[Newsbot]

Title: Canada's economy is struggling to keep up with resurgent G7
Category: Business
Posted By: andyt
Date: 2011-01-02 18:31:11
Canadian

[andyt]

$1:

Rather than No. 1 with a bullet among the G7, Canada could have fallen as far as sixth in recent growth...

It's even worse if the calculation is on a per capita basis — a truer measure of economic strength. By that scale, Canada is dead last with a 0.9 per cent gain per person.

$1:

Stanford also tries to shatter another "myth" of the recovery — that Canada's labour markets have performed superbly, recovering all the jobs lost during the recession, and then some.
It's one thing for Germany to boast that it has recovered all the lost jobs, he explains, since Germany has a stable population. In Canada, where the working-age population is rising by about 1.5 per cent a year, the economy must create 300,000 jobs just to keep up.
"Less than one-fifth of the damage done to Canada's labour market by the recession has been repaired," he says.

Where is this increase in our working-age population coming from? Most of it must be from immigration, so if we didn't import any immigrants we would have to add a lot less jobs every year just to keep up.

[sandorski]

andyt andyt:

Where is this increase in our working-age population coming from? Most of it must be from immigration, so if we didn't import any immigrants we would have to add a lot less jobs every year just to keep up.

Except if we cut down on that it makes the Retiring Baby Boomer issues worse. Immigration should continue as is.

[Bruce_the_vii]

About 60% of the population is abled bodied, so at 255,000 immigration is adding 153,000 workers a year. The statistic quoted is "working age" which includes the elderly in Statistics Canada jargon, not just the abled bodied - so it may be higher.

Immigration isn't really going to pay for the Retiring Baby Boomers. Immigrants come as families, that is with two children each on average. They are dependants, as are retired people. So while the number of people working to number of people retired ratio eases up a notch the actually dependency rate remains the same. The children are nearly as expansive as retirees and immigrants tend to pay for themselves rather than pay for old people. The number of people working in the Western countries is 48% to 51% of the population and immigration would not be improving that.

Stephan Harper has run stimulative budgets while allowing mass immigration. The stimulation just absorbed the new immigrants, in effect. I call it Keynsian Immigration. Jim Stafford would never in a million years mention this, despite it being "half of macro economics".

Stephan Harper's mass immigration is based on labour shortages just around the corner. Meanwhile Finance Minister Jim Flaherty is offering $50 billion in corporate tax cuts to stimulate job growth. That is he thinks the opposite of his not too much respected leader.

I've never heard of this statistic "growth per capita". If growth in the economy is 1.7% the growth per capita will be the same. I read about Jim Stafford from time to time and he indulges in such creative arithmetic to be printable.

[andyt]

sandorski sandorski:

andyt andyt:

Where is this increase in our working-age population coming from? Most of it must be from immigration, so if we didn't import any immigrants we would have to add a lot less jobs every year just to keep up.

Except if we cut down on that it makes the Retiring Baby Boomer issues worse. Immigration should continue as is.

We're struggling to create enough jobs to meet our needs, but you want to keep importing people.

As far as the aging demographics, it would take a minimum of tripling our current immigration to truly impact that. That would lead to us having 150 million people in Canada by 2050 - do you really think we have the jobs and infrastructure to handle that. And what happens when those people all get old - we have to import how many to take care of those 150 million? When does it end? What you're proposing is a mugs game, unending population growth because we always need young people to take care of the every increase old ones. Better to find a solution now that doesn't depend on ever increasing population. And where will we get the immigrants from? China is facing a demographic problem that makes ours look like peanuts - it's just a generation later than ours. Same with India, they won't be able to keep breeding like flies indefinitely either. Nope, it's a mugs game.

[Canadian_Mind]

Bruce_the_vii Bruce_the_vii:

About 60% of the population is abled bodied, so at 255,000 immigration is adding 153,000 workers a year. The statistic quoted is "working age" which includes the elderly in Statistics Canada jargon, not just the abled bodied - so it may be higher.

Immigration isn't really going to pay for the Retiring Baby Boomers. Immigrants come as families, that is with two children each on average. They are dependants, as are retired people. So while the number of people working to number of people retired ratio eases up a notch the actually dependency rate remains the same. The children are nearly as expansive as retirees and immigrants tend to pay for themselves rather than pay for old people. The number of people working in the Western countries is 48% to 51% of the population and immigration would not be improving that.

Stephan Harper has run stimulative budgets while allowing mass immigration. The stimulation just absorbed the new immigrants, in effect. I call it Keynsian Immigration. Jim Stafford would never in a million years mention this, despite it being "half of macro economics".

