Your turn

TURN modified

When I first lost my mind and went to Parliament twenty-six years ago, people bitched about the government. Spending, they said, is out of control.

That year (1988) the feds spent $132 billion running the country, and the national debt was $322 billion. This year Ottawa’s shelling out $279 billion and the national debt is $649 billion. Spending has doubled, but so has the debt. This is not good.

In 1988 there was rampant inflation and mortgages were 12%. People and government struggled. Today there’s almost no inflation and rates are under 3%. We struggle still. Personal debt is historic. The current government has been spending more than it takes in for the last six years. And these are conservatives. This is not good.

Well, according to Joe Owe, our almost-new finance minister, the country will run a small surplus next year (even though almost all the provinces are in deficit). Strangely, 2015 is also an election year. And now Joe is asking Canadians this question: how should we spend the surplus?

In fact, the feds have released a video aimed at high school students posing exactly this query. Here it is:

So, have you ever wondered where all of the money goes when it reaches Ottawa? You should. We are a highly-taxed people, certainly compared to the Yanks. About $26 billion a year is burned up paying interest on the accumulated debt, and the rest is consumed by civil servants, transfers and program spending.

Here is a complete list of that spending for the current fiscal year, by department. You will see, for example, that $18.6 billion is spent on the military, $2 billion on CMHC, $3.8 billion collecting taxes, $2.3 billion on prisons, $1 billion on the CBC, $51.6 billion on employment and social development (mostly transfers to the provinces), $87.6 billion by Joe’s department (including the debt interest), $5.3 billion on foreign affairs, $8 billion on aboriginals, $2.6 billion on the Mounties and $49 million on Enterprise Cape Breton.

That’s just a sampling. Go poke around for yourself.

The point is, this is your money. The MSM never actually tells you where it goes. Nor does your MP. Instead, each time a budget is released reporters focus on the goodies dispensed or any new personal taxes to be imposed – because that’s the spin they’re given.

Few people end up knowing the national debt has doubled or that the current government recently ran the worst deficit in national history, spending $55 billion more in one year than was collected. Yes, it’s Keynesian economics at work (spend more in the bad years), but let’s go back to Joe’s question: what do we do now? If the economy is limping ahead, taxes are rising and we may have a small surplus, what’s to be done with it? Spend it, or cut tax with it, or use it to reduce debt?

This is what he’s asking the students to do, without providing them a summary of current spending. Joes says he will seriously consider their feedback. Go figure.

And now I’m asking you. The surplus next year will be $1.9 billion, or 0.68% of the budget. It would have been a lot more, but the government just announced an income-splitting program for middle-class couples and $60 more monthly for child care. There is no provision for debt repayment.

Did I mention there’s an election next year?

Well, I know Joe. And if the students get to say something, we probably should, too. Give me your thoughts. I’ll pass them on.

By the way, back in 1988 I produced a worksheet for citizens listing all the federal spending, providing them a chance to design their own budget. Over a hundred MPs adopted it, and mailed it to their constituents. Finance minister Mike Wilson ended up with about a million of them, and never looked at me the same way again.

He decided we needed the GST. Oops.

250 comments ↓

#1 AsiaKid on 11.23.14 at 12:58 pm

WOohoo First!!!!

#2 Diana Young on 11.23.14 at 12:59 pm

I always enjoy reading your perspective on the economy. It is difficult to ask high school students their opinion when they haven’t been taught the basics of financial literacy. When my otherwise brilliant nieces and nephews graduated from college and university they still did not understand what net worth mean (you mean it is actually more important how much you are worth than what you earn?) I was motivated to write a book geared specifically at this age group. Turns out that it became a #1 Amazon best seller because the parents, grandparents were buying it as gifts, but reading it first. The overwhelming feedback I received was that they didn’t understand it themselves so were unable to teach their kids. This to me is the saddest statement, because if we don’t understand how to manage our own “small government at home”, how can we be expected to understand the staggering amounts that the government tosses around. Enough of a rant. I look forward to reading your newest book. Cheers!

#3 Paul on 11.23.14 at 1:00 pm

This was March 2008 where are we now?
http://www.torontolife.com/magazine/2008/3/

#4 mishuko on 11.23.14 at 1:05 pm

They say knowledge is power and this is it in numbers now. Unfortunately I agree with some bloggers here that they are ‘schooled’ in a ‘farm’ type scenario and the majority of them won’t even know what we spend on or what deficit/surplus actually means.

I highly doubt they would understand that a surplus doesn’t mean the debt is gone. Something I didn’t even understand until a few short years ago.

I will hazard a guess, they will be asking for higher education credits to subsidize their post secondary education… Cause apparently everyone needs the new iteration of the highschool diploma.

As for what we should do? Aim at restructuring the CHMC or reduce our national debt. Or heck… reduce the provincial debts.

#5 Linda on 11.23.14 at 1:06 pm

So pay down the debt, already. Yes, the amount of the projected surplus is teeny compared to the debt, but one must start somewhere. And from small acorns do might oaks grow.

#6 joe on 11.23.14 at 1:10 pm

49 million for Enterprise Cape Breton…..cheap shot Garth.

How so? One small example of ‘inconsequential’ spending. I like Cape Breton. — Garth

#7 T.O. Bubble Boy on 11.23.14 at 1:13 pm

So, what you’re saying is that we need Rob Ford as Prime Minister?

(kidding)

#8 T.O. Bubble Boy on 11.23.14 at 1:19 pm

Looking at the breakdown, over half of Federal spending goes to “Transfer Payments”… so, budgeting and spending problems can’t be fixed at the Federal level alone.

#9 earthboundmisfit on 11.23.14 at 1:20 pm

The military could, and should, be given about a 6 billion haircut. We’ve become far to big for our britches under the Harpocrites.

#10 Socrates on 11.23.14 at 1:22 pm

Set an example for all and pay down the debt with it.

#11 Roman on 11.23.14 at 1:27 pm

It looks pretty miserable compared to the south neighbour budget.

#12 Quebec is Great on 11.23.14 at 1:27 pm

1. Decriminalize marijuana use (that alone should cut prison population by half) and tax it (that should bring in about 1 billion a year.. no? ).
2. Completely overhaul CRTC so it is a functional body with the interest of the people as first priority.
3. Overhaul Employment Act. As long as its easier to promote incompetence (vs fire) in this country, all government services, public services and private companies will be expensive, ineffective and unable to adapt.
4. Pay politicians a lot more, then kill them by firing squad if they are ever found guilty of corruption or even just failure of stewardship responsibility. I like this idea also for securities and banking regulators and other regulatory bodies such as water boards, etc.
5. Online voting. Perhaps even some voting capabilities directed straight to the people instead of leaving it up to MP’s / MPP’s

8 billion on the Aboriginal population seems pretty high .. is this level of spend temporary or sytemic?

my two cents anyway

#13 Tom from Mississauga on 11.23.14 at 1:30 pm

Ah, no inflation Garth? I don’t think so. Maybe globally.

Great question here. It’s never been harder for families to raise small kids. The Cons set up Trudeau perfectly and he totally took the bait.

#14 Quebec is Great on 11.23.14 at 1:31 pm

Ya, I probably pushed it a bit on point 4, but you know, crime seems to pay right now in politics.

#15 Nacho Cheese on 11.23.14 at 1:51 pm

$132 Billion in 1988 would be $230 billion in 2014 according the to inflation calculator from the bank of Canada. The current $279 billion isn’t that far off, especially considering the extra costs associated with the growth in population in the last 26 years.

The salient point is the debt. Its doubling demonstrates the inability to finance the country on revenues. — Garth

#16 Squad on 11.23.14 at 1:51 pm

Use it to pay down the debt. It would be a start.

#17 Herb on 11.23.14 at 1:51 pm

” The surplus next year will be $1.9 billion, or 0.68% of the budget.”

Even a Conservative Minister of Finance should be able to recognize a “rounding error” and know how to deal with it without engaging alibi “focus groups”.

The more interesting question would be how to handle the more likely deficit, but that’s pretty well established: just add it to the national debt.

#18 Shane on 11.23.14 at 2:00 pm

Garth, first on the list no brainer get rid of CBC why are we paying 1 billion for a news channel???

#19 Nwo on 11.23.14 at 2:01 pm

Compare that to our neighbours.
75 B/month in “easing”

#20 crowdedelevatorfartz on 11.23.14 at 2:01 pm

Use the budget excess to pay severance to 30% of all govt civil servants. That would save money in the long run.
Geez only $49 million for Enterprise Cape Breton? A mere drop in the bucket compared to the 1 billion shovelled into propping up Sysco Steel over its pathetic lifetime. Where’s Billy Joe MacLean when you need him?

#21 JacqueShellacque on 11.23.14 at 2:01 pm

In the same way that Prussia could be described as an army that had a nation, Canada can be described as a government that has a country. The biggest problem is that almost everyone accepts, even desires, government to be in every facet of their lives. At my most pessimistic, I believe we’ve reached a critical mass, where government, its spending, and bureaucracy are so omnipresent that people can’t do anything without it. Government in Canada at all levels has become a self-justifying, metastasizing beast. This will inevitably squeeze the middle class and have a huge impact on the development and morality (yes, that still matters) of society. The rich can avoid taxes, which will either reduce their own societal participation, or they’ll gravitate to the power that running bureaucracy promises. The poor and lazy won’t work and hence won’t pay any taxes at all. Hard to believe that this is (as the eco-set like to say) ‘sustainable’ in the long term. What we first need to talk about is that there are consequences to everything, including interventionism. So long as we allow all those who feed off the teat of public funds in this country – bureaucrats, sociocultural “elites”, public sector workers, politicians – to claim they are the only bulwark between a decent society on one hand and laissez-faire Max Max libertarianism on the other, things will get worse. At worst, incrementally so, so that it’ll be too late to do anything about it once anyone notices.

#22 Joseph R. on 11.23.14 at 2:03 pm

We should spent that 1.9 billions in space exploration.

#23 crowdedelevatorfartz on 11.23.14 at 2:14 pm

@#19 Nwo

Ummmm, the QE ended last month. Or did you miss that news month?

#24 Cato the Elder on 11.23.14 at 2:33 pm

The government IS NOT A BUSINESS. It should not be ‘running a profit’ nor should it be ‘running a deficit’.

It should perform the tasks it is CHARGED to do, and collect the minimal amount needed.

If surpluses are had, they should be returned to the taxpayer. They shouldn’t try to find some other nonsensical way to spend it – because NEXT year they will try to justify spending in that area again! It will become a new obligation!

What the hell is the matter with people? Do we not learn from history? No one needs to try to figure this out by themselves. Open a book. Read.

Deficit spending in recessions IS THE WRONG THING TO DO. Recessions are the result of a misallocation of capital DURING THE BOOM. The moment you inflate the currency to ignite an upswing, you have already distorted the economy and GUARANTEED a future recession.

How many times does it take before people will learn? They have been pumping trillions into the economy to prop up financial asset prices (to the detriment of the middle class) to no avail for years. They tried it during the great depression and it didn’t work. FDR was DUMB ENOUGH to think destroying viable crops was a good idea! All to ‘increase’ prices! How are higher prices good for consumers?

Prices MUST FALL TO A LEVEL commensurate with demand. Once they do, people will start buying again. The market is sending signals when prices start to fall – it is saying ‘this is too expensive. the price must drop before people will buy it again’. If we understand that, then propping up prices with fiscal stimulants, bailouts, and money printing will PROLONG the problem.

The Austrian economists are right. Keynes is wrong. Keynes is one of the most evil people to live in the 20th century. Look at all the wars his demented ideology has caused. Look at all the poverty. The destruction of the middle class and the debt slavery of the west ARE ALL HIS FAULT!

WAKE UP! It’s all intertwined. These things don’t happen in a vacuum. Politicians are all collectively under his spell. It’s allure is because Keynsian economic policy enhances the power of the state. Politicians love power. The middle class is a result of a dissemination of power, a decentralization of decision making to the local level. It is NOT compatible with Keynsian philosphy.

The Austrians were right!

#25 suave on 11.23.14 at 2:41 pm

Let me understand this clearly:

$18.6 billion is spent on the military,
$2 billion on CMHC,
$3.8 billion collecting taxes,
$2.3 billion on prisons,
$1 billion on the CBC,
$51.6 billion on employment and social development (mostly transfers to the provinces),
$87.6 billion by Joe’s dep. (including the debt interest),
$5.3 billion on foreign affairs,
$8 billion on aboriginals,
$2.6 billion on the Mounties and
$49 million on Enterprise Cape Breton.

BUT:

$26 billion a year is burned up paying interest on the accumulated debt,
and the rest is consumed by civil servants,
transfers and program spending.

And teachers who make 80k per year and
will retire with 60K annual pension.
And because they don’t even think of working flax hours like before 8 am we have massive grid lock in GTA
as chain reaction is passed on parent’s working hours.
My observation is very first Monday after school is done gridlock eases substantially..

since i am stupid what mathematics and economic laws can sustain this ?

somebody explain me please…

Marc please reply i like your posts…you should open your blog.

As I said, the examples I gave were only that – examples. Check the link for the full spectrum of federal government spending. Teachers are provincial employees. — Garth

#26 Kevin on 11.23.14 at 2:45 pm

let’s start by getting rid of the CBC. What a waste

#27 markymark on 11.23.14 at 2:45 pm

Increase the TFSA limit to 10,000 bucks!!

Please……………

#28 suave on 11.23.14 at 2:49 pm

What to do with tax Surplus:

Divide surplus by SIN that worked in Year that suprplus is made…
send check to people.
they will deposit to bank they trust -love
bank will have to beg them to bussiness.
government end up clean and uncorrupted

ANY other spending is suspicious because lobbyists are still roaming around free and are nor executed or jailed.

plus do not insult us here with honest government and other stories as we know by now that there is no innocent government not liberal not PC not NDP…

worked for Swiss we colud be second in the world to do this..

hahahaha am i stupid or what….hahahaha

#29 sayitaintso on 11.23.14 at 2:50 pm

The salient point is the debt. Its doubling demonstrates the inability to finance the country on revenues. — Garth
_______________________________________

sort of like the US.

Except we don’t run the world. — Garth

#30 saskatoon on 11.23.14 at 2:54 pm

why does the canadian government borrow money at all?

it has money creation power…without interest.

#31 zoe on 11.23.14 at 2:55 pm

Are you sure we’re taxed more than the US? I have a few friends who have moved there and who are finding that when you tally up state, county, federal AMS healthcare, they’re worse off, and are wanting to come home before they have kids and/or hit their 40s and start needing real medical coverage. Taxes for small businesses are also surprisingly high compared to CCPCs.

