Equalization, Deficit Woes, Women in the Workplace
National Unity is Coming Along Quite Nicely.
It feels like it’s all we can talk about after October’s federal election are the angry sentiments that have boiled over the results of a Liberal minority parliament, notably in Western Canada.
And it probably doesn’t help that this past week Bloc Quebecois leader Yves-Francois Blanchet stated that Quebec’s needs ‘have been met and Quebec would not support any more pipeline development.
Predictably, this sparked major backlash from Alberta and Premier Jason Kenney.
At a speech in Calgary, Kenney warned Blanchet that he could not “have his cake and eat it” and that Blanchet needed to “pick a lane”. He fired back at Blanchet saying that Quebec has benefited immensely from Alberta’s oil development through the federal equalization program.
Equalization. A word filled with tension and confusion across the country.
The federal equalization program transfers general revenue to lower-income provinces to ensure all Canadians receive comparable public services across Canada.
While Kenney has claimed that Quebec has received $13 billion dollars this fiscal year through the equalization program due to Alberta’s oil revenue, many economists have argued that the link between Quebec and Alberta’s oil sands are much weaker than Kenney is suggesting. Nonetheless, the argument is politically potent.
Confused? Well you’re in luck, we interviewed economist Trevor Tombe from the University of Calgary to explain to us the ins and outs of equalization for this week’s Btchcoin 101.
It seems as if Canada is headed towards a more divisive state of politics and certainly it will be interesting to see where we’re headed to in our political future. What a time to be alive!
A Not So Sunny Forecast for JT’s next term…
Economically, that is.
It seems our nation-wide financials are less positive than we thought. Last Thursday, the Parliamentary Budget Office (PBO), which provides independent financial analysis to Parliament, updated its forecast based on revised growth projections: putting deficits at $1.6B larger on average for the period of 2019-2025.
This places the deficit higher than the projections put out this summer, on which the election campaigns were based.
The cause of the increased deficit? Fear of international trade disputes, and less-than-great Canadian export projections (see: our shrinking oil and gas and forestry sectors). While GDP growth was previously projected at 2.0 per cent, it is now projected at 1.7 per cent for 2020.
In the 2019 campaign, Trudeau promised a number of new (and expensive!) programs, and is expected to need to increase spending to work effectively as a minority government.
The PBO estimates that these expenses combined with the updated forecast reduce the probability of the budget being balanced by 2024-2025, and reduce the probability of the debt-to-GDP ratio being lower than 30.9 per cent in that year.
TLDR: a country’s debt-to-GDP ratio is a metric of our debt to our economic output; the higher it is, the less likely it is that we are able to pay off our debts. So, overall not good.
We mentioned last week that the Bank of Canada is holding interest rates steady at 1.75 per cent, while globally other countries have cut rates due to rising fears of a US-China Trade war. The PBO expects interest rates will be increased in 2020…..that is, assuming the trade disputes will be over by then.
Economists suggest that Trudeau is going to have to adjust either its targets or delay spending- we’ll all be patiently awaiting the federal fall fiscal update to see which it is.
#Breaking: Workplaces are Still Sh*tty for Women…
That’s sorta, kinda, maybe, the conclusion of the 2019 edition of McKinsey & Company’s Women in the Workplace report, which collects data and insights from almost 600 companies, and from 250,000 employees.
Yes, we’ve all heard that women are making progress in ascending the corporate ladder. For example, at the C-Level, the representation of women has risen from 17% in 2015 to 21% in 2019.
That’s great news, but as the report’s data shows, women are still underrepresented at every corporate level. While we often hear about the “glass ceiling” in reference to women making CEO, the McKinsey report points to women being stalled much earlier in their careers, and specifically at the stage in which they’re moving into their first managerial role.
For every 100 men promoted and hired to a managerial role, only 72 women are promoted and hired. When you apply a racial lens to the data, the results become even more disheartening – only 58 black women and 68 Latina women would receive promotions.
The problem is systemic: Women of colour, and particularly black women, are far less likely than their white colleagues to receive managerial support and mentorship. Women with disabilities also face the same lack of sponsorship and support from managers.
The recommendations of the report are worth reading, even for those who aren’t in a managerial or human resources career. They’re also clear – organizations need to be smarter about inclusion. It’s not just about naming a female CEO – its about making sure that junior members of the team aren’t being left behind.