Saturday, October 01, 2016

On the growth and the aging of Canada's population

CBC was one of the several news sources to announce earlier this week that Canada's population has grown to surpass the 36 million mark.

A record number of immigrants and refugees arriving on Canadian shores helped push Canada's official population over 36 million as of July 1, Statistics Canada says.

The data agency says there were 437,815 more people living in Canada than there were on the same day a year earlier, bringing the official population to 36,286,425.

In absolute terms, that's the biggest annual surge since 1988. In percentage terms, the population grew by 1.2 per cent.

The "increase is one of the largest increases since the baby boom in the 1950s," BMO economist Doug Porter said, "although this recent increase is driven more by immigration."

Indeed, the numbers show that some 320,932 immigrants arrived in Canada between the two Canada Days. More than 30,000 Syrian refugees are included in that figure, as they are classified as permanent residents by Immigration, Refugees and Citizenship Canada.

"The country had not received such a large number of immigrants in a single annual period since the early 1910s, during the settlement of Western Canada," Statistics Canada said in a release.

The relevant tables are here.

As Bloomberg noted in a recent article, this growth is not nearly enough, not to rejuvenate Canada's working-age cohorts and not to drive economic growth to hoped-for levels.

Bank of Canada Governor Stephen Poloz gave a blunt speech last week, saying that five decades of expansion powered by the Baby Boom generation is ending, and Canada's potential economic growth has slowed to 1.5 percent. That pace is almost a full percentage point below the average gain in gross domestic product over the last 35 years.

For Canada, at least, business leaders should now count themselves lucky to earn a "pretty good return'' of 4 percent like some companies in Asia, he said. Young people must think about working longer and saving more to fund the retirement their parents had, and governments must make tougher decisions on tax, trade and immigration policy in the hopes of salvaging marginal gains in future income growth, Poloz said.

``Those folks have been entering retirement for the past few years, and potential economic growth has been slowing as a direct result,'' Poloz said last week in Quebec City. ``We cannot just sit back and wait for these slow-moving forces to reverse.''

The biggest gain in the population over the past 12 months has been the 55 years and older set, which rose almost six times more than the so-called prime age population aged 25 to 54.

It's a trend mirrored in most industrialized nations such as Japan, where the central bank is struggling against deflation and anemic growth. Central banks around the world have set near-zero or negative interest rates aiming to regenerate inflation. Slow global growth hurts Canada's trade-dependent economy by curbing exports of crude oil, machinery and minerals.

The fading job market means the Bank of Canada's 0.5 percent policy interest rate won't need to rise as soon or as much in past economic recoveries to keep inflation in check. The so-called neutral rate that keeps the economy in balance could be as low as 0.75 percent now from as high as 5.5 percent before the global financial crisis, Poloz said.

Monday, September 26, 2016

Andrew Coyne in the National Post on the highly contingent successes of liberalism in Canada

I write from a Canadian perspective. Sometimes, it's important to remember that mine, too, is a pespective consequent to any number of highly contingent events. Andrew Coyne's recent article in the National Post "Canada’s openness a product of our history, geography more than a particular Liberal trait", is worth reading in full. He's entirely right to point out, of course, that the relative success of liberal themes in Canada is highly contingent on any number of factors. (Canada has no prospects for any substantial unauthorized cross-border migration, for instance.)

If Canadians are in a less belligerent mood than our American and European cousins, it may be because we have not endured anything like the series of calamities they have. In contrast to the United States, median incomes in Canada have grown steadily for most of the past 20 years; inequality, whether measured from the top or the bottom, is nothing like as bad. Our housing market did not collapse, nor did our banking sector.

We have no experience with terrorism on anything like the scale of recent attacks in the United States or Europe, let alone 9/11. Neither has immigration presented the kinds of challenges here that it has elsewhere. We have no counterpart to the 12 million illegal immigrants that are the source of so much controversy in the U.S. And while the 25,000 Syrian refugees we have admitted in the past year far exceed the American intake, it is a tiny fraction of the numbers that have arrived on Europe’s shores and borders. (People in other countries talk admiringly of the Canadian “points” system, but 3,000 miles of ocean and a cold climate are probably a more effective means of selection.)

And yet, even with all these advantages, we have had our brushes with nativism. It has become conventional wisdom that the Harper government lost the last election over it, but if you look at the polls two things jump out: the success of the anti-niqab campaign, especially in Quebec; and that Conservative support rose in the four weeks after the Syrian refugee crisis forced its way into the campaign. It was, not coincidentally, the Conservatives who, of the three parties, took the most cautious line on the crisis.