Stephan Harper's mass immigration is based on labour shortages just around the corner. Meanwhile Finance Minister Jim Flaherty is offering $50 billion in corporate tax cuts to stimulate job growth. That is he thinks the opposite of his not too much respected leader.

I've never heard of this statistic "growth per capita". If growth in the economy is 1.7% the growth per capita will be the same. I read about Jim Stafford from time to time and he indulges in such creative arithmetic to be printable.

Wouldn't an immigrant family that brings a husband, wife, and 2 kids to Canada not have the same burden of supporting elderly parents as your native Canadian family would? Sure they send money home to the grandparents, but thats probably far cheaper than having the grandparents living in Canada, living off the system. Just a guess, but I would like your thoughts on that concept.

I don't understand how 1.7% nationally translates into 0.9% per capita either. That makes no sense to me.


Andy, assuming the population produces 2.1 kids per woman, we wouldn't have as big of a demographic crisis. People would work for 40-50 years, and then retire for 10-20. It wouldn't be as good of a situation as it is right now where there are 5 working people for every retiree, but it wont be as bad as the 2.5 working pop or less per retiree we will be seeing in the future. It would be around 3 workers per retiree, or around 3.5+ if you increase the retirement age to 70.

Fact is, if you want to be supported as an old person, someone has to be there to support you. In a way it puts the onus on you to make sure you have offspring to look after you. Either that, or you become wealthy enough to support yourself your entire life, and save enough for your retirement including medical costs. But 99% of the population can't do that, and at the end of their lives will be living off of someone else's dime.

[Bruce_the_vii]

Hi Canadian_Mind:

Yes, an immigrant couple might be sending money home and this would be cheaper than Canadian standards. I never really thought about that angle much. While immigrants don't have grandparents in the system I can make out immigration still doesn't budge the dependency ratio - the number of people working as a percent of the population.

Give me a second and I'll post the 2010 figure.

The 2010 population was 34.2 million while the number of people working was 17.2 million - for a working ratio of 50.3. So you can see adding an immigrant family with two children but both parents working is going to leave the dependency ratio the same. With an aging population the working ratio will go down some, it's true, but the two dependent children dent the advantage to the tax system.

The present immigration program is screwed up, unless it improves their will be no tax advantage. Presently it's too agressive and causes unemployment.

[andyt]

Canadian_Mind Canadian_Mind:

Andy, assuming the population produces 2.1 kids per woman, we wouldn't have as big of a demographic crisis. People would work for 40-50 years, and then retire for 10-20. It wouldn't be as good of a situation as it is right now where there are 5 working people for every retiree, but it wont be as bad as the 2.5 working pop or less per retiree we will be seeing in the future. It would be around 3 workers per retiree, or around 3.5+ if you increase the retirement age to 70.

Fact is, if you want to be supported as an old person, someone has to be there to support you. In a way it puts the onus on you to make sure you have offspring to look after you. Either that, or you become wealthy enough to support yourself your entire life, and save enough for your retirement including medical costs. But 99% of the population can't do that, and at the end of their lives will be living off of someone else's dime.

You're right. But we have a world population closing in on 7 billion. Personally I think that's already too many. How people do we add before you think we have too many?

So we're going to hit the wall at some point. At some point old people will have to be supported by fewer younger people, unless at that point the younger ones kill of or just neglect the older ones. NOt a pretty solution - I hope we come up with something more creative.

[Canadian_Mind]

Bruce_the_vii Bruce_the_vii:

Hi Canadian_Mind:

Yes, an immigrant couple might be sending money home and this would be cheaper than Canadian standards. I never really thought about that angle much. While immigrants don't have grandparents in the system I can make out immigration still doesn't budge the dependency ratio - the number of people working as a percent of the population.

Give me a second and I'll post the 2010 figure.

Could the dependancy ratio be because people native to Canada would have less children, and therefore less "lower" dependants than immigrants? I don't know if they do or not, but I'm assuming so.

Further, with both children and elderly can be considered dependents, consider this: in a case where it is one child per adult as a dependant, the adult will become elderly around the same time the child becomes an adult, maintaining the dependancy ratio over the long term. The alternative is one elderly person as a dependent to an adult. While the elderly person eventually dies, relieving their burden, the adult will too become elderly. With no child dependents, the adult now has no one to care for them.

Of course, it isn't as simple as that, but wouldn't the ideal ratio be where one adult is supporting both 1 child and 1 elderly grandparent, and as the cycle of life goes, the grandparent dies, the adult grows old, and the child grows up and has a child of their own, thus maintaining the 1 - 1 - 1 cycle.

