Wednesday Morning Links

Miscellaneous material for your midweek reading.

- Stephen Gordon weighs in again on the Cons' census disaster:

Many readers may have thought that the census issue was settled last summer; it wasn’t. We haven’t even begun to deal with the consequences of the decision to replace the mandatory long-form census with the voluntary NHS. As Economy Lab contributor Kevin Milligan and his UBC colleague David Green note in Canadian Public Policy, one of the most striking features of the census is its ‘hidden ubiquity’. The census is an invisible -- and yet essential -- element of virtually all the data that inform policy debates.
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Employment and inflation data have the power to move markets, and policy-makers need reliable data to guide their decisions. The list is goes on, and is almost endless. For example, the labour market experiences of immigrants will be an increasing preoccupation for policy-makers as the population ages; the only source of information about immigrants is the census.

The most recent census was in 2006, and it looks as though the next usable census will take place in 2021 at the earliest. Our understanding of what is going on in the Canadian economy in the next decades will grow steadily weaker as more cars pile on the census train wreck.

- Marc Lee describes the right strategy for a government which actually wants to boost an economy emerging from a recession, rather than looking for excuses to go on a slashing spree:

Keeping up the stimulus is a top priority, and even leaning more heavily into job creation would be advised. If deficits are of concern, then increase corporate taxes and income taxes on the wealthy. Engage mortgage relief to the millions of US households who are underwater. But don’t buy into the doom and gloom stories about default. While it is true that a default would be uncharted territory, constitutionally, US debt is backed by law. The US issues debt in a currency it controls, and the Fed could play a major role by buying up some of the outstanding debt for cash. But ultimately, as James Galbraith points out, the big holder of US debt is China and it does not really have anywhere else to go to park its money (some gold, Swiss francs and some Canadian dollars on the margin perhaps).

For Canada, this means we need to keep our cool, and NOT play the austerity game revealed in last month’s budget. Piling on with spending cuts and layoffs will only make things worse. Federally and provincially, governments need to focus on employment not deficits in order to maintain robust demand in the economy (climate action is a great place to start). The Bank of Canada also needs to reconsider murmurings of interest rate increases this fall in light of these developments. Our biggest risk is that we harm ourselves to save a summary statistic rather than focus on the real challenges.

- Chantal Hebert points out how the Cons figure to start chipping away at health care across most of Canada:

The Conservative election promise to maintain the 6 per cent rate of increase in the federal health transfer for the duration of the current federal mandate will only translate in a one-year extension to the existing arrangements. And even under that regime, federal funding to most provinces could start to grow more slowly.

In one of its first budgets, the Harper government promised to bring Ontario’s share of the health transfer in line with its population as of 2014.

Topping up Ontario’s share out of the existing pie would mean that there would be less funding to go around for the other provinces.

Despite the promises of the last federal campaign, the next chapter of the medicare saga will most likely be written in red ink in the provinces.

- Finally, E3's analysis of the possible social costs of carbon provides some needed perspective on an issue where even lower-end estimates are all too often treated as making action too costly to be worth pursuing.