What are the ThinkTanks Thinking?

Terrance Hunsley
by Terrance Hunsley

Our selection of think tanks for this issue includes:

  • C D Howe Institute, 
  • Canadian Centre for Policy Alternatives (CCPA),  
  • the Fraser Institute, 
  • the Institute for Research on Public Policy (IRPP),  
  • Institut national de la recherche scientifique, (INRS) 
  • the Macdonald Laurier Institute (MLI),  
  • Brookings Institution, (USA), and 
  • the Institute for Public Policy Research (IPPR), UK

On the CD Howe site, Michael J. O’Connor writes a letter to Bill Morneau, Minister of Finance regarding  A Tax Policy Response for Commercial Landlords and Tenants

Acknowledging that these are uncharted issues as a result of the sudden restrictions on mobility due to the COVID-19 pandemic, he suggests the federal government implement a national framework to guide landlord-tenant rent renegotiation, with a tax incentive for commercial landlords to enter into such agreements.

The real estate rental and leasing industry represents about 12.5% of GDP. He suggests that government support to landlords and tenants during the COVID-19 dislocation will be essential to the economic recovery.

https://www.cdhowe.org/intelligence-memos/michael-j-o’connor-–-tax-policy-response-commercial-landlords-and-tenants

Canadian Centre for Policy Alternatives (CCPA) :  

Labour economist Jim Stanford writes about the Bank of Canada entering the game of Quantitative Easing (QE).  

Starting April 1, the bank commenced buying at least $5 billion of Government of Canada bonds every week. And the bank pledged to continue that weekly pace until the economy was well into its eventual post-pandemic recovery. The QE program will thus likely continue for at least a year, adding $250 billion or more to the bank’s already substantial holdings of federal bonds.

As of March 2020 (before the start of QE), the Bank of Canada already owned over $100 billion worth of federal government debt (about 15% of the total outstanding). Those holdings are now set to more than triple over the coming year—by an amount broadly equivalent to the humungous budget deficit the government will incur over the same period.

He suggests that QE has become a standard tool for central banks, especially over the last decade. 

For example, the U.S. Federal Reserve has announced an unlimited QE program, worth trillions of dollars, to buy a huge range of different assets: government bonds, corporate bonds, mortgage-related securities, and special new bonds to provide lending to small and medium-sized businesses.

Although many economists caution that governments could become profligate spenders with such access to easy money, or that hyperinflation could result as too much money chases too few products, he suggests that it is unlikely to happen here.

https://www.policyalternatives.ca

The Fraser Institute Blog  is concerned that supply management is impeding supermarkets from keeping their shelves stocked, especially for cheese, milk, eggs and chicken.

Supply management is a national regulatory framework that allows producers of raw milk, eggs and poultry to maintain higher prices for their products than would exist in a competitive market by fixing farm level prices and restricting supply. Licenses and quotas issued by provincial government agencies control who can produce, what can be produced, when and how much. Meanwhile, access to products offered by foreign suppliers is impeded. Importers of large quantities of chicken, cheese and butter are compelled to pay taxes exceeding 200 per cent. The result is that domestic suppliers have the Canadian market mostly to themselves.

Acknowledging that there are shortages across a broad range of products, the blog suggests that dairy supplies are an “Intentional shortage”.  The counterproductive outcomes from farm level price fixing, production quotas, and high import taxes on Canadians are intensified by the COVID-19 pandemic.

They quote research revealing that …supply management causes the average Canadian household to bear an extra cost of $300 to $444 annually.., and that the burden falls disproportionately on the poor, who pay a larger share of their income on food. They suggest we follow the examples of Australia and New Zealand and move away from supply management.

ttps://www.fraserinstitute.org

The Institute for Research on Public Policy IRPP (Policy Options) reports that the COVID crisis has generated a major increase in the confidence and support that people are reporting for their governments. The article, by Daniel Tisch, points to the following improvements in perceived relationships with governments:

  • 55 percent of respondents report improvement in their relationships with their provincial governments, more than three times the number (18 percent) reporting a decline.
  • 46 percent cite improved relationships with Canada’s federal government, with just 26 percent citing a decline.
  • 41 percent say they have improved relationships with their municipal governments, more than double the number (20 percent) reporting a decline.

He also points out the contrast between these attitudes and …the loud and widespread criticism of governments in social media during the COVID-19 pandemic.

https://policyoptions.irpp.org/magazines/april-2020/covid-19-has-improved-canadians-relationship-with-government/

Institut national de la recherche scientifique (INRS)

(par Audrey-Maude Vézina)

La « destruction créatrice », un concept lancé par l’économiste autrichien Joseph Schumpeter, est le processus qui caractérise le monde du travail en ces temps de pandémie. « Des emplois vont disparaître, et d’autres vont apparaître. La hiérarchie des métiers sera modifiée tant sur le plan de la rémunération que de la hiérarchie symbolique, selon leur utilité. De nouvelles idées vont surgir et les façons de faire vont changer », avance le professeur Mircea Vultur, spécialiste du travail et de l’insertion professionnelle à l’Institut national de la recherche scientifique (INRS).

La COVID-19 a bouleversé le marché du travail. Le professeur Mircea Vultur s’attend à une modification dans la hiérarchie des emplois. Ces emplois pourraient être réévalués en fonction de leur degré d’utilité sociale et de leur pénibilité…. « Les emplois les plus sollicités seront revalorisés tant sur le plan de la rémunération que du prestige. Par exemple, les aide-soignants, les préposés aux bénéficiaires et les employés d’épiceries sont déjà mieux payés qu’avant la COVID-19 », soutient-il.

http://www.ucs.inrs.ca/actualites/covid-19-vers-une-nouvelle-dynamique-de-l-emploi

MacDonald Laurier Institute (MLI)

Senior Fellow Philip Cross finds that Canadians’ lack of willingness to change jobs might be contributing to lower wage growth. In the new paper titled Moving Around to Get Ahead: Why Canadians’ Reluctance to Change Jobs Could Be Suppressing Wage Growth, Cross outlines the evidence behind this phenomenon.

From 2010 to 2015, those who left their jobs average 15.4% wage increases versus 2.9% for those who stayed in place. Nonetheless the share of workers leaving their jobs has declined to 3.0%, from 4.2 between 2000 and 2009 and 3.7 from 2010 to 2015, Cross takes this as a sign of labour market inefficiency, and that people are more willing to move when the economy is working well.

He suggests that rising job insecurity may be making people less willing to move. (We might also imagine that an ageing work force and the need to keep two earners in good jobs could have an effect.) 

Is a lack of willingness to change jobs suppressing wage growth? New MLI Study

 

Brookings Institution

Lesley Chiou and Catherine Tucker (Social Distancing, Internet Access and Inequality) measured the effect of high-speed internet on an individual’s ability to self-isolate. They tracked 20 million mobile devices and whether they leave their homes on a particular day.  They correlated their data with reported income levels for the geographic areas of the devices.  (They did not clarify whether the 20 million device owners were informed and consented to their research.) They conclude that

while income is correlated with differences in the ability to stay at home, the unequal diffusion of high-speed Internet in homes across regions drives much of this observed income effect. 

…the combination of having both high income and high- speed Internet appears to be the biggest driver of propensity to stay at home. Our results suggest that the digital divide—or the fact that income and home Internet access are correlated—appears to explain much inequality we observe in people’s ability to self-isolate.

https://www.nber.org/papers/w26982?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email&utm_content=86806451

Institute for Public Policy Research (IPPR)

Harry Quilter-Pinner and Dean Hochlaf  (Social care: Free at the point of need – The case for free personal care in England) make the case that adult social care is one the most important public services in the UK. 

For hundreds of thousands of people it provides vital care and support – in their homes or in a residential setting – to ensure that they can maintain their independence, dignity and quality of life as they age. This may involve receiving help with basic tasks such as getting up or eating, or 24-hour support for people with complex needs such as dementia.

But, as in Canada, social care is not provided under the same umbrella of universality as medical services and institutional health care.  Many people are paying for part or all of their support services, and ability to pay has become a major factor in the quality of service one can access.

The UK is hitting the big jump in numbers of older seniors at about the same time as Canada and demand for supportive personal care is going to increase dramatically. failure to “grasp the nettle” and deal with the issue will lead to further health and life inequalities, greater inefficiency of the overall health care system, and escalating pressure on hospitals and other publicly funded institutions.

https://www.ippr.org/research/publications/social-care-free-at-the-point-of-need

Comments or suggestions? Email us at contact@socialcanada.org.

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