Seeing red

Well, there ya go. The indy PBO (Parliamentary Budget Office)  has confirmed what this cerebral but athletic blog told you. Trudeau fibbed. The federal deficit will be bigger, and your need to do something about it more urgent.

You may recall during the election campaign that the T2 guys admitted (a) they have no plans to balance the budget, which means spending will exceed revenues and (b) we’ll therefore be borrowing one mother of a load of money. The shortfall last year was $14 billion. Next year it’ll be $27 billion. In fact Mr. Socks forecast a deficit north of $20 billion every year during the Lib mandate.

But, says the PBO, not so fast. Deficits will actually average $1.6 billion above that, and likely a lot more if one of two things happen (and both will). First, the economy slows at some point during the next four years and, second, T2 clings to power by sleeping with Singh. NDP demands to keep the minority government afloat are expected to include some version of its pharmacare program, social housing initiatives and (yes) increased taxation on the rich people who some to this pathetic site and should know better than to be successful. The PBO admits it did not include Trudeau’s campaign promises in its projections, either. So throw in some extra billions.

Trudeau could roll the dice, cuddle up to the Bloc and avoid taking on some of the NDP baggage. But that would involve caving to another set of demands, while making Jason Kenny’s head explode. There’s no getting away from the economy, however. Growth is expected to be anemic – well below 2% for the next few years – and any expansion of the current global trade wars would shiv us. Plus, just imagine if oil prices remained low and we didn’t build that pipeline. More of Jason’s brains going airborne.

As we’ve warned you for some days now, the greatest impact of this federal spending agenda will be more taxes. Yes, residential real estate is a target. And so are incomes and investments, as well as the equity and retained earnings of small corps. The first de facto coalition government budget is about 90 days away, and may not be pretty. Unless you’re one of those commie moisters with tats, a vape pen collection, three degrees, airpods, a transit pass and a big chip, then consider going defensive.

Let’s review some of the top suggestions…

First, capital gains. The odds of the inclusion rate rising are elevated. This would be a moronic move, but under active consideration. Instead of letting you keep 50% of a gain with no tax, that might fall to 25% with the remainder being added to annual taxable income. Bummer. If you have an asset that’s grown substantially – like a family cottage or secondary rental property – it might be wise to crystallize that gain before the rules change. In terms of financial portfolios, hiking the rate would also be a negative but probably not a good enough reason for most people to cash out.

Income splitting. If one spouse makes less than the other you have a great vehicle for saving tax. Open a spousal RRSP, for example. The higher-income earner makes contributions into it and claims the full deduction from income. After three years the money becomes the property of the other spouse and can be removed at their lower rate.

Spousal loans. No brainer. Just lend whack of extra money to your squeeze and let him/her use it to invest. So long as you charge interest (the required rate is just 2%) none of the investment gains will be attributed back. Your partner can even claim the interest paid as a deduction against the investment gains.

TFSA gifts. Another way to income-split within a household. Give your spouse or adult children money they can use to invest in their tax-free accounts. There is zero attribution back to you, and all of the proceeds accumulate free of tax.

Pay the family expenses if you earn more. Let the less-taxed spouse be the family investor at their lower marginal rate. Also have a joint non-registered account. That way half the gains will attract less tax and additionally, if the cat kills you while sleeping, all of the money becomes your spouse’s property without probate or delay.

Small business dude? Don’t pay yourself only in dividends, as so many do. There’s no real tax savings plus you earn no RRSP room. For entrepreneurs without pensions and with potential creditors, registered retirement savings are a key tool for deferring and shifting tax. Also remember that Libs hate you, as demonstrated last year. The assault on retained earnings and passive income will continue so abandon that plan of stashing retirement savings inside your corp. They’re coming for you.

We’ll continue this on future days. Apparently voting has consequences. Imagine that.

Federal gross debt, 1870-2019 (in 2019 dollars)

147 comments ↓

#1 N on 11.15.19 at 3:30 pm

https://www.theglobeandmail.com/business/article-cn-rail-to-lay-off-1600-employees-amid-weakening-economy-trade/

#2 Andrewski on 11.15.19 at 3:34 pm

Quelle surprise!? Hang on people, we’re in for a bumpy ride. Loving the TFSA idea.

#3 Westcdn on 11.15.19 at 3:44 pm

The main reason I am seriously considering Alberta leave Confederation is to get from under Federal policies and programs. It is not a repudiation of being Canadian. Albertans are just terrible at virtue signalling. My complaint is Alberta has paid overall (IMO) from being a part of Confederation.

I have an attitude that it is not charity unless it hurts. I get very serious how that money is being used. Let us just say I am disappointed with Blanchet – his sense of entitlement offends me.

We disagree as Canadians but it is important we find common ground and get the job done. I may even get to respect Butts and Blanchet if I was working with them but make no mistake I want Alberta to succeed.
A blast from the past – https://thetyee.ca/Views/2006/06/07/AlbertaEffect/

#4 nice graph on 11.15.19 at 3:54 pm

Nice to see the debt graph at the bottom. Is it just me, or is it actually the Cons in blue who suck the most at curtailing spending? The only time the debt goes down is in red…..

The last Tory administration dealt with the GFC. But, yes, they all suck. – Garth

#5 Abc123 on 11.15.19 at 4:04 pm

“ abandon that plan of stashing retirement savings inside your Corp”

Are you then advocating for removing all income out of your Corp even if that puts you in highest tax bracket ?

Does it not make sense to maintain control over your funds and invest them as long as possible by continually deferring the tax liability ?

Vinny Bobbarini says while clutching his aching head “ I’m so confused “ !

#6 mj on 11.15.19 at 4:06 pm

I know things change daily. A few days ago you said forget about recession. and today you think things can slow down in the next 4 years. are the odds higher today it’s possible that we can see a recession

Recession is consecutive quarters of negative growth. Not as stated. – Garth

#7 Bezengy on 11.15.19 at 4:06 pm

I seen this coming a long time ago and have been preparing for a long time but like a good friend of mine once said when I was putting on my life jacket, “what the hell are you doing?, the waters thirty three degrees man”
Btw….thats one degree of your not a boomer.

#8 Gerry on 11.15.19 at 4:09 pm

If you set up a joint (with spouse) non registered account, who and what percentage of the gains is attributable to whom? For example: one spouse makes employment income and one spouse is unemployed?

#9 Mr Canada on 11.15.19 at 4:09 pm

This article reminds me of Game of Thrones/House of Stark : winter is coming………….

#10 AGuyInVancouver on 11.15.19 at 4:10 pm

#3 Westcdn on 11.15.19 at 3:44 pm
The main reason I am seriously considering Alberta leave Confederation is to get from under Federal policies and programs. It is not a repudiation of being Canadian. Albertans are just terrible at virtue signalling. My complaint is Alberta has paid overall (IMO) from being a part of Confederation.

I have an attitude that it is not charity unless it hurts. I get very serious how that money is being used. Let us just say I am disappointed with Blanchet – his sense of entitlement offends me.

We disagree as Canadians but it is important we find common ground and get the job done. I may even get to respect Butts and Blanchet if I was working with them but make no mistake I want Alberta to succeed.
A blast from the past – https://thetyee.ca/Views/2006/06/07/AlbertaEffect/
– – –
Great, so you’ll be living in a little petro-state just as demand for fossil fuels starts a permanent decline. Good thinking!
https://www.bloomberg.com/news/articles/2019-11-15/why-even-saudi-aramco-is-now-talking-about-peak-oil-quicktake?srnd=premium-canada

#11 Gerry on 11.15.19 at 4:17 pm

Also, if I set up a joint non registered investment account, can I still use the unused carry forward capital loss balance (on stocks) on just my portion, my spouses, both or not at all?

#12 Jesse on 11.15.19 at 4:17 pm

This country is imploding fast. Have Canadians lost their minds? Don’t forget, Trudeau wants YOU to pay for CO2, expect carbon taxes to rise as well…your cost of living will go up 15% over night. Goodbye Canadian economy. It’s time to leave Canada.

#13 PetertheSeparatistfromCalgary on 11.15.19 at 4:19 pm

63% of voters voted for either the Liberals, NDP, Greens or Bloc.

That means 63% of Canada’s population want our energy industry and hence Alberta to decline. This despite the fact that all Canadians benefit from Alberta’s energy industry.

Albertans can not stay part of a country that hates us. It is time for Alberta to leave.

#14 Alex on 11.15.19 at 4:20 pm

Federal government spending that isn’t taxed away just becomes private sector savings & excess profits. As long as the spending doesn’t drive excess inflation, there’s little to worry about. And with so much debt being held by Canadians, that is not an imminent threat.

http://www.canadian-accountant.com/content/business/how-government-deficits-fund-private-savings

#15 Shawn Allen on 11.15.19 at 4:21 pm

Higher Taxes on investment gains?

