[Canada] Canadian Politics Redux

[Jacob]

Trudeau sounds more and more like his father - delivers a 29.4 billion dollar deficit.  Projects deficits for the next five years.

http://www.cbc.ca/news/politics/federal-budget-2016-main-1.3501802

He did run on having budget deficits.

He ran on three years of $10b deