Chapter 6 B.C. outperforms nation in disposable income

Link: http://www.canada.com/vancouversun/story.html?id=e818e927-5900-4c3c-8c33-7e2c296fe972&k=20144

Summary

The main idea of this article is just as it suggests in the title. “B.C. outperforms nation in disposable income”. B.C. has the biggest gains in disposable income compared to their previous two decades. Consumes are spending more in B.C. for furnishing sand appliances, and even cars were sold in “record numbers”. We also expedited the strongest expansion nine a while of 3.6 per cent, mostly due to an increase in personal consumption by 5.3 per cent. The real gross domestic product of our province is better than the national growth rate of 2.7 per cent; we are only second to the crazy oil spurting province of Alberta. Personal disposable income grew, and in turn, caused an increase in per capita after-tax income which is 15 percent higher than three years ago. Our provincial economy is only expect to go higher by 3.6 percent in GDP, the strong employment and income growth is “expected to support household consumption”., and the amount of business investment and also the 2010 Olympics are expected to further boost our construction industry. One thing that was weak was our forestry industry, which is expected to drag B.C. down, but only slightly.

Relation to Ch.6 – Determination of National Income

The chapter outlines the component of aggregate demand. It is an important factor in determining our national income. The aggregate demand itself is determined on different factors or “components” of aggregate demand. One of the factors influencing the level of consumption expenditures is disposable income, what this article was about. The growth B.C. experienced is a positive thing, since higher disposable income would in turn create a higher aggregate demand. It is believed that disposable income is the most important factor, since we spend accordingly to how much we can afford. Putting money into the economy usual increases the GDP, and a little increase in B.C. we had this theory proven. The increase in our disposable income, was also shown as a increase in our GDP levels.

Chapter 5

'B.C.'s unemployment rate drops to 4.3%'

Link:
http://www.canada.com/theprovince/news/money/story.html?id=af000191-b361-4fae-8e29-31b74c12103e&k=87430

Summary

Statistics Canada reported that despite a large drop of almost 2,000 jobs, unemployment rates still declined 0.4 per cent. In May the jobless rate was 4.7, and in a short time period, it fell down to 4.3 per cent. Overall, there was a lost of 6,000 full time jobs, but this number was partially offset by a opening of 4,000 part time positions. Service Canada’s Vancouver office believes that the switch of full time jobs with part time jobs indicates a slowing job market in BC. The lower unemployment rate might have been due to a lowered participation rate. More job seekers are giving up their hunt for work. B.C’s participation rate was lowered from 65.7 per cent in May to 65.2 per cent in June. Growth in some sectors of BC grew like construction and health, while others fell like the manufacturing industry. Throughout Canada the same situation is also occurring, 4,600 jobs disappeared nationally. Alberta is a shinning star in all of this; their employment went up 3.9 per cent, which is three times as much as the rest of the countries average. The interest-rate decision by the Bank of Canada is uncertain, because of the new report that came in on the loss of jobs. “The bank has raised its short-term policy rate seven times since last September in an effort to prevent hot spots in the economy from flaring into general price inflation.”


Relation to Ch.5 – Economic Indicators

This short article shows us the importance of certain economic indicators. It serves as a great example seeing how interest rate decisions are somewhat decide upon employment and unemployment rates. Are the people in BC becoming lazier? Since the unemployment rate only reflects on those who are wanting to work but cant find work, if a person wanted to give up, they would make it seem like a good thing that the rate went down, falsify the data. Participation rate however, shows the per cent of the working age population either working or seeking work, it is a good idea to use this rate in conjunction with the unemployment rate. I don’t really get what’s going on with here, but Alberta seems pretty cool and attractive. If I end up aimless in my future and don’t go to post secondary then I guess going to work in Alberta would be an option. Workin’ in on an oil rig, it would seem like a strange lifestyle that I certainly know my parents wouldn’t approve of. Alberta seems to have it “going on”.

Chapter 4

‘Tax cuts expected in today's budget’

Link:

http://www.canada.com/theprovince/news/money/story.html?id=36b8c5ab-da6f-427e-a4f7-833209e4c6d4&k=11768

Summary

Like the title says, tax cuts are expected. The Finance Minister of Canada, James Flaherty, made several promises regarding the taxes families have to pay, saying that they, the families, are bearing an excessive tax burden. As well as promising “significant tax cuts in budget” he also promised “substantial” increase spending on Canada’s military. The new spending on the military budge will include $ 2 billion for three icebreakers and a deep-sea port, which will be used in the north of Canada. They want to let their presence be known, to more strongly show their claim on Arctic. Government spending will not only be bigger on military but also used to pay for some promises made by the previous Liberal government. This includes $ 500 million for West Coasts ports and transportation facilities improvements. "The GST and the child care and all these other tax cuts are going to cost a lot," said a senior Conservative source, "but they've also made a lot of spending commitments and they said to me it's going to be the biggest budget in a long time in terms of spending priorities." The GST was reduced by 1 per cent form seven to six per cent, and families were given $ 1, 2000 a year per child under six, for child-care payments. Taxes for businesses were also promised to be cut. Douglas Porter, an economist of BMO Nesbitt Burns, said the higher energy prices and higher borrowing costs would be easier for consumers to deal with, it will also put upward pressure on interest rates, increasing the borrowing costs.

Relationship to Ch. 4 – Government in Canada

Canada is the only G7 country that has a surplus for their previous fiscal years. Even though they had a surplus for that year, they still do have a national debt, which is about 500 billion dollars. It is necessary to lower the tax rate, since it is shown that many families must spend about half of their income on taxes, but that will greatly affect the Canada’s revenue from the taxes. Not only are they reducing taxes on the population, but they are increasing spending. It doesn’t really make that much sense to do both at the same time, spending more carelessly as well as lowering taxes. It is even more strange that the government promised “drastic” changes to spending and to the tax cuts. I don’t really think its that important to spend $2billion on the North, seeing as only a fraction of our population lives up there. Instead of spending more, I think we should apply the surplus to the national debt, which we are constantly losing money from interest on it.

Chapter 3

‘Police arrest 17 trying to retrieve 'secret plans' to privatize Canada Post’

Link:

http://www.canada.com/ottawacitizen/news/city/story.html?id=4492ec28-c571-43ba-a7ec-0d12177aa5de

Summary

Outside the Riverside Drive building, Canada postal services corporate headquarters stood around 150 protestors and a police barricade. They watched as Canadian Union of Postal Workers president Deborah Bourque and former president Jean-Claude Parrot, as well as 15 others, get arrested for trespassing after crossing the police barricade into the building. The 17 people who entered the building were after one thing, “secret plans”. They believe that Canada post is hiding "secret plans" that has Canada Post’s future agenda, including job cuts and eventual privatization. After the union boss and his party were arrested, they were issued fines and released. The protesters and arrestees believed they were trying to prevent Canada Post from privatization, and the closure of postal plants and offices around the country. This idea came from a planned closing of a Quebec City mail-sorting plant, which cost 300 workers their jobs. They think that it is the first of many plants to be close, and believe that corporate executives are hiding the plans to avoid public criticisms. "They've been wanting to privatize Canada Post for years and I think their plan is ultimately to downsize for the sake of profit," added Brockville postal worker Shelley Hamilton. "The Quebec closure is the start. I came here to deliver a message that we are intent on finding what their plans are." Of course, Canada Post denies the accusations, saying “We don't have any secret plans. They are asking for documents that don't exist”.

Relationship to Ch. 3 – Government in the Market

Canada Post is a Canadian postal service that functions as a crown corporation. Before the 70s Canada Post had a natural monopoly in the mailing services in Canada. Mailing services were a necessity that had to be provided throughout the country. But, in the 70s they had new competitors such as UPS, and later FedEx, loosening their grip on their monopoly, putting them in a defect. Privatization of Canada Post should be taken rather seriously, since the majority of our population uses their mailing service. There would be governmental control, for example, they might be able to raise the prices of the service. A private company’s interest is to make profit, and they would try to cut corners to reduce expenses. They might try cutting expenses such as limiting their services to certain areas, making them unavailable to rural or lowly populated areas, or there will be massive layoffs. I think that in the future, Canada Post would possibly become privatized. With the increasing amount of competitors in this market, there wouldn’t be a need for the government to run it themselves. I also think that if they were to become a privately owned company, it would be greatly regulated and restricted by the government. There is also a potential security risk in making it private, since the government cannot regulate what goes in and out as closely.