At least Stan Brooks won’t likely be affected.

I understand, he has little, because the “the system is rigged” against him.

AND, if he does have to pay it will be in devalued dollars due to inflation, so that will dull the pain.

#16 DG on 11.15.19 at 4:21 pm

The figure is a bit misleading… shouldn’t we use depth as percentage of GDP or depth per person..?

#17 Kurt re: #4 Nice Graph on 11.15.19 at 4:29 pm

#4 Nice Graph – I remember the ballooning of the debt under Mulroney – he had been handed a time-bomb of deficit spending by Trudeau pere. He committed the ultimate political sacrifice by replacing the Manufacturer’s Sales Tax (which was undermining Canadian companies in our own markets!) with the GST, and lost all the political capital he would have needed to reign in the deficit. Hell, his party was reduced to unofficial status. (Turner has credited the GST with being key in getting the deficit under control.) Only during the vote-splitting Bloc/Reform party years could the government afford to go after the debt. The problem is not red or blue, it’s the entitled git next to you. You will see no improvement until the stupid and entitled 30% of Canadians (15% screaming for tax cuts, the other 15% screaming for more programs) get cut out of the loop. I don’t know how you do that.

#18 Camille on 11.15.19 at 4:34 pm

It’s all about entropy. Or can’t put genie back in the bottle. We already have some form of socialism and even MMT. Act accordingly.

#19 SoggyShorts on 11.15.19 at 4:34 pm

If they go after Corp retained earnings, what form would that take?
A higher taxation on realized capital gains within the Corp or…?

#20 Post on 11.15.19 at 4:47 pm

If the liberals impose a higher capital gains inclusion rate, they can forget about winning the next election. That would be the talking points that the Conservatives are looking for. It’s hard enough for those trying to build a retirement nest egg right now. You wouldn’t be just about hurting corporations and wealthy, now you’re talking hurting the middle class. That would throw a whole lot of the electorate voting out the Liberals.

#21 MF on 11.15.19 at 4:50 pm

Bit of a scare monger post. Don’t believe most of that will come to fruition. I do, however, think taxing re more is a good idea.

Government gave it through bad policy (interest rates too low for too long), government can take it through bad policy too.

MF

#22 Tudor on 11.15.19 at 4:54 pm

Why not look at Debt to GDP ratios, or Government expenditures to GDP? The Fraser Institute maps both on page 14-15 here:
https://www.fraserinstitute.org/sites/default/files/federal-fiscal-history-canada-1867-2017.pdf

Of course the nominal debt will always increase — context is important. The graph you shared above is a great example of how to lie with statistics ;)

#23 Shawn Allen on 11.15.19 at 4:56 pm

That’s deep!

#16 DG on 11.15.19 at 4:21 pm

The figure is a bit misleading… shouldn’t we use depth as percentage of GDP or depth per person..?

|*****************
Fed debt as percent of fed annual income.

Personal debt as a percent of personal annual income.

100% of annual income is not a magic figure.

Lower is generally better

#24 The real Kip (Ret) on 11.15.19 at 4:58 pm

You’re worried about our government? The US just blew past $23-trillion of national debt and they’re just hammering it higher. No worries.

#25 MF on 11.15.19 at 4:58 pm

12 Jesse on 11.15.19

I love people who post this drivel.

If you are worried about Canada’s debt I don’t think you will be comfortable anywhere else.

MF

#26 AlbertaGuy in AB on 11.15.19 at 5:07 pm

An increase to GST is probably the “fairest” and quickest way to increase revenue…that seems to be the sleeper no-one wants to talk about. And on a total debt to GDP basis Canada is still one of the least ugly sisters at the dance.

https://www.imf.org/external/datamapper/[email protected]/CAN/USA/ADVEC

#27 SmarterSquirrel on 11.15.19 at 5:15 pm

What no advice on moving yourself and assets to Andorra or some other tax reduced location? Tax hits are going to get a lot worse… shame there seem to be so few ways to avoid it…

#28 Leo on 11.15.19 at 5:22 pm

It looks like the options include having a spouse…. anyone got the latest mail order bride catalog, I wanna get my order in before all the good ones are gone. :P

#29 Yukon Elvis on 11.15.19 at 5:23 pm

The 60% that voted for free stuff will love the tax increases.That is how they get their free stuff. They will vote for free stuff again in 9 months or 4 years. No escape.

#30 Bob Dog on 11.15.19 at 5:29 pm

With winter fast approaching it may be time to look into a NAFTA TN-1 visa to work in the sunny dry south. Voting did nothing to solve the growing housing crisis. The weather sucks here and the Government of Canada is corrupt. It in way represents the average tax payer.

https://workpermit.com/immigration/usa/us-tn-1-visa-canadians

FYI. If you work in USA for 10 years you are entitled to a US social security pension in addition to the paltry pension you will maybe some day receive from the Canadian government

#31 Figure it Out on 11.15.19 at 5:39 pm

“63% of voters voted for either the Liberals, NDP, Greens or Bloc. That means 63% of Canada’s population want our energy industry and hence Alberta to decline.”

94% of the people who think that the second statement, above, follows from the first… shouldn’t be allowed to vote. But that’s democracy for ya.

#32 Leichendiener on 11.15.19 at 5:42 pm

“sleeping with Singh”. That says it all. We have our own currency. Debt matters.

#33 joblo on 11.15.19 at 5:48 pm

As long as SNC lanolin gets the DPA all is good.
Almost a double since labor day.

#34 crowdedelevatorfartz on 11.15.19 at 5:50 pm

I’m thinking the economic downtown in Canuckda is coming sooner rather than later.

Talked to a freight driver today.
They’re a Customs Bonded company and they can haul hazardous goods….. very very slow.
Nothings moving.

#35 Loonie Doctor on 11.15.19 at 5:52 pm

Listening to the government talk about fiddling with investment income reminds me of watching Jurassic Park. Each time, they meddle with something that has evolved for certain reasons over time. It eventually backfires. Scariest thing, there are 6 Jurassic Park movies with the same plot (just more complex each time) and same outcome (dinosaurs eat people). Just like tweaks to our tax system.

https://www.looniedoctor.ca/2019/11/15/investment-income-taxation-2/

-LD

#36 Randy on 11.15.19 at 5:53 pm

Don’t worry, Trudeau, Butts, Morneau, Bronfmans and the 20 Elite Liberal Families all have their fortunes hidden in Offshore Accounts. Everything will be OK for them.

#37 crowdedelevatorfartz on 11.15.19 at 5:54 pm

@#147 Soggysharts
“To be fair, letting one rip in the stairwell doesn’t have the same effect as in a crowded elevator…”
*****

hahahaha
speaking from experience Soggy?

#38 Renter's Revenge! on 11.15.19 at 5:57 pm

#23 Shawn Allen on 11.15.19 at 4:56 pm
That’s deep!
#16 DG on 11.15.19 at 4:21 pm
The figure is a bit misleading… shouldn’t we use depth as percentage of GDP or depth per person..?
|*****************
Fed debt as percent of fed annual income.
Personal debt as a percent of personal annual income.
100% of annual income is not a magic figure.
Lower is generally better

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

Haha! The misspelling of “debt” is evolving, from “debt” to “dept” to “depth”.

Anyhow, some facts I just looked up for context:
– The federal deficit is ~6% of the overall budget ($20B/$350B).
– The debt is growing at ~2.5% per year ($20B/$800B), close to the rate of growth of the economy.
– The government has run a deficit about 80% of the time since confederation.

Given the above, nothing about current circumstances seems to suggest that now is the time to panic.

Since the debt is growing at the same rate as the economy, there shouldn’t be any reason to increase tax rates or add new taxes. The only reason I can think of is that if the nature of the economy changes, the government may have to change what gets taxed in order to maintain their revenues. For example, if consumer spending goes down and home purchases increase, then sales tax will go down, and in order to compensate, taxes on houses will have to increase.

I suppose another reason would be that every time a tax break is added somewhere, a new tax has be added somewhere else in order to compensate for the lost revenue. It’s also pretty well known that governments use taxes and tax breaks to encourage and discourage various types of behaviour. We can only hope that what they encourage and discourage people to do makes sense in the long run.

#39 JSS on 11.15.19 at 5:57 pm

Omg the TSX broke 17,000.
Thanks Trudeau

#40 Jesse on 11.15.19 at 5:58 pm

#24 The real Kip (Ret) on 11.15.19 at 4:58 pm
You’re worried about our government? The US just blew past $23-trillion of national debt and they’re just hammering it higher. No worries.
************************

The US is a special case as the US Dollar is the world’s reserve currency, we can’t be compared to the USA

************************
#25 MF on 11.15.19 at 4:58 pm
12 Jesse on 11.15.19

I love people who post this drivel.