#32 zoe on 11.23.14 at 2:55 pm

(Should be “and healthcare”. My autocorrect is insane.)

#33 Zoe on 11.23.14 at 3:02 pm

#12 Online voting won’t be cheaper; do you realise how much the US spends on those stupid machines and they don’t even need network infrastructure or decent online security. I work in tech, and online voting scares me. Hackable, DDoSable, fraudable (don’t think they wouldn’t). A simple paper and pencil and free church basement and a fee scrutineers is so much cheaper than the infrastructure to handle the same number of votes online, not to mention the exclusion factor of poop people who would vote where? No, keep it simple and safe.

#34 Zoe on 11.23.14 at 3:02 pm

POOR PROPLE. My computer is a snob.

#35 Nwo on 11.23.14 at 3:08 pm

@crowdedelevatirfartz
But what debt did it leave?

#36 RealistvsExtremist on 11.23.14 at 3:15 pm

Great article except for the “no inflation” part.

I actually just figured something out. Now there is NO WAY that any elected dictator (Harpo right now) would agree to this……but taxes should be a form of listed inflation.

You will have people that say “hey the gst is lower” blah blah blah…..but when you look at the combined amount of taxes, fees, levies, surcharges blah blah blah I think everyone an agree taxes are way up from 1988. Why do you think women MUST work while institutionalizing young kids before school?

And to continue with inflation……I guess Garth is one of those strange fantasy creatures that does not buy heat, phones, pay property taxes, buy food, pay some kind of medical plan, use toll road bridges, pay phoney “environmental charges – which are on freaking everything today”, buy gasoline or diesel, stay in hotels (35% taxes when you include parking), go to national parks (which used to be free), go to any park (which charges for parking now), park in Vancouver (highest in N.America) or go to the Aquarium (more than $150 bucks pre tax for family of 4).

Nope……these cold blooded non eating creatures just sit under rocks all day writing blogs. Just saying :-)

#37 RealistvsExtremist on 11.23.14 at 3:24 pm

#176 None on 11.21.14 at 5:14 pm
#174 RealistvsExtremist on 11.21.14 at 4:14 pm

And being ignorant of facts shows how the brainwashed sheeple have no clue…….

====================

Get off your high horse. Just because you read the rantings of whackjobs on the Internet and watch their Youtube videos does not mean you have some special insight to the world.
+++++++++++++++++++++++++++

I find it interesting that everytime there is a person that is passionate about showing us how the “real world works” there always has to be a bully who belittles or calls people names or such rather than “providing their own research” to counter the arguments. In the olden days they just showed up and ran you through with a sword, today they tare called wack jobs and conspiracy theorists (invented by the people with the swords).

#38 Rosholt on 11.23.14 at 3:28 pm

increase the TSFA to $11,000 each person/year!!

#39 NoName on 11.23.14 at 3:39 pm

joe, we want our 220 back.

#40 Fed Up on 11.23.14 at 3:42 pm

The Conservatives want to be re-elected and know allowing people to keep more of their own money is the way to do it.

Pay off the debt. It is an anchor around all of our necks. Accountability for government and individuals. Stop pretending that it is possible to run anything (let alone government) indefinitely on debt. Sooner or later a brick wall is hit and then people really suffer. This is true of every economic unit.

#41 David on 11.23.14 at 3:42 pm

Beer and popcorn.

#42 Realties.ca » Your turn on 11.23.14 at 3:51 pm

[…] Source: http://www.greaterfool.ca/2014/11/23/your-turn/ […]

#43 Doug on 11.23.14 at 3:59 pm

PAY. DOWN. THE. DEBT.

#44 Blacksheep on 11.23.14 at 4:08 pm

Worried about federal debt?

Is the following statement, TRUE or FALSE?

“Our federal government has only so much $’s to spend, just like your household” (Harper)

I’m guessing Garth’s blog today, would have most saying, true. I have another question then, how many times has Garth pointed out, with 100% accuracy, that the Canadian federal government, being a sovereign issuer of currency, cannot be forced to default, in said currency?

How can this be. Is the Gov. constrained in it’s spending, or not?

I can tell you after much research, it is technically, absolutely FALSE, but unfortunately the perception must be maintained to keep society in line. I suggest Dogs on the ball enough to be concerned about sovereign debt, dig a bit deeper to find out what MMT is about and really give it a chance. It will change your perspective on all things $ related.

But please, keep it to yourself, it’s kind of a secret.

#45 Westcdn on 11.23.14 at 4:08 pm

I had a few hours to kill this morning so I was poking around the internet looking at Alberta, Ontario and the Federal budget documents. I suspect both provinces will have to increase personal tax revenues although Alberta does have extra capacity to borrow. I noticed both provinces were projecting less transfer payments from the Feds so I wondered if the Feds were going to achieve their budget surplus by reducing “transfers”.
I browsed through this red herring laded 427 page publication to find an answer. http://www.budget.gc.ca/2014/docs/plan/pdf/budget2014-eng.pdf

The budget plan is simple enough – grow revenues faster than expenses (see page 276). “Transfers” to Provinces and Individuals are not being reduced in total. The only expenditure where I noticed reductions were public service compensation and department of defence capital expenditures (see page 268). They only partially explain the budget surplus.

Then I looked at revenue projections (page 278) and notice that personal and corporate taxes are projected to grow about 5.8% per annum for the next 5 years. I attribute most of the increase to tax bracket creep. GST revenue increase will be about the same – reminds of my complaints about property tax.

Those Central Bankers better work a little harder to get inflation going again otherwise pity the debt laded middle class Canadian employee. It is getting tougher to be a new home owner.

#46 Parliamentary Pension Plan on 11.23.14 at 4:10 pm

Here’s my feedback Garth.

I find the equating of government finances with simple household budgets to either be so incompetent as to be nearly criminal, or purposefully disingenuous. I am appalled at how every single person of importance in our federal government is representing only the views of the greedy rich, whose singular desire is to pay less in taxes.

Tell you buddy Joe that most typical Canadians are concerned about fair wages and reliable ongoing opportunities to make a good living, rather than worrying about esoteric concepts like national debt, the interest on which costs less than inflation.

But this is all a meaningless exercise anyway, isn’t it Garth? Joe is an empty suit, a reliable servant who gets rewarded with a high paying do-nothing think-nothing “job” and a lifetime indexed pension (funded by guess who). Noone cares about some wrinkly old monkey reading a teleprompter, pronouncing words composed by a small army of Michael Sonas. We both know that the one person in this government who makes all the important decisions had the whole world figured out when he was in his 20s and playing economist, no doubt a “contrarian” in his day, just like you. I doubt he gives a crap what any of us think. Even you, Garth.

#47 Sponge Rob on 11.23.14 at 4:15 pm

When the next global recession hits, maybe next year, the high tax nanny states (European union, Canada) will get creamed. Especially if interest rates go up and confidence in government’s ability to pay is ever questioned.
I’m pretty appalled that after many years of so called conservative rule, here we sit in deficit forever. They needed to take a flame thrower to the bureaucracy and needless spending. That was their mandate. They failed and betrayed us. Again.
Discussing a surplus that amounts to a rounding error and probably won’t happen due to dropping oil revenues…that just focuses the discussion away from how horribly the so called conservatives have failed us.

#48 David on 11.23.14 at 4:16 pm

“Keynes is one of the most evil people to live in the 20th century.”

So, top five? Ten? I’m just curious how far that hyperbole stretches.

#49 gmc on 11.23.14 at 4:18 pm

Buy Gold everyone else in the world is doing it.
HA!

#50 Linda Pearson on 11.23.14 at 4:20 pm

I clicked on the link and read it line by line. But nowhere could I identify what Linden MacIntyre speaks of in his posting today on Huffington Post’s website (that talks about his reasons for leaving CBC) where he states that our government also pays funds to CTV and to Global corporations. Read part of what he says here:

Weigh this stinginess when it comes to public services against the generosity to private sector businesses — the policy protection and financial incentives to keep them happy doing what they make a lot of money doing. When we take into account the subsidies to private broadcasters like CTV and Global, and independent television producers, to generate Canadian programming it adds up to the same billion-dollar figure that keeps the CBC afloat.

Fair enough, except the public money by law entitles the public to make programming demands on the CBC — like providing a variety of services over radio and three television networks, in both official languages and a host of aboriginal dialects. Plus we have to grin and bear it every time some right-winger calls us a “state broadcaster” and throws the billion-dollar funding in our faces. And that billion dollars in public money is, by the way, a pittance compared to what other enlightened countries invest to support their public broadcasters.

Canada is one of the most expensive countries in the world to service because of its cultural diversity and vast geography. I’m using figures that are a few years old, but they still make the important point. Per capita spending by Canadians to support the CBC is a fraction of what other countries spend: $33, compared to $154 in Switzerland, $134 in Germany or $67 in Ireland. Among the 18 western countries that consider a publicly owned broadcaster to be worth a share of public money, we rank sixteenth.

I admit that I am a classic CBC supporter and am glad it exists. I’m also sorry for the decline in its radio programming, since my partiality is to radio rather than to television. And before someone suggests that I support it directly with my own money, let me remind you that there are plenty of other budget line items that you may support but that don’t interest me.

Finally, as to where I think the expected – but unlikely to actually materialize – surplus should be spent, I side with those who have already suggested putting it toward the deficit. Or, here’s a thought, how about we use it to send the bright lights in Ottawa to just about any night-school course on how to make a budget. Yeah, that’s where I want it spent.

#51 John in Mtl on 11.23.14 at 4:21 pm

Hum… how about invest the surplus as per Garth’s weightings; the portfolio gains used to pay down the debt. Sure, the gains are “small change” compared to the capital but hey, gotta start somewhere and thousands pile up to make millions & billions eventually! Rinse & repeat for each year a surplus is declared. Never touch the capital until the country is flat broke.

Imagine if we did that 40 years ago, maybe we would have no debt at all today.

#52 John in Mtl on 11.23.14 at 4:27 pm

Oh, also, take a few million and assemble a parliamentary commission and investigate Quebec’s wasteful (or corrupt) & never ending failed IT contract awards & IT businesses catering to gov’t. Do the same for Canada.

Unbeleivable that we have so much more powerful machines & programming languages today and not a software engineering team can make anything work as well as what used to run on old Vax’s & transistor mainframes programmed in Cobol & Fortran. I mean, are all these kids too incompetent today as compared to their predecessors in the 60′ & 70’s?

#53 gmc on 11.23.14 at 4:27 pm

just kidding on the gold, we have lots on the ground, but a new Swiss system would work great here, as it is now, rob from Peter, the worker and give to Paul, and Paul will follow your every desire.
what a system, use and abuse.
Absolutely nobody has a right for a bailout or hand out , all needs to participate in one way or other to make this place call Canada a great nation.

#54 A Yank in BC on 11.23.14 at 4:37 pm

#9 earthboundmisfit

Canada’s defense budget is only about 1% of it’s GDP. Few countries on earth spend so little. And you want to reduce that?

#55 Big Sexy on 11.23.14 at 4:38 pm

There will be no budget surplus because of rising interest rates.

BUT, if there is one, I want to see:

A 30-40% haircut to the military. If we’re not going to be peacekeeping, then our tax money shouln’t be used to antagonize other countries and fanatics.

Decriminalizing MJ and taxing it – more revenue, less money spent on prisons. Use some of extra cash to go back to a system of rehabilitation, not incarceration.

$200M to R&D for SMEs. When it comes to innovation, as a country, we suck.

DEBT REPAYMENT.

Reduce foreign monetary support – we still have natives in our country using buckets as toilets.

On that note, plan for one LARGE (3+$B) balloon payment to our reserves, 1 year before we do away with the Indian Act and INAC. Time for us to stop funding the mountain of wastefulness that is the reserve system. It’s not political suicide, it NEEDS to be done.

If only one of those ideas, debt repayment – can’t go wrong there.

If only high school students were smart enough to ask for debt repayment – because we have been mortgaging our kids’ futures.

#56 Bloke from England on 11.23.14 at 4:43 pm

$1.4 Billion on “Canadian Heritage”, what? The country didn’t exist before the BNA Act and that wasn’t even 150 years ago! $1.4B is one hell of a lot of Timbits.

#57 Bobs ur uncle on 11.23.14 at 4:52 pm

Already two comments about axing the CBC, but no one complaining about the budget of the CMHC which is twice as big? Hmmm…

#58 FormerSaskie on 11.23.14 at 5:04 pm

I would like the 3 levels of government, the big brains in all of the sciences and some finance types -ie Garth- to get together and develop long term policies for Canada in its entirety.

The Harper conservatives have taken short term, boutlique policy decision makinh to a ridiculous level and Canadians have lost many opportunities to prosper.

Our country lacks leadership, vision and any sense of cohesion. If we don’t elect a better quality of person to govern at all levels we will continue to be a mediocre country.

ABC 2015

#59 Cici on 11.23.14 at 5:16 pm

Most university students don’t know what the S&P 500 is, let alone a mutual fund or ETF. Most probably can’t balance their own monthly budget, and run up debts on credit cards (and in student loans), just to pay a basic lifestyle and overpriced rents. Most highschool students are clueless, as Bank of Mom and Dad take of everything. How can they effectively determine national budget surplus spending if they don’t even know the difference between a TFSA and RRSP, or what an actual budget is?

Anyways, I just love that the goverment can claim to have a “surplus” when they have such monumental debt (the carrying costs of which are edging ever higher), and are spending more money than they bring in.

All I know is that if I had $60,000 in credit card debt, a $5,000 monthly “budget,” and was only bringing in $3,000 a month in income, I would get my hide tanned by Gail Vaz Oxlade if I managed to reduce my spending to $4,000 a month and tried to pass that off as a $1,000 budget “surplus.”

This government is idiotic, but so are people who are paying upwards of $700,000 on housing when they have negative household savings.

This government is irresponsible, and should be putting any surpluses towards debt repayment before things get positively scary. In addition, they should reduce their spending in line with actual revenues before they talk about “budget surpluses.”

#60 Jacob Balthasar on 11.23.14 at 5:27 pm

Mr. Turner, thank you for posting such an informative national budgetary & monetary affairs overview.

Don’t know much about Joe Owe but every country definitely needs its own John Law!

#61 Blacksheep on 11.23.14 at 5:29 pm

Saskatoon # 30

“why does the canadian government borrow money at all?” “it has money creation power…without interest.”
————————————-
That’s why they pay interest. To maintain the perception that they are spending constrained. Shhh…its a secret.