It is probably true that they overplayed their hand in the end: Canadians do not like to have their nativism rubbed in their faces. But if the Parti Québécois made the same mistake — the ban on religious wear in the civil service was also initially popular — it should not be forgotten that the McGuinty government in Ontario owed its re-election in 2007 to a similar calculated appeal to public fears. (We do not know how Kellie Leitch’s iteration will play out, but so far the polls are with her.)

Tuesday, September 20, 2016

On the physical constraints to the independence of Statistics Canada

Before this weekend, the biggest news relating to Statistics Canada had to do with the very high response rate to the 2016 census just concluded, 98.4% of those surveyed nation-wide responding. The news Friday that chief statistician Wayne Smith had resigned in protest caught many people off guard.

Canada's chief statistician has resigned in protest over what he says is the federal governments' failure to protect Statistics Canada's independence.

Wayne Smith says the government's decision to create Shared Services Canada and centralize all information technology services across government has compromised Statistics Canada's ability to fulfil its mandate.

"I have made the best effort I can to have this situation remediated, but to no effect," Smith said in a note to the National Statistical Council, which advises him. "I cannot lend my support to government initiatives that will purport to protect the independence of Statistics Canada when, in fact, that independence has never been more compromised,"

"I do not wish to preside over the decline of what is still, but cannot remain in these circumstances, a world-leading statistical office."

[. . .]

Shared Services was created by the previous government to centralize and standardize information technology across the federal government in a bid to save money. It has struggled to meet expectations with several agencies, including the RCMP and the Canadian Forces, which have complained of data centre crashes, red tape, bad customer service and unpaid bills.

Smith said he had issued a warning that ever since Statistics Canada began relying on Shared Services for its IT, the research department had begun losing control of the information it collects from Canadians through operations such as the long-form census.

In the note, Smith argued that Shared Services holds "an effective veto over many of Statistics Canada's decisions concerning the collection, processing, storage, analysis and dissemination of official statistics through denial or constructive denial of essential services."

"Statistics Canada is increasingly hobbled in the delivery of its programs through disruptive, ineffective, slow and unaffordable supply of physical informatics services by Shared Services Canada," he added.

(Smith's full statement is available here.)

I said "many people" above because reports about the failures of Shared Services have appeared periodically in the past year. On the 30th of January, for instance, the Ottawa Citizen published James Bagnall's article "Circuit overload: Why Shared Services Canada is struggling" looking at the problems of the service.

Shared Services is responsible for collapsing 63 federal email programs into a single system, consolidating nearly 500 data centres into seven and streamlining the government’s telecommunications. By 2020, if all goes well, the government will have invested more than $1 billion to modernize a ramshackle electronic infrastructure that is currently vulnerable to hackers and costly to run.

If it works, taxpayers can expect to save at least $60 million annually to run federal websites and online services. But on Shared Services’ present course, it may take years more than planned to complete this multi-faceted project – at a cost that can only be guessed at now.

It’s not going smoothly. Government workers are no longer surprised to receive notices that begin with the telltale line: “We have been advised by Shared Services Canada …” What usually follows is an explanation of which systems aren’t working at that particular time, with an estimate of when they’ll be restored.

Sometimes it’s an email issue. Earlier this week, for instance, employees at one of the smaller departments were informed that their emails were getting through to the public but not to government colleagues.

Other times, data centres are to blame. The failure of a power distribution unit two months ago at the government’s data centre along Aviation Parkway triggered an emergency shutdown at multiple government websites for days.

Briefly put, technological issues have combined with a far too broad a mandate to create a technological impasse. This July, CBC carried the relevant federal minister's CBC promises to make Shared Services work, perhaps ironically at the same time that it also reported on Statistics Canada's complaints that Shared Services was not meeting its needs for the 2016 census. After his resignation, Smith was interviewed by the CBC at length about the problems Statistics Canada encountered.

The Liberal government has inherited a Conservative technological initiative in government that is not working well at all in Shared Services, much as it has with the Phoenix payroll service for federal government employees. As with Phoenix, it has not made obvious signs of moving beyond this. The only conclusion to be drawn from this is the obvious: The institutional constraints to the independence of Statistics Canada that I have written about here in the past are not the only sorts of constraints. There are material constraints, too. As yet, there are no signs that these latter will be removed.