previously anticipated.

“Despite the rapid growth in emerging economies, the United States remains a large and wealthy market that is right next door to Canada, whereas emerging markets are a significant distance away,”

the U.S. is also Canada’s leading source of foreign direct investment, or FDI. In 2010, the stock of U.S. investment here was $306-billion.