#62 Mister Obvious on 11.23.14 at 5:42 pm

I have an engineering background.

I have to laugh when a prediction is made that in a year’s time we will have 0.68% surplus when the actual uncertainty in the calculation is likely +/- 5%

There is no justification for attaching the word ‘surplus’ or ‘deficit’ to next year’s budget at this point because it’s impossible to call. It could easily go either way. But I do admit it sounds better than this:

“Due to uncertainties in the forecasting process we can predict the federal budget will show either a deficit or surplus not exceeding 5%. Of course, that prediction itself has reliability factor of only 90%.”

Now that would glass over a few student eyeballs.

#63 Freedom First on 11.23.14 at 6:03 pm

First of all Garth, thank you for caring, and being so resilient throughout your life on doing the right thing and speaking the truth no matter the consequences.

Loved reading your Post today, though the terribly ugly details inspired a massive bowel movement from me before I could write my comment.

What to suggest, what to suggest? OK, let’s keep it simple. I would like the Canadian Government to operate in a way that the buying power of our currency never goes down.

#64 life is good on 11.23.14 at 6:09 pm

A no-brainer….double the TFSA to 11K per year as promised.

That way, they help those who want to help themselves…not the other way around !

#65 espressobob on 11.23.14 at 6:10 pm

A message to Joe Oliver,

Why are Canadians on the hook for residential real estate?!?!

#66 pitfield on 11.23.14 at 6:15 pm

Sell the Artic to the Russians for 1 trillion dollars. Debt solved, until next government starts with debt again.

#67 Blenton McFlurther on 11.23.14 at 6:24 pm

Buy gold bullion to strengthen the Canadian Dollar, and I’m not joking. If oil continues its descent to $50 then we need something else backing the Loonie. Otherwise all our goods will become more expensive, raising inflation and depleting the spending power of our citizens. The other countries who do buy gold will reap purchasing power and buy our oil with their strong dollars. Canada already has an alarmingly small amount of bullion in its central bank and it would be a good time for national security to add more bullion for protection.

Just wow. — Garth

#68 RayofLight on 11.23.14 at 6:27 pm

I would vote PC if they said they would increase the TFSA contributions to $10,000. I m financing the TFSAs now by with drawing from the RRSPs. In a perfect world , the $ in the RRSPs would be in the TFSAs . I am willing to take the tax hit now because I can see the tax rate being higher 10 years from now.

#69 chapter 9 on 11.23.14 at 6:41 pm

“The current government recently ran the worst deficit in national history,spending $55 billion more in one year than was collected”. Garth

Just think where they would be now if they hadn’t rolled the $57 billion surplus that was sitting in the Employment Insurance account into general revenues.
Talk about employers/employees being bent over!
The architect of this plan was Jean Chretien back in 1996 when the act was first amended to allow this tax grab to take place.

The fed’s spend $8 billion on aboriginals. Why are the provincial governments spending close to $1 billion as well. This is an example of where we run duplicate or in some cases triplicate services which we can no longer afford.

#70 Millenial on 11.23.14 at 6:46 pm

I’m confused by CMHC being on the budget for $2 billion dollars. My understanding is they charge people to insure their mortgages: they lose $2billion a year doing this?

#71 Basil Fawlty on 11.23.14 at 7:17 pm

On the revenue side, this government has cut corporate taxes from about 22% to 16%, now one of the lowest rates in the developed world.
On the spending side they are ramping up prison spending at a time when crime rates are going down.
Plus, they plan to reduce spending on health care, as the population ages.

#72 Wrote a note to Joe about looming retirement crisis - he told me to take a hike on 11.23.14 at 7:40 pm

Below is the note I wrote to Joe O.; it took him over 5 months to respond and when he did he responded to someone else’s letter. When he finally responded to me letter he basically said “take a long walk off of a short dock” Here’s the letter I sent:

” Please read the articles below concerning the looming retirement crisis:

http://www.thestar.com/business/2014/04/11/a_pensioncrisis_primer.html

http://business.financialpost.com/2013/09/23/retirement-crisis-in-america-77-year-old-flips-burgers-to-earn-in-a-week-what-he-used-to-make-in-an-hour/

With Canada’s looming retirement crisis fast approaching, (i.e. half of Canadians have no retirement savings and 73% have no corporate pensions), it is imperative that the government come to a better tax agreement with the US concerning Canadians holding US stocks in their portfolios. To do otherwise only endangers further Canadian retirees financial independence in their twilight years. If the Canadian government doesn’t take action it’ll be restricting Canadian retirees , for tax purposes, to hold mostly Canadian stocks in their portfolio’s.

To be candid, Canada has a very small undiversified stock market made up mostly of commodities and financials; it is also very volatile. Canadians need the ability to diversify their portfolios, without the burden of usurious and unfair taxes. To do otherwise restricts the financial freedom of those retirees to make wise financial choices and places a greater dependence of those retirees on government benefits, which isn’t what we as Canadians want.

A tax friendly world wide diversified stock portfolio (60% stocks, 40% bonds), lessens the inevitable shock of any market downturn; it’ll allow Canadians to better prepare financially, while giving them more security.

I applaud the government’s introduction of TFSA’s to assist Canadians to prepare for the future, but I would like to see legislation and tax treaties with the US which will relinquish the tax burden of dividends and capital gains earned from US stocks held in a Canadian TFSA portfolio.

Currently this is how holding US stock in your portfolio works in Canada, I’ve included two remedies as well:

Dividends from U.S. stocks in a non-registered account are taxed in Canada at regular rates, just like interest income. This has to stop, they should be taxed as Canadian stock dividends are now.

Dividends or capital gains from US stocks held in TFSA’s, must not be taxed by the US Government, similar to the treatment given currently to RRSP’s. This would mean having a reciprocal tax agreement with the US concerning Roth IRA’s for eligible Canadians holding Roth IRA’s and Americans living in Canada.

In summary please convince other parliamentarians that by supporting these two simple initiatives it will advance the government goal for all Canadians to be financially independent in their retirement years, thereby lessening the burden on the Federal Government. These two simple initiatives will make a noticeably positive and tangible difference to the financial independence of all Canadian retirees that invest in the stock market.
I look forward to hearing from you on this issue. ”

Again Joe said and I’m paraphrasing “bug off” I’m not voting Conservative.

Start demanding answers from your MP’s and hold them accountable, you’ll find a lot of them don’t want to be accountable. Which makes them lousy for leadership.
 

#73 SealTeam0 on 11.23.14 at 7:40 pm

After reading the whole list the thing is that without having a better breakdown of how they are intending to spend the money it’s hard to conclude where to cut. Certainly it would have made more sense to have done something serious about infrastructure over the last number of years while money has been cheap. They pay lip service but had they actually got some things going it would have bolstered business and employment. In the long run that would increase productivity and revenue.
Most people forget this government inherited a surplus. Problem is Harper forgot everything he was on about for so many years before getting into power and becoming drunk with it.
I don’t get how they have squandered so much when pretty much anyone will tell you they have reduced services and things are falling apart. Maybe it’s because we have never before had a government that was so big on jet setting around the world all of the time.
As someone else commented the provinces have to be involved also but Steve doesn’t have the time of day for their leadership (such as that leadership is).
Income splitting sure as hell should not be implemented. Even the idea of doubling the TFSA limit would not do anything for the largest part of the population simply because they don’t have that much left over to save.
Is there somewhere that a more detailed breakdown can be found? Basically I just see huge numbers with the briefest of details there. I guess one would have to get the book that is the whole budget.
We really need a change in Ottawa. Real problem is the choices we currently have are bleak, bleaker and never going to happen. There should be no such thing as career politians. That might be a good start. Oh and the comment about paying these fools more, WHY? They are already making double what most households in this country are. If you think that will stop corruption, I’d say not likely. Greedy people are greedy no matter how much they get they want more. Apparently some can’t even behave like civilized people around women.

#74 Cato the Elder on 11.23.14 at 7:42 pm

Re: #30 Saskatoon

Wonderful question Saskatoon. Odd that rather than issue our own currency interest free, we must instead pay interest to the money printers at the PRIVATE Bank of Canada.

Doesn’t make much sense. Unless you understand that we are completely owned by private banks, and that a small group of families controlling these banks going back centuries are at it’s core.

Try to get off this fake corporate currency, and your nation will be destroyed. Libya, Iraq, Yemen, Afghanistan, Syria, etc. Now Russia and Iran are being vilified, wonder why?

#75 Bob Copeland on 11.23.14 at 7:46 pm

Put it all on the debt. Stop all child care and give it back to those that earned it. Let those having children grow up and accept their responsibilities.

#76 Cato the Elder on 11.23.14 at 7:49 pm

Re: #67 Blenton

Good to see someone else on here understand that a WEAK dollar is not a good thing.

A weak currency makes everything more expensive. The oft cited reason it is beneficial being ‘exports’ is FALSE and illogical.

Manufacturers DO NOT benefit from a weak dollar. They have to BUY raw materials to process in their manufacturing plants, and if those costs go up, so does their end product. The benefit with a STRONG dollar is that at least they can afford better machinery to increase their productivity, which they couldn’t do as well with a weak dollar.

This is the same even in our natural resources sector. If it costs more to extract because machinery, repairs, parts, energy, and all the other components that go into it are more expensive, then our exports will be more expensive.

The thinking behind a weak dollar is a humungous MYTH. Once existing product in inventory has been sold at the cheaper rate, it must be REPLENISHED. It will be replenished at a higher cost, thus increasing prices, thus reducing international demand. We are then BACK in the same problem! Except now, machinery is more expensive too.

Great job socialists! We need real free markets NOW. Say goodbye to the middle class if this nonsensical, DISPROVEN, Keynsian stupidity continues.

#77 james on 11.23.14 at 7:53 pm

#52

“Unbeleivable that we have so much more powerful machines & programming languages today and not a software engineering team can make anything work as well as what used to run on old Vax’s & transistor mainframes programmed in Cobol & Fortran. I mean, are all these kids too incompetent today as compared to their predecessors in the 60′ & 70’s?v”

——————

The problem is with government procurement. They are not getting Silicon Valley firms to build software. It is bloated, incompetent and corrupt contractors like CGI, who employ people who are at the bottom end of the spectrum.

Why do I say this? I have seen these professional consulting and services firms from the inside. i have also spoken to people like Mikey Dickerson who had to take over messes.

In some cases the problems are hard, as in the case of eHealth where you have major cultural and political impediments. In other cases (e.g,. gun registry), it is profiteering and incompetence.

#78 james on 11.23.14 at 7:54 pm

The government is NOT following Keynesian economics.

Keynes maintained that governments should spend in tough times to stimulate the economy, but they should save in good times.

Look at the idiots in Alberta, who spent like drunken sailors during this past boom, not noticing the development of the Bakken oil fields. They were not Keynesians. They were drunks.

#79 mitzerboy on 11.23.14 at 7:55 pm

thankz for the pictures garth
….my old lab/mix is on his last leg and he smiles when I show him the pictures

#80 Victor V on 11.23.14 at 7:56 pm

Double the TFSA contribution to $11,000 as was promised.

#81 cmj on 11.23.14 at 8:00 pm

I think we need to provide financial education at many levels
1 In elementary school we can teach students about having financial goals and budgeting their money to not overspend
2High school students have ongoing courses to learn how to live within their means. Many students get credit cards and abuse them or else use cell phones that cost too much money. Every senior student would receive a certain amount of time with a financial planner to review their personal finances before being employed and making their own living
3There would be a compulsory financial course for high school graduation
4Community courses would be available to adults to learn about financial planning. Once they have completed and passed the course, they would be fully reimbursed up to $300 – or whatever is realistic
5Teach parents that endulging our children with so much consumerism gives kids a sense of entitlement. And the spending just goes on and on from one generation to the other and waking up one day to huge debt or no retirement plan.
Our government is only a reflection of our personal state of finances. We fail to ask the important question, “Where is my money going?” “Do I agree that these are the priorities?”
Thanks for the thoughtful blog today and asking our input.

#82 Yuus bin Haad on 11.23.14 at 8:01 pm

Rehearse for 2017 – hand out some medals, hold a parade, and let off some fireworks (and maybe run some more ads). What the heck.

#83 Macrath on 11.23.14 at 8:08 pm

The Gov should diversify their portfolio of 10 billion in GM shares . Add 1.9 billion in REITs , preferred shares
and emerging markets.

#84 Obvious Truth on 11.23.14 at 8:22 pm

I’m thinking get rid of cap gains on my cottage. The good old days.

#85 lee bow on 11.23.14 at 8:23 pm

Simplify the tax form, stop the pork. Excessive spending on CRA.

Spend the surplus to privatize CMHC, or reduce exposure. Government shouldn’t be in derivatives business.

#86 gladiator on 11.23.14 at 8:25 pm

Biggest questions by far are:
Why does our government have to take on debt on which it has to pay interest?
Why can’t it issue money on its own?
Who does it pay interest to (ok, it’s Bank Of Canada) and who benefits from this interest (who owns BOC)?

#87 Timmy on 11.23.14 at 8:29 pm

Of course spending has ballooned because we have a “Conservative” government. Now Harpo is trying to suck up to the Veterans by offering money for Vet programs.

#88 Daisy Mae on 11.23.14 at 8:43 pm

Re #6 Joe:

“SYDNEY — Enterprise Cape Breton Corp. is no more, but the region is losing nothing, says the minister of state for the Atlantic Canada Opportunities Agency.”

***********************

So not only was it an ‘inconsequential’ expenditure as Garth states, it was wasted tax dollars?

#89 Lookoutbelow on 11.23.14 at 8:46 pm

Looks to me that our federal debt is simply not high enough. Who cares about it anyways. The Government borrows it and the Canadian Taxpayer has to pay it back.

Kinda sounds like MORAL HAZARD to me.

We need to boost the debt to about $1.7 Trillion. About 10 % of the US national debt. Only then we can call ourselves the “richest nation on earth”. Just like the Yanks do.

#90 Daisy Mae on 11.23.14 at 9:02 pm

“…not to mention the exclusion factor of poop people who would vote where? No, keep it simple and safe.

#34 Zoe:
POOR PROPLE. My computer is a snob”

******************

THAT is hilarious! Haven’t had such a good laugh in ages! LOL

#91 45north on 11.23.14 at 9:03 pm

Few people end up knowing the national debt has doubled or that the current government recently ran the worst deficit in national history, spending $55 billion more in one year than was collected.

