Canadian Economy Research Articles

Country Survey: Canadian Military Expenditure and Defence Policy

ABSTRACT This paper provides an overview of the Canadian defence sector following the Cold War. A review of Canadian defence policy in this period indicates that, though the mission of the Canadian military did not change, fiscal realities forced severe restrictions on the size and capabilities of the organization. Comparisons between Canada and other G7 NATO nations indicate that throughout this period, Canada has consistently devoted fewer resources to the military than its allies. A review of Canada’s defence industrial base and defence policy indicates that this limited funding has led to a small and uncompetitive defence sector in the Canadian economy. Lastly, a regression analysis of Canada’s defence spending is undertaken which reveals that domestic economic variables are the primary determinant of Canadian defence spending during this period.

Exploring the Effects of the COVID-19 Pandemic on International Students and Universities in Canada

International students in Canada make enormous contribution to the Canadian economy. As domestic students’ enrolment has declined, international students’ admissions have compensated for economic losses that Canadian universities incur from the decline of domestic students’ enrolment. The COVID-19 pandemic is impacting international students’ admissions to Canadian universities. Drawing on various secondary data sources, this article argues that international students in Canada are vulnerable due to their temporary immigration status. They are excluded from most governments’ relief programs aimed at supporting Canadians during this pandemic. Most international students experience psychological and financial difficulties amid the pandemic. The situation is triggering a further decline in international students’ admission, creating economic implications for Canadian universities. By exploring the challenges facing international students and the strategies required to strengthen international students' resilience and universities’ capacities, the paper contributes to our understanding of the plights of international students and educational institutions amid the COVID-19 pandemic.

Trust, Public Institutions, and Pandemic Management: Some Evidence from the COVID-19 Pandemic in Canada

The COVID-19 pandemic has reignited interest in trust in public institutions as the efficacy of public health interventions is predicated on trust in the institutions (different levels of government and health authorities). Using a unique micro-level dataset, I assess trust of Canadians in public institutions and whether it might contribute to containment of the COVID-19 pandemic. I find that on average Canadians trust their public institutions and this trust is primarily driven by social trust. However, trust in institutions is not uniform. It is strongly positively related to level of education, age, and sex. More educated, older, female Canadians are more likely to trust public institutions. However, there are significant differences across provinces as well. I provide positive evidence relating trust and flattening of the COVID-19 incidence curve. I also find that higher level of trust in public institutions significantly increases the likelihood of taking vaccines when they become available. This initial assessment of trust in containing COVID-19 indicates that policymakers should take the initiative to maintain and enhance trust to effectively implement public initiatives to curb future waves of this and other pandemics, which have significant consequences for the Canadian economy.

The Influence of Oil Prices on Equity Returns of Canadian Energy Firms

Using monthly data from January 2000 to August 2018, this paper examines how the Canadian oil and gas industry and individual firms’ equity prices react to oil price fluctuations, which are measured by the traditional West Texas Intermediate (WTI) benchmark and the Canada-specific Western Canadian Select (WCS) benchmark. The findings provide support for the view that oil price movements are an important factor in explaining the equity returns of the overall industry and for many individual oil and gas firms in Canada. Both WTI and WCS measures provide statistically significant evidence, but the results support that WTI may still be the more relevant measure for Canadian-based firms. We also find that the spread between WTI and WCS has a minimal impact on the firms’ equity returns. Additional tests for asymmetric impacts of oil price movements on Canadian oil and gas equity returns have provided little evidence, whereas time-varying impacts are found for a handful of firms. The empirical findings predicated on the holistic view of the impacts of oil price fluctuations on equity market returns will enhance investor confidence and strengthen the Canadian economy.

“We Can’t Be Too Selective about This”: Immigration Advocacy in the Canadian English-Language Press, 1949–57

Immigration policy during the immediate years after the Second World War highly restricted the arrival of newcomers. Before 1947, Canada’s immigration system was a preferential one, with the highest priority given to British subjects coming to Canada from the United Kingdom, or from any of the British dominions, and the United States. Canada’s preferences then extended to Northern Europeans, then to Central and Southern Europeans. Chinese, Greeks, Italians, Portuguese, and Spanish immigrants were excluded. During the years of Prime Minister Louis St-Laurent (1948–57), Canadians read about the economic benefits that a robust immigration policy promised in the English-language press. The St-Laurent government was under significant pressure to increase the flow of migrants into Canada. However, the Liberal government studiously monitored recent arrivals with a conservative approach to economic growth. The Canadian business community perceived this policy as too cautious, and their preference for a more robust policy frequently surfaced in the English-language press. This article shows that newspapers coverage across the country criticized the government’s immigration policy during the 1950s and advocated for an approach that accommodated more newcomers to spur population and economic growth. Through their coverage, the editors and journalists reasoned that boosting immigration accelerated the Canadian economy. English Canadian journalists and newspapers attempted to influence Canadians about the economic benefits of increasing migration to Canada.

