Canadians Get Tax-Free Savings Account (TFSA) in 2008 Budget
The new Tax-Free Savings Account (TFSA), revealed in the Conservative 2008 Budget starts in 2009 and gives Canadians aged 18 and older tax free contribution room of up to $5,000 annually (from their taxable income). The investment income, including capital gains, earned in a TFSA will not be taxed -- even when withdrawn.
The plan also allows an investor to withdraw funds from the TFSA at any time and for any purpose. The withdrawal amount can then be put back at a later date without reducing contribution room for that year. Unused room can be carried forward to future years.
TFSA Good For Retirees
Foreign Exchange Markets: Devaluation and Revaluation
We are re-posting this popular article about the foreign currency and the devaluation and revaluation systems. After all, what's the point of trying to predict foreign exchange markets (FOREX) if you don't even know how the market moves and reacts to change? The world's largest market that is open 24 hours does react to certain changes and you need to know how to watch and interpret these movements. Why let some third-party web application make predictions for you when you can do the work yourself?
Devaluation and Revaluation of Currencies
The Pros of Import Quotas In Comparison to Tariffs
This is a response to an article from about.com about the cons of import quotas, we decided to suggest a few pros and expand on some more cons. Now don't get me wrong, the article brings up 3 smart points, but let's not all hurl insults at import quotas. Here are some more cons and some pros.
Using his analogy of cricket bats (why not something more useful like barley? barley=beer, anyways,) if the government used an import quota they are in fact restricting the supply of bats domestically. That means the local producer benefits from less competition, higher prices for his goods, but the consumer will in turn pay more.
Read the rest of this entry »
New Forum At DiscussEconomics - Ask Your Questions
A new economics questions forum has been launched here at DiscussEconomics. We noticed that a number of people like to use the board to ask questions about economics, assignments, or exams. We have created a new forum just for these kinds of posts.
Feel free to post your questions free of charge and have economists take a browse. We also ask you to add to the board by responding to some posts yourself as well! So visit our Economics Questions forum today and start posting your questions.
OPEC’s Response to Alberta Oilsands Market Share - Part 3
This is part three of a three part series exploring the impact Alberta oilsands projects can have on world market price as dictated by OPEC. Click here for Part 1 and part 2.
OPEC's Response to an Expanding Oilsands Market Share
If the parameters stated above hold true, what particular market reactions could one expect from OPEC? If Alberta displaces the exports of Venezuela and Saudi Arabia, this will account for just over 4% of total OPEC production. Therefore the new question is: will OPEC attempt to recover their lost market share? Or is it possible that emerging markets elsewhere such as India or China will substitute for the lost market. It is impossible to speculate what future market trends will be, whether developing markets will in fact meet expectations when it comes to crude oil demand. One thing, however, is certain: OPEC will attempt to recover any losses if the US market was the most profitable market for them, and if it was the most accessible. Venezuela may be concerned with their diminished share; 2002 US exports accounted for about 37% of total national production. This number reaches almost 50% with the increase in future US demand, however, diminishes to about 42% once the oilsands 'steals' their share. Finding alternate markets with ease may be difficult for Venezuela in comparison with Saudi Arabia due to geographic location. Despite ideas OPEC may be willing to forego production in 2012 for future production, the loss of the Venezuelan market share may be enough to elicit a response from OPEC.
Read the rest of this entry »
Canadian Housing Market to Cool - Alberta Included
Alberta's housing market is about to slowdown which should improve affordability in 2008, according to
a new housing report issued by RBC Economics. Since November, selling a house in Calgary has been difficult with a the slow buying period and overall lower demand.
RBC currently calculates the need for pre-tax household income for a detached bungalow to be 43 per cent, the standard two-story home to 46 per cent, and the standard townhouse to 33 per cent. The standard condo was the only segment to witness affordability improve to 28 per cent.
Read the rest of this entry »
Alberta Oil sands vs OEPC Market Supply and Price - Part 2
This article is a continuation part two of three. Read part 1 here:
With a viable world market within striking distance, I will argue that the only method for inducing a change in OPEC behaviour is to 'steal' import supply from the United States. It is unlikely that oilsands products will make it to any other world market due to logistic costs. Shipping oil to the nearest transport hub, likely in British Columbia, would be the only alternative for sending crude to the market abroad. It is more efficient to create and build upon the existing transportation system directly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import the lowest cost product. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of the oilsands export market will hinge upon the producer's ability to maintain an affordable product under market conditions. Presently this is the case, high market prices support the market for expensive bitumen exports.
Canadian January Monetary Policy Report
The Bank of Canada released its January 2008 Monetary Policy Report Update. Highlights include expectations that the Canadian economy will continues to operate above its production capacity, despite some slowing in growth in the fourth quarter of
2007. Both total and core inflation have been lower than projected in the October Monetary Policy Report, largely reflecting a price-level adjustment related to increased competitive pressures in the retail sector stemming from the level of the Canadian dollar. Financial conditions have deteriorated since October, leading to tighter credit conditions in industrialized countries. Given this, and a deeper and more prolonged decline in the U.S. housing sector, the U.S. economic outlook for 2008 has been revised downwards significantly.
Read the rest of this entry »
The Economics of Property Law
Here is an article originally launched to the ezines but now we've decided to put it on our own blog. It deals with Coase laws and the economics of property law.
The lack of defined property rights leads to the abuse of certain activities as a result of a differing perceptions regarding how choices affect marginal private benefits and social costs. How does this impact society and what does this say about how private enterprises make choices? let's use the example of pollution and the effects on property owners.
Read the rest of this entry »
Alberta Oilsands vs World Oil Market Supply and Price
Here is an undergrad paper written by one of our members exploring the viability of Alberta oilsands impacting the overall world market price for crude. We're now featuring it on our blog after the article spent time in the ezines. Enjoy, any comments are always appreciated.
Abstract: This paper will investigate the impact production of the Alberta oilsands reserves may have on the world oil market and how the OPEC cartel could respond to this new supply. The primary market used in examples is the relationship between the United States, Alberta, and OPEC. The effect lost world oil market share and subsequent OPEC responses will also be investigated. Crude oil is the only resource under consideration within this paper despite other resources available within the oilsands resource.
Read the rest of this entry »