Harper doesn’t want to talk about this

neither does Trudeau

neither does Mulcair

because paying off the debt means that our standard of living falls. My vision is that this can be done with some kind of social acceptance. Today’s young people are starring a decline in their standard of living in the face – it’s pretty obvious that they as a group are not going to have their parents standard of living. Garth has been talking about a decline in house prices – that is going to be a bitter pill.

God help us!

#92 Daisy Mae on 11.23.14 at 9:05 pm

Still laughing! LOL

#93 Edward on 11.23.14 at 9:06 pm

Garth can you comment on this story?

http://www.cnbc.com/id/102195927?trknav=homestack:topnews:3

That’s why you should have a balanced portfolio. Then you can stop reading that stuff. — Garth

#94 TRT on 11.23.14 at 9:10 pm

If students are smart, apply it all to tuition grants.

#95 45north on 11.23.14 at 9:11 pm

Zoe : A simple paper and pencil and free church basement and a free scrutineers is so much cheaper than the infrastructure to handle the same number of votes online, not to mention the exclusion factor of poor people who would vote where? No, keep it simple and safe.

I agree. I have worked as a scrutineer in one municipal and one provincial election. I am proud of our system.

I did rent out our church hall for one federal election. The cost wasn’t great but it wasn’t free. Also the actual workers are not free.

#96 live within your means on 11.23.14 at 9:11 pm

I love that the Feds call themselves Conservative & Christie Clark in BC uses the name Liberals. Not. Neither are Conservative nor Liberal. Makes me want to vomit.

#97 Sheane Wallace on 11.23.14 at 9:12 pm

No inflation?

How about that bacon that was 5 $ for 500 g and now is 7 $ for 375 g?
How about all the shrinking packages at the stores?

No inflation? Sure. Keep repeating it, somebody might believe it.

You eat bacon? That explains it. — Garth

#98 saskatoon on 11.23.14 at 9:13 pm

#86 gladiator

i know, dude.

i just said this above.

sigh.

#99 Tripp on 11.23.14 at 9:14 pm

Hard to believe, Finance is five times the size of National Defence! It really shows what our priorities are…

#100 Sheane Wallace on 11.23.14 at 9:17 pm

#89 Lookoutbelow

our debt is already at these levels, just add provincial + federal debt. Most of the states do not provide any services in US, our provinces provide most of the services but their combined debt is higher than the federal debt.

And when CMHC blows up we will surely surpass the Yankees. Just wait.

#101 young & foolish on 11.23.14 at 9:17 pm

Keynes understood MMT well …. and there is no going back now that we are all ‘entitled’ to an ever expanding list of ‘services’.

Can you imagine what society would actually look like with less ‘government intervention’? Most people would be horrified. Who really cares about government deficits anyway? They are like today’s monster mortgages … never expected to be paid off.

#102 saskatoon on 11.23.14 at 9:20 pm

#78 james

it’s crony keynesian!

#103 Darren on 11.23.14 at 9:22 pm

Logic would say paying down the debt prior to interest rates reverting to the mean, thus increasing annual interest costs, would be prudent.
But, that is not the way to buy votes….

#104 Sheane Wallace on 11.23.14 at 9:26 pm

folks, there can be no meaningful interest rates increase despite the crippling inflation. deal with it. It is just talks.

Rates have been declining in the last 30 years while debt has been piling, now there is no way back, just look at Japan, their currency dove 20 % in the last year while interest rates are at 0. Canadian dollar dove 10 % vs. the US dollar. interest rates at 1 %. There are just lies, lie after lie.

Current banking system and debt structure can not handle any interest rates increase, there are just talks and manipulations that suppress the flight out of bonds temporarily. When this thing unwinds it would be rather rapid and quick and most people would be screwed big time.

#105 Sean on 11.23.14 at 9:27 pm

C’mon now! Loyal blog dogs should all know the answer.

The gubmint should invest in a diversified portfolio. As they are complicit with governments and central banks, globally, in fostering the greatest bond and credit bubble in history, they should of course continue to borrow. But instead of spend, they should invest.

#106 TRT on 11.23.14 at 9:27 pm

Keynesian economics biggest scam….Austrian is the truth.

#107 Jonathan on 11.23.14 at 9:28 pm

Any conspiracy nutbars on here, get yourself over to CBC docs 8-9 EST tonight for “JFK – The Lost Bullet”.

Good therapy for you – more conclusive scientific proof that Oswald was the killer. Too bad so many losers have wasted so much time in their parents basement blogging against that fact.

Oh, and while I have your attention, conspirass-y nutjobs:

No, gold is not the answer.

Yes, climate change and overall climate warming are real and a serious threat. (ask your pals in Buffalo today about this)

Aliens have likely never come close to landing on earth (still too far away if any do exist). The possible presence of some on the comment section on this blog might be a major counterfactual, I do acknowledge.

Ayn Rand was a pathetic and derivative nutjob as well as a fourth rate writer of 100% crap.

Flu vaccines don’t cause autism.

HAM and foreign buyers are not the cause of the Canadian real estate bubble and they won’t prevent it from deflating.

#108 Here there on 11.23.14 at 9:28 pm

Perhaps, the surplus can be invested on a conservative portfolio producing eight per cent return, say, six after deducting for inflation. Applying the 72 rule, the amount of money will double after twelve years. By that time the cons and veteran affairs dept. will achieve, by attrition, more savings. As the standup philosopher said, “It is a club. And you and me, we ain’t on it.” Or otherwise, as somebody, no long ago, was waxing philosophically, we can move to Liechtenstein, the land of milk and honey.

#109 RealistvsExtremist on 11.23.14 at 9:36 pm

#97 Sheane Wallace on 11.23.14 at 9:12 pm
No inflation?

How about that bacon that was 5 $ for 500 g and now is 7 $ for 375 g?
How about all the shrinking packages at the stores?

No inflation? Sure. Keep repeating it, somebody might believe it.

You eat bacon? That explains it. — Garth

++++++++++++++++++++++++++++++

We don’t eat bacon. But we feed our kids organic milk which is $9 a gallon. Why? Because we are forced to because non-organic milk is all GMO (cows are fed GMO feed). Unlike the “olden days” when grains fed to cows were NOT GMO.

So……$9 for “regular” milk. No inflation here……

#110 Sheane Wallace on 11.23.14 at 9:49 pm

DELETED

#111 Rabi Dmangycur on 11.23.14 at 9:56 pm

1. Increase TFSA to $11,000 per year.

2. Do like Norway resource savings fund. Invest surpluses in a balanced portfolio with professional manager.

3. Turn CMHC into a profitable corporation. Make the banks and mortgage lenders put some skin in the game.

#112 David w on 11.23.14 at 9:59 pm

Put in a rainy day fund.

#113 joblo on 11.23.14 at 10:03 pm

Let’s have another Olympics!

#114 JO on 11.23.14 at 10:05 pm

when the global government bond markets enters its inevitable bear, interest expenditures WILL overtake all other spending. Government will react in its classic and destructive manner as usual: raise taxes even more and eventually monetize the debt issuance. The final stage will likely see debt monetization paying for deep tax cuts.
We cannot raise taxes overall although major tax reform is desperately needed, nor can we cut spending dramatically or use surpluses to payoff debt. Our only hope of surviving this massive debt problem without huge political ramifications is to grow our productivity strongly:
1) eliminate income tax on the first 50 k of income for all, then from above 50 k to 150 k charge 15 % and from above 150 k, charge 25 %. Key is definition of total income is EVERYTHING including rent and cap gains etc
2) then slowly increase HST to 16 or 17 and provide pre-bates to those under 30 k total income
3) convert all existing govt debt into strip bonds with no interest paid but maturity value to be honoured. Limit any printing of money to no more than rate of growth in productivity or some other measure and stop govt borrowing – kick the banks out of the govt bond selling business
4) eliminate CMHC and the NHA, allow mortgage write downs for underwater borrowers but require repayment to the govt once their home is sold
5) create a massive infrastructure bank financed by printed money from BofC.create massive similar funds to invest in robotics, nanotechnology, biotech, and renewables. BofC would get out of the interest rate manipulation business and focus only on lender of last resort including the buying of corp bonds if needed
6) inflation will pick up but once productivity picks up, it should come down.
7) governance of the massive investment funds will be critical to avoid inevitable attempts by special interest groups
Food for thought only
Major change is underway globally and this existing neoliberal junk economic system is in the midst of a spectacular collapse

5)

#115 Montellino on 11.23.14 at 10:08 pm

give the money to those with a mountain of student debt..
it seems only appropriate given its probably a one-off surplus (election year), youth unemployment is high, tuition is rising and prospects suck, oh and Poloz publicly made fun of recent grads (all of whom are eligible voters)

the amount of surplus is inconsequential otherwise and wont make a dent anywhere else so this is the only win-win for Harpo&co

#116 Sheane Wallace on 11.23.14 at 10:08 pm

You eat bacon? That explains it. — Garth

amusing, isn’t it?

#117 Bob on 11.23.14 at 10:12 pm

All I want from Harper for Christmas is a 10K limit for my TFSA in 2015.

Canada should reform EI….turn it into another pension plan, but one which you can draw on when your out of work….most people would then have a million dollar pension + CPP….retirement would be grand for most :)

#118 Country Girl on 11.23.14 at 10:15 pm

For sure, some of the surplus needs to go to these Canadian Thalidomide survivors:

http://tinyurl.com/ox2587o

Also, use some of the surplus to improve health care, i.e., quicker access to MRI, a basic dental plan for those without insurance coverage.

#119 Retired Boomer - WI on 11.23.14 at 10:16 pm

Well, it is NOT my country, so I won’t offer any suggestions on your domestic spending.

A few thoughts on money value might be in order.

Crowing about .68% surplus is a mere rounding error. IF there is any excess, apply it to the debt.

I wish my country used a “zero based” budget each year based on 95% of anticipated revenues. Any shortfall would be covered by a uniform import tax on all the imported crap. Two reasons, domestic protection, and revenue. For ONE YEAR then reassess.

The value of the money is more important than the prices of goods. Prices increase usually because the value of the money has slipped.

People do not wish to assume responsibility for their own choices. Student loans should be funded primarily based on pay back from former borrowers. Too many in default, well we hardly need more borrowers there.

Government spending should be growing no faster than the population growth.

To eliminate debt, one needs to pay back both interest and principal. Hell, we aren’t running balanced accounts here in the US, and MY tax rate is lower than it was 14 years ago. Same income inflation adjusted. Does THAT picture make any sense?

end rant-

#120 David w on 11.23.14 at 10:16 pm

It’s too expensive to raise a family. W need free daycare in this country. Two kids set a person $20k in daycare costs per year.

#121 Ian on 11.23.14 at 10:18 pm

Seems obvious, pay off debt.

#122 Nemesis on 11.23.14 at 10:23 pm

#EasyPeasy… #JustAskDave…

http://youtu.be/ZARAldXlSyA

#123 RealistvsExtremist on 11.23.14 at 10:24 pm

#107 Jonathan on 11.23.14 at 9:28 pm
Any conspiracy nutbars on here, get yourself over to CBC docs 8-9 EST tonight for “JFK – The Lost Bullet”.

Good therapy for you – more conclusive scientific proof that Oswald was the killer. Too bad so many losers have wasted so much time in their parents basement blogging against that fact.
++++++++++++++++++++++++

Another name caller using a “govt” tv program to try and prove foolery.

Jonathan….I used to be in the military. If you can find anyone on the planet that can shoot an old bolt action Italian piece of crap rifle accurately 3 times into a moving target over 100 yards away in 3 seconds I will write you a cheque for $50K.

Whose the “nut job” now?

#124 mb on 11.23.14 at 10:29 pm

Gdp has trippled since 88 and when you factor inflation as well the debt and spending increases since then have actually decreased on a % of gdp basis.

But a doubling of the debt is structural. — Garth

#125 Stupesing in Cabbagetown on 11.23.14 at 10:30 pm

#75 Bob Copeland “Stop all child care and give it back to those that earned it. Let those having children grow up and accept their responsibilities.”

Wow, that is harsh. And in an era of falling birth rates you would advocate for making it even more difficult to raise children? Remember, that child you help support today will be paying your old age pension tomorrow.

#126 RealistvsExtremist on 11.23.14 at 10:33 pm

#117 Bob on 11.23.14 at 10:12 pm
All I want from Harper for Christmas is a 10K limit for my TFSA in 2015.

Canada should reform EI….turn it into another pension plan, but one which you can draw on when your out of work….most people would then have a million dollar pension + CPP….retirement would be grand for most :)
+++++++++++++++++++++

You just defined the Public Sector. It is really a shame that we have two classes of working people in this country.

#127 KWkid on 11.23.14 at 10:46 pm

Go to Rama and put it all on black. If we lose so what, it’s just more money the government has pissed away. But if we win it’s the most productive thing this government has ever accomplished. We can even make it a prime time special on CBC.

#128 JC on 11.23.14 at 10:46 pm

Garth, in your opinion will Ontario’s credit rating be downgraded next year?

#129 kommykim on 11.23.14 at 10:48 pm

Pay down the debt. It’s time we stopped screwing our future selves.

#130 Jonathan on 11.23.14 at 10:51 pm

#123 RealistvsExtremist

Another name caller using a “govt” tv program to try and prove foolery.

Jonathan….I used to be in the military. If you can find anyone on the planet that can shoot an old bolt action Italian piece of crap rifle accurately 3 times into a moving target over 100 yards away in 3 seconds I will write you a cheque for $50K.

Whose the “nut job” now

——————————————————————

Umm, you are, and you have rather conclusively proven that, sorry to say.

One point made in the film on JFK is that the bullets took much longer than 3 seconds to be fired, closer to 11.

Of course nut jobs like you don’t actually read or inspect evidence do you, you just look for quick confirmations of your existing nutty ideas.

I estimate your IQ at about 74.

You served in the military? That is spooky. Hope you got no further than cleaning toilets.

*On the bright side, the Harpocrites now have a cynical election carrot to help veterans with mental health issues.

http://www.ctvnews.ca/politics/ottawa-announces-200m-in-funding-for-soldiers-mental-health-services-1.2115116

You might want to contact them. Seriously. They open at 8:30 a.m. tomorrow. Don’t wait a minute past that.

Get help.

#131 Red Deer Rob on 11.23.14 at 10:52 pm

Use the surplus to pay down the debt!

Also, reallocate resources in the Ministry of Finance to regulate the realty profession. I’m sure with those 37.5hr government work weeks there is slack in the department somewhere. 1/2 hr “15 minute” breaks is common when the timmies or Starbucks line up is super long.

