According to Statistics Canada’s latest consumer price index report, in February the annual inflation rate fell to 2.8 per cent, raising the prospect of interest rate cuts by the Bank of Canada sometime this year. “Inflation is caused by too many dollars chasing too few goods” used to be the traditional diagnosis of the cause of inflation, prompting central banks to fight it by slowing the growth of the money supply. This approach is based on what is known as the “monetarist” theory of inflation, which suggests that supply shocks such as those associated with the COVID pandemic do not ca ..read more

 My wife Helene and I just returned from a two-week trip to these three areas. We were members of a group of 7 former members of the Canadian parliament (all Conservatives, except for one NDPer) and 6 of their spouses and friends.  The trip was managed by the Canadian Association of Former Parliamentarians (CAFP), which you should know, did not subsidize it. The CAFP secretary Carolina Moore accompanied us and made sure we made all our appointments and that all the bills were paid. The itinerary and logistics of the trip were handled by Chungsen Leung (CS), with the assistance of Dor ..read more

              The mission of universities has always been the passing on and expansion of human knowledge, which has made universities contribute much to the historic growth in Canadian and world income. This traditional mission is now threatened by policies designed and enforced by many employees that were recently hired by Canadian universities to work in offices called by different monikers “Equity and Inclusion” (EI) at the University of British Columbia, “People, Equity, and Inclusion” (PEI) at Simon Fraser University, “Equity, Diversity and Inclusion ..read more

  A recent Leger Poll found that 49 per cent of Canadians think the federal government’s new target of 500,000 immigrants a year is too many, while fully 75 per cent are concerned the plan will result in excessive demand for housing and social services. For his part, the immigration minister, Sean Fraser, tells Canadians they need not worry: immigrants will provide the labour required to build the housing stock they’ll need.  The majority of Canadians have always welcomed immigrants and believe they benefit the economy and themselves. What worries them today is the pro ..read more

  Canada’s health care system is one of the costliest and most poorly performing of all the universal public health care systems in the Western democracies. Now, according to Alika Lafontaine, head of the Canadian Medical Association (CMA) it is on the verge of collapse. Indications of collapse abound. Millions of Canadians cannot find a family doctor, wait lists for specialists are at record lengths, access to diagnostic equipment is severely limited and the emergency departments of hospitals are sometimes closed. What can be done to improve the s ..read more

  ROBINSON, FRIDAY AND ALEXANDRIA – A FABLE (About the Effects of Income Equalization) Herbert Grubel, Emeritus Professor of Economics, Simon Fraser University After Robinson was shipwrecked on a deserted island, he fished the local reef and collected wild corn in the forest to feed himself well enough to survive and be content with his fate. When Friday was shipwrecked and joined him on the island, he and Robinson initially fished and collected corn together and shared the bounty equally. However, after a while it became clear that Robinson was relatively better at fishing and Friday was ..read more

  When the current inflation began the Bank of Canada assured the public it was caused by the pandemic’s temporary disruption of supply chains and would not last. But the price increases persisted and the Bank changed its mind and has begun raising interest rates to reduce the demand for goods, services, and assets and try to prevent a dreaded wage-price spiral. That the Ukraine war has disturbed key markets has not helped. In contrast, the academic economists known as monetarists have insisted from the start that the inflation was due, not to tempo ..read more

  To understand and forecast inflation, follow the money Former Bank of Canada Governor John Crow was once asked whether the money supply had been used in the Bank’s economic model and forecasts he had just presented. His response was that although money was not in the model he regularly looked over his shoulder to be sure the money supply was not growing too quickly. During his time in office, both the money supply and prices grew at satisfactorily moderate rates. Current Governor Tiff Macklem should have spent more time looking over his shoulder. In the first year of the COVID epid ..read more

Ten reasons Canadians are unhappier I was surprised but not shocked when the latest international survey of happiness found that Canadians have become considerably less happy. In 2012, when the survey was first published, we were the fourth-happiest country in the world. This year we are 15th. The index of happiness used to create this ranking is based on survey respondents’ subjective assessment of where on a scale of zero (least happy) to 10 (most happy) they find themselves. As in all surveys that rely on the use of subjective criteria, the results should be treated skep ..read more

  Whether the recent increases in Canada’s consumer price index are temporary changes due to supply and labour shortages in some sectors or a more permanent problem driven by the excess creation of money is being hotly debated by economists at the moment. The first explanation is favoured by economists at the Bank of Canada and some academics. They argue that September’s 4.4 per cent increase in the CPI was caused mostly by supply-chain bottlenecks that will soon end, allowing a prompt return to the targeted two per cent rate of inflation. They buttress their arguments by drawing on data ..read more