Chapter 5 -- Economic Indicators

http://www.vancouversun.com/Business/loses+jobs/1263615/story.html

Lost Jobs In BC

Summary
In January’s worst record, 68,000 BC full-time workers lost their jobs. From Statistics Canada said that most of these workers were from manufacturing and construction sector and was counterbalanced as an equivalent by a gain of 33,000 part-time positions. BC’s unemployment rate has risen from 3.8% in March 2008 –all-time low record to 6.1% as of now. The highest unemployment rate known in BC records was 14.1% in 1987. The Canadian economy was affected by a lost of 129,000 jobs in January which consisted most of full-time workers.

Connection
In Canada, the employment rate statistics are released every month. The unemployment rate is defined as the percentage of the labour force that is not working, yet is looking for work. The increase in unemployment rate is not necessary mean it’s a good indicator of the economic hardship that Canadians are facing. In Canada, the employment insurance program provides monetary benefits to people who cease to be employed. Those eligible to collect benefits are people who have been terminated or laid off from their job, who are able to work because of illness or who qualify for maternity benefits. In order to qualify, a person must have been employed and have made contributions to the employment insurance fund. The contributions are automatically deducted from earnings at the person’s place of employment.

Reflection
I believe that the unemployment rate will continue to rise since the recession has begun at the start of 2009. There are many factors that influence this change, which can include changes in the composition of labour force, changes in the employment-insurance program, changes in oil prices, changes in technology and the changes in the pattern of world trade. I think that the employment insurance program is regarded as an income supplement and not as temporary income assistance between jobs. The solution to the unemployment probably depends on the number of vacancies available. If there are no jobs available, then jobs will need to be created. If jobs are available, then a way will have to be found to match the unemployed workers to the available opportunities.

Chapter 4 -- Government in Canada

http://www.vancouversun.com/Sports/Olympic+security+costs+soar+high/1314715/story.html

http://www.vancouversun.com/Sports/Olympic+security+costs+soar+high/1314715/story.html

An Increase in Olympic Security Cost

Summary
An estimation cost of $900 million to provide Olympic security will be spent for 2010 Winter Games in Vancouver. This amount has surpassed all sports venue construction and as well as operating budgets to host the 1988 Winter Olympics in Calgary. Before the games end, the 2010 security bill will likely place an increase in inflation. It includes a future estimation of $175 million with two-thirds approached from Canadian taxpayers. Police officials say that they will do whatever it takes to provide the Olympics safe with security.

Connection
Taxes are imposed in order to provide revenue for government and also to influence economic conditions. The effect of the taxation level has implications for the economy. Canadian taxpayers are placed the burden of paying more money through taxes to makeup the cost of the Olympics. Therefore as a response, inflation –defined as an increase in overall level of prices, will occur as a result to help increase the revenue collected by the government. When price increase, consumers pay in taxes also increase and along with that, an individual’s income will increase as well. In Canada the personal income tax is a progressive tax, as wages and income increase, individuals move into a higher tax brackets and pay a greater percentage of their income in taxes. If wage increase only keep up with inflation, the individual would be worse off than before, since a greater percentage of the individual’s income is now paid in taxes.

Reflection
With the enormous expenses due to the Olympics, the economy will the likely face recession. Under public pressure, I think that indexing would be a good time to come in because it can reduce the high tax amount in the rate of inflation. In order to adjust for price increases, personal exemptions will increase annually in line with inflation. Although, it would benefit the individuals in indexing of personal income, the government will result a loss of revenue. If indexing were removed from the tax system, government tax revenues would increase right along with rising prices. Hopefully, indexing can control the government against the possibility of profiting from high inflation.