If you are worried about Canada’s debt I don’t think you will be comfortable anywhere else.

MF
************************

Why should we recklessly add more unnecessary debt. What’s wrong with wanting to have a balanced budget and plan for the future? Why should we burn the house down like several other countries?

************************
#26 AlbertaGuy in AB on 11.15.19 at 5:07 pm
An increase to GST is probably the “fairest” and quickest way to increase revenue…that seems to be the sleeper no-one wants to talk about. And on a total debt to GDP basis Canada is still one of the least ugly sisters at the dance.
************************

Or you know…don’t spend as much and manage the debt. Reckless spending with just cause out currency to devalue and our taxes to substantially rise in the future to pay this off (scaring off investment capital as well). This isn’t how we should be managing deficits. Maybe we shouldn’t let 4 out of 10 families off the hook and pay ZERO taxes. Trudeau and the Liberals is juts pandering and trying to buy more votes. This is disgusting.

#41 tccontrarian on 11.15.19 at 6:03 pm

It’s a global problem and there’s no way out of it. Inflation will at some point become a serious concern. The yellow ‘canary’ (ie. gold), is acting as it has been in anticipation of this reality. Preparation is key!

From what Powell (the US Fed Chairman), said, it is the belief of the Federal Reserve that we’re going to keep living in a Low Growth, Low Interest Rates and Low Inflation world, created by various major trends that are beyond the Federal Reserve’s ability to impact meaningfully.

When asked about the inherent risks to the economy in a low-rate environment to stimulate, if a recession appears, he shocked the members by responding that if the FED had to follow historical lines of policy, the Fed Funds Rate would be dropped by 5%, all the way down to -3.50%, if judging by today’s rate.

That means that the FED has just alerted to investors, globally, that the heavy lifting going forward will be done by the government, using fiscal policies, because -3.5% is not going to happen.

So, higher taxes EVERYWHERE!

tcc

#42 David Pylyp on 11.15.19 at 6:04 pm

“Apparently voting has consequences. Imagine that.”

Amen

David Pylyp
Toronto

#43 dutch4505 on 11.15.19 at 6:08 pm

will an increase in gst from 5% back to 7% happen? if your back is against the wall and you need tax revenue it may come about.

#44 not 1st on 11.15.19 at 6:10 pm

Recession is consecutive quarters of negative growth. Not as stated. – Garth

——-
Whats it called when GDP is less than inflation like forever. I would call that a technical FUBAR.

Trudeau is in so over his head its not funny. Good job GTA zombies.

#45 Remembrancer on 11.15.19 at 6:13 pm

#16 DG on 11.15.19 at 4:21 pm
The figure is a bit misleading… shouldn’t we use depth as percentage of GDP or depth per person..?
———————————
Why? To water down the stats so it makes you feel better? No? How about debt as % of taxes collected annually then i.e. something that matters?

#46 not 1st on 11.15.19 at 6:13 pm

Canada is the road kill that gets hit by about 10 or 20 cars before its launched into the ditch to rot.

Mean while MAGA…that is all.

Where is smoking man? Man was that guy right on the money when he carried his money into trumpland.

#47 not 1st on 11.15.19 at 6:19 pm

Why is housing a right?

Why is owning a house in the most expensive places in the country a right that the govt will enforce off the backs of people who don’t get to live there?

Ahhh socialism.

#48 Figmund Sreud on 11.15.19 at 6:22 pm

Trudeau could roll the dice, cuddle up to the Bloc and avoid taking on some of the NDP baggage. But that would involve caving to another set of demands, while making Jason Kenny’s head explode.
_________________________________________

Well, … I’m not sure how Alberta’s situation can get much, much worse if such occurs?

Seriously, … the province has since, … oh, about 1993 – Ralph Klein’s election – seen roughly 5.6 billion barrels of conventional crude production worth about US$316 billion at current prices, and is somehow C$66 billion in debt now!

Anyway, … squandered opportunity ‘til now, … and now we have Premier Jason Kenney:
[ https://images.app.goo.gl/3qJqa9yZVBmmjb4g8 ]

… gawd, be merciful!

Best,

F.S. – Calgary, Alberta.

#49 Politicians are useless on 11.15.19 at 6:23 pm

I remember when pencil neck Shear stood up in the debate and said….with my policies the average family will save $268 next year…. that almost had all of Canada on the floor laughing… he can tak $268 and put it in his pipe and smoke it.. this is how pathetic politics has become!

#50 Oakville stinks! on 11.15.19 at 6:26 pm

Smoking man wasn’t the only person….

Took 100% of my money and invested in the US as well. Gonna move there too after politicians mess Canada up! Just a few years away.

#51 PastThePeak on 11.15.19 at 6:34 pm

I’ll add a couple more to Garth’s suggestions.
– If you can, if you have a skill / trade / interest, startup a small side business as a sole proprietorship. You can invest in it for some time, just ensure you can provide it is “economically viable”. You can deduct any losses against your regular salaried income as you are investing in that business.

– If you have flexible working arrangements, plan on down shifting to lower pace (lower pay) as soon as possible. Enjoy life and work less – get below the government “target” threshold ($150K+ in earnings). Anyone who works contract can do this, and those in some salaried positions if employer is amenable. Take leaves or sabbaticals if available.

#52 Debtslavecreator on 11.15.19 at 6:37 pm

Purposely running massive deficits with record low rates to buy today’s voters is looting
The decline in morals and brazen theft knows no bounds
Think your safe by maxing our the TFSA and RRSp?
Think your CPP and other pensions are going to let you live well in 20 years ??
Study your financial history
Better yet- take a trip to Buenos Aries , Iceland, Russia etc and talk to several average old folks and ask them to tell you the story

Then expect the late 2020s/2030s in Canada and most of the West to match more or less

What we are going through is an old story
The playbook is the same
Just some minor tweaks here and there

#53 leebow on 11.15.19 at 6:41 pm

Garth,

It’s really amazing how you produce this blog for so many years, while managing work and side projects. Can you share your day with us, how much time you spend writing? How financial blogging differs from general non-fiction writing or journalism? Please reveal all your secrets.

But then I’d have to kill you. – Garth

#54 Nonplused on 11.15.19 at 6:54 pm

Does this put further negative pressure on the loonie? I would think it does.

The problem with all these new taxes, any taxes really, is that they don’t create any more wealth, they just suck the money out of one part of the economy and stuff it into some other part, usually at a great loss of productivity. That makes us collectively poorer, because money isn’t real, it is just a measurement of productivity. Any measures that reduce productivity reduce our collective wealth.

And deficits are just delayed taxes. That is why they eventually reduce productivity as well. Even if the government never intends to repay the debt, the interest burden continues to rise.

Wealth taxes are particularly destructive because you can’t tax wealth, most forms of wealth are not money. You can’t send in 1% of your house to the government every year. You have to go out and do something to get some money (like working). So wealth and property taxes are really just an income tax, but an arbitrary one because the amount of tax is not related to your actual income.

Wealth taxes are also arbitrary because nobody knows what anything is worth until it is sold, and we already have capital gains taxes for that. Let’s say we have a budding entrepreneur who has gone against Trudeau’s advice and grown his business from one truck to a fleet of 50, all at various levels of depreciation. What is the business worth? How much “good will” should be assigned based on his reputation for good service? Is there added value for all the computers in the office? The labor pool? Numbers must be assigned to all these things and more to determine how wealthy this guy is, but none of it is actually money. So even after the horrendously messy process of figuring out how much the business is worth, now our tow truck guy has to come up with 1% of that (or whatever the rate is) in cash. Where is he going to get that? Sell a truck? To who? Nope, what he is going to do is raise the price he charges for tows, and you end up paying it should your car break down. He has to get the money some how, because tow trucks are not money no matter how much they cost.

The problem with all these socialist ideological policies is that they are written by people who don’t understand economics, and are thus doomed to fail. An economy only has one effective tax rate. It doesn’t matter how many different little taxes they layer up on everything, the only number that matters is the percent of GDP that goes to taxes, and we all pay that effective rate. It’s baked into prices. A carbon tax is just an HST by another name. The HST is just an income tax by another name. A wealth tax or property tax is just an income tax by another name. Payroll taxes are just income taxes. It’s all income tax. It all has to be paid out of cash flow. And studies show that this cumulative number can’t go much above 40% before serious disincentives begin to destroy productivity. That’s what all this talk about higher taxes causing less revenue is all about. It really does happen, because once you get to a certain tax bracket the motivation to work longer hours or work at all drops off considerably.

