This is Pretty Amazing!!

Given that the Loonie has been on the rise, the value of our current account actually hit record high is very unusual.

This shows energy is a very inelastic commodity.

On the other hand, with cuts in the automobile manufacturing sector (mostly by GM) in the last couple months, I suspect the surplus of our current account will come down in the coming months - given that energy prices stablize at the current level.

One thing for sure though, Saskatchewan better start exploiting its energy deposit - especially in oil and gas.

Nobody knows if the States will still heavily rely on fossil fuel in a couple decades. Saskatchewanian do not want to miss the good fortune.

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Current account surplus swells

TAVIA GRANT

Globe and Mail Update

Canada's current account surplus hit a record $13.28-billion in the fourth quarter on higher natural gas and auto exports, Statistics Canada said Monday.

The surplus increased by $5.5-billion in the quarter and surpassed the $12.5-billion analysts had expected. The third-quarter surplus was revised down to $7.76-billion. All figures are seasonally adjusted.

Last year, the current account surplus reached $30.2-billion, surpassing its previous record of $29.3-billion in 2000, the government agency said.

The Canadian dollar strengthened as the report showed strong exports and high commodity prices are buoying economic growth. Further details about the health of Canada's economy will come Tuesday with the release of the fourth-quarter gross domestic product.

Monday's report showed exports rose in the fourth quarter, as higher energy prices increased the value of natural gas exports and auto product shipments grew by more than $1-billion.

Imports, meantime, also increased, led by machinery and equipment, industrial goods and energy products.

The current account measures transactions on exports and interest income against imports and interest expenses.

The Canadian dollar rose to 87.21 cents after the release from Friday's Bank of Canada close of 87.05 cents.

Canada's GDP report tomorrow is expected to show real growth of 2.6 per cent in the fourth quarter.

© Copyright 2006 Bell Globemedia Publishing Inc. All Rights Reserved.

Need to be Good to be Lucky

Are we missing the "lucky loonie" for our men's hockey team??

MacKay & Brison

Saw this cartoon today on The Hill Times.

Is This for Real??

Japan has been in and out of some serious recessions in the past 16 years, due to "structural reasons".

Hopefully they are turly out of the maze this time around.

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Japan's economy

Picking itself up

Feb 23rd 2006 | TOKYO
From The Economist print edition

The recovery is spreading, by and large

IF THE latest figures are to be believed, then last year, Japan (yes, Japan) grew faster, at 2.8%, than any G7 economy except America. And as of the final quarter of the year, it was growing faster than America as well, clocking up a 4.2% growth rate, year-on-year. Japan's GDP figures are notoriously prone to revision, so some of the shine may yet come off last year's performance. What is not in doubt, though, is that Japan's recovery is solid and increasingly broad-based.

In the recovery's early stages, rapid export growth played a crucial part in boosting industrial production and so company profits. After a soft patch early last year, export growth has accelerated again, with demand from China particularly strong. But what is striking now is the recovery in domestic demand. Companies with growing order books are spending on capital goods: fixed-capital investment grew at an annualised 7.2% in the last quarter of the year, while the outlook for machinery orders looks buoyant. Companies need to hire more workers. So the availability of jobs continues to grow. For the first time in over a decade, for instance, Japan has as many jobs on offer as there are applicants. Demand for workers is pushing up wages, and that is now clearly being felt in the shops. In the last quarter of 2005, personal consumption jumped sharply, growing at an annualised 3.2%. Department stores in and around Tokyo report brisk winter sales, and the first retail growth in nine years looks set to continue.

Confidence is returning to the housing market, too. New housing starts are holding up in the face of heavy winter snows, as well as a confidence-sapping scandal involving faked earthquake-resistance data for condominiums. And after a period when the housing recovery was confined chiefly to the Tokyo area, it has now spread to other parts, notably around Osaka and Nagoya. Thanks partly to the demand for mortgages, bank lending is starting to pick up again for the first time in years. With Japan pulling out of deflation, the Bank of Japan is likely to begin winding down its policy of super-loose money as soon as March or, more likely, April.

What are the dark spots in this picture? Taking a mildly contrarian stance, Richard Jerram, Japan economist at Macquarie Research, finds a couple. One is fairly soft import growth for such a purportedly robust recovery. This in part reflects the extent to which the recovery is taking place not chiefly in the manufacturing sector, but rather in services, where import demand is relatively low.