#132 Spiltbongwater on 11.23.14 at 11:07 pm

You eat bacon? That explains it. — Garth

Explains what, that he is not a Jew, or a Muslim? What does eating bacon explain about someone?

Another one. — Garth

#133 RealistvsExtremist on 11.23.14 at 11:09 pm

in jest……

Greater Fool Weather Balloon chart:

http://www.philtinsley.com/wordpress/blog%20images/USAF_ID_chart.gif

#134 Eco Capitalist on 11.23.14 at 11:11 pm

Pay down debt. Are they not conservatives? Why must they ask? Ah yes, they are politicians first, conservatives second. In fact, regardless of ideology, they are all politicians first.

No wonder we never get anywhere.

#135 RealistvsExtremist on 11.23.14 at 11:41 pm

#130 Jonathan on 11.23.14 at 10:51 pm
#123 RealistvsExtremist

Another name caller using a “govt” tv program to try and prove foolery.

Whose the “nut job” now

——————————————————————

Of course nut jobs like you don’t actually read or inspect evidence do you, you just look for quick confirmations of your existing nutty ideas.

I estimate your IQ at about 74.

You served in the military? That is spooky. Hope you got no further than cleaning toilets.

*On the bright side, the Harpocrites now have a cynical election carrot to help veterans with mental health issues.

http://www.ctvnews.ca/politics/ottawa-announces-200m-in-funding-for-soldiers-mental-health-services-1.2115116

Get help.
++++++++++++++++++++++++++

I rest my case.

#136 Kenchie on 11.23.14 at 11:49 pm

“Give me your thoughts. I’ll pass them on.”

Garth,

Couple of thoughts:

1) Go to Seneca Casino and put it all on black! With the winnings, pay down the debt! If he loses, tell him to continue lying about the state of fiscal affairs in Canada.

2) Increase the TFSA to $10k, as mentioned by the MSM earlier this year. We don’t deserve it, but it would be awesome for all of us (entitled) millennials.

3) Increase the surplus by cutting the $2.1bn subsidy to CMHC, and force CMHC to increase their fees on home purchasers to cover the difference. Also, legislate that banks can’t tack the fees onto the mortgage so it’s amortized over 25 years. Banks should have to pass it on straight to CMHC, and home buyers should have to take it into account before agents can show them homes.

4) Give more money to Statistics Canada so they hire better statisticians and managers so they can rebuild their reputation.

And from deep left field…

5) Ask Chalk River Laboratories to exploit their large market share of global medical isotopes by increasing the prices and return on investment for shareholders (i.e. Canadian Taxpayers).

#137 Paully on 11.23.14 at 11:49 pm

I would have to go with paying down the debt as the obvious choice. Then, as the next step, they should simplify the tax system so that they don’t need legions of civil servants to ensure compliance.

Unfortunately, Governments would rather bribe the electorate with their own money rather than be responsible stewards with the taxpayers’ dollars.

#138 Flamed out in Kitchener on 11.23.14 at 11:50 pm

Just put it on the Debt already … or if we want to get creative … how about a rebate apportioned on tuition for students – they need some help starting out these days. No fun starting a life after academia with a load of debt to deal with … or; use the funds to put a Budgeting / Finance course in play at the high school level …

#139 Second Class on 11.23.14 at 11:53 pm

First thin the government should do is up corporate taxes/get rid of corporate disounts and get rid of personal taxes. Easier to tax a few thousand corporations than several million people. Corporations should pay people 25% less to compensate.

Second. If anybody wants to pay off their share of the country’s debt they should have the option to and never have to pay gst etc for life.

Third. The government is clearly not capable of running crown corps at a profit so they should instead follow garths investment plan and collect healthy income.

That is all and the beer is good tonight. Im off work.

Third

#140 Kenchie on 11.23.14 at 11:55 pm

#3 Paul on 11.23.14 at 1:00 pm
“This was March 2008 where are we now?
http://www.torontolife.com/magazine/2008/3/

Perfect example of “the more things change, the more they stay the same”.

Only difference is that the numbers are larger…

#141 devore on 11.23.14 at 11:57 pm

A surplus? Return the money to taxpayers, and reduce the budget and tax rates next year.

#142 Dee on 11.23.14 at 11:59 pm

#52 – A big part of the problem is that, for all everyone yells about civil servants and gold-plated jobs, doing IT in the civil service is a nightmare. I make $120k/year in private industry; I just saw an equivalent IT posting at Queen’s Park for $62k/year. Only the laziest person unable to get any job in private industry would take that.

So, the staff are useless, everything gets contracted out to giant (also useless) contractors for billions over budget, and nothing ever gets done.

And then we wonder how, for example, PRESTO -still- doesn’t work. (How many of the IT staff involved on PRESTO are on the Sunshine List? Zero. On top of that, we’ve spent $700 million on what was supposed to be a $250 million contract, and the contractor is now selling the tech to other cities even though it still doesn’t work here. http://spacing.ca/toronto/2014/01/15/presto-technology-sold-washington-d-c-raises-questions/

Make civil service jobs appealing and actual good workers will show up. Do that, and you’ll save far more in the long run.

#143 devore on 11.24.14 at 12:02 am

#50 Linda Pearson

Fair enough, except the public money by law entitles the public to make programming demands on the CBC

It does no such thing. If you have a problem with the CBC, you do what you would do if you had a problem with Global: write a complaint letter to the Ombudsman.

CBC answers to the one who writes the check: department of heritage. Oh, and advertisers. The control and influence you have over CBC: zero.

#144 nonplused on 11.24.14 at 12:14 am

Well it appears nonplused must apologize. Some days ago I was called out for incorrectly stating that a 10 year engineer makes $140,000 a year, which apparently was way too high. I now have the most recent APEGA magazine in my hands with this year’s survey, and have to admit it says a “D” level engineer, all industries, make a total compensation of $137,357 (median). My deepest apologies. Average was $152,143 but let’s not let that get in the way. This was total compensation, so yes the base is lower, but teachers and such don’t get bonuses. You should count it if it’s regular. Dog knows my ex-wife and her lawyer did.

So again my apologies for being so misleading with my portrait of engineering as a good career path for those how have “the knack”. Stick to playing in a band or something as $137k a year is definitely not a living wage. How are you ever going to pay off your student loan, especially here in Canada where tuition is only $4k a year? It’s just not feasible. (And for those that can read through the sarcasm, send your kids to engineering if they are willing. Or dentistry.)

On to the topic of the day, I served a term on the student union council at the U of C, finance commissioner. At that time it was easy for engineering students (go figure) to get elected because the engineers tended to vote in blocks for their own, whereas the rest of the campus hardly voted at all. I made posters and everything, but I probably didn’t need to. But back to the story.

So yes our student union was just coming off a few years of deficits, Mac Hall expansion and all, and just posted it’s first small surplus in a while but was deeply in debt. Do you think there was any chance of paying down the debt with the surplus (which I advocated)? Nope. Every pet project came up including sending counsel members girlfriends on exchange programs. It was then I lost my faith in democracy. It doesn’t work. Elected officials at all levels work for themselves.

Oh and then there was the outright bribery of the counsel by the insurance company that wanted to do the student health insurance thing. I mean the plus side was now you couldn’t knock a co-ed up because they all had the pill basically for free, but was surprising was how cheap it was to buy the vote. Beers, basically.

#145 pete on 11.24.14 at 12:15 am

$18.6 billion is spent on the military? What a waste of money. For those brainwashed to understand that’s the military is used as a tool to protect business interests around the world. I think 2.6 Billion is more then enough. Really it should be zero but there are some members of society willing to die to defend business interests…..oooops I mean freedom And democracy….lol who is stupid enough to believe that?

#146 pete on 11.24.14 at 12:22 am

We should also get rid of CHMC and allow the free markets to dictate interest rates for sub-prime borrowers. Looks like CONSERVATIVES HATES the FREE MARKET and thus nothing more then a socialist government. Harper = CONsocialists

#147 nonplused on 11.24.14 at 12:28 am

PS – I wasn’t opposed to the insurance program, just it being mandatory. But it was sold on the idea of if it’s mandatory it will be cheaper on a per-person basis and – beers!

#148 devore on 11.24.14 at 12:30 am

#78 james

The government is NOT following Keynesian economics.

Keynes maintained that governments should spend in tough times to stimulate the economy, but they should save in good times.

Then Keyensian economics are a pipedream, because doing the above, cutting spending and services during “good times”, is political suicide, and can never happen. Can you just imagine the outrage?

#149 OffshoreObserver on 11.24.14 at 12:41 am

1/ Pay down the National Debt
2/ Disband the CBC
3/ Evaporate CMHC
4/ Rationalize all the civil service pensions: cap them to realistic amounts; realistic amount of employment tenure; no “double-dipping” etc.

#150 Cici on 11.24.14 at 1:17 am

#50 Linda Pearson

Great post Linda ;-)

#151 Peter on 11.24.14 at 1:22 am

Easy–pay off the debt. And I don’t mean reduce our debt-to-GDP to a so-called “sustainable” level. I mean reduce it to zero. As far as I’m concerned, maintaining any amount of public debt in perpetuity is profoundly unethical. Paying off the owners of Canada Savings bounds is simply not a worthwhile use of our tax dollars. It’s a direct transfer of wealth from the masses to the very few.

#152 Palpatine on 11.24.14 at 1:30 am

A couple of thoughts:

1) Since $1.9 billion is well within the margin of error, definitely don’t promise to spend it. If this money is actually there at the end of the year, pay down debt or put it in savings.

2) $2 billion for CMHC? CMHC should be required to be profitable and the maximum property value should be below $300k (indexed to inflation).

3) Simplify tax system, which would include cancelling the income splitting proposal.

#153 Dave on 11.24.14 at 1:35 am

Purchase Turks and Caicos

#154 stage1dave on 11.24.14 at 1:50 am

I’m afraid my cynicism overtakes me when I read topics such as this…which is probably why my (very) few recent posts have been ireverant, irrelevant, or perhaps both?

A .68% surplus? Wow…in my world, I’d be blowing that on graded hockey cards or tour t-shirts. (actually, I’d seriously be considering another line of work if that’s all the revenue I was generating)

Although 1.9 B is a fair amount of money, it won’t make much of dent in a 649 B deficit. I’ve always been a big fan of getting rid of whatever debt I had ASAP (or not acquiring it at all) but I do like a realistic repayment schedule! I’d be lot more concerned about how I was amassing the debt in the first place?

And, as always, I’ve never thought “the government” should be run like business; it’s there to serve it’s citizens…not to generate a profit. It’s not a “business”.

We have too many people in the highest levels of government whose stated (or unstated) desire is to simply render it irrelevant, by whatever means. Whether you want to bring Austrian, Chicago school, or whatever RW economic ideology into the equation, recent history has proved worldwide (& will continue to prove) that the only way these theoretical monetary fantasies can be implemented is by force, fear, & ultimately out of the barrel of a gun.

No civilized population whose collective & individual IQ exceeds the outside ambient air temperature will “vote” for them…ask any South American, Asian, or African dictator.

(I’ve been self-employed for almost 30 yrs, & can’t remember the last time I asked the government for anything…except to spread out an unexpected tax re-assessment over several payments)

The only way I can ever see government “changing” is the same way way any other disorganized & chaotic massive organization changes…conscientious people of good character, work ethic, & organizational skills who possess grade 10 math skills will hopefully become involved.

It would also be a massive help if they were capable of telling freeloaders to hit the road; whether those people are currently in their employ or just knocking at the door. And it shouldn’t matter how well they are dressed, or who they know.

And no, I’m not suggesting that the government should remain a “closed shop” in all situations, we have several conveniences in this country (roads, railways, power plants, etc) that do require a little more involvement than a bunch of bankers arguing over multipliers in the interest rate.

If we’d had to rely on private financing for any of these initiatives (& a few more) most of us would simply not be here…or warm…or mobile…or anywhere to go.

So, to recap, all government needs is more involvement by intelligent, socially concerned individuals with some semblance of a moral compass & a common sense approach to getting things accomplished. Hahaha…no problem…

Private industry-wise, it’s even simpler…your CFO who has 2 degrees from Ivy League Universities can’t balance the books? Fire him…or her. Your CEO is petitioning gov’t for money for the second time in a decade because they’ve gone bankrupt…again? See ya…Your entire middle-and-upper-management team has been caught red-handed laundering drug money profits when not involved in rigging the mortgage market? Uummm…isn’t that what jail is for?

The only way government needs to get involved here is to simply apply the law, & provide for it’s expedient application. Period…well, they might need to expand the prison system…

Damn, life seems simple tonite…now I’ll ramble a bit, then it’s time for ice cream.

Re: the tragic murder of Mr. Kennedy (the last true president the U.S. ever had) it’s worth remembering that no person has ever been shot in the front of the head…from behind. Or perhaps stated more succinctly, slightly off the starboard quarter, from behind.

Stated more baldly, the laws of physics cannot be broken to aid convenient belief!

The Off-World “threat” is a bit more involved, but suffice it to say that “distance” is not a relevant factor here. (or, more appropriately stated; our understanding of distance) There’s no linear travel involved here, it’s more a case of focusing an incredible amount of “power” on where you want to go, drawing it toward you, thus bending space n’ time, & then having what we laughingly regard as reality unfold back around you; or where you are…or where you think you should be…or where you might be.

(Lets hope interstellar travel doesn’t function like the booking desk of a major airline!)

Trying to visualize what a PhD is trying to explain is like having your head slowly filled with glue…I’m sure the back-engineering is continuing.

Finally, THEY’VE been here a LOT longer than we have…my major concern is twofold: 1) Most of THEM probably don’t have much more concern for US than we do for ant colonies, and 2) Our supposed “leaders”, who in the process of cutting deals to gain access to advanced technology, would probably do it with a civilization that (despite having 2000 centuries of recorded history) may be just as socially & economically retarded as we are.

Blah…so what should we do with that 1.9 B, anyway?

#155 kommykim on 11.24.14 at 1:55 am

RE: #141 devore on 11.23.14 at 11:57 pm
A surplus? Return the money to taxpayers, and reduce the budget and tax rates next year.

Um, the “taxpayers” owe billions that they need to pay back first. Then and ONLY then, can we have a tax cut.

#156 Dear Joe Owe on 11.24.14 at 2:35 am

Love you Garth….I really am hoping Joe Owe or his minions are reading this.

Use the surplus to audit transfer agreements.