Chapter 2

‘The death of the electric car’

Link: http://news.bbc.co.uk/2/hi/uk_news/magazine/5245036.stm

Summary

In the past, the electric car was viewed as a futuristic solution to our air pollution, and to our over consumption of oil. But now that the dream of an electric car has become a reality, why does it still seem to be just a fantasy? General Motor actually came up with a decent eclectic car that could do 0-60mph in less than 8 seconds, with a top speed of 80mph, and has over a hundred mile range. In this article, it explained why the electric car didn’t take off as it was expected to. In a documentary entitled, “Who Killed the Electric Car”, Chris Paine, the maker of the film, blames the death of the electric car on “cynical and conspiring car makers and oil firms, as well as apathetic consumers and weak government and regulators”. Even though “weak government and regulators” and a part in the “demise of the eclectic car”, it was mostly due to the extremely limited customer acceptance of the car. Factors that were to blame for this were the price, the short lived batters, the heavy weight, and the “hideous appearance”, a comment that was made by Lindsay Tosh. Since electric cars were not taking off as they were expected to, companies like ford are promoting hybrid cars, cars that use both an electric motor and petrol engine, to conserve gas. The energy created from braking charges the battery for the motor in hybrid cars. But just like the electric car, “there are image problems for hybrid cars and a lack of incentive for people to move away from petrol-only cars”.

Relationship to Ch.2- Supply and Demand

This article relates to many topics covered in chapter 2, including supply and demand. Because there was hardly any demand for the electric car, supply and the price was affected. The relation between supply, demand, and the price are all interconnected. The low quantity demand for the cars gave it a higher price, because it would be more expensive to produce the cars in lesser quantities. Although hybrid and electric cars are an alternative to cars that use gas, isn’t high enough for consumers to start seriously thinking about switching. Oil is a still inelastic because there aren’t any good alternatives to it, electric and hybrid cars may save a couple dollars on gas, and it is more of an inconvenience to switch.

Chapter 1

‘Scarce fresh water an investment boon’

Link:

http://www.canada.com/edmontonjournal/news/business/story.html?id=60e8a4c1-b733-4f96-a85c-d723c1f4e221

Summary

Usable water has become even more valuable than oil, with over 70 percent of the world’s surface area is covered with water, how is that even possible? Unfortunately, 98 percent of the world’s water is saltwater, with only two percent as usable freshwater. Even worse, of the two percent that remains, only one percent of it is accessible, through lakes, rivers, and streams. The rest of the water is frozen in the polar ice caps. “The lack of usable water worldwide has made it more valuable than oil. The Bloomberg World Water Index of 11 utilities returned 35 per cent annually since 2003, compared with 29 per cent for oil and gas stocks” Water prices are only predicted to go higher and higher. As the world continues to grow, more resources are consumed. For example, an increase in population would need an increase in meat, and to produce more meat, there must be vegetation for the animals, and to grow more vegetation, it requires more water. Not only is freshwater used for human consumption, but also in industries, and largely in agriculture. The use for freshwater may rise 22 per cent by 2025, compared to 1995. “The United Nations estimates that by 2050 more than two billion people in 48 countries will be short of water.” Because of the growing need of fresh water, revenues in investment of water are expected to only increase; currently the water industry generates about $450 billion in revenue annually, following behind electricity and oil.

Relationship to Ch. 1 – Resources (land) and Scarcity

In chapter 1, we learned about the basic concepts of economics. The scarcity of a resource, like water, is a one of the most important concepts of economics. Without scarcity, there wouldn’t be any point of studying economics. Because there is a need or a demand for freshwater, and because there is a limited supply, there is a value on it, a value that will only continue to increase. Everyone needs water, it is essential to our lives. Even though in Canada, with our large chunk of the world’s water supply, for only one percent of the world’s population, we could still face a water crisis. Because of our extensive use of water for domestic, industrial and agricultural purposes, the supply of water could still not be enough to be sustainable in the future. We, as citizens of this world, each have a duty to conserve our resources as best we can.