This was the point I was trying to get across addressing Andy.



Andy - You're right, 7 Billion is too much for the planet as a whole. But if we were spread out more diversely and learned to live more efficiently, the planet could sustain a higher human population than it could currently sustain. Either way, 7 Billion is far too much. 2-3 Billion, sustained with 2.1 kids per mother, is ideal IMO.

In Canada alone, we could probably support 100 to 125 million people, and still live comfortably. Granted, we'd loose some of the things we value as Canadians, and people wont like seeing Toronto with 15 million people, Montreal and Vancouver between 7.5 million and 10 million each, etc.

But thats no different then when in the early 1900s we passed 8 million in population, and no one in Toronto or Montreal wanted to see those cities pass the 1 million mark, no one in Vancouver thought it would or wanted it to pass the 100 000 mark, etc. We can sustain higher numbers, but we would be living a different lifestyle depending on where we choose to live, and some places wont be the way we want them to be anymore.

Further, I don't think neglecting the elderly is a great solution either. I want to know I'm going to be supported until the day I die. But we should find ways to decrease the elderly's burden without effecting quality of life. To me this would include raising the retirement age to better balance dependancy ratios, allow for controlled deaths so that someone with a terminal illness isn't clogging the medical system for 6 months to a year when they'll never see the light of day anyways (the way my grandfather went, but it took him almost 5 years to die), etc.

Also, for the dependancy ratio, make it easier for youth to get into a profession at a younger age. Example would be in highschool one can take an academic route that will set them up for either University or a trade school, or they could opt to do trades training in highschool, being fully qualified in a trade when they graduate at the age of 17 or 18. it would only take up to 4 years off the time they are dependants, but by getting qualified for a profession in the public school system, they aren't burdened with student fees later on, and can add 4 years to their "contributor" years, and take 4 years off their dependency years.

One last thing, just because I suggest retirement age should be increased, doesn't mean everyone must work till then. If you can retire at 55 and support yourself, awesome, do it. You're still paying your taxes, but you wont get certain old-age benefits till your 70. You might even lower your overall dependancy because you took 10+ years of hard work out of the equation, which could mitigate costly medical problems later on.

[sandorski]

andyt andyt:

We're struggling to create enough jobs to meet our needs, but you want to keep importing people.

.

Yes. This is a temporary situation. The higher our population, the less dependent we are on the US.

[Canadian_Mind]

sandorski sandorski:

andyt andyt:

We're struggling to create enough jobs to meet our needs, but you want to keep importing people.

.

Yes. This is a temporary situation. The higher our population, the less dependent we are on the US.

Not necessarily, might just mean we end up importing more of the same goods from them to support more people, but have more people trying export the same number of good to them. In overall numbers they are growing faster than they are, but % wise we are outpacing them for growth.

What needs to happen to decrease reliance on the US is to further diversify trade. More trade with Tiawan, Japan, South Korea, Russia, Europe, and South America would be a boon for us.

[Bruce_the_vii]

Hi Canadian_Mind:

The working ratio is 50.3 so 49.7 are dependents. It's not 1 to 1 to 1. However, you are right suggesting this may change with the birth rate. One point is that the elderly ratio after the baby boom was low, abnormally low. The low rate was a tax advantage but those days are over.

In the case of below replacement birth rate, now common in the West, the elderly ratio will go up. If the economy is good you can add some immigrants. A really difficult question is just how are the Chinese going to manage a very high dependency ratio as they try to cut their population to 600 million.

You can grow the country with immigration. However, the government pays scant attention to the immigration program and gets the numbers wrong. Also the quality of the jobs being produced is suspect and so you may want to review the maximize growth problem.

By rights the whole world should now have a one baby per family plan as does China. Anyone living in BC will tell you that the best mines, the minerals, are being exhausted. You can make out that there will be a sever resource crisis by the 22nd century. However, people are resistant.

You don't want to see Toronto become 15 million people like New York. New York City is hellishin expensive and New Yorkers move away from it. It only grows by immigration. You want to keep Toronto affordable and livable, not 15 million.

[Canadian_Mind]

Bruce_the_vii Bruce_the_vii:

Hi Canadian_Mind:

The working ratio is 50.3 so 49.7 are dependents. It's not 1 to 1 to 1. However, you are right suggesting this may change with the birth rate. One point is that the elderly ratio after the baby boom was low, abnormally low. The low rate was a tax advantage but those days are over.

In the case of below replacement birth rate, now common in the West, the elderly ratio will go up. If the economy is good you can add some immigrants. A really difficult question is just how are the Chinese going to manage a very high dependency ratio as they try to cut their population to 600 million.

