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Home Policy Articles: Monetary & Capital Management

Market economies are based upon money. An important field of study with the realm of Economics and Political Economy concerns questions about the movement of money within regional, national, and international markets. What institutions govern money and investment? What techniques are best to use in managing the flow of money? Should there be fewer or additional barriers to the movement of money and capital across borders?

This section of focuses on the important political and economic debates around the macro-management of money.



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A Guide to the Enron Collapse

In A Guide to the Enron Collapse, Darren Puscas provides a condensed summary of the major events leading to Enron’s 2001 downfall. Puscas’s analysis includes potential trouble spots that should have been noticed before the collapse, a discussion of the role played by the broader economic crisis at the time, and an examination of Enron’s role in pushing negotiations to secure the General Agreement on Trade in Services (GATS) at the World Trade Organization (WTO). Additionally, Puscas considers whether a similar incident could happen in Canada and proposes lessons that might be learned specifically by Ontario Hydro, in light of the Enron debacle. The analysis concludes with calls for a structural overhaul of the American and Canadian corporate system, changes Puscas believes will make corporate finance more transparent and prevent similar incidents in the future.

Anyone Got a Plan?

As a result of Hurricane Katrina, governments worldwide have scrutinized their emergency response plans for natural disasters. However, Michael Mendelson cautions, they have failed to plan for another type of emergency: an economic slump likely to happen within the next two to three years.

Assessing the Record of Public-Private Partnerships

On May 29, 2002, the Canadian Centre for Policy Alternatives’ (CCPA) BC Office co-sponsored a public forum on the topic of public-private partnerships (P3s). Sylvia Fuller’s report summarizes the proceedings of that forum.

Bank Mergers: Why We Need Them, How to Get Them

In this backgrounder David Bond argues that the financial services sector, especially banks, is so central to our lives and well-being that any breakdown in its operation can have severe ripple effects on the entire economy. He suggests, however, that for most of Canada’s history, the financial services sector has been largely at the disposal of governments, which have been intent to use the sector to meet special interest demands.

Banking in North America

This brief report serves as the introduction to Mapping the New North American Reality, a series of brief articles written by Canadian, American, and Mexican policy experts exploring the nature of North American economic integration.

Building Prosperity in a Canada Strong and Free

This is the fourth part of former Ontario Premier Mike Harris and former Reform leader Preston Manning’s vision for a stronger Canada. In this report, Harris and Manning discuss optimizing the size of government, reducing taxation, and eliminating inter-provincial trade barriers and excessive regulation.

California Shorts a Circuit: Should Canadians Trust the Wiring Diagram?

Mark Jaccard’s article focuses on the California energy crisis of 2000-01 in the aftermath of its electricity reforms, considers the apparent failures of those reforms, and suggests lessons that can be learned, from a Canadian perspective. Jaccard begins by outlining the debate surrounding privatization of the energy sector, arguing that “sceptics” who believe privatization will inevitably lead to California-like crises are wrong. Rather than demonstrating an inherent flaw in the reforms being undertaken in Ontario and Alberta (occurring at the time of his writing), Jaccard suggests the California crisis should be viewed as an example of the “large risks of market design.”

Changing the Nature of Governance to Create Value

In this commentary Allaire and Firsirotu discuss three different modes of corporate governance: fiduciary, shareholder rights, and value-creating. They argue that after a period of generally slack governance standards, there are undeniable intrinsic benefits to tightening up the fiduciary and monitoring role of boards of directors. They point out that fiduciary duty has come to define the new governance orthodoxy.

Counting the Cost: Impact of the Rising Loonie on Western Commodity Exports

The strong rise in the Canadian dollar vis-à-vis the US dollar since the beginning of 2002 has created a serious challenge for many businesses that rely on international exports. According to Todd Hirsch, because the Canadian economy is so dependent on exports, the soaring loonie has led most economic forecasters to revise real GDP growth downward in 2004.

Debt Accumulation, Debt Reduction, and Debt Spillovers in Canada, 1974-98

To a certain degree, the amount of debt a government accumulates is beyond its control. Recession means a loss of tax revenue, an increase in certain expenditures and an increase in debt. Debt accumulation from this source should, however, be of limited duration.

Do we still need to regulate telephone services?

The Canadian Radio-television and Telecommunications Commission (CRTC) has ruled there is insufficient competition in the telecommunications industry. In December 2003 the CRTC proposed handicaps on the traditional telephone monopolies in order to allow new companies to enter the market.

Economic Freedom of North America, 2004 Annual Report

This Fraser Institute publication is the second edition of the annual report, Economic Freedom of North America.

EPCOR: A Study of Ownership, Accountability and the Public Interest

This report discusses the many characteristics of EPCOR that make it a company with many contradictions. Diana Gibson points to the fact that EPCOR is owned by the City of Edmonton, yet is not answerable to the public, and that it is not a private company yet it has stock on the Toronto Stock Exchange and operates in areas outside of Alberta (including the US). Gibson considers the unique positioning of EPCOR in light of accountability and public interest. In her opinion EPCOR's shortage in these areas is of immediate importance because the City of Edmonton is considering handing its drainage system over to EPCOR. Gibson suggests a number measures that could improve accountability.

EPCOR: A Study of Ownership, Accountability, and the Public Interest

As Diana Gibson explains, EPCOR was founded on Edmonton’s power and water utilities, yet operates in other provinces and in the US.

Exploring Canada’s Innovation Character: Benchmarking Against Global Best

In this report, the Conference Board of Canada presents a framework for understanding innovation, an evaluation of Canada’s innovation performance, and suggestions for future action that can be taken in this regard. An international comparison is used to assess Canada’s global standing in innovation.

Exploring the Promise of Asset-Based Social Policies: Reviewing Evidence from Research and Practice

This paper explores the potential benefits of polices which aim to increase assets for low income earners. The paper includes discussions of asset-based polices, the challenges they entail and future directions for research in the area. Throughout the paper consideration of poverty reduction and social exclusion are a focus.

Financing Canadian Innovation: Why Canada Should End Roadblocks to Foreign Private Equity

In this article, Stephen A. Hurwitz and Louis J. Marett attempt to answer the question: why do promising Canadian ventures attract only one-third of the capital of their US competitors in the North American marketplace?

Financing Entrepreneurs. Better Canadian Policy for Venture Capital

Douglas Cumming asserts that the development and maintenance of a strong economy depends, in great part, on innovation and the role of entrepreneurs.

Firm Foundations: Putting Private and Public Foundations on Level Ground

In her paper, Abigail Payne suggests that charitable organizations play an important role in Canadian society. They provide beneficial goods and services not offered by governments or the private sector. However, Payne also points out that these organizations rely on private donors, whose contributions help to fund the goods and services provided by these foundations. Governments encourage donor support by providing charities with favourable tax status. According to Payne, however, these tax exemptions raise a number of issues.

Found Money: Matching Canadians’ Savings with Their Infrastructure Needs

William B.P. Robson argues that Canada’s need for investment in infrastructure to meet the demands of growth and aging developments can be met by using the savings of private Canadians.

Fringe Banking in Winnipeg’s North End

This study, by Buckland and Martin, explores why fringe banks in Winnipeg’s north end are growing, when they charge higher fees for services that do mainstream banks. They focus on why clients use these services, and whether fringe banks earn excessive profits. The authors present contrasting views on the legitimacy of fringe banks and outline results from recent studies on fringe banking in Canada and the US.

Future Taxes on Pension Savings as a Government Asset

In this article Jenna Robbins and Michael R. Veall attempt to evaluate the revenues the Canadian government can expect to gain as a result of investors choosing to withdraw funds from their Registered Retirement Savings Plans (RRSPs) and Registered Pension Plans (RPPs). The authors point out that much of the debate about fiscal policy is framed by the debt, and too little attention given to rising assets. To “the asset side,” Veall and Robbins add what they estimate is around $200 billion of RRSP and RPP accumulations, which are rarely accounted for (as of 1999).

Give Canadian Workers the Tools to do the Job! Why Canada Needs More Robust Capital Investment

Robin Banerjee and William B.P. Robson argue that Canada’s capital investment is lagging behind other OECD countries.

Good Policies for Bad Times

This Backgrounder by Shay Aba follows a seminar convened by the C.D. Howe Institute on February 1, 2002 pertaining to the themes of Canada’s “current and future economic conditions,” as well as “the roles of fiscal and monetary policy.” Those who attended the seminar called for moderate to average rates of growth, in concert with the downturn (at the time) in the global economy, and its anticipated recovery. With demand for stocks, and therefore stock prices, expected to rise, most attendees agreed that monetary policy, rather than fiscal policy, should be used to smooth out the business cycle.

Improving Canada's Business Environment and Competitiveness

This report follows a discussion of the Government of Canada (GoC) document Advantage Canada: Building a Strong Economy for Canadians, which accompanied the November 2006 fiscal update.

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