So why is the deficit exploding even though Trudeau is raising taxes everywhere he thinks he can pull one over with a cozy and friendly catch phrase like “carbon tax” or “wealth tax”? Well, there is your answer. He’s raising the effective tax rate beyond the theoretical limit and driving down commerce. People don’t have the money to drive as much, so they aren’t calling for as many tows. That means tow truck drivers get laid off or work shorter hours. That means they need less fast food lunches. McDonald’s lays off a few teenagers. Everyone in the whole economic chain suffers as a result. Wealth is destroyed, because human labor is the source of all wealth (that isn’t raw materials or land, and human labor long ago far eclipsed raw materials and land as the most important input).

Socialism is the long disproved theory that you can create a utopia where everyone works and nobody gets paid. It doesn’t work, and it has resulted in the death of 100’s of millions of uncooperative peasants. Think Hitler was the worst mass murderer of all time? Not even close, although he’s probably in the top 5. Think Stalin or Mao. Socialism kills. Literally. It has to, because that is the only way you can get people to work without getting paid fairly for their labor. But killing off a large portion of your labor force just because they won’t work for free is not exactly good economic policy making. Eventually the economy collapses.

As the old Soviet era phrase goes, “They pretend to pay us, and we pretend to work.” That does not create prosperity.

And don’t get me going on the Scandinavia countries! They are not socialist! They have as much capitalism going on as Canada does. And they have North Sea oil, so they are sucking a good amount of wealth out of Britain and Quebec. If you follow the dollars, the Americans pay Alberta for oil. Ottawa transfers those dollars to Quebec. Quebec then buys oil from Norway. The Norwegians get rich, because they don’t have to buy oil from anyone, but have a lot to sell.

Why people in Eastern Canada think deep sea oil shipped over the Atlantic is more environmentally friendly than piped Alberta dilbit is anyone’s guess. Doesn’t anyone remember the Deep Water Horizon? Exxon Valdez? I think vested interests, including possibly the Norwegian, Saudi and US governments, are manipulating the media to protect market share in Quebec and Ontario, but I can’t prove it. There is no rational way Canada should be importing so much oil, or any oil products at all for that matter. Anyway I digress.

#55 Shawn Allen on 11.15.19 at 6:59 pm

Context and graphs

#22 Tudor on 11.15.19 at 4:54 pm

Of course the nominal debt will always increase — context is important. The graph you shared above is a great example of how to lie with statistics ;)

**************************
100% agree. Context is everything. Presenting numbers without context is weak.

Had not bothered to look at the chart but you are right.

It should be a log scale. Lon term trends require log scale to show the trend properly.

Properly interpreted that chart says that the gross debt (whatever that is) has hardly increased at all in 2019 dollars since the early 90’s. Well done! Now that was mostly due to Chretian / Martin but the fact is the debt has hardly budged in 2019 dollars especially in context to GDP – probably lower as percent of GDP?

#56 Politico on 11.15.19 at 7:03 pm

The sentiment in Alberta is definitely worse after this election outcome. It’s no wonder Kenney started talking about the Quebec model so quickly after the results came in. There is little appetite among the majority of Albertans to continue living with dictates from Ottawa influenced by either the NDP or the PQ. That is the only outcome that could be worse for the west than a Liberal majority.

I know Garth thinks I’m crazy any time I talk about Wexit, and I admit I think complete separation is unlikely and undesirable. But why couldn’t Alberta administer its own pension plan? Why not collect its own taxes instead of sending them to Ottawa and hoping they’ll send some money back? I’m not sure the proposal to replace the RCMP really accomplishes anything, but if cities can have their own police force why not a province? The RCMP officers probably don’t even need to be laid off, they can just take new jobs with Alberta in the places they are already living and keep doing more or less the very same job.

The precedent has already largely been set by Quebec. Soft “Wexit” is a near certainty at this point. Quebec has hamstrung confederation with their separatist threats and financial demands for so long now it is probably time for all provinces to take possession of the same rights Quebec reserves for itself. And I don’t mean that with any hatred. It could just be that they were right all along. Times change.

#57 Bytor the Snow Dog on 11.15.19 at 7:06 pm

Why more deficits? Where are the cuts, specifically to all the special interest grievance groups?

I’m tired of this.

Millennials now need to shut the f up. You elected this guy and enabled him and his buddy Mr. Singh.

You own this now.

#58 leebow on 11.15.19 at 7:12 pm

But then I’d have to kill you. – Garth

Lol. Did it involve meeting a strange man at crossroads and signing a lengthy document with blood, something von Goethe would write about? I’d take a chance, even if that means I can never visit Lunenburg.

#59 Sail away on 11.15.19 at 7:16 pm

I prepared to make some changes last year during discussion of the proposed tax measures, and will do the same this year.

But… it’s all just speculative at this point. We’ll definitely know what’s to be put forward before it’s done. Governments love to talk.

From past experience and following IH’s lead, there will probably be a way to benefit. Might have to tap the dual citizenship cross-border tax treaty. Wait and see…

#60 crazyfox on 11.15.19 at 7:17 pm

The problem with going on about 20 billion dollar deficits being too high is that it’s been normalized. Who normalized it? Trudeau? Nope. (I stand to correct myself, Pierre normalized it in his last 4 years of power but bear with me)

https://www.cbc.ca/news2/interactives/canada-deficit/debt.html

Take Harper for example. Harper inherited surplus’s from Martin and still ran up 160 billion over 10 years (adjusted and non adjusted runs about the same numbers). In the last 6 years of power however, Harper ran up $178 billion (adjusted) for a whopping annual average of $29.65 billion.
Isn’t that a nice alternative to Trudeau. Get a Harper clone 2.0 reboot in there, like that will go well.

Check out Mulroney:

1984 -37.2
1985 -33.3
1986 -29.8
1987 -29
1988 -29.9
1989 -29.1
1990 -33.9
1991 -32.3
1992 -39

Mulroney averaged $293.5 billion over 9 years for a whopping $32.61 billion annual average. The adjusted deficit average was much higher at $484.9 billion over 9 years clocking at $53.98 billion annual deficits. That’s crazy. What was Mulroney/Campbell’s 1 year deficit, $38.5 billion? CBC stuck 93′ on Chretien but it was a Conservative budget. Throw 93′ into the Conservative mix and we get $330 billion in Mulroney debt over 10 years and Harper debt of $160 billion adding up to $490 billion with 20 years of Conservative governments (non adjusted). If this debt clock is right:

https://www.debtclock.ca/

The Canadian federal government is indebted by $698 billion and $ 490 billion came from Conservative governments! Y’know, post Trudeau or T1, $490 billion
from Cons vs $208 billion from Libs since confederation only with the Cons, it took them a mere 20 years. And now you imply we vote for Conservative governments for sound fiscal policy Garth? Based on what, history?

(Insert half panic, half fear emoji. Hard swallow emoji. Double blink emoji. Clearing throat emoji. Sweating profusely emoji. Double blink emoji) :)

Is this the plan? Vote for the half Conservative, half traitor party and all will end well?

T2 has run up $52 billion in the first 3 years of office. Justin is expected to run $14.7 billion this fiscal year. If its close to this number, his first 4 years of office is averaging $17 billion dollar deficits in a continued growing economy. It’s not great. We would all love surplus but you know what’s worse? A Conservative government in power. At least, according to history if that means anything in a politically impassioned world.

Btw, the argument that we are going to see the same budget for 2020 that the Libs campaigned on, I think we all know it will be different. However, I am not convinced it will be higher than projected and I really have to wonder if, considering Canada’s growing economy, that the federal debt to GDP ratio isn’t a more important thing to watch. This, plus the combined intergovernmental debt to GDP ratio of all public debt as it isn’t just the fed who takes the spending burden (If your a federalist anyhow, lots of traitors out there who care not.)

#61 not 1st on 11.15.19 at 7:19 pm

Canada will soon be one of those scary night time stories you tell your kids. Please papa, tell us about the dark times before Canada shattered apart. Then the story will go, well it started just after we kicked out an MBA trained economist because we didn’t like his hair.

#62 Yanniel on 11.15.19 at 7:21 pm

“ Pay the family expenses if you earn more.“

I am trying to make sense of the sentence above in the context of couples with shared finances (starting with a joint checking account where all the employment income goes).

Cash flows in (as earnings) and out (as expenses) from this joint account…how can we differentiate who’s paying what?

#63 crowdedelevatorfartz on 11.15.19 at 7:23 pm

@#49 Politicos
“with my policies the average family will save $268 next year…. ”
+++

True enough,
But then I was clicking past the “Home Shopping network” the other night and saw some piece of crap bauble selling for $18.00 or 6 easy payments of $3.00……
I’m not kidding.

#64 SunDays on 11.15.19 at 7:26 pm

The slowdown has started already. Canada’s main industry of “creating consumer debt” has reached its limits. Time to fire up the next core competency: “creating more government”.