You can grow the country with immigration. However, the government pays scant attention to the immigration program and gets the numbers wrong. Also the quality of the jobs being produced is suspect and so you may want to review the maximize growth problem.

By rights the whole world should now have a one baby per family plan as does China. Anyone living in BC will tell you that the best mines, the minerals, are being exhausted. You can make out that there will be a sever resource crisis by the 22nd century. However, people are resistant.

I'm not going to comment on immigration, but I do think that some immigrants aren't of the caliber I'd expect to be allowed into the country. Others blow my mind at how efficient they are. I also don't like the fact that we take the best and brightest away from the poorest countries. Perhaps a solution to that would be to categorize countries based on wealth, average education, etc. and only take a certain number of immigrants from category A, category B, etc.

And the 1 to 1 to 1 ratio was just an example of how an adult who works 45 years +/- supports a child for 20 years +/-, and a retiree for 10 years, +/-. This, in my mind is a good ratio, and isn't to far off from what you posted percentage wise.

Honestly, I don't care about the Chinese or their problems. I care about Canada first. They may come up with some interesting solutions that we may wish to emulate, but thats as far as I go with that. We should still be growing.

As for resources, I expect we're eventually going to have to come up with some creative solutions to get all the metals and such we need. Mining garbage is an idea that comes to my mind.

And for Toronto being 15 million like New York, it may be as expensive as hell to live in New York, but the city is more affordable to live in than Toronto, because there are more wealthy jobs in the city to compensate for the expensive housing (personal GDP in the city is higher, so are housing prices, so it evens out). Yes, a lot of people move to and from New York, but a lot also stay there. That might have something to do with New Yorks position as a world city, as well as how crowded it is.

[andyt]

Canadian_Mind Canadian_Mind:

Honestly, I don't care about the Chinese or their problems. I care about Canada first. They may come up with some interesting solutions that we may wish to emulate, but thats as far as I go with that. We should still be growing.

You make a lot of good points which I'm too tired to address. But in a global world, we'd better worry about pretty well every country, certainly ones that are as influential (and will be more) as China. But maybe if Saul Rubin is right, and we hit peak oil, we won't have to worry about China as much because transportation costs will be too high, so we'll have to learn to do things locally again. And accept a way lower material standard of living. All get wood stoves in Vancouver I guess.

[Khar]

Bruce_the_vii Bruce_the_vii:

About 60% of the population is abled bodied, so at 255,000 immigration is adding 153,000 workers a year. The statistic quoted is "working age" which includes the elderly in Statistics Canada jargon, not just the abled bodied - so it may be higher.

Immigration isn't really going to pay for the Retiring Baby Boomers. Immigrants come as families, that is with two children each on average. They are dependants, as are retired people. So while the number of people working to number of people retired ratio eases up a notch the actually dependency rate remains the same. The children are nearly as expansive as retirees and immigrants tend to pay for themselves rather than pay for old people. The number of people working in the Western countries is 48% to 51% of the population and immigration would not be improving that.

Stephan Harper's mass immigration is based on labour shortages just around the corner. Meanwhile Finance Minister Jim Flaherty is offering $50 billion in corporate tax cuts to stimulate job growth. That is he thinks the opposite of his not too much respected leader.

I've never heard of this statistic "growth per capita". If growth in the economy is 1.7% the growth per capita will be the same. I read about Jim Stafford from time to time and he indulges in such creative arithmetic to be printable.

Actually, 60% is entirely the wrong way to approach it. You assume that the demographics of our immigrants are the same as Canadians. The amount of family members brought in as a family class immigrant has been routinely less than half the economic immigrants, for example.

That means for each family member brought over, over two and a bit economic workers are brought over. This does not preclude them becoming a member of the economy down the road, either.

So we already have a base of almost 60% of total with just economic class citizens. Add on to this the fact that those roughly 50,000 children, spouses and partners can find work, those 20,000 parents and grandparents may be able to find work, and that our refugees may be able to find work (the last chunk of the equation).

This still means that over half of the people are working or capable of working, and that dependents likely count for less than the half you imply they account for with the "number of people working in the Western countries is 48% to 51% of the population and immigration would not be improving that" line. Indeed, integration of landed immigrants has been reported to have been going fairly well.

All you have to do is check out the immigration reports.

As I have explained to you before, Harper and Flaherty are likely working on different time tables. Our current problem is a shortage of jobs. Out future problem is a shortage in labour. The cut is supposed to work for the short term, the immigration technique for the long term.