“The Mother of Combines”: Representations of the United States in Early Canadian Discourse on the Combines Problem and the Formation of Canadian National Identity

AbstractIn 1887, Canada was in a fervour over so-called “combines,” a term used to cover price-fixing schemes, pool agreements, trusts, and other cartel arrangements. The public debate led to the passage in 1889 of the Anti-Combines Act, the world’s first modern competition statute, enacted a year prior to the United States’ Sherman Antitrust Act. But while Canada acted before its neighbour to the south, the United States was omnipresent in the Canadian debates in four ways: as a benchmark against which the Canadian economy and the combines problem should be judged; as a model for potential legal action; as a potential economic liberator; and as the very source and propagator of the combines problem. Canadians thus alternately presented the United States as saviour or devil, as paragon or antithesis. The result was a paradox of a sort: Canadians borrowed American ideas in order to avoid becoming American.

Canada

The Canadian economy was operating at close to capacity and had strong policy buffers when the COVID-19 pandemic hit. Economic and social restrictions put in place in March 2020 helped to mitigate the first wave of the virus, but they came at a significant cost. There was an unprecedented decline in activity in the first half of 2020, followed by a strong rebound in the third quarter as virus-related restrictions were eased. With the onset of the second wave of the virus in late September sparking renewed restrictions across the country, the recovery has slowed. Looking ahead, the strength and durability of the recovery hinges on the evolution of the pandemic.

Asthma Management: A Review of GINA Recommendations from 2019

Asthma is a chronic condition that affects more than 3.8 million people in Canada. It is a condition that if not controlled may result in significant morbidity and mortality. Asthma is the leading cause of absenteeism from school and one of the leading causes of work loss through both absenteeism and presenteeism. The direct costs of asthma, including hospitalization, healthcare professional services and medication and indirect costs, including decreased productivity, are estimated at $2.1 billion annually. The cost of asthma to the Canadian economy is expected to climb to $4.2 billion annually by 2030. While many detrimental consequences of asthma stem from the condition itself, a significant proportion of the morbidity associated with asthma is also a result of systemic corticosteroids used to treat asthma exacerbations. There are many factors that lead to uncontrolled asthma, such as inappropriate and/or inadequate treatment of the condition. Access to appropriate treatment for realistic and achievable disease management, is critical in reducing the likelihood of experiencing an asthma exacerbation The Global Initiative for Asthma (GINA) Scientific Committee has developed a sophisticated set of procedures to review the world’s literature with regard to asthma management and to update the GINA documents to reflect this state-of-the-art information. The output is a report entitled Global Strategy for Asthma Management and Prevention complete with teaching slides and an abridged “pocket guide” of the main report’s recommendations. All of this is made freely available at ginasthma.org. and includes an update to reflect the COVID-19 pandemic. The GINA report is not a set of guidelines but, rather, an “integrated evidence-based strategy focusing on translation into clinical practice”for health care practitioners with the goal of reducing both short- and long-term asthma exacerbations and adverse events. This article will focus on the key changes to the latest iteration of GINA recommendations for asthma management.

The impact of inflation targeting: Testing the good luck hypothesis

AbstractStarting in the mid‐1980s, the level and volatility of inflation decreased across industrial countries. The inflation stabilization can be explained by a shift in monetary policy or by a lucky period of low volatility in business cycle shocks. To test the “good luck hypothesis,” we examine the inflation experience of Canada, one of the earliest and most successful adopters of an inflation targeting monetary policy. We Kalman‐filter the historical structural shocks consistent with an estimated dynamic stochastic general equilibrium (DSGE) model of the Canadian economy. The estimated shocks are used to build counterfactual histories. The good luck hypothesis can explain only a minor portion of the change in the path and volatility of inflation after the shift in policy. Most of inflation and output stabilization is accounted by the impact on expectations. Unconditionally, the inflation targeting policy does not improve on the previous policy in terms of inflation volatility, but supports a more favourable trade‐off, reducing substantially output volatility.

