Posthaste: Canada’s business climate slips in World Bank ranking, how aliens see our economy — and so long, Super Mario
Premier Jason Kenney is calling his first budget (that will be tabled today), the “most important Alberta budget in 25 years” — and it will be one to watch. Kenney warned in a speech last night that it will not be “an easy budget.” With a planned 2.8% cut to public spending, it won’t be as bad as the 18% cuts of Ralph Klein’s government in the mid-1990s, but all seem to agree it will hurt. A report commissioned to look into the province’s finances found last month that Alberta needed to cut $600 million in spending if there was a chance of balancing the budget by 2022-23. “Without decisive action, the province faces year after year of deficits and ever-increasing debt,” it said. All this amid a prolonged recession. Premier Kenney and his finance minister Travis Toews have their work cut out for them.
World Bank has released its annual Doing Business survey and 115 of the 190 economies made it easier to do business — Canada wasn’t among them. New Zealand took the top spot for the fourth year in a row followed by Singapore, Hong Kong, Denmark and South Korea. The United States came sixth and the U.K. eighth despite fears about Brexit’s impact on business. Canada ranked 23rd, but its score slipped 0.1 percentage points. The annual survey examines changes in the regulation of business activity to determine if it is supporting efficiency and the freedom to do business. Canada got negative points for resolving solvency, and an increase to fees for construction permits and registering property. The top 10 countries most improved were Saudi Arabia, Jordon, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India and Nigeria. The World Bank said together, they implemented 59 regulatory reforms in 2018/19, accounting for a fifth of all the reforms recorded worldwide.
And so long, Super Mario. European Central Bank president Mario Draghi released his last rate decision this morning after eight years of holding the eurozone together, whatever it took. Since he took office on Nov. 1, 2011, his accommodative policy pulled the eurozone out of recession, weathered the Greek and European debt crises and helped create 11 million jobs. The ECB held its rate today, putting Draghi in the same place he started, still propping up a struggling currency bloc. Former IMF boss Christine Lagarde takes the helm on Oct. 31.
Here’s what you need to know this morning:
The first provincial budget by Alberta Premier Jason Kenney’s United Conservative government to be tabled
CMHC will release its 2019 Housing Market Outlook Report
European Central Bank releases interest rate decision (7:45 a.m. ET)
Rotman School of Management holds 5th annual conference in Toronto on Machine Learning and the Market for Intelligence. Speakers include Alibaba President Michael Evans and Rotman dean Tiff Macklem among others
Today’s data: U.S. durable goods orders, U.S. new home sales
If aliens were ever to approach Earth from its dark side, they would already know a lot about the global economy even before they reached the atmosphere, according to IMF economist Jiaxiong Yao. Economists are now using the night sky to calculate economic activity and GDP of regions, especially conflict areas where reliable data can be hard to get. In the image below, for example, you see the stark difference in activity between North and South Korea in 2019. The two below that show the growth in Asia’s activity between 1992 and 2013. Rich countries tend to be brighter than less so, but it’s not always that simple. The night sky over a developing nation can be brighter because of the rapid infrastructure building below. The more an economy grows the brighter it appears. The night lights of advanced nations, on the other hand, grow only about half as fast as GDP because the economy is powered by science and technology innovations which give off less light. Other curiosities: On a per capita basis, Nordic countries are the brightest spots on earth, while Japan appears almost as dark as Syria before Arab Spring because of the energy conservation and high population there.