Canadian consumer insolvencies are surging:
https://www.bnnbloomberg.ca/canadian-insolvencies-increase-8-4-over-past-12-months-to-sept-1.1346799

#65 Yanniel on 11.15.19 at 7:28 pm

FYI Garth. The site is very sluggish when posting comments. I’ve noticed this on distinct days. People could end up posting duplicates when they click the refresh button in the browser as a response to the site freezing.

Comments are posted after I approve them. Live with it. – Garth

#66 Quintelian on 11.15.19 at 7:32 pm

Deficits aren’t necessarily a bad thing. For starters it’s a reliably proven Boogeyman to dredge up a rally slogan for those who foolishly believe in the Reagan and Thatcher lie.

But aside for its usefulness as bait, some of the money does go to orphans and widows, and the sick and the elder. And yes, we know it crowds out private investment, can have detrimental impact on currency, and eventually it has to be paid by the next generation who will enjoy the investments made in infrastructure, education, and a base to build upon an enlightened society.

Suck it up you crusty curmudgeons; you can’t take it with you, might as well contribute to the betterment of society and pay your fair share of taxes

#67 Flop... on 11.15.19 at 7:42 pm

How have you guys been?

Sorry, didn’t have much time to post this week.

Been working on my next New York Times best seller.

I only have a working title at this stage, as I am gathering more evidence, but here it is as it stands.

Keep your enemies close and your Millennials closer…

M45BC

#68 Smoking Man on 11.15.19 at 7:44 pm

Investments and people are fleeing Canada.

Millennials and the ones after them by in large are radical lefties.

Boomers starting the die off. T2 gets 20 more years.

Run for your lives…..

Soon as I become a USA citizen, getting my kids here.

#69 The 519 on 11.15.19 at 7:47 pm

“T2 clings to power by sleeping with Singh.”

Nothing wrong with that. Trudeau looks like he can take some orders (in parliament) from the more masculine looking Singh.

#70 Yanniel on 11.15.19 at 7:47 pm

#65 Yanniel on 11.15.19 at 7:28 pm
FYI Garth. The site is very sluggish when posting comments. I’ve noticed this on distinct days. People could end up posting duplicates when they click the refresh button in the browser as a response to the site freezing.

Comments are posted after I approve them. Live with it. – Garth

——

You missed my point. I know you moderate the comments. I wanted to make you aware that the site is suffering some kind technical bottleneck (Ask your webmaster). I was trying to be kind by letting you know. I should know better.

#71 Flop... on 11.15.19 at 7:49 pm

#28 Leo on 11.15.19 at 5:22 pm
It looks like the options include having a spouse…. anyone got the latest mail order bride catalog, I wanna get my order in before all the good ones are gone. :P

//////////////////

I would not go down this route.

Correction.

My wife said not to go down this route.

She ordered a mail order husband from Tanzania.

They sent one from Tasmania.

She got a guy with dark skin, but overall it didn’t work out too good for her…

M45BC

#72 crowdedelevatorfartz on 11.15.19 at 7:50 pm

@#65 Yanniel
“the site is very sluggish when posting comments. ”
+++++

Its a free site without annoying Ads…..just annoying Boomers.

#73 FreeBird on 11.15.19 at 7:50 pm

“A government big enough to give you everything you want is big enough to take everything you have.” -T. Jefferson

Something to keep in mind. No?

#74 not 1st on 11.15.19 at 7:58 pm

Quebec has set all the precedents we need to wall ourselves off from the Marxists.

CPP, yup, AB is out. ROC premiums to increase 10% to cover the shortfall.

A new one just came up, unilateral trade deals. We don’t need no stinking NAFTA to go cut a side deal with Trump. Quebec already cut a deal with California on their own, so can we. Just give trump a little kicker and he will take it to tidewater and BC and Blanchet can pound sand.

Same goes for the rest of our resources. Take it south where there is real capital and investment and let the americans do it for us.

#75 FreeBird on 11.15.19 at 8:04 pm

36 Randy on 11.15.19 at 5:53 pm
Don’t worry, Trudeau, Butts, Morneau, Bronfmans and the 20 Elite Liberal Families all have their fortunes hidden in Offshore Accounts. Everything will be OK for them.
———————
It’s where the message of pay your fair share is prob better aimed. Maybe not just Liberals.

#76 John in Mtl on 11.15.19 at 8:15 pm

#54 Nonplused on 11.15.19 at 6:54 pm
“There is no rational way Canada should be importing so much oil, or any oil products at all for that matter.”

Agreed! What I’ve always wondered is this: how come we Canucks can’t refine our own oil and sell a finished product that could be used instead of buying from the Saudis or Venezuela? I’m sure it isn’t a technical problem so what is it – political, “friends in high places don’t want us to do it”, the US, – what?

#77 Tom on 11.15.19 at 8:25 pm

So what’s stopping the cons from saying to JT, dude just go easy on the rich guys and we will pass your budget?

Pretty sure a majority lib budget is closer to the PC stance rather than NDP

#78 Reximus on 11.15.19 at 8:25 pm

#68 smoking man

per capita debt is a lot higher in the US
…So President Warren will likely want to talk to you

#79 leebow on 11.15.19 at 8:37 pm

#66 Quintelian

Do you have a number in mind? How much tax is too much? I am genuinely curious what you think.

#80 leebow on 11.15.19 at 8:44 pm

#68 Smoking Man

Do you have any issue with the moral imperative? Do you think Canada did not give you enough to expect some tax loyalty from you? For me it’s an important consideration. What about you?

#81 Loonie Doctor on 11.15.19 at 8:45 pm

#62 Yanniel

We use this income splitting strategy. My pay check goes into our joint account from which we live.

My wife’s goes to her own separate account in her name only. She invests from that account in her own separate investment account. That investment income is attributable to her. The downside is that it is hers and if she died it doesn’t just automatically become mine immediately like it would if we had a joint investment account. We have radically different income levels. So, for us the tax savings is a bigger concern than that.
-LD

#82 dumpster fire on 11.15.19 at 8:46 pm

So can we offset a capital gain taxed with 50% inclusion now against a capital loss with 75% inclusion later? Hmn…

#83 Nonplused on 11.15.19 at 8:47 pm

#72 crowdedelevatorfartz on 11.15.19 at 7:50 pm
@#65 Yanniel
“the site is very sluggish when posting comments. ”
+++++

Its a free site without annoying Ads…..just annoying Boomers.”

True, true. But I am an annoying Gen-X.

Anyway, I’ve committed the sin of double posting before because I’ve gotten a weird error message but the original turned out to go through, and the error was somewhere in the update. Oh well, I try not to. And I agree there is only so much we can expect Garth to pay to sort it out. You get what you pay for! Generally the best site out there for wide ranging commentary about economics and then there is the comment section, which can be bad but compared to Zero is relatively mild. Sometimes actual conversations happen.

#84 Blackdog on 11.15.19 at 8:47 pm

@Blacksheep, from yesterday’s post : ” I asked you to refute NASA’s findings posted on their website? I’m sure they would love you to give em a call, to you know, help straighten out their ‘science denier’ rational…”

This is getting weird. Please stop insisting like an angry school teacher chastising a lazy student, that I analyze a piece of text that you pulled out of a cloud climatology project.

You have issues if you think your out of context, copy/paste job proves man-made climate change is not real and that NASA is a man-made climate change denier.

#85 akashic record on 11.15.19 at 8:55 pm

Global debt by the end of year is record 330% of world GDP.

Makes it hard to be a fanboy for the theory of globalist economy. Even without thinking of the carbon footprint impact.

#86 Blackdog on 11.15.19 at 9:04 pm

After reading Blacksheep’s assignment to me (repeated several times to make sure I follow his instructions), it got me thinking that there may be a lot of financially well-off people who comment here, but that doesn’t necessarily mean they have a particularly high IQ or critical thinking skills.

#87 Charity on 11.15.19 at 9:08 pm

The Tories were elected to lead in the worst years and had to cover the messes made by liberals who always squander during the good years!!! The liberals have smaller deficits when they know it needs to be cut back times. And this is how we have ended up with a more “I deserve…” society today. Alberta sees this and every Jessica Allen out there hates them for it!

