What are the Think Tanks Thinking?

Terrance Hunsley
Terrance Hunsley

This week we take a look at The Fraser Institute, Homeless Hub, Institute for New Economic Thinking, a speech on how Japan and Germany finance an aging society, The Conference Board of Canada, Brookings Institution,  Manhattan Institute, FEPS, World Economic Forum, the HUMA Parliamentary Committee,   C D Howe Institute and Policy Options, IRPP.


The Fraser Institute’s Jake Fuss and Alex Whelan, suggest that Canadian governments should choose to reduce spending after the crisis is over, as opposed, in their thoughts, to increasing taxes. They point out that the private sector tends to invest more when governments reduce spending. They also express doubt about government stimulus spending, pointing out that in previous recessions,  government spending may have been announced in the recession, but the dollars did not reach people until the economy was in recovery.

They suggest that spending reductions will result in more economic growth, compared to increased taxes.

Comment: The point about getting money into people’s hands when it is needed seems important. It would suggest that flowing money to large companies through a bureaucratic procurement process can indeed have a less than desirable effect in reducing the impact of a recession. Flowing money directly to people who will consume seems both more immediate, and potentially more useful to the economy.   Secondly, it would have been useful if the authors had addressed the distributive effects of reducing spending vs increased taxes. According to the IMF, the austerity programs introduced by many governments after the 2008 Great Recession, brought about increased inequality and arguably, lower longer term growth. 

http://fraserinstitute.org/  Governments across Canada must reduce spending post-recession



The Homeless Hub has launched a new publication on an early intervention model for youth homelessness. We reproduced their ad below.

NEW Publication: Youth Reconnect Program Model Guide

Stephen Gaetz et al. / Making the Shift, Canadian Observatory on Homelessness, A Way Home Canada 

We’re excited to announce the release of the Youth Reconnect Program Model Guide—a community-based early intervention model which aims to reduce and prevent youth homelessness by helping young people stay connected to their family, community, school and strengthen their connections to natural supports.

Developed in partnership with A Way Home Canada, this guide is informed by findings from the Making the Shift Demonstration Lab, and builds on principles from Housing First for Youth (HF4Y), and practices from the Family and Natural Supports (FNS) program model.

The guide features: an overview of the model, case examples of Youth Reconnect in practice and an implementation tip sheet! Perfect for: Service Providers and Managers; Funders and Policy-makers; the Education sector; and Researchers.

Read the blog post by Jesse Ward for more info.




The Institute for New Economic Thinking  Lynn Parramore and Rosie Collington Discuss the possibility that Big Pharma will be a profiteer in treatments of COVID. They refer to a recent incident when Gilead attempted to be granted “Orphan Drug” status for a drug in clinical test stage, with a view of controlling its distribution and thereby insisting on higher prices for a longer time. They recommend that governments retain an ownership stake in new drugs for which they have financed the research, and that they put more controls on pricing. 

And that’s where we do have some cause for optimism. The backlash Gilead received after seeking Orphan Drug status from patient organizations, patent reform groups, lawmakers, academics, and some media outlets is indicative of the growing awareness that exists around drug pricing and regulation in the U.S. and beyond.

….It’s pretty clear that the shareholders of pharmaceutical companies actually take on relatively minimal risk compared with the state, which is almost always responsible for the initial financial investment in basic science that constitutes the foundation of drug development. That early stage investment is incredibly risky, because very few of the compounds under study will actually be developed into drugs. Researchers at Bentley University in Massachusetts were nonetheless able to identify that every one of the 210 new drugs approved by the Food and Drug Administration in the U.S. between 2010 and 2016 had received funding from the NIH at some stage in their development, worth in total more than $100 billion.




How Japan and Germany are financing an ageing society:

(Not a think tank, but a 2018 speech by Hiroshi Nakaso,  Deputy Governor of  the Bank of Japan to annual general meeting of Germany Bundesbank.) 

Japan and, to a lesser extent, Germany, are two countries who could provide some guidance for Canada when we worry that we won’t have enough workers to support our elderly. 

Japan hit a major recession and financial crisis in the 1990’s, and again in the Great Recession of 2008, triggered by the unregulated US banking system. Their recovery was hampered a labour shortage. The economy stagnated and experienced deflation. 

Japan’s response was to combine quantitative easing (increasing the money supply by the bank of Japan buying government bonds and other securities) with increasing labour supply and labour productivity. The increase in labour supply (surprise surprise) came from women. Japan had a traditional division of labour with fewer women in the labour force.   But now, Japanese women have participation rates in the same range as the US and Europe. 

Japanese industry has also become more productive, reorganizing and investing in technology to reduce their labour needs.

In comparing Japan and Germany, he notes the substantial increase in German productivity, as well as Germany’s increase in labour supply through immigration and foreign workers.    

Source: Germany and Japan: A Central Banker’s Perspective on their Past and Future Relationship 



The Conference Board of Canada takes a look at how educational institutions will adapt their programming, and what they might do to attract students back to the classroom. 

Some institutions will move their courses almost entirely online. Others will welcome students back to campus with social distancing practices and health precautions in place. Approaches will vary. But whenever and however institutions do re-open their campuses, two questions remain: will students go? And how will they decide? By leveraging a behavioural perspective, institutions can adopt strategies that reduce risk, maximize student safety, and encourage students to come back.

… to provide safe and inclusive learning environments, post-secondary institutions will need to integrate people-first or behaviourally-informed perspectives into their response and recovery planning. In other words, to make their campuses safer, institutions will need to focus on the reasons why people fail to make safe decisions or engage in unsafe behaviours in the first place.




The Brookings Institution (Key Issues Facing US Policymakers) suggests four priorities for the US government when the recession wanes: 

Increasing affordable housing. Once the current public health crisis has been contained, policymakers should make more serious efforts to reduce the number of households who lack affordable, stable, decent-quality housing. Ingrid Ellen, Erin Graves, Katherine O’Regan, and Jenny Schuetz outline three goals to focus on.


Supporting frontline workers. When we think of frontline workers, grocery clerks and healthcare providers often come to mind first. But there are millions more that should not be overlooked. To provide effective support, Congress must define who they are, Joseph Kane and Adie Tomer argue.


Engaging with the global community. Congress has so far spent 0.1% of its total COVID-19 response on international actions. George Ingram highlights a recent poll which shows that Americans want global engagement on fighting the virus.


Moving to mail-in ballots. In the age of COVID-19, voting by mail has turned into a partisan issue, but there is little evidence that mail-in voting systems favor one political party or the other, Elaine Kamarck writes.


The Manhattan Institute, Buy American Isn’t Always Best

The question is presented as a trade-off between resilience—the ability to withstand a big, unpredictable shock—and efficiency, getting stuff as cheaply and quickly as possible. Americans have just experienced shortages of many goods, especially medical supplies, so it’s tempting to argue that we should focus on resilience. But a “Buy American” drug program does not promote resilience.

… Even as a longer-term strategy, a Buy American program would make us less resilient. First, the 80 percent figure of drugs coming from China is false. In fact, about 60 percent of American pharmaceutical spending is on domestically produced drugs, though strictly speaking, American-made is hard to define, because many intermediate inputs come from abroad.




The Foundation for European Progressive Studies (FEPS), addressed the issue of women being hit disproportionately by the pandemic.

The EU Commissioner for Equality, Helena Dalli. In her keynote speech, Dalli explained how the current situation even risks increasing that gender pay-gap: “The pandemic has exposed the disproportionate representation of women in low-paid work and precarious working conditions.” The Commissioner announced that binding pay transparency measures will be presented later this year as one of the first deliverables and steps in closing the pay gap.


The World Economic Forum has announced a new initiative entitled The Great Reset. 

As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons. Drawing from the vision and vast expertise of the leaders engaged across the Forum’s communities, the Great Reset initiative has a set of dimensions to build a new social contract that honours the dignity of every human being.

The words are inspiring, although it is difficult to envision an organization of the international business elite coming up with a progressive social contract which reduces inequalities within nations, as well as reducing poverty worldwide. Because of the increasing tension between democratic nation states and global corporations, it could become an interesting forum. 




In Parliament this week, at the HUMA committee,  Hassan Yussuf of the Canadian Labour Congress called for making long term care part of the public health system ,…

 This situation was created by years of provincial budget cuts, increased private for-profit ownership of long-term care homes, and health care staff shortages due to low wages, few benefits, excessive workloads, unsafe working conditions and a lack of full-time hours. Of course, the provinces and territories are responsible for delivering health care services. However, Canada desperately needs high, uniform national standards for long-term care.

    The CLC urges the federal government to work with the provinces and territories to remove private for-profit business from the long-term care sector. Long-term care must be brought fully into the public health system and regulated under the Canada Health Act. Residents must be guaranteed high-quality care, with proper staffing and health and safety protections for workers. As well, essential work done by long-term care employees must be properly valued. If we are going to address the staffing problems and shortcomings in residential care, workers need permanent increases in wages and benefits, and improvements in working conditions.




The C D Howe Institute’s Jeremy Kronick and Steve Ambler, talk about the Bank of Canada’s intervention in the market to buy up federal, provincial, and private sector bonds and other securities. (quantitative easing?) It now has $465B on its balance sheet. Where did it get the money to do that? Well, it just creates it.  

It would appear the Bank’s strategy has largely succeeded, with borrowing costs on federal and provincial debt coming down

…Bank of Canada watchers should expect the balance sheet to stay big for quite some time. There is ample evidence that QE will boost private sector spending only to the extent that it is expected to remain in place over a longer period of time. Households, businesses and markets get jittery if they think the expansion will be quickly reversed. We have seen the failure of other central banks to generate robust recoveries because they shrank their balance sheets too soon.




IRPP’s Policy Options has posted an article by Tamara Krawchenko and Dawn Leach, How Canadian Policies can enable Indigenous Economic Development. The article addresses a recent OECD report with recommendations for improvements. Canada has recently put in place a policy to procure 5% of government goods and services from Indigenous businesses, but could do more by providing greater access to land and natural resources, and by improving its policies for place-based economic development. The article will be posted soon on SocialCanada.org. 

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