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Politics in 2016

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Kilo_302 said:
You and Rocky Mountain have cited "free markets" in this discussion. Perhaps you can explain how it's better for a Saudi government owned "company" to essentially control Canadian grain production than it is for our own farmers, or even our own government.

Actually, its a little more complicated than that. What happened is that two companies bought a majority holding of the CWB. One company, Bunge Canada, which originally started out in Holland but now has its world HQ in the U.S., partnered with SALIC Canada, which is a subsidiary of the Saudi Agricultural and Livestock Investment Company (SALIC). These two companies bought a 50.1 % majority share in the new company, now called G3.

The other 49.9 % of the company is part of a Farmers Trust and administered through the Farmer Equity Plan announced by the CWB in 2013.

For more information about the Bunge-SALIC deal go to this link: https://www.realagriculture.com/2015/04/g3-bunge-salic-canada-buys-cwb/

 
So the army.ca day of rage is march 22nd.

Budget starting point is a deficit of 18.4 billion .

Probably only going to get bigger. Still, if we get things like free university and veterans support I will turn a blind eye to it.
 
Altair said:
... if we get things like free university and veterans support I will turn a blind eye to it.
In the first budget?  Pretty optimistic ...
 
Altair said:
So the army.ca day of rage is march 22nd.

Budget starting point is a deficit of 18.4 billion .

Probably only going to get bigger. Still, if we get things like free university and veterans support I will turn a blind eye to it.

As I said some time ago:

PPCLI Guy said:
The only OECD country (besides Canada, and I question the current numbers) that currently runs a surplus is Norway.  I do not understand our fetish surrounding deficits.

Our central government debt to GDP (depending on which source you use) hovers around 30%, which is enviable.  The overall government debt (includes provinces) to GDP ratio is less encouraging, at around 93% - up from 76% in 2008 - but it is trending down, and nowhere near the US level of 123%.

Debt as a percentage of GDP worries me more than deficits - a view shared by many economists.  If deficit spending on things like infrastructure increase GDP (and hence the indebtedness ratio) then I have no issues with the idea - deficits for "entitlements" that do not have a positive impact on GDP - not so much.

So, all of that to say that we are the only country other than Norway (a very special case) that runs a surplus....
 
PPCLI Guy said:
As I said some time ago:
If deficit spending on things like infrastructure increase GDP (and hence the indebtedness ratio) then I have no issues with the idea - deficits for "entitlements" that do not have a positive impact on GDP - not so much.


Obviously I cannot comment until after we see the spending programme, but the leading (political) indicators seem, to me, to point to entitlements rather than to useful infrastructure.

Further, I'm not persuaded, not even by columnists in The Economist and the Financial Times, that stimulus spending, even very carefully focused stimulus spending, is the answer to Canada's current economic problems. I doubt that some borrowing to fund long term infrastructure maintenance (where provincial and local governments cannot or will not spend, themselves) will do any harm, but I'm not convinced we will see much of that, and even if we do we will have just put some lipstick on irresponsible provincial pigs.

I suspect that Prime Minister Justin Trudeau and Finance Minister Bill Morneau will please no one enough and will only manage to frighten Bay Street even more.
 
I am nearly certain that the 30 billion deficit figure will balloon to 40 billion at some point in this government's mandate as they try, desperately, to keep all the promises that they made.

All of it- 100 percent- will have to be cut by some future government, when that GDP to deficit ratio starts to get well and truly out of hand. And it will have to be paid back, which means even less money for program spending.

People never learn.
 
SeaKingTacco said:
I am nearly certain that the 30 billion deficit figure will balloon to 40 billion at some point in this government's mandate as they try, desperately, to keep all the promises that they made.

All of it- 100 percent- will have to be cut by some future government, when that GDP to deficit ratio starts to get well and truly out of hand. And it will have to be paid back, which means even less money for program spending.

People never learn.

I as well am not a fan of deficit spending; however, I think your quote is not quite correct.

By some measures, Canada's Federal National debt compared to GDP is actually not bad compared to other countries (that does not make it a good thing).  It is actually hard to compare because there are so many ways to measure it: net public debt vs gross debt (which includes inter federal government liabilities, like when they borrow from EI), internal vs external debt, public debt vs national debt, federal debt vs all government debt.

However, so much of the net public federal debt is to Canadian Financial Institutions (mainly mutual funds and banks), that there is a huge hidden pressure to keep that number high.  Although it's hard to really find actual number unless you dig through endless Treasury documnets, I'll use http://www.taxpayer.com/media/Who%20Ownes%20Canadas%20Debt.pdf as a simplification.  By that measure 72% of all of government gross debt s to Canadian financial institutions, and just for simplicity let's say half of it is to mutuals (which I think is about right).  Those institutions want to get good performance out of their investments, so...

One example is the Ontario Teacher's Pension Plan https://en.wikipedia.org/wiki/Ontario_Teachers%27_Pension_Plan which keeps comming up becuase it "is one of the world’s largest institutional investors."  It has incredible influence on how all levels of government manage debt.

So, the quote "it will have to be paid back" isn't fully true (from my point of view unfortunately, to a certain extent).  It's unlikely any of it will ever be meaningfully paid pack.  However, if we could hold deficit spending (I prefer a programmed value of 0 deficit and 0 surplus, and then borrow for emergencies and apply any surplus to the debt; by the way, that also means get rid of the March spending sprees), then given we have been running consistently with inflation since the 40s (with some blips) the overall effect would shrink.  But it's exactly those institutions desire for their investments to perform that will keep governments from not outruling deficit spending all together.

So, on one side you have powerfull business ineterests that want to lend money to the government "safe bet," and on the other you have Joe average that doesn't really understand how the money flows, but likes is new roads, lower taxes, better hospitals and schools... it is natural that it balances at a position to satisfy both.  It never gets corrected because Joe average doesn't understand that somewhere around 10% of his salary is going straight to large corporations via the method of servicing the public debt interest.

Joe average also doesn't understand that literally most of the money he makes off of performance of his investments, primarily RRSPs becuase Joe average can't afford and doesn't understand much else, is also coming straight out of his own tax base.  But the institutions get their service fees in moving it around, which keeps lots of bean counters employed, and keeps the shareholders happy.  Who are themselves Mr Joe upper-middle class...
 
GDP - $1.5 trillion
Stimulus spending promised $ 10 billion
7/10th of 1 %
$285 per capita

That will stimulate nothing.  I suspect that much of Trudeau's infrastructure spending will be social infrastructure that will come with future costs that will make us poorer.  He has done an elephant dump on pipelines.  There are 4 pipelines, each valued at $10 - 15 billion, proposed.  They will cost the government nothing and bring in hundreds of billions in future revenue.  All he has to do is get out of the way.

I thought the whole problem with Canada's economy was high oil prices and Dutch disease.  Why hasn't the economy rebounded from low oil prices and a low dollar?  It is because the Canadian economy is so bound up in a socialist quagmire and government indecision that nothing is happening.  It's Ontario's turn at bat and they're striking out.
 
Rocky Mountains said:
GDP - $1.5 trillion
Stimulus spending promised $ 10 billion
7/10th of 1 %
$285 per capita

That will stimulate nothing.  I suspect that much of Trudeau's infrastructure spending will be social infrastructure that will come with future costs that will make us poorer.  He has done an elephant dump on pipelines.  There are 4 pipelines, each valued at $10 - 15 billion, proposed.  They will cost the government nothing and bring in hundreds of billions in future revenue.  All he has to do is get out of the way.

I thought the whole problem with Canada's economy was high oil prices and Dutch disease.  Why hasn't the economy rebounded from low oil prices and a low dollar?  It is because the Canadian economy is so bound up in a socialist quagmire and government indecision that nothing is happening.  It's Ontario's turn at bat and they're striking out.