The transfer agreements for Employment & Social Development ie LMDA are not working for the intended clients… Ie those Canadians who have paid into the EI fund.
Lots of money has been wasted and I know first hand that all the numbers being presented to the Feds are fudged… and some of my old federal donkey friends can’t seem to see this … Its hurtful to see the poor quality service being provided to EI clients. It’s a money making machine for the contractors as all they care about or are worried about is the billing. Only if the Feds could see the nonsense that goes on and the lack of accountability in the current EPBC. The talking bobble heads for the MSDSI lack experience in handling such a program.

The Feds need to take this program (and the poor federal employees they sent over) back because BC is doing a lousy job administering these funds. They need to talk directly with approved service providers and hear what’s going on. Audit the bloody program as the costs per client are well over historical numbers. As we currently stand the BC government is doing a disservice to EI clients.

The Feds ended immigrant settlement transfer agreements… This should be next on your list Joe.

#157 ILoveCharts on 11.24.14 at 2:44 am

Don’t make any more f%##$#@ changes to the tax code. It ends up just being a transfer of wealth to lawyers and accountants. Pay down the debt.

#158 Millenial1982 on 11.24.14 at 3:05 am

Garth I’m surprised to see how many people didn’t read the question.

To put this in perspective let’s say a family earning $70,000 after tax income finds out they are getting a refund of $476 (0.68%). They have $162,400 in debt and are facing similar questions you have posed. The fact is this is really a pittance in the big picture. The positive here though is as long as it’s used wisely to make a long term difference that’s key and it’s certainly better than being in deficit position.

My vote for the government is to SPEND whatever money it takes to conduct operational reviews and efficiencies on however many government departments we can, make them public, and act on them. Likely this will result in drastic cuts. Start with the small end and work our way up. We can’t fight the champ right off the start. Need to get warmed up, pick up steam and take it from there. I would be confident that those hired to do such work would come up with conclusions that could result in savings if IMPLEMENTED well above a measly 0.68% which just doesn’t cut it. We need to be doing way better to make a difference.

Someone needs to be the bearer of bad news and call a spade a spade and make some tough short term decisions that would result in long term results.

On a side note it’s always been my concern what public service jobs and pensions cost tax payers and the road they are leading us to. Not too long ago I read in Maclean’s the best three pensions in Canada belong to the RCMP, Armed Forces, and your typical Public Sector Government Employee. Not to mention government wages are much better: http://globalnews.ca/news/1359634/reality-check-comparing-ontarios-public-and-private-sectors/ I realize that’s Ontario but I’m sure the same is said across Canada. Anyway these salaries are like exponential debts working against us. The costs are higher, growing faster and always will be until something drastic happens. Hydro and OPP are one example we always hear about in the news. Fact is no matter what % increase they are talking when comparing to the private sector they will always outpace it because they earn so much more. Simple math.

This would be a much more enjoyable exercise if we were talking a much bigger surplus.. maybe one day.

#159 Mark on 11.24.14 at 3:06 am

“Look at the idiots in Alberta, who spent like drunken sailors during this past boom, not noticing the development of the Bakken oil fields. “

Idiots? The Bakken oil fields are still higher cost production than the oilsands. And depletion is quite rapid. Yes, there have been some spectacular oilsands failures, particularly the project that sunk Nexen and partners. But to imply that the Bakken production has damaged Alberta in any meaningful way for all but the short term is really stretching it.

#160 Leo Tolstoy on 11.24.14 at 3:15 am

There’s no point for a country to pay down debt. There’s nothing in it for the government. Voters don’t respond to it.

Income splitting and child care support will move the needle far more.

Speaking for myself, I could care less if the country carries a ton of debt. What financial impact is there on me? Nothing.

#161 john on 11.24.14 at 3:26 am

Garth…you state the increase in government expenses over the past 26 years as if there have been no increases in public service wages and personal.

Also you might consider that real inflation of M3 has risen 14% p/a since 2000. Also consumer inflation ( trhe kind not counted by the fed is running rampant and far far far higher than the 2.4% the gov admits to.

#162 Wes Coast on 11.24.14 at 3:32 am

Kudos to the Conservatives and the PM for introducing income splitting. Election or not it’s about time the tax code stop penalizing spouses that choose to focus on their kids over career. Guaranteed this investment in the next generation will pay off. Everything else is joint marital property – income should be as well.

As for the surplus, reduce business / employment taxes to allow Canadian business to hire more people and keep the economy growing. We need to diversify out of housing and that starts with reducing the penalty on business for hiring people.

Disclosure: I currently do not own a business and would not directly benefit from this.

#163 Exurban on 11.24.14 at 4:10 am

Mixed bag of comments. I recently re-read a couple of pieces by Andrew Coyne on this very subject — but written during the unfortunate “stimulus” period a few years ago. They’re worth a quick scan. From 2010:

How to cut $20-billion from spending without really trying

He summarizes his own recommendations as “…hold provincial transfers and departmental spending to about 3% per annum (from 2009 levels); shutter the regional development agencies, make the larger Crown corporations pay their own way, close the corporate welfare spigot — in a word, desubsidize the economy; and enforce some basic principles of fairness and neutrality, and you’re there. As it turns out, the burden is neatly divided into three, roughly equal parts: one-third from the provinces, one-third from the feds, and one-third from everyone else.

Of course, very little of that was done. BTW, the enormously expensive stimulus is in some degree the fault of all three federal parties, although Harper went much farther than was probably necessary for his minority government to survive.

Coyne also did a short piece on the actions of the Chretien/Martin government in the 1990s. From 2011:

How we really beat the deficit

Concluding paragraph: What made the difference, then? Why did Chretien succeed where Mulroney failed? Because, after the shock of the 1995 Mexican peso crisis, and the glimpse it provided of the truly ruinous debt spiral toward which we were headed, they abandoned gradualism. The only way to beat the remorseless arithmetic of compound interest, they realized, was to make deep, quick cuts in the deficit — so deep and so quick as to get the rate of growth in debt below the rate of growth in the economy, and turn the debt spiral in reverse. And the only way to do that was to make deep cuts in spending.

How deep? From $122-billion in the year they took office, and $123-billion after their first budget, spending was slashed over the next two years by $12-billion. Even as late as fiscal 2000, program spending remained below $120-billion. Adjusting for inflation and population growth, spending was cut by nearly 20%, and held there for another three years. That’s restraint. And that — not economic growth — was the key to their success.

What Coyne doesn’t spell out is that a lot of that “restraint” was pushed down to the provinces. Any serious cutback now would likely do more of the same. My own additional shortlist would gut CIDA, the CBC and the associated subsidies Linden McIntyre mentioned, and the aboriginal spending. Plus, it’s not strictly speaking an immediate budgetary measure, but we have to put more of our citizens to work and that means less “Temporary” Foreign Workers and low-wage immigrants.

Oh, the question was what to do with the surplus? Apply it to the debt, for sure. That should be a no-brainer even if interest rates stay down — and you know they just might, since they have been falling for 33 years. Garth thinks that’s going to turn around, and maybe it will, but in any case debt can be devastating no matter the interest rate.

#164 liquidincalgary on 11.24.14 at 8:00 am

pete said:

$18.6 billion is spent on the military? What a waste of money.

==========================================

pete, every country in the world has a standing army, its own or someone else’s

#165 maxx on 11.24.14 at 8:10 am

I totally respect this exercise, most especially you and your unwavering commitment Garth, however I don’t hold out any hope of tptb doing anything remotely sensible with the results.

Same old, same old…..

#166 maxx on 11.24.14 at 8:14 am

Excellent and relevant rant.

A glaring pock mark in pan-Canadian education.

#167 Tim on 11.24.14 at 8:38 am

I would personally raise the GST back to 7% to expressly pay off the debt. Then after the debt is less than 1 year’s worth of current spending you can take the interest savings and put it as tax savings goodies if they like. Long term I would keep the GST and drop income tax levels on the lowest income earners. Stop kissing up to the $100K or higher income crowd…the don’t need the tax break (and I am one of them).

#168 johnny_igerence on 11.24.14 at 8:48 am

8 billion “spent” on Aboriginals? How many non-Aboriginals have ever read a treaty? Be aware, the tax system is our invention, not theirs.

#169 NoName on 11.24.14 at 9:18 am

#54 A Yank in BC on 11.23.14 at 4:37 pm

are you an american? altho i do agree that our army is equipped with funny stuff, ka f-18 and in a future f-35 there is no need to spend on defence budget.
any country that want ro runs u down can do that, only thing we could hope that they didn’t learn anything for wwii and eastern front, but on another hand we don’t have reserve of man power that stalin had.
contry that have population in excess of 1billion people dont have to have trained personnel, they can ship us just sent “few” elderlis with slingshots and that is end of us…

abut, please, thank you and i am sorry

https://www.youtube.com/watch?v=S74zf0YZX20

#170 Mr. Frugal on 11.24.14 at 9:24 am

What to do with the surplus??? This is the equivalent of welfare bums debating whether to spend their GST rebate on weed or crack.

As long as we have debt there is no “true” surplus.

#171 TurnerNation on 11.24.14 at 9:29 am

A great suggestion for our occupied govt. the H regime:
Axe police forces and task military with policing and justice duties. I predict a 95% confession rate. The other 5%, don’t ask what happened. And, swift justice delivered.

#172 Smoking Man on 11.24.14 at 10:28 am

BREAKING: AP Source: Defense Secretary Hagel resigning from Obama Cabinet Monday.

Trouble in paradise, what gives…this could be serious.

#173 Grantmi on 11.24.14 at 10:30 am

#1 AsiaKid on 11.23.14 at 12:58 pm

WOohoo First!!!!

WOohoo Idiot!!!

#174 Dub on 11.24.14 at 10:34 am

Increase the TFSA room by 6000$ each year so people would be encouraged to save/invest more and be self sufficient when they come to retirement age.

#175 Rational Optimist on 11.24.14 at 10:35 am

Here’s a question: in the late ‘80s, Canadian GDP was about half a trillion US. Now, it’s something like 1.8 trillion. Isn’t the debt-to-GDP ratio a lot more important than the value of the debt itself? That was over 100% in the ‘90s (when the WSJ declared us an honorary member of the third world), but really has moved up and down over the past few decades as you might expect from Keynesianism- it grew following the crappy years in the ‘80s; we trimmed it afterwards through the good years in the ‘90s; it reached a low six or seven years ago and is now back up following the recession. How bad are things really? I think we’re at a 90% debt-to-GDP ratio now. That’s not so bad, considering we’re only six years out from a terrible recession.

The answer, anyway, is that we’ve been out of recession for several years now, so it’s time to pay off the debt a bit. With luck, we’ll have paid enough down that we’ll be ready to spend more when another recession hits. Any surplus should now be directed to debt repayment- if you decide to cut taxes instead, then there is no surplus and no balanced budget at all.

#176 Rational Optimist on 11.24.14 at 10:40 am

54 A Yank in BC on 11.23.14 at 4:37 pm

“#9 earthboundmisfit

Canada’s defense budget is only about 1% of it’s GDP. Few countries on earth spend so little. And you want to reduce that?”

Canada should be ambitious and make its goal to be number one in this regard.

#177 Holy Crap Wheres The Tylenol on 11.24.14 at 10:46 am

Here is a complete list of that spending for the current fiscal year, by department. You will see, for example, that $18.6 billion is spent on the military, $2 billion on CMHC, $3.8 billion collecting taxes, $2.3 billion on prisons, $1 billion on the CBC, $51.6 billion on employment and social development (mostly transfers to the provinces), $87.6 billion by Joe’s department (including the debt interest), $5.3 billion on foreign affairs, $8 billion on aboriginals, $2.6 billion on the Mounties and $49 million on Enterprise Cape Breton.
____________________________________________

Without even thinking about why do we invest 1 billion in the CBC? That would be the first one on my list to cut, spin off or privatize. Why do we need a state run television and radio? What are we that dam insecure that we need to shove Canadianism down our God Dam throats. Get rid of the CBC. It can be funded privately, perhaps they will be better stewards of the monies given to them if they knew it had to be earned.

#178 Kenchie on 11.24.14 at 10:52 am

“Stupid Things Finance People Say”

http://www.fool.com/investing/general/2013/11/14/stupid-things-finance-people-say.aspx

#179 Daisy Mae on 11.24.14 at 10:54 am

“This year Ottawa’s shelling out $279 billion and the national debt is $649 billion.”

********************

The government doesn’t appear to understand what a ‘surplus’ is — according to the dictionary a surplus is described as “additional, leftover, remaining, spare, superfluous, supernumerary, supplementary”.

So someone should sit ’em down and explain this in very elementary terms.

#180 davikk on 11.24.14 at 11:03 am

Dr. Paul Craig Roberts – The Whole Thing is a House of Cards Based in Corruption

http://investmentwatchblog.com/dr-paul-craig-roberts-the-whole-thing-is-a-house-of-cards-based-in-corruption/

#181 Ray Skunk on 11.24.14 at 11:04 am

#142 Dee –

Have you seen how much the IT guys at OPG are coining it in on the Sunshine List? Don’t forget the 1:5 pension contribution.

I find with the Ontario Public Service at least, compensation depends wildly on which segment you’re in. My spouse works an essential service (in all but declaration, but if you want someone to answer the phone when you call 911, you would agree) – compensation there is fairly weak considering the hours, stress and basic medical knowledge required.

For some reason paramedics and their support staff are woefully compensated compared to their colleagues over at Fire and Police. The latter get paid very handsomely – not to mention worshiped as heroes if God forbid anyone should try and rein them in a little.

#182 Rexx Rock on 11.24.14 at 11:06 am

We need no government.Everything they do is very costly,punishable and over regulated.They are no better than the mafia.

#183 Daisy Mae on 11.24.14 at 11:07 am

#72 Wrote a note to Joe: “I applaud the government’s introduction of TFSA’s to assist Canadians to prepare for the future…”

******************

Garth needs to get credit for this introduction — not the government.

#184 Daisy Mae on 11.24.14 at 11:12 am

#73 Seal: “We really need a change in Ottawa. Real problem is the choices we currently have are bleak, bleaker and never going to happen.”

****************

That IS the real dilemma, isn’t it?

#185 Dominoes Lining Up on 11.24.14 at 11:19 am

A great example of how a government can screw up what should be a promising future for a population.

http://www.msn.com/en-ca/news/world/women-not-equal-to-men-turkeys-erdogan/ar-BBfAc2R

Note how positive things looked for Turkey in this analysis two years back.

http://opinion.financialpost.com/2012/09/21/is-canada-headed-for-demographic-disaster/

Canada’s debt was well managed by the Liberals in the 1990s. But it came at the price of abandoning many services as well as the 1989 ‘commitment’ to end child poverty. (Remember that? Not many do)

Today, child poverty is even worse.

http://www.thestar.com/opinion/editorials/2014/11/21/end_child_poverty_in_canada_now_editorial.html

Government supports gambling everything on CMHC backed mortgages for a housing bubble to distract us from real issues.