Sisyphus and Climate Change: Educating in the Context of Tragedies of the Commons

The tragedy of the commons is a primary contributing factor in ensuring that humanity makes no serious inroads in averting climate change. As a recent Canadian politician pointed out, we could shut down the Canadian economy tomorrow, and it would make no measurable difference in global greenhouse gas emissions. When coordinated effort is required, it would seem that doing the “right thing” alone is irrational: it will harm oneself with no positive consequences as a result. Such is the tragedy. And that is the challenge that we take up here. Though Garrett Hardin suggests that the solution is a governmental process that rules over all contenders, since a world government seems unlikely before the planet hits the tippy point, we suggest an educational initiative instead: one that holds a mirror up to the behaviour of individuals, rather than to the behaviour of individuals in groups. Such an educational initiative would be focused on priming individuals to keep constant track of what they do as individuals as opposed to focusing on the behaviour of humanity in general. Such an educational initiative would focus on tackling the “problem solvers” rather than just “the problem”.

A survey on the effect of supply chain disruption on Canadian economy

During the past two years, Canadian economy was on hold since there were many businesses closed due to COVID-19 pandemic. Many business owners decided to ask their employees to work from their homes and working in distance created some troubles for many clients. Businesses asked Canada post to deliver their orders. As a result, Canada post was met with huge orders where most of them were delivered late. It is estimated that supply chain disruption has hurt Canadian economy, significantly. This paper surveys the effects of supply chain disruption on Canadian economy.

Biden Administration and Canada's Economic Interests

In the XXI century, there is a slight decline in the importance of the United States for Canada as an economic partner, but the United States remain the main external force influencing the development of the Canadian economy. Canada is interested in unhindered access of its goods to the American market, free flow of capital between the two countries, the development of North American economic integration and, most importantly, in sustainable economic growth in the United States. If the economic policy of the Joe Biden administration ensures the dynamic development of the American economy, then this will have a positive impact on the Canadian economy. At the same time, a number of provisions of Biden's economic strategy, such as raising the corporate income tax, strengthening control over mergers and acquisitions, and the "Buy American" policy, contradict Canadian economic interests. At first glance, the Biden administration's commitment to combating climate change is also negative for Canada. However, a number of Canadian stakeholders may also become beneficiaries of the new "green" course of the American economy. In general, the Canadian establishment believes that Canada’s national interests are in further integration of the US and Canadian economies. The Biden administration's tenure in the White House is unlikely to be an obstacle to this process.

A Proposal for a Canadian CBDC

Undoubtedly inspired by recent advances in technology-driven payment systems such as mobile payment systems, cryptocurrencies, and blockchain technologies, recent years have seen central banks worldwide explore the possibility of issuing digital forms of fiat money called central bank digital currencies or CBDCs. A thoughtfully designed CBDC can help satisfy numerous policy objectives, improve economic efficiency and inclusivity, and serve as a platform for economic innovation. However, the vast CBDC design landscape, coupled with its potential to massively disrupt the financial system and broader economy, warrants caution, calling for a careful and methodical analysis of various designs' strengths, weaknesses, and risk profiles. At this time, the Bank of Canada (BoC) has not committed to issuing a CBDC; nevertheless, it does rank among the more than 80% of central banks globally who, according to a recent survey by the Bank for International Settlements (BIS), are at least contingency planning for the eventuality of doing so. This report details and analyzes the authors' vision for a hypothetical BoC-issued retail CBDC for use in the Canadian context, taking into account both, the `business case' for its adoption from the perspective of BoC, policymakers, the financial services industry, and the Canadian economy more generally and how its widespread adoption would impact ordinary Canadians. The design considered in this report leverages a mix of distributed ledger technologies (DLTs} and electronic cash (`e-cash') schemes with advanced cryptographic primitives. The confluence of these building blocks results in a scalable, resilient, privacy-centric, and universally accessible design that strives to bring added value (a Pareto improvement) for all stakeholders in Canada. In light of the abundance of CBDC designs in circulation, this report emphasizes aspects and implications of the design specifically tailored for Canada, such as ensuring universal access for remote communities and strong privacy protections consistent with Canada's role as a world leader in civil liberties and human rights. Likewise, some core aspects of the proposed architecture reflect characteristics of Canadian law and the Canadian financial system, which may differ substantially from other countries.