A second, more worrying, blot, is that for all that the labour market has tightened over the past year, employment growth, at an annualised 0.5%, is still too sluggish. This, says Mr Jerram, could point to a skills mismatch in the economy, where people are insufficiently suited for the kind of jobs being offered; if he is right, then the situation is not likely to improve anytime soon.

The employment picture also has a strongly regional element to it. In Tokyo, one-and-a-half jobs are being offered for every applicant: but in Hokkaido and Kyushu, Japan's northernmost and southernmost big islands, there are still too few on offer. To that extent, the fruits of the recovery are sure to be shared unevenly.

Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.

DR Rebels - Now and Then......

I was cleaning up some of my archive files today, and found a list of members of the Democratic Representative Caucus (DRC):

Chuck Strahl
Gary Lunn
Jim Pankiw
Val Meredith
Grant McNally
Jay Hill
Jim Gouk
Monte Solberg
Andy Burton
Brian Fitzpatric
Deborah Grey
Inky Mark
Art Hanger

Interesting though, when you take a look at this list, the following members are now cabinet ministers with the new Conservative Government:

Chuck Strahl
Gary Lunn
Monte Solberg

Jay Hill is the Chief Government Whip.

Only three of the thirteen DR members are not in the cabinet (Hanger, Mark, and Fitzpatric).

The rest of them are either retired or lost their seats in Election 2004 or 2006:

Jim Pankiw (Was not allowed to be back in the CA Caucus in 2003, and lost in Election 2004 as an Independent)
Val Meredith (Lost in riding nomination prior to Election 2004)
Grant McNally (Retired)
Jim Gouk (Retired)
Andy Burton (Lost in Election 2004 & 2006)
Deborah Grey (Retired)

The Tax Cut Debate!!

I was working on a local campaign during the Election and didn't have much time to focus on the tax cut debate.

Anyhow, let me try to re-visit the most controversial tax debate, during the election campaign, here: the Conservative will cut the GST by 2% (1% immediately and another percent in 5 years), but reverse the Liberal tax cut - both lowering the rate on the lowest tax bracket from 16% to 15% and increasing the basic personal exemption by $400, which has been in effect as of Jan. 1, 2006.

The Conservative plan does carry a lot of sound bite in the media, as the Liberal broke their promise in reversing the GST after the 1993 Election.

But in reality, which plan is better?

From a social welfare prospective (without any data analyses), the Liberal plan provides better tax relief for low and middle class earners.

As much as I disagree with the CBC from time to time, they made a decent analysis on this issue. However, how accurate is the analysis when embedded with real data?? I don't know.

But I will soon be able to find out more, as I am currently playing with this Statscan product: Social Policy Simulation Database and Model (SPSD/M for short).

For all you policy wonks, you should check this book out: Taxing Ourselves: A Citizen's Guide to the Great Debate over Tax Reform.

Sask Party Convention!!

I was at the Sask Party convention, in Saskatoon, the past weekend.

Overall, it was a good convention. A very upbeat convention. Of course, it could be better if there were more hospitality suites (only 3, as there were only 3 candidates running for Party President and they were all shut down by mid-night.)

The highlight of the weekend, of course, was the Leader's keynote speech. As some of you know that Brad Wall is one helluva speaker (but I have to say that Mulroney is still the MAN!! Anyhow, Wall is on my "favourite speakers" list, and I'm sure that he'll do better than Brian in 20 years!!) Check this out!! (via Sask Party's web-site: http://www.saskparty.com/)

The script can be found here (via Small Dead Animals.)

New Cabinet

Well, I finally got some time to get back to blogging. This will be another short one, but hopefully I can keep it up to 1 to 2 posts per week.

Anyhow, the list of new cabinet ministers can be found here:

http://pm.gc.ca/eng/cabinet.asp

Those two controversial appointments are David Emerson and Michael Fortier.

For Emerson, I actually don't mind his appointment. Emerson has never been big on partisan politics, and his only goal to get elected is to serve the Canadian public. We all know that Emerson never wants to be in opposition. He wants to make impacts and changes within the government. And when you look at his record when he was the Minister of Industry, he did a very good job.

I always respect Emerson's ability and talent. It is great for Canadians to have somebody like Emerson in the Cabinet, regardless which Party he affiliates with.

Fortier is a more controversial appointment. I remember him in the 98 PC Party Leadership, running against Joe Clark, Hugh Segal, Brian Pallister, and David Orchard. Fortier came last in that race. On the other hand, Fortier has achieved a lot in the private sector, and I will give him time to prove himself in the new government before I criticize him.