Wouldn’t it be better to gamble everything instead on the future of our children?

What a wonderfully different country we could be in only twenty years if we did that.

#186 Zoe on 11.24.14 at 11:45 am

45North: my autocorrect betrayed me –meant “a few” scrutineers, not free scrutineers. I’ve worked elections, it’s a coupleahundred bucks. Re space rental, fair enough. Multiplied by the stations across the country, still I suspect cheaper than the payback on a computer system — see health erecords debacle.

#187 Debtfree on 11.24.14 at 11:47 am

DELETED

#188 Josh in Calgary on 11.24.14 at 11:50 am

#43 Doug,
You have it exactly right. There is no choice and the answer is simple. PAY DOWN THE DEBT.

This should always be the first option mentioned and it should take extraordinary options to bump this one off the table, not vote buying programs like income splitting (and I stand to benefit from that, so it’s not sour grapes).

It’s exacly like managing your own finances. You finally have money left over at the end of the month … what do you do? Pay off the credit card (some of it), or book a vacation.

Sure a vacation would be nice and you’ve no doubt “earned it”, but life won’t get better (financially speaking) until you take care of your debt.

Now there are some good reasons for a government to carry some debt, but what would be wrong with being a work leader in low debt to GDP?

#189 Kenchie on 11.24.14 at 11:52 am

“Why Uber drivers hate Uber”

http://qz.com/299655/why-your-uber-driver-hates-uber/

#190 Vangrrl on 11.24.14 at 11:53 am

http://www.cbc.ca/news/politics/tfsas-will-lead-to-welfare-for-the-wealthy-government-warned-1.2843835

#191 Josh in Calgary on 11.24.14 at 11:56 am

#166 Tim,
I agree with your sentiment but keeping GST higher actually hurts the lowest earners more. They typically spend most of their paychecks on essentials and their income tax is already next to nothing (as it should be).

The place to start is by rolling back tax breaks which typically favour the rich anyways. Instead we’re rolling out more because they win elections.

#192 Debtfree on 11.24.14 at 12:13 pm

Oh, oh , cbc just put up an article on the TFSA . I wonder if they will still give little f the credit for coming up with it or throw the guy who actually did come up with it under the bus . You must grin a great deal these days Garth .

#193 Doug in London on 11.24.14 at 12:18 pm

It’s simple, use that surplus to pay down some of the debt. In the last decade the government, against the advice of economists, decided to cut the HST rate when surpluses occurred. It’s easy to see where that got us, so now’s the time to start paying down that debt. As Tim, post #166 said, wealthy people don’t need any more tax breaks.

#194 Kenchie on 11.24.14 at 12:20 pm

It’s easier to turn a part-time employee into a full-time (or close to) than to hire new people. It’s also a situation that isn’t covered by the MSM on a monthly basis like the jobs report is.

As Garth has mentioned several times, the US economy is growing again, and the bottom of the pyramid is starting to benefit from it.

http://www.bloomberg.com/news/2014-11-24/jets-are-out-televisions-in-as-u-s-growth-benefits-spread.html

#195 Mike S on 11.24.14 at 12:21 pm

We actually spend 2B$ on CMHC?
I though it was a cash cow (until the bubble bursts)

#196 Rainclouds on 11.24.14 at 12:26 pm

We get what we deserve.

Become informed about what YOUR elected representatives are up to and believe in. Vote accordingly

Too much power/influence in the PMO, needs to be curtailed. We need electoral reform. Vote accordingly

We get what we deserve…………….

http://www.theglobeandmail.com/globe-debate/michael-chong-on-parliamentary-reform-canadians-are-losing-faith-in-their-democratic-institutions/article21678294/

#197 Rational Optimist on 11.24.14 at 12:28 pm

188 Vangrrl on 11.24.14 at 11:53 am

The CBC characterizes OAS as “welfare”?

#198 NotAGreaterFool on 11.24.14 at 12:29 pm

CMHC says all-in-all, no concerns.

http://www.cmhc.ca/en/corp/nero/nere/2014/2014-11-24-1030.cfm?WT.cg_n=TWT_MAC

About the 416, it says the acceleration in house prices is stable or unchanged.

#199 Mike S on 11.24.14 at 12:31 pm

“Yes, it’s Keynesian economics at work (spend more in the bad years)”

Canada didn’t really had bad years as of yet. Not compared to the US. While the US was experience massive bubble burst and private sector deleveraging we just accumulated more debt (on all levels) “enjoyed” high housing prices (And taxes) and high revenues in the resource sector.
This surplus that we are trying to spend would not be available in normal conditions (and it won’t be – just wait a few years)

#200 Ronaldo on 11.24.14 at 12:32 pm

This is very hilarious. This would be equivalent to a person making $250,900 per year with a debt of $649,000 and having a “projected” surplus of $1,900 asking his kids what they would like him to do with this amount. That wouldn’t even cover their cell phone bill. Remember not that long ago, our dear government squandered $1 billion on security for the G20 like it was a drop in the bucket. I guess maybe it was given this example. It still boggles my mind how this could even have been possible. Give this example to the school kids and see what they come back with.

#201 Jeff on 11.24.14 at 1:08 pm

What to do when we have debt ? Pay it.

Oh well, paying debt is not really a popular decision.

#202 Mike S on 11.24.14 at 1:14 pm

“Already two comments about axing the CBC, but no one complaining about the budget of the CMHC which is twice as big? Hmmm…”

I am not complaining about CBC in general (I liked the Olympics in HD) but I do complain about their incompetence when covering real estate. We do need independent news, but they must be independent. If they are going to just reprint the CREA press releases, why do we need to pay them?

Same thing for our government. I am not against PC in general, but H needs to be out, as I view him personally responsible for breaking several things (including the housing market)

#203 Whitey on 11.24.14 at 1:17 pm

Pay down the debt and cancel the recent election promises.

#204 Capt. Obvious on 11.24.14 at 1:19 pm

The surplus should be spent on paying down the national debt. Some government debt is ok, but we should take opportunities to reduce it when possible.

#205 chapter 9 on 11.24.14 at 1:34 pm

$2.4 Billion a year. Another duplicated program between the fed’s and the provinces. The fed’s portion $1.5 billion. The cost of official bilingualism. The highest concentration of French- Quebec,Ont.,New Brunswick all other provinces it is virtually non existent.
All the new immigrants to this country(80%) their mother tongue is neither French or English.
And what are the costs for business? Can’t imagine.
But, it’s only your money and since 1987 taxpayers have spent roughly $65 billion.
This is no longer an asset it is a liability!!

#206 None on 11.24.14 at 1:36 pm

#24 Cato the Elder on 11.23.14 at 2:33 pm

===========

Cool it with your capitalization man. It really makes your posts jarring to read.

#207 My House is my Friend on 11.24.14 at 1:55 pm

Interest payments of $26 billion on a debt of $649 billion is $867.00 per man woman and child per year. Before 1971 those payments went back to the bank of Canada and by extension back to the taxpayer and now they go to the private banks like RBC and TD. Why??? Ever since around 1971 our national debt is skyrocketing. Your whining about $1.9 billion when $26 billion is there for the taking!

#208 Mike T. on 11.24.14 at 1:56 pm

‘Trouble in paradise, what gives…this could be serious.’

My guess – he’s not complicit with some part of ‘the agenda’ but has served the establishment well so he can just leave rather than go out in scandalous fashion

as if we’d ever find out the truth though

#209 None on 11.24.14 at 2:00 pm

#37 RealistvsExtremist on 11.23.14 at 3:24 pm

And being ignorant of facts shows how the brainwashed sheeple have no clue…….
====================
Get off your high horse. Just because you read the rantings of whackjobs on the Internet and watch their Youtube videos does not mean you have some special insight to the world.
+++++++++++++++++++++++++++
I find it interesting that everytime there is a person that is passionate about showing us how the “real world works” there always has to be a bully who belittles or calls people names or such rather than “providing their own research” to counter the arguments. In the olden days they just showed up and ran you through with a sword, today they tare called wack jobs and conspiracy theorists (invented by the people with the swords).

===================

Wait, but so long as you are the one disparaging people, calling them brainwashed and sheeple because they don’t agree with you, that’s just fine right?

#210 Debtfree on 11.24.14 at 2:09 pm

@187 stop telling the truth .

#211 Steve on 11.24.14 at 2:12 pm

Since the question was ‘What do we do with the surplus” – Pay down the debt!

As many have extended the inquiry into giving more general advise, here is mine: Please stop spending our futures to buy the votes to stay in power! That would increase the surplus even more.

Since most of the population and most of the politicians do not want to make those tough choices, I hold out little hope for material change, and expect we will continue to live and spend beyond our means until we reach a point of extremem crisis, perhaps like Greece…

For the CMHC ‘haters’, please have a look at this to become more informed.

http://www.cmhc-schl.gc.ca/en/corp/about/index.cfm

CMHC does more than mortgage insurance, which is self-financing. The other programs eat up the $2b.

#212 None on 11.24.14 at 2:28 pm

#123 RealistvsExtremist on 11.23.14 at 10:24 pm
Another name caller using a “govt” tv program to try and prove foolery.

===============

Wait, are you saying that CBC is also in on the whole conspiracy by broadcasting this documentary? Specifically that they are showing this National Geographic film to help support the narrative that there was only one shooter in order to help out their pals at the CIA?

#213 Mister Obvious on 11.24.14 at 2:37 pm

Just a thought here about TFSA’s inspired by today’s CBC article.

If it comes to pass that a future government gets serious about means testing for OAS, GIS and perhaps other programs, do they not face some difficulty with the TFSA?

I’d imagine that an annual tax return is rich with information indicating a taxpayer’s ‘means’ but the current value of a TFSA is not part of that document.

Sure, the feds keep tabs on what goes in and out to ensure no over-contributions occur in a calendar year. But do they know (or should they even care) what balance is actually present for the purposes of determining eligibility for government programs?

#214 Mark on 11.24.14 at 2:44 pm

“A big part of the problem is that, for all everyone yells about civil servants and gold-plated jobs, doing IT in the civil service is a nightmare. I make $120k/year in private industry; I just saw an equivalent IT posting at Queen’s Park for $62k/year. Only the laziest person unable to get any job in private industry would take that.”

That’s a heck of a lot of IT people these days, as even the government positions paying very little are receiving hundreds of applications. The IT job market is a giant mess in Canada, with a lot of very good talent not being able to even get basic responses from the employers, while not-so-good talent can float from failure to failure.

Root of the problem seems to be that HR personnel do most of the hiring, and are more interested in the behavioural interview stuff, than they are at actual technical skills. Or HR people craft job descriptions so specific that practically nobody but liars and crooks can meet them (by cutting and pasting).

#215 RealistvsExtremist on 11.24.14 at 2:59 pm

#206 None on 11.24.14 at 1:36 pm
#24 Cato the Elder on 11.23.14 at 2:33 pm

===========

Cool it with your capitalization man. It really makes your posts jarring to read.
++++++++++++++++++++++++++++++

Why? Truth hurt about the communist totalitarian country we are turning into? Yes. That does make my head hurt.

#216 RealistvsExtremist on 11.24.14 at 3:06 pm

As Garth has mentioned several times, the US economy is growing again, and the bottom of the pyramid is starting to benefit from it.

http://www.bloomberg.com/news/2014-11-24/jets-are-out-televisions-in-as-u-s-growth-benefits-spread.html

++++++++++++++++++++++++++++++++++++
“Susan Carpenter, a 44-year-old supervisor at a Lincolnton, North Carolina, factory that makes oil filters, said she can see the improvement. The two raises she’s received since starting work in February 2012 both occurred this year. She now makes $12 an hour — up from about $10 last year, and is putting in more than 40 hours a week.”

WOW – TWELVE BUCKS AN HOUR FOR A SUPERVISOR

at that galactic rate the young 44 year old will be able to save a 5% downpayment for a 400 ft shoebox in Yaletown, Vancouver in about 5 years.

God Bless Amerika…….

#217 Nemesis on 11.24.14 at 3:09 pm

#WTF,It’sMondayAfterAll… #LegLiftingThinkPieces… #ForPoliticalPoochies… #SomeHeavyLifting…

[TheTyee] – What We Forgot on Remembrance Day

…”If there is no one to hold the prime minister to account, how is there democracy?”…

http://www.thetyee.ca/Opinion/2014/11/24/Forgot-On-Remembrance-Day/

[CounterPunch] – The Struggle Against Dystopia: Neoliberal Violence in the Age of Orwellian Nightmares

…”What exists in the United States today and increasingly in Canada is fundamentally a new mode of politics, one wedded to a notion of power removed from accountability of any kind, and this poses a dangerous and calamitous threat to democracy itself, because such power is difficult to understand, analyze, and counter. The collapse of the public into the private, the depoliticization of the citizenry in the face of an egregious celebrity culture, and the disabling of education as a critical public sphere makes it easier for neoliberal capital with its hatred of democracy and celebration of the market to render its ideologies, values, and practices as a matter of common sense, removed from critical inquiry and dissent.”…

http://www.counterpunch.org/2014/11/24/neoliberal-violence-in-the-age-of-orwellian-nightmares/

#218 Sheane Wallace on 11.24.14 at 3:14 pm

different degrees of incompetence from those responsible for the housing bubble:

https://ca.finance.yahoo.com/news/modest-amount-overvaluation-canadian-housing-markets-cmhc-says-173444312.html

Modest amount of overvaluation in Canadian housing markets: CMHC

However, both Bank of Canada governor Stephen Poloz and Finance Minister Joe Oliver have downplayed the susceptibility of the Canadian housing market.

#219 Mike S on 11.24.14 at 3:57 pm

According to CMHC:

“The level of home prices in Vancouver is supported by local growth in personal disposable income and long-term population growth.”

Slight problems in Toronto, but no correction is expected

#220 Mark on 11.24.14 at 3:58 pm

“different degrees of incompetence from those responsible for the housing bubble:”

Its not incompetence. Its outright dishonesty. Like that famous Iraqi “Minister of Information”. Toronto prices could very well be in an outright and highly visible crash (they’re falling, but not crashing as of yet), and the CMHC would probably still be out there claiming “rising prices”. Additionally, the CMHC is completely dishonest with its claims that it is not in the subprime mortgage insurance.