#88 Rargary on 11.15.19 at 9:12 pm

I used to be proud to be Canadian. That’s been dwindling lately. So much corruption (hence the mismanaged gov’t money). Nobody is getting to the heart of why we will never have a balanced budget

#89 not 1st on 11.15.19 at 9:12 pm

What causes inequality? Apparently, well-educated people working harder

At one time either hard work or talent got you a decent income. Now, increasingly, the highest incomes go to talented people who also work very hard

https://business.financialpost.com/opinion/william-watson-what-causes-inequality-apparently-well-educated-people-working-harder

#90 not 1st on 11.15.19 at 9:18 pm

Like I said, Trudeau has no idea whats coming down the tracks for him.

https://business.financialpost.com/transportation/rail/cn-to-cut-jobs-as-trade-wars-shaky-north-american-economy-take-toll

#91 Smoking Man on 11.15.19 at 9:29 pm

#80 leebow on 11.15.19 at 8:44 pm
#68 Smoking Man

Do you have any issue with the moral imperative? Do you think Canada did not give you enough to expect some tax loyalty from you? For me it’s an important consideration. What about you?
…….

Taxes are theft. Should be voluntary..

#92 Yanniel on 11.15.19 at 9:29 pm

#72 crowdedelevatorfartz on 11.15.19 at 7:50 pm
@#65 Yanniel
“the site is very sluggish when posting comments. ”
+++++

Its a free site without annoying Ads…..just annoying Boomers

You are also missing the point. A technical glitch (that freezes the site when people try to post a comment) could result in more work for the moderator. The moderator might end up receiving replicated comments. Believing or not I was trying to help.

PS: I am a Millennial.

#93 Dutchy on 11.15.19 at 9:37 pm

Interesting.
Debt level changes since 1985 :
Mulroney 1985-1995 +42%
Mostly liberals 1995-2005 -10%
Harper 2005-2015 +11%

I guess T-2 is following in the Conservatives footsteps.

#94 leebow on 11.15.19 at 9:44 pm

#91 Smoking Man

How much would you pay voluntarily?

#95 Lost...but not leased on 11.15.19 at 9:52 pm

QUOTE:

First, the economy slows at some point during the next four years and, second, T2 clings to power by sleeping with Singh. NDP demands to keep the minority government afloat are expected to include some version of its pharmacare program, social housing initiatives and (yes) increased taxation on the rich people who some to this pathetic site and should know better than to be successful.

——–

COMMENT:

So …..what IS the deal ????

We gots ?!?…..Responsible/Representative Gov’t ie .01%……or Political Prostitution ie 99.9%(aka status quo)?

Reducto Ad Absurdum…
…..why doesn’t Turdeau and NDP quit being “entry level communists”…aka death by a thou$and cut$ $ocialist$…cut to the chase and simply confiscate all private property…. and thus solve all the problems they have created via bad past political decisions….( ie in USA the Federal Reserve and FDR administration )….let things come full circle.

PS: History has numerous examples of how this turned out…(y’now learn from OR repeat….zero middle ground)

#96 Barb on 11.15.19 at 9:56 pm

Let’s remember T2 needs another ~700 million to “buy a seat” on the UN’s Security Council. (He won’t get it!)

He’s likely designing his “acceptance costume” as we type tonight.

#97 Phylis on 11.15.19 at 9:57 pm

#76 John in Mtl on 11.15.19 at 8:15 pm Do it ourselves? For starters, consider getting the product to market in volume. Hint hint pipelines.

#98 Phylis on 11.15.19 at 10:03 pm

Oh and environmental hurdles.

#99 Sail Away on 11.15.19 at 10:08 pm

#86 Blackdog on 11.15.19 at 9:04 pm

After reading Blacksheep’s assignment to me (repeated several times to make sure I follow his instructions), it got me thinking that there may be a lot of financially well-off people who comment here, but that doesn’t necessarily mean they have a particularly high IQ or critical thinking skills.

—————————

Which camp do you place yourself in, oh wise one?

I don’t know about you, but when I get richer, it automatically makes me smarter.

#100 crazyfox on 11.15.19 at 10:09 pm

#93 Dutchy on 11.15.19 at 9:37 pm

Your numbers are off. Once again, I’ll repost this link showing each annual federal deficit going back as far as Pearson, with %’s of GDP.

https://www.cbc.ca/news2/interactives/canada-deficit/debt.html

#101 MF on 11.15.19 at 10:23 pm

#93 Dutchy on 11.15.19 at 9:37 pm

Harper and the Conservatives were in power during the great recession…you know, when the entire world came to the brink of absolute economic collapse and spending was necessary to prevent lineups outside soup houses.

What’s T2’s debt for?

MF

#102 Ronaldo on 11.15.19 at 10:25 pm

#92 Yanniel on 11.15.19 at 9:29 pm

PS: I am a Millennial.
—————————————————————–
That’s ok. We’ll forgive you.

#103 Randy on 11.15.19 at 11:01 pm

What Global reset ?

#104 Remembrancer on 11.15.19 at 11:07 pm

#76 John in Mtl on 11.15.19 at 8:15 pm
….
Agreed! What I’ve always wondered is this: how come we Canucks can’t refine our own oil and sell a finished product that could be used instead of buying from the Saudis or Venezuela? I’m sure it isn’t a technical problem so what is it – political, “friends in high places don’t want us to do it”, the US, – what?
—————————————-
Dude, what are you smoking – are you actually from MTL? You can’t really miss this thingee in Pointe-aux-Trembles – its been there for like 50-60 years…

https://www.suncor.com/en-CA/about-us/refining/montreal-refinery

Oh and where does the crude come from?
https://www.cer-rec.gc.ca/nrg/ntgrtd/mrkt/nrgsstmprfls/qc-eng.html

Now go to a Petro Canada station and get some of that North American-sourced Suncor-refined gasoline…

#105 saskatoon on 11.15.19 at 11:50 pm

#80 leebow

moral imperative? tax loyalty?

lol. you’re joking, right?

taxes themselves are immoral and violent.

why would anyone be loyal to those who take from them by force?

oh right, thieves of a feather flock together…

#106 BC Renovator on 11.16.19 at 12:29 am

Def a depressing week on the GF Blog, but thx for the info Ol’Garth.

#107 Deplorable aliens on 11.16.19 at 12:32 am

#68 Smoking Man on 11.15.19 at 7:44 pm
Investments and people are fleeing Canada.

Millennials and the ones after them by in large are radical lefties.

Boomers starting the die off. T2 gets 20 more years.

Run for your lives…..

Soon as I become a USA citizen, getting my kids here.

Wouldn’t that be the chain migration from a shithole country that the orange dude banned….

#108 Dr V on 11.16.19 at 12:50 am

74 Not first

“CPP, yup, AB is out. ROC premiums to increase 10% to
cover the shortfall.”

Don’t see why that would be the case. CPP slush fund is growing, but a portion of current contributions must still support current benefits. Pay as you go.

If AB sets up its on plan, they should be able to take their rightful share of the current slush fund, collect
their own premiums and continue on. Same as now.

AB must have the highest percentage of people contributing the max, but that would be reflected by
lower average benefits in other provinces and a lower total payout.

where is the shortfall?

#109 Dr V on 11.16.19 at 1:08 am

Here we go:

https://www.cbc.ca/news/canada/calgary/cpp-kenney-aimco-leo-de-bever-pensions-alberta-fair-deal-1.5360228

“The federal finance department says a province that wants to exit the Canada Pension Plan must give three years written notice, pass comparable pension legislation and assume all of the obligations and liabilities of CPP benefits due to employment or self-employment in the province.”

#110 Longterm on 11.16.19 at 1:12 am

#87 Charity on 11.15.19 at 9:08 pm

I’m no Liberal supporter, but you are just making that up. The late 80s and early 90s until the 91/92 recession was a a booming economy with the Conservatives in power ramping up the debt [look at the graph], then the economy tanked in recession and the Liberals came to power and Paul Martin drove down the debt during the rubbish economy years [I remember my own unemployment in Calgary well], and then the economy recovered and the Cons took power during the boom years and drove the debt back up.

Believe me, I’m not a Liberal supporter, I just match the graph to the reality of what went on rather than making it match and confirm an preconceived but erroneous narrative.

#111 AACI Homedog on 11.16.19 at 1:19 am

Time to get a joint account in a cannaboid company, it seems.

#112 Moh on 11.16.19 at 1:39 am

This taxation is getting ridiculous it’s Scheer madness.

#113 SoggyShorts on 11.16.19 at 3:01 am

82 dumpster fire on 11.15.19 at 8:46 pm
So can we offset a capital gain taxed with 50% inclusion now against a capital loss with 75% inclusion later? Hmn…
**********
Aren’t gains and losses offset by each other at 1:1 regardless of rate?

E.g.
A 10k loss in 2019 can be used to offset a 25k gain in 2020 whether the rate goes up to 100% or down to 5%.
25k-10k= 15k and you pay the 2020 rate on that 15k.