Economic cooperation of Canada with Asia-Pacific countries in the energy sector

The article is devoted to an urgent problem of our time - the integration of Canadian energy markets into the energy markets of the Asia-Pacific region. Canada's economy is currently the 16th largest in the world in terms of GDP and is heavily dependent on international trade, whose prosperity is inextricably linked to external markets and the ability to access those markets. In turn, China, Japan, and South Korea are the world's largest importers of crude oil and liquefied natural gas. The study considers not only the reasons for the need of Canada's energy markets to enter the Asia-Pacific region, but also analyzes the dependence of the Canadian economy on the economy of the United States of America. The main conclusions of the study consist in outlining the ways of integrating the energy markets of Canada and the Asia-Pacific countries. The built economic model of interaction should not only exist within the framework of the created legal acts but also should determine the importance of the formation of this economic institution for subsequent development. This work is of particular relevance due to the fact that joint development within the economic area creates a stable relationship, which can later be used for external use, within the framework of building a new type of economic model. Thus, the information acquires statistical value and can be used in further research. The author believes that the goal of this research is achieved by considering the economic cooperation of Canada with the Asia-Pacific countries in the energy sector.

Using payments data to nowcast macroeconomic variables during the onset of Covid-19

The spread of COVID-19 has caused large-scale loss of life and economic damage. This pandemic has had a swift effect on the macroeconomy, posing a new and different shock to the Canadian economy. Governments have responded in many ways, including through public health measures, fiscal stimulus and monetary policy. Policy-makers seek to understand the current state of the economy for their COVID-19 support to be effective. However, major economic indicators are released with a substantial delay. This problem is usually dealt with by using a linear model of past economic variables. But this is not the best approach presently, given the large and nonlinear effects of COVID-19 on the economy. In this paper, we develop a model to predict the current state of the economy—known as nowcasting—using retail payments system data and machine learning. The Canadian retail payments data aid in understanding the current state of the economy because they include many types of transactions and are available daily. These data features are ideal for macroeconomic nowcasting during a crisis. The flexibility of machine learning can help capture the large and nonlinear effects of the COVID-19 shock. We find that our model—compared with a benchmark model—has a significant increase in prediction accuracy, measured as a 15 to 45 percent reduction in forecast error.

Canada’s Economy in 2021: Exiting the “Pandemic” Recession

The article analyses the dynamics of the Canadian economy in 2020-2021, during the unprecedented global “pandemic” recession. It is shown that like in many other countries, the economic ups and downs in Canada closely followed the waves of the COVID-19 infection spreading across the regions and the subsequent rounds of regulatory restrictions on “high-contact” economic activities, citizens’ travel inside and outside the country, international trade, and etc. In the latter half of the 2020 several goods-producing industries showed signs of recovery which continued through the following year. However, it was only mass vaccination of Canadians in all provinces and territories that created conditions for sustained re-opening of businesses in most sectors of the national economy by the end 2021. The author looks at the internal and external drivers of recovery and continued growth. It is shown that on the whole the federal emergency plan proved to be successful in providing income support for Canadians and preventing bankruptcies among small and medium-sized businesses. The 2021 Federal Budget includes more than $100 billion in new spending over three years. It is expected that massive fiscal stimulus coupled with pent-up demand will sustain strong consumer spending after the speedy vaccine rollout allows businesses to fully reopen. At the same time, non-residential capital expenditures by private sector companies will increase only moderately in most sectors after a sizable decline in 2020. This year Canada’s resource-based industries are benefiting from the growing global demand for oil and gas, base metals, forest and agricultural products. The concluding part of the article analyses the major risks which can slow the economic recovery: the global supply-chain bottlenecks, labour market imbalances, growing inflation pressures, and massive federal budget deficit.