#221 bdy sktrn on 11.24.14 at 3:59 pm

#216 RealistvsExtremist on 11.24.14 at 3:06 pm

houses also cost 1/10 less in that town.

shack and salaries in van, seattle,sf,la,sd are 10x more.

it balances out.

#222 Sheane Wallace on 11.24.14 at 4:02 pm

#214 Mark

The IT job market is a giant mess in Canada, with a lot of very good talent not being able to even get basic responses from the employers, while not-so-good talent can float from failure to failure.
…………………………

I interviewed 2 years ago people for a senior technical position in the private sector, for the business of a friend of mine, out of 10 interviewed and over 200 resumes the only viable was a Canadian working from 15 years in the states, who wanted to get back to Canada. Just after getting the offer he got cold feet.

Talant you are saying…

#223 Mike S on 11.24.14 at 4:04 pm

“CMHC does more than mortgage insurance, which is self-financing. The other programs eat up the $2b.”

It seems to me that CMHC are pretty bad at the other things they do.
They say they do “Affordable housing”. I don’t quite sure where that is. Me and my wife make above average salaries, and have a quite nice networth for our age, but we find nothing near “Affordable”.
I guess our problem is that we can actually do the math, and we did see the costs of comparable houses south of the border

#224 dosouth on 11.24.14 at 4:09 pm

#218 Sheane Wallace on 11.24.14 at 3:14 pm –

“However, both Bank of Canada governor Stephen Poloz and Finance Minister Joe Oliver have downplayed the susceptibility of the Canadian housing market….”

How true, wonder when the saying will come true?

… This will not turn out well…..

#225 Rational Optimist on 11.24.14 at 4:17 pm

216 RealistvsExtremist on 11.24.14 at 3:06 pm

“WOW – TWELVE BUCKS AN HOUR FOR A SUPERVISOR”

Such negativity. Did you miss the part where it said she was making ten bucks an hour last year? Sounds like a twenty percent wage increase to me.

She’s in Lincolnton, North Carolina; why would she care how much condos in Vancouver cost?

#226 OMG The better one on 11.24.14 at 4:37 pm

Finally Smoking Man found. He is in Las Vegas this week after all. Smoky the markets are all going to hell without your hockey Schtick.

http://www.reviewjournal.com/news/las-vegas/police-seek-suspect-sunset-station-robbery

#227 johnny d on 11.24.14 at 4:38 pm

Get rid of the CBC? Sure let’s not spend anything on arts and culture. Canada barely has its own culture anymore anyway so let’s put the last nail in that coffin.

Apparently no one listens to CBC radio which has a very eclectic music selection and showcases Canadian artists that would otherwise get no exposure. Let’s stick to radio that’s 90% ads and the same ten US pop songs.

As for the news portion of CBC… Let’s not forget who actually did the INVESTIGATIVE JOURNALISM to bring to light all the faults of the temporary foreign worker program. Specifically with cases like the RBC firing Canadians to hire TFWs and also several Alberta based oil companies. Let’s stick to news from sources like Global which is just a giant advertisement for CREA and the likes.

TV… Pffft… Who needs original programming and top notch sports coverage. Even though the NHL wouldn’t be what it is today without Hockey Night in Canada. Let’s stick to reality TV and NFL which is 90% ads sandwiched in between 20 second plays.

Seriously maybe some people should actually watch and listen to some CBC content before bashing our national media outlet. Have some pride that we spend on something culturally important and available to everyone.

#228 Kris on 11.24.14 at 4:50 pm

Just in CBC news.
CMHC says Canadian house valuation only modestly overvalued.
Good grief…the whole country is a scam.

#229 RealistvsExtremist on 11.24.14 at 4:54 pm

#214 Mark on 11.24.14 at 2:44 pm
“A big part of the problem is that, for all everyone yells about civil servants and gold-plated jobs, doing IT in the civil service is a nightmare. I make $120k/year in private industry; I just saw an equivalent IT posting at Queen’s Park for $62k/year. Only the laziest person unable to get any job in private industry would take that.”

That’s a heck of a lot of IT people these days, as even the government positions paying very little are receiving hundreds of applications. The IT job market is a giant mess in Canada, with a lot of very good talent not being able to even get basic responses from the employers, while not-so-good talent can float from failure to failure.

++++++++++++++++++++++++++++++++++

Completely and utterly false. I am an owner in IT and I can tell you right now that any good IT developer can get a 100K private sector job in the snap of their fingers.

IT is not a mess in Canada.

Only the Public Service is…….

Private Sector IT is leading the way to changing how we work and run as a society. The Govt and the Public Sector is nothing more than a giant zit on everyone’s butt for the most part taxing and regulating everything in existence for no other reason generally than to be able to “justify” their existence.

#230 RealistvsExtremist on 11.24.14 at 4:59 pm

#225 Rational Optimist on 11.24.14 at 4:17 pm
216 RealistvsExtremist on 11.24.14 at 3:06 pm

“WOW – TWELVE BUCKS AN HOUR FOR A SUPERVISOR”

Such negativity. Did you miss the part where it said she was making ten bucks an hour last year? Sounds like a twenty percent wage increase to me.

She’s in Lincolnton, North Carolina; why would she care how much condos in Vancouver cost?

+++++++++++++++++++++++++++++++++

The “Rationale” there is like saying if your paid 4 bucks an hour and it goes to you are getting an 100% wage increase.

Granted its cheaper to live in N.Carolina….but not that much cheaper. They still pay income tax, state tax and now……….the OBOZO Medical tax. So after all that a 44 year old supervisor is left with 7 or so bucks an hour.

WOW !!

My comparison stands.

#231 RealistvsExtremist on 11.24.14 at 5:00 pm

Sorry…..

…4 bucks an hour and it goes to 8 bucks you are getting an 100% wage increase……

#232 gut check on 11.24.14 at 5:09 pm

it costs almost twice as much to collect taxes as it does to run our prison system?

Well.. that number oughta be looked at.

5.3 billion on foreign affairs, huh?
Is that broken down anywhere?

#233 Mark on 11.24.14 at 5:13 pm

“I interviewed 2 years ago people for a senior technical position in the private sector, for the business of a friend of mine, out of 10 interviewed and over 200 resumes the only viable was a Canadian working from 15 years in the states, who wanted to get back to Canada”

Lots of employers, maybe even in your situation, have inflated senses of what they’re looking for. To receive 200 resumes and to only find one viable, is significantly inconsistent with what I’ve seen in the labour market out there. Small firms receiving hundreds of resumes, mostly qualified. Larger firms receiving thousands of resumes. Both large and small firms not even possessing enough professionalism to respond to qualified applicants. A strong desire to have an exact match of the guy who previously filled the position, rather than someone who can grow into the position. Not to mention completely inappropriate behaviour such as coding tests.

#234 Bruce on 11.24.14 at 5:17 pm

It’s a no brainer. Pay down debt!!!
It seems to me that Keynsian Economics goes out the
window when we have a surplus. There’s no votes in paying off your tab!!!

#235 TnT on 11.24.14 at 5:31 pm

#220 Mark

Toronto prices could very well be in an outright and highly visible crash (they’re falling, but not crashing as of yet)

Hahahaha… funniest thing you ever posted….

#236 saskatoon on 11.24.14 at 5:42 pm

WTF:

https://www.youtube.com/watch?v=mLPvv-TZxpI

Brad Lamb vs. American Express

#237 45north on 11.24.14 at 6:02 pm

re civll servants: Here’s one that did her job to the benefit of a whole country:

Dr. Kelsey’s resistance to the relentless pressures of the drug’s manufacturer likely spared thousands of American families from tragedy. It also elevated Dr. Kelsey to one of the most celebrated civil servants in that country.

http://www.theglobeandmail.com/news/national/canadian-doctor-averted-disaster-by-keeping-thalidomide-out-of-the-us/article21721337/

the glass half full

#238 Mark on 11.24.14 at 6:39 pm

“Completely and utterly false. I am an owner in IT and I can tell you right now that any good IT developer can get a 100K private sector job in the snap of their fingers.

IT is not a mess in Canada.

Not true at all. Those $100k private sector jobs in IT are practically non-existent, and when they do exist, they receive so many applications from good people that most of them go un-responded to. IT demand in Canada is minimal. Significant numbers of new CS grads can’t find jobs, and not for lack of desire or talent, but for the mere fact that their applications are lost in deluge of applications that firms who are looking for IT talent receive. Top CS grad of my alma mater, who actually was allowed to teach an undergrad class while in 4th year university, in mobile app development (she was that good/up-to-date), could only find a job as an alumni relations assistant. The bigger private sector is hooked on outsourcing, like RBC, to India where they can pay employees 1/3rd of Canadian wages. Your claim that good developers can easily command $100k is pure fantasy.

#239 Mark on 11.24.14 at 6:57 pm

“IT is not a mess in Canada.”

Here, I’ll help you out with a link since I’m feeling extra generous today:

http://c.ymcdn.com/sites/www.ospe.on.ca/resource/resmgr/DOC_advocacy/2014_DOC_Crisis_Labour_Marke.pdf

Page 16. Less than half of CS/Math/InfoTech grads working in the field, and a substantial number not even working in a field where a university degree is required at all (ie: as technicians).

I would call this a mess. I think anyone reasonable would call it a mess, for so many people with profession-specific training (versus more general degrees such as in Arts) not even being able to find employment in their profession. And with employers being over-run with applications from qualified people, it is clear that a lot of very good talent is falling between the cracks.

#240 maxx on 11.24.14 at 7:02 pm

#179 Daisy Mae on 11.24.14 at 10:54 am

“This year Ottawa’s shelling out $279 billion and the national debt is $649 billion.”

********************

The government doesn’t appear to understand what a ‘surplus’ is — according to the dictionary a surplus is described as “additional, leftover, remaining, spare, superfluous, supernumerary, supplementary”.

So someone should sit ‘em down and explain this in very elementary terms.

Hear! Hear!

#241 jess on 11.24.14 at 7:19 pm

I wonder how much tax they don’t collect ?

….”the study, the researchers took 128 bankers
found that bankers started cheating when prompted to remember that they were bankers .”

http://www.nature.com/nature/journal/vaop/ncurrent/full/nature13977.html
http://nymag.com/daily/intelligencer/2014/11/bankers-are-cheating-cheaters-who-cheat.html

http://visar.csustan.edu/aaba/jerseypage.html

#242 Mark on 11.24.14 at 7:20 pm

“Brad Lamb vs. American Express”

Unless he’s lying, at least he’s at least claiming to be “all-in”. And hence, as the market continues to slow down/fall in Toronto, likely to suffer a severe loss in personal wealth. Unlike the CMHC real estate pumping fonctionnaires who, after leaving Canada’s RE economy in devastation and being dismissed, will get to enjoy nice pensions in retirement and risk none of their personal wealth for the significant reward of being paid to spread false propaganda about the housing market.

Looks like he’s put on a bit of weight too. Must be quite a stressful life these days.

#243 chapter 9 on 11.24.14 at 7:29 pm

I guess it finally dawned on someone in the foreign affairs department that “Well maybe we can stop sending China $30 million a year now, ya like they ever needed the money” Who are the clowns that think this stuff up or is it, we have to spend the budget so we will get more next year. I am surprised we are not giving Bill Gates money!!

#244 crossbordershopper on 11.24.14 at 7:40 pm

Love being poor.
I have no worries at all at all the goverment spending as long as i get free stuff and no stress.
So keep going to work everyday people lot of people waiting for your tax money.
You give it or we take it. You dont want to give me directly the goverment will do my dirtywork and collect.
Im sitting back having a drink pay day end of the week running low on suds.

#245 Jarvis Korte on 11.24.14 at 7:57 pm

1) Make surplus bigger by ending welfare payments, cough transfer payments to Quebec.

2) Take said surplus to allow accelerated capital assets write offs (CCA), to selected new capital additions in certain industries which will diversify the economy. $1.8 billion isn’t a lot to play with. Not talking a corporate tax hand out, just a targeted deferral.

3) Spend the money on a group of smart business, public policy etc group who actually has teeth. Their initiative, to shrink government, have less people sucking off the tit of private enterprises. Reduce government regulation and interference in the economy. Get ride of obsolete and concluded laws and regulations which hinder Canadian competiveness on a global economy.

4) steam roll over all left coasters and eastern leeches who don’t want oil to be exported from their ports but have no problem putting their hand out for a share of all the wealth created by the hard working people in the oil business (in the form of health care and useless government services)/

#246 Entrepreneur on 11.24.14 at 8:48 pm

Pay down the debt and cut spending. Also, more tax for the big corporations to reduce tax on small business (after all the resources are for Canadians). Give small business breaks so they can survive.

It was our host, Garth Turner (when on parliament hill) suggested the TFSA. Am I not correct in saying that?

There are 18 refineries in Canada. As Gil McGowan of Alberta Federation of Labour said “Keep the jobs here”…”get the maximum value out of the resources they own”…”doing so creates more jobs and wealth.”

#247 RAL on 11.24.14 at 9:08 pm

#227 johnny d
Get rid of the CBC? Sure let’s not spend anything on arts and culture. Canada barely has its own culture anymore anyway so let’s put the last nail in that coffin.
—————————————————————–

There are other sources of funding for Canadian culture. How can you feel comfortable with a government funded organization telling us what we should be like? If you look at the other contents of the budget you will see Telefilm Canada also has a budget. I would have to suspect that the Canadian Council for the Arts would have some budget for Canadian content, Canadian Heritage (did you get your flag?) has a larger budget than CBC and the provinces also have budgets to subsidize Canadian programs. If you watch the credits of many shows on discovery or treehouse you will see there are a lot of different agencies that are funding Canadian content.

If you didn’t have a government agency dictating what they think the culture of the country should be than the general public will decide what they want to watch or listen to (viewership generates ad revenue).

We all come to read this pathetic blog because we choose to. I find it to be a much more beneficial way to spend my time than a lot of the drivel that government subsidies have supported. Go Garth!

#248 RAL on 11.24.14 at 9:09 pm

BTW. My vote. Stop digging the giant money hole and start paying down the debt.

#249 james on 11.24.14 at 9:56 pm

Garth,

Still reading u daily. The only comments I read r when u give a subliminal rebuttal. K and I r close to separating so I hope to give u total control of my finances shortly. Control will free me. I love my dog, I love my garden, I love my raised beds, I love your blog,…..

Keep up Your Work,

James

#250 Tony on 11.25.14 at 12:52 am

The Canadian government should of course number one stop sending money to third world countries as a gift. This country could also end up a third world country. The surplus or deficit is “TBA” To Be Announced. Which will be at midnight on the last day of next year.