#114 SoggyShorts on 11.16.19 at 3:15 am

#93 Dutchy on 11.15.19 at 9:37 pm

Interesting.
Debt level changes since 1985 :
Mulroney 1985-1995 +42%
Mostly liberals 1995-2005 -10%
Harper 2005-2015 +11%

I guess T-2 is following in the Conservatives footsteps.
***********

1. Harper reigned during the great recession.
2. You inherit a lot from the previous administration like how government spending doubled right before Molroney took over.

Here you go:

https://policyoptions.irpp.org/fr/magazines/the-best-pms-in-the-past-50-years/six-stewards-of-canadas-economy-history-by-the-numbers-favours-mulroney-and-chretien-while-trudeau-leaves-a-legacy-of-deficits-and-debt/

#115 Figure it Out on 11.16.19 at 6:04 am

If the Federal Government can’t afford to pay cash to build the TMX pipeline, out of current revenue and without running overall deficits, it shouldn’t build it at all. This wild, unconstrained deficit spending has got to stop!

Note to chowderheads: The above is sarcastic. It is intended to goad people into thinking, some of whom are unused to the habit.

#116 Steven Rowlandson on 11.16.19 at 6:42 am

Garth when ever I consider what legal Canadian political parties are all about I see various shades of red all the time… I don’t wear rose colored glasses.
As for deficits. I consider them to be contrary to the national interest and worthy of being outlawed along with those who approve of them.

#117 Greg on 11.16.19 at 7:57 am

re: “if the cat kills you while sleeping” / Global Debt#

I once knew a guy who’s cat … . The family even tried getting rid of the cat, but it kept coming back the very next day. https://www.youtube.com/watch?v=__WkW5vuTyY
https://www.youtube.com/watch?v=bETCusT5kNM

*Global debt on track to exceed $250 TRILLION this year
https://www.rt.com/business/473528-global-debt-surges-us-china/

#118 crowdedelevatorfartz on 11.16.19 at 8:02 am

@#92 Yanny
“PS: I am a Millennial.”
++++

Yes, I suspected as such.
The whining about how slow the comments “sluggishly” loaded was the first clue.
Hence my self deprecatory comment about “Boomers” infesting the sight.

I’m curious as to what the children of Millennials will be called……
The Damned?

#119 John in Mtl on 11.16.19 at 8:05 am

#104 Remembrancer on 11.15.19 at 11:07 pm
“Dude, what are you smoking – are you actually from MTL? You can’t really miss this thingee in Pointe-aux-Trembles – its been there for like 50-60 years…”

Yep I know about that one, it used to stink up the whole island when I was a kid.

I should have been more precise: What I meant was “why can’t we refine our own crude of Alberta right on the spot next to the extraction zones, then ship finished products to other parts of Canada”.

#120 crowdedelevatorfartz on 11.16.19 at 8:06 am

@#112 Moh True Doh!
“This taxation is getting ridiculous it’s Scheer madness.”
++++

Not bad. A little punful but not bad.

#121 John in Mtl on 11.16.19 at 8:12 am

@ #104 Remembrancer on 11.15.19 at 11:07 pm

Oh, and thanks for the links, interesting reading of Quebec’s energy profile!

#122 crowdedelevatorfartz on 11.16.19 at 8:15 am

@393 Dutchy
“I guess T-2 is following in the Conservatives footsteps.”
++++

Well he certainly isnt following in the fiscally astute footsteps of Cretien and Martin.
And if you think these 20+ Billion PER YEAR deficits are chicken feed…
Just wait for the economy to give itself an enema while interest rates rise….
Rising, prolonged, unemployment among a majority of voters tends to make them very very nasty.
Trudeau is an out of control, speeding train and the fiscal debt bridge is out……

#123 Millennial Realist on 11.16.19 at 8:17 am

That graph shows beautifully that when the Boomer Cons get into power, debt explodes. The 1% get richer, everyone else gets the shaft.

The lie of Conservatism. It’s a Scheer fraud.

#124 Shawn Allen on 11.16.19 at 8:37 am

Why can’t “we”

I should have been more precise: What I meant was “why can’t we refine our own crude of Alberta right on the spot next to the extraction zones, then ship finished products to other parts of Canada”.

******************************
Because “we” are not a we when it comes to economics (or much else short of all-out war). Canadian residents, corporations, municipalities and even provinces operate, as they logically should, based on their own self interests.

If it is cheaper for a Montreal refiner to buy oil from middle east, that is what they do.

The alternative of a giant collective operating as one “we” has been tried as communism and failed miserably.

#125 Shawn Allen on 11.16.19 at 8:48 am

Alberta CPP would start with zero dollars

109 Dr V on 11.16.19 at 1:08 am
Here we go:

https://www.cbc.ca/news/canada/calgary/cpp-kenney-aimco-leo-de-bever-pensions-alberta-fair-deal-1.5360228

“The federal finance department says a province that wants to exit the Canada Pension Plan must give three years written notice, pass comparable pension legislation and assume all of the obligations and liabilities of CPP benefits due to employment or self-employment in the province.”

*********************************
So Alberta would assume obligations. That could be going forward only. Nothing there about assuming existing CPP assets.

People would still be mobile. Past CPP entilements would likley stay in CPP and be added to if an ALbertan worked out of province.

New Alberta CPP would apply to employment within Alberta only and only on a go forward basis?

Every Albertan who worked outside the province even briefly would end up with two separate plans?

#126 not 1st on 11.16.19 at 8:54 am

Some of you need to learn a hard lesson on debt.

There is debt stimulus and there is debt shovelled into a giant gaping hole with no return.

Can you guess which one Trudeau is working on?

#127 Remembrancer on 11.16.19 at 9:08 am

#119 John in Mtl on 11.16.19 at 8:05 am
I should have been more precise: What I meant was “why can’t we refine our own crude of Alberta right on the spot next to the extraction zones, then ship finished products to other parts of Canada”.
—————————————-
Sure, you could argue more pipeline capacity for refined products opens up markets but Alberta already has the majority of refinery capacity oh, and has production capacity for local markets, already…

https://www.cer-rec.gc.ca/nrg/ntgrtd/mrkt/nrgsstmprfls/ab-eng.html

Not as a populist rabble-rousing a story, but refineries and pipelines are expensive to build and are subject to the economics of the production, distribution and sales pricing of a global commodity with what is now the globe’s largest self-sufficient consumer to the south – not just, as perpetuated by the shrill western ruling elites holding sway over the populace from their cynical pulpits, the “east’s” desire to keep Alberta down… True, the bleating theatrics of factions like the BQ playing to their home town crowd don’t sound supportive but I wouldn’t look to them for leadership in nation building anyway. They’re more into pandering to locals and maintaining the suckling at the aerospace, engineering, ship building and dairy quota federal teats… But being from MTL I’m sure you’ve seen some of that…

#128 John in Mtl on 11.16.19 at 9:17 am

@ #104 Remembrancer on 11.15.19 at 11:07 pm

There’s nothing like a good read to get educated LOL. Your link to “Provincial and Territorial Energy Profiles” are very interesting, even for a dude like me who has little interest in where our energy comes from.

Besides Quebec hydro infrastructures, I had no idea of just how extensive and diverse the rest of our energy infrastructures are in Canada!

Thanks again for the link, now I have a much better idea of the where’s and why’s of things!

#129 NoName on 11.16.19 at 9:21 am

#117 Greg on 11.16.19 at 7:57 am
re: “if the cat kills you while sleeping” / Global Debt#

I once knew a guy who’s cat … . The family even tried getting rid of the cat, but it kept coming back the very next day. https://www.youtube.com/watch?v=__WkW5vuTyY
https://www.youtube.com/watch?v=bETCusT5kNM

*Global debt on track to exceed $250 TRILLION this year
https://www.rt.com/business/473528-global-debt-surges-us-china/

That 250 trillion sound so scary, but its not that bad 0nly 33k per person, and as we keep multyplying number will be deluted down i guess.

debt per capita countries us dollars
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

#130 Mr Canada on 11.16.19 at 9:49 am

Higher taxes equals more government in Canada – it won’t solve the problem — the C$ will simply drop and silently kill your purchasing power — everyone should seriously look to convert more C$ to US$

#131 joblo on 11.16.19 at 10:07 am

Alberta, with CPP investments like 2B in Affordable Housing in India (boo hoo Kanata) and over 2.6B recently for NE USA wind farms why would you want out?

https://www.theglobeandmail.com/business/article-cppib-bets-on-renewable-energy-with-263-billion-purchase-of-wind/

https://www.cbc.ca/news/business/canada-pension-mumbai-housing-1.3299154

#132 dharma bum on 11.16.19 at 10:22 am

What a pathetic disgusting and incompetent government we have. Trudeau is the perfect poster boy for this lack of efficacy and lust for power and status.
What do we get in return?
Debt and deficits.
If only they did their jobs in a humble and efficient way.
One can only dream.
I pity the future generations.

#133 Dr V on 11.16.19 at 10:45 am

125 Shawn

“Nothing there about assuming existing CPP assets.”

Please read the link.

I don’t see an issue with either drawing solely from the
provincial plan vs a combination of the two plans, but that could be confusing to administer.

“So Alberta would assume obligations”.

That’s obligations and liabilities Shawn. Hence the claim on the slush fund and a referendum.

Regardless, this was all to refute blogger “Not 1st” ‘s claim that the rest of Canada would have to contribute more to the CPP if Alberta exited.

#134 Windsurfer on 11.16.19 at 10:56 am

I am going to make an off-the-wall prediction which will take 20+ years to verify. Those who hated Pierre Trudeau also intensely dislike Justin. They also will dislike Hadrien, Ella or Xavier, should they ever decide on politics.

p.s. take care, Garth. Don’t you yearn for those heady days of packed halls in Oakville talking about the Green Shift?

#135 Randy on 11.16.19 at 10:57 am

Canada is always 10 years behind the U.S. because Socialists/Marxists are ‘retarded’.

#136 Sail Away on 11.16.19 at 10:59 am

#120 crowdedelevatorfartz on 11.16.19 at 8:06 am
@#112 Moh True Doh!

“This taxation is getting ridiculous it’s Scheer madness.”
++++

Not bad. A little punful but not bad.

————————

Singh a song of sixpence
All that’s yours is mine
Four and twenty Boomers
Baked in a pie

#137 Gravy Train on 11.16.19 at 11:07 am

#124 Shawn Allen on 11.16.19 at 8:37 am
“Because ‘we’ are not a we when it comes to economics (or much else short of all-out war). Canadian residents, corporations, municipalities and even provinces operate, as they logically should, based on their own self-interests.” Gosh, this trope of yours is getting tiresome. How do you explain altruism (charitable donations, volunteerism, self-sacrifice, etc.), or the provision of public goods (national defence, justice administration, transportation infrastructure, etc.), or the sharing economy or collaborative consumption? We’re all in it together, my friend! :)
https://en.m.wikipedia.org/wiki/Sharing_economy
https://en.m.wikipedia.org/wiki/Collaborative_consumption

“If it is cheaper for a Montreal refiner to buy oil from [Middle East], that is what [it does].” Can’t argue with that. :)

“The alternative of a giant collective operating as one ‘we’ has been tried as communism and failed miserably.” Yours is all-or-nothing thinking. :)

“There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy.” — Shakespeare

#138 not 1st on 11.16.19 at 11:22 am

#124 Shawn Allen on 11.16.19 at 8:37 am

If it is cheaper for a Montreal refiner to buy oil from middle east, that is what they do.
—-

That is not why they do it. That’s a hold over thumb in the eye to Canada from the first sovereignty battle and NEP back in PET days. Same reason the pipelines are almost all pointed to Trumpland now. Same reason there is a refinery in Montreal and not AB.

You cannot imagine the destruction that PET and Quebec wreaked on Confederation back in the day. You see how AB responded the first time. They had no choice when a hostile Marxist govt came for all their wealth. The next will be scorched earth policy. Quebecs western oil can be turned off with a button in Edmonton. So can Vancouvers.

#139 crazyfox on 11.16.19 at 11:29 am

#126 not 1st on 11.16.19 at 8:54 am

https://www.canada.ca/en/treasury-board-secretariat/services/planned-government-spending/budgets-expenditures/program-expenditures-standard-object-2016-17.html

Knock yourself out.

Perhaps you can imagine a government at surplus by killing spending to infrastructure ($187 billion over 10 years) like Trump has done since he took office. Like, that will end well.

Or, you could kill equalization and money transfers to the provinces, raking it in for the feds while the provinces go broke.

Roll back civil servant salaries perhaps? Harper tried it. First couple years, he created a 3 billion dollar hole offering 80% full pension for early retirement. Then came the end of salaries negotiated by unions in favor of contracts. Year 3 was 2.5 billion in savings. Year 4 was 4 billion. Year 5 was a half a billion. Why so low in year 5? Contracts came up for negotiation. So, government saved less than a billion a year rolling back wages and reducing civil servant workforce.

What are the Cons complaining about now? Civil servants under contract, salaries are cheaper.

Same with EI. Harper extended the claim waiting period from 2 weeks to 4 weeks. What are the Cons complaining about now, since Alberta unemployment hovers around 7.5 to 8%? EI of course.

Watching new governments come in, especially ones with ego and pomp is like watching a government re-inventing the wheel. There is only one way to surplus…. productivity and trade. For that, we need bright people (spending in education), healthy people (spending in medicare and a healthy food source through regulation) and spending in infrastructure. When you look at how provinces spend, you will see this is where it goes but! There is a lot to be said about government regulation. Regulation is a dual edged sword. It can kill an economy like a housing bubble gone bust, or it can lower disease rates like heart disease and diabetes through food and drug regulations. This is where the hard work is for any successful government, regulation and trade.

#140 Debt solutions on 11.16.19 at 12:03 pm

It must be very difficult to be in Parliament everyone’s wants something. Everyone hates you?
So I googled Canada debt, federal about 700 billion and provincials about another 700 billion and little beavers 2.2 Trillion. Hmmmmmm
Solutions? So long as everyone works and pays taxes we are all good.

My only solution is raise the GST as it fair, the more disposable income you have the more you spend, if you buy 100,000 motor home or boat you pay more tax, Same goes for cars Higher price pay more.
Simple?

And finally I believe all person and corporations like Irving should pay Canadian taxes no matter where the money is located. I never understood that loophole.

So you heard my solutions, what will T2 do?

Lower OAS clawback limit from 78,000 down to some number maybe $50,000 really if you earn $50,000 a year in pensions do you need government welfare?
Stop pension splitting between significant others
The young Mills will love that one.

I think CPP is on good footing no change
I don’t think NDP has the guts to have another election so this budget will be all liberal, yes everyone will Nash their collective teeth, but call another election? Maybe I am wrong Joe Clark got thrown out over a gas tax of 4 cents, to pay off the deficit, remember him?
Politics !

#141 Remembrancer on 11.16.19 at 12:10 pm

#128 John in Mtl on 11.16.19 at 9:17 am

No problem John, glad to hear you found it interesting as some here would rather not let facts get in the way of a good opinion. As a country of regions, you are right, the energy profile is diverse and maps roughly the east / west and north/south gateways, much like manufacturing and trade.

As someone in Ontario that has multiple KM long lines of tanker car trains passing near by, would love to see more pipelines as well instead. Though the rail road is what built this country in later stages after the water ways were followed…

Thanks again for the link, now I have a much better idea of the where’s and why’s of things!

#142 Remembrancer on 11.16.19 at 12:25 pm

#138 not 1st on 11.16.19 at 11:22 am

Complaining about marxists and in the same breath that maybe a publicly traded company has maximized share holder value by globally sourcing raw material inputs for its product is really rich…

BTW that Saudi meme is old news, maybe update the charter / home school gripes curriculum soon?

#143 Cheshire cat on 11.16.19 at 12:41 pm

I suspect the bulk of whiners here voted liberal,ndp, or Bloc.
So stop whining
You own it

#144 Remembrancer on 11.16.19 at 1:29 pm

#138 not 1st on 11.16.19 at 11:22 am
Same reason there is a refinery in Montreal and not AB.
————-
Au contraire mon ami… Alberta has a mitt-full of refineries…

https://www.cer-rec.gc.ca/nrg/ntgrtd/mrkt/nrgsstmprfls/ab-eng.html

#145 Charity on 11.16.19 at 3:21 pm

Longterm
How many years does it take to recoup from Sr Trudeau policies? 2-3-4 years? Liberals benefit every time from when the Tories take over. I remember no work for students empty and unfinished buildings in Calgary from 88-92. Then things improve and we have a liberal gov just in time to creat the bust in late nineties that gives rise to the GFC in mid 2000’s and now back to Tories who have to fix it again.
I remember it well. Didn’t make up a stitch of it.

#146 Jesse on 11.16.19 at 7:49 pm

#123 Millennial Realist on 11.16.19 at 8:17 am
That graph shows beautifully that when the Boomer Cons get into power, debt explodes. The 1% get richer, everyone else gets the shaft.

The lie of Conservatism. It’s a Scheer fraud.
*************************

Are you aware, today, Trudeau and the Liberals are plunging the country into debt? That debt is completely unnecessary. Governments are supposed to maintain or cut spending when times are good, and spend (take on debt) when we enter recession/depression (like 2008). We are at the end of a bull market, the recession is coming. Trudeau is being very irresponsible with our debt.

#147 Shawn on 11.17.19 at 8:02 am

An increasing budget deficit usually leads to a lower $CAD