Exploring the Role of Leisure in Immigrant Students’ Lived and Embodied Experiences of Identity, Community, and Belonging within Halifax, Nova Scotia

The Canadian government employs robust efforts to promote and prioritize immigration, as immigration significantly contributes to Canadian economy, population, and culture. As Canada continues to grow as a culturally and racially diverse society, it is necessary to explore and understand immigrants’ lived and embodied experiences within community, their sense of identity, and feelings of belonging, as these phenomena can shape health and well-being. Leisure activities or experiences are understood to cultivate and promote self-expression, socialization, and wellness amidst and despite challenges related to resettlement as experienced by immigrants. While there is enough literature about adult immigrants’ settlement experiences and the impacts of such experiences on physical, social, emotional, and mental health and well-being, immigrants attending post-secondary institutions are understudied, particularly in Atlantic Canada. Further, the role of leisure in cultivating a sense of identity and belonging is underdeveloped within these contexts. This proposed qualitative study attends to these gaps by exploring the role of leisure in the lived and embodied experiences of identity, community, and belonging as experienced by immigrants attending post-secondary institutions in Halifax, Nova Scotia, Canada. Guided by Merleau-Ponty’s principles of embodiment and a transformative paradigm, this proposed study employs collage-making, a creative, participatory method to engage participants and understand their experiences, amplify their voices, and potentially enrich their lives and well-being. Findings of this proposed study can inform policy and practice within post-secondary institutions, settlement services, and community centres, and can deepen our understanding of leisure’s potential to contribute to immigrants’ identity, belonging, and well-being.

Federal Export Development Infrastructure in Canada

Canada is one of the leading economically developed countries and is among the most involved in international trade. Performance of the Canadian economy largely depends on the realization of Canadian businesses’ export potential. The article examines Canada’s federal export development infrastructure. Special attention is paid to the analysis of the activities of the federal state corporations Export Development Canada and Canadian Commercial Corporation, as well as of the Trade Commissioner Service. The paper also studies recent trends and structure of Canadian exports.

Between the commodity and the gift: the Coastal GasLink pipeline and the contested temporalities of Canadian and Witsuwit'en law

This article examines the conflicting subjectivities and space-times of Indigenous and colonial law that underpin the recent shutdown of the Canadian economy as people barricaded railways and ports in solidarity with the Witsuwit'en hereditary chiefs’ blockade against the Coastal GasLink pipeline across their territory. The article argues that this conflict between Canadian and Witsuwit'en law reflects fundamental tensions between their respective foundations in relations of the commodity and the gift. Within settler capitalist society, the value of a commodity is constructed relationally through a political economy of exchange that aims to speed transactions to maximize profits. With an ongoing drive for time-space compression, there is continual pressure in settler capitalism to develop new infrastructure that can speed the circulation of commodities. In Witsuwit'en society, the gift presents a contrasting logic of place-time extension. Rather than focusing on closing transactions to increase profits, gift giving stretches reciprocal obligations into the past and future. Contrasting these distinct conceptions of the relationship between value and time, the article argues that the Witsuwit'en struggle with Coastal GasLink should be understood as conflict between colonial temporal enclosures and a radical promise to open futures different to those engendered by the colonial present.

Stuck in the Middle with You: Is the Trudeau Government Really Representative of a Central Canadian “Laurentian Elite?”

In the aftermath of the 2019 election, the re-election of Justin Trudeau’s Liberals brought out a significant amount of regional tension, in particular in the West. Trudeau, it was claimed, and those in the Liberal Party more generally, represented a central Canadian “Laurentian elite,” which did not care about Western Canadian or other regional interests. This article takes stock of this claim. To do so, it will examine the history of the “Laurentian elite” concept to clarify the idea. It argues that indeed, the Trudeau Liberals have governed as classic representatives of the “Laurentian consensus” on what is “good” for Canada, a consensus that reflects a broader philosophy on how to govern the state. This philosophy focuses on protecting key central Canadian economic interests (for example, dairy farmers and manufacturers like SNC Lavalin or Bombardier), while also supporting free trade in other sectors less important to the central Canadian economy (such as defending oil exports through the new NAFTA agreement). Other examples of Trudeau’s commitment to the Laurentian consensus include a more cooperative federalism (such as in immigration and labour market policy), more money for social programs (the Canada Child Benefit, CPP enhancement, and possible Pharmacare), expanding individual rights and liberties (cannabis legalization, opposition to Quebec’s Bill 21), and the promotion of official language communities. The paper will conclude with a brief contrast with the policies of Trudeau’s predecessor Stephen Harper, to find that while the prior Conservative government did not pursue a Laurentian agenda per se, Prime Minister Stephen Harper himself must nevertheless be seen as closely aligned with the “consensus” as well.