Did you expect a shattered manufacturing sector to just restart within a year of the oil crash? Do you believe in unicorns?

"Socialist quagmire?" Canada has been privatizing, selling off and liberalizing assets for decades. The state has been retreating before supposedly "free-market" forces. All those things conservatives have been calling for have been happening. Canadian society is the least "socialist" it's been since World War 2.

"Why hasn't the Canadian economy rebounded?" you ask. It might have something to do with the fact that good paying jobs that allow people to buy homes and cars and send their kids to university are becoming more of a rarity. A lot of those jobs are the manufacturing ones you referred to above. But guess what? It would have required socialism to keep them here, in the form of opposition to NAFTA.

Socialism would also address the problem of Canadian corporations sitting on $670 billion of dead money, which is directly affecting levels of R & D investment, employment growth and overall economic growth. This dead money has doubled since 2005 when it was at $300 billion.

By any definition, most of Canada's major economic policies have been moving to the right for decades. You're defining yourself has being off the charts right-wing if you think our current system bears any semblance to socialism whatsoever. It's no where near a rational position.
 
It's nice to have the gang back and talking.

About serious stuff now, not petty silly stuff like before.
 
Altair said:
So the army.ca day of rage is march 22nd.

Budget starting point is a deficit of 18.4 billion .

Probably only going to get bigger. Still, if we get things like free university and veterans support I will turn a blind eye to it.

Free university to who? The students?

Who pays for this?
 
About that dead money...."it wasn’t long before Carney changed his mind. Dead money, he said the following spring, is “dead no longer. Resurrected.” If only he would pass the word to some of his acolytes."

Posted with the usual caveats...

Andrew Coyne: Criticisms that corporations are sitting on piles of ‘dead’ money should be put to rest

http://business.financialpost.com/financial-post-magazine/canada-dead-money-myth

The phrase “dead money” is one of Mark Carney’s parting gifts to the country. It was in a speech to the Canadian Auto Workers two years ago that the then-governor of the Bank of Canada famously took aim at corporate Canada, accusing it of hoarding billions of dollars in cash that could more profitably be invested.

How he knew this was as much a mystery as how the corporations themselves could have been so blind to their own self-interest. Still, the governor had no doubt. If corporations could not find useful ways to invest the funds, he said, “give it to shareholders and they’ll figure it out.”

Others have since taken his idea and run with it. A number of commentators have called for corporate cash holdings to be taxed, as an incentive to invest them. The Broadbent Institute, an NDP-affiliated think tank, recently issued a report calling for the appropriation of $670 million from corporate coffers to provide every person under the age of 25 with a “Youth Job Guarantee.” Never mind how any of this would work. As a new study from the C.D. Howe Institute (It’s Alive! Corporate Cash and Business Investment) makes clear, the whole underlying premise, of corporate cash as useless “dead money,” is an illusion.

There is no shortage of investment, for starters. Since 2011, it finds, investment “has been growing at roughly the same pace as the economy.” Indeed, as a share of output, it is slightly above the average of the last 30 years. Neither is the money “dead.” Corporations do not build cash holdings out of sheer inertia, but as a kind of insurance, protecting themselves from sudden cost increases or revenue declines. That’s entirely prudent, especially in the volatile resource sectors that make up so much of Canada’s economy. Indeed, when it comes to the banking sector, another prime “dead money” offender, it is government policy.

Corporations used to manage risk by maintaining large inventories. This tended, perversely, to amplify the business cycle: as inventories mounted in the early stages of a recession, corporations would shutter factories and lay off workers, rehiring them only after inventories had sufficiently fallen. Nowadays, there’s a greater tendency to hedge with cash, giving companies the flexibility they need to take advantage of globalized supply chains and just-in-time delivery, raising and lowering purchases as market conditions warrant.

The rise in cash holdings is not just happening in Canada, but around the world. It isn’t a reflection of some uniquely Canadian tendency to caution, but a response to changing circumstances. The uncertainties of the world economy, in the aftermath of the financial crisis, are an obvious contributing factor. And with interest rates near zero, the opportunity cost of holding cash is low.

Most of all, it has nothing to do with the level of investment. Believe it or not, corporations have other options when it comes to funding investment than cracking open the piggybank. They can borrow, issue stock or sell fixed assets. There is no simple relationship between the decision to hold cash and the decision to invest. Indeed, some of the biggest cash hoarders, such as energy and mining, are also some of the biggest investors.

As the C.D. Howe study’s author, Finn Poschmann, says, if governments are concerned that businesses are not investing as much as they might like, they should “attend to factors that encourage business investment, such as a stable fiscal environment, stable investment policy, and committing to reduce rather than increase taxes.”

As for Carney, it wasn’t long before he changed his mind. Dead money, he said the following spring, is “dead no longer. Resurrected.” If only he would pass the word to some of his acolytes.


Cheers
Larry
 
Hamish Seggie said:
Free university to who? The students?

Who pays for this?

I would actually be in favour of sponsored education in professions identified as "vital" or "in need" such as medicine, engineering, the trades, etc as a means of getting people into important trades that we are short of in the country. However, free education for everyone to me is a waste of money... you want that coveted degree in Irish Studies? You pay for your own trip up Mazelows hierarchy of needs....
 
Bird_Gunner45 said:
I would actually be in favour of sponsored education in professions identified as "vital" or "in need" such as medicine, engineering, the trades, etc as a means of getting people into important trades that we are short of in the country. However, free education for everyone to me is a waste of money... you want that coveted degree in Irish Studies? You pay for your own trip up Mazelows hierarchy of needs....

Agreed.  I missed the election promise of a GI Bill (essentially) but I'd be in favour of one that was targeted to the studies you mentioned.
 
Altair said:
for veterans.

It was a election promise so we shall see.

Its called UTPNCM, or CEOTP if you want a ring to knock. University =/= getting a job after graduation. I'd rather a beefed up retraining package for everyone, not just 3B releases.

I sincerely hope you're not betting on money coming our way, they got the votes, and have already clearly stated they're not boosting the defense budget (mile wide, inch deep support) despite pushing more people into theatre.

Then again, with $40B deficit running, they can afford to pay VRs from BMQ to go to university, its not their money, its our children and grandchildren's problem, right?
 
Larry Strong said:
About that dead money...."it wasn’t long before Carney changed his mind. Dead money, he said the following spring, is “dead no longer. Resurrected.” If only he would pass the word to some of his acolytes."

Posted with the usual caveats...

Andrew Coyne: Criticisms that corporations are sitting on piles of ‘dead’ money should be put to rest

http://business.financialpost.com/financial-post-magazine/canada-dead-money-myth


Cheers
Larry

Of course nations that do try to tax corporate cash tend to find that both corporations and cash tend to leave. Apple has perhaps the most visible dragons hoard of @ $35 billion, which it must keep offshore to protect it from the huge tax bite of Uncle Sam. While $35 billion over the life of Apple may seem impressive, the Ontario Liberals alone created over $100 billion in debt in just over 10 years, so destruction is certainly faster and easier than creation. If some pre budget speculation is correct, then Gerald Butts' plans would consume the entire Apple cash reserve in less than two years....
 
If they want to FRP again, I'd give it some serious consideration.
 
PuckChaser said:
I sincerely hope you're not betting on money coming our way, they got the votes, and have already clearly stated they're not boosting the defense budget (mile wide, inch deep support) despite pushing more people into theatre.

Then again, with $40B deficit running, they can afford to pay VRs from BMQ to go to university, its not their money, its our children and grandchildren's problem, right?
I would imagine one would need to finish their initial contract at least
 
Altair said:
I would imagine one would need to finish their initial contract at least.

Who knows. Like the rest of the election promises, plenty of flash, no full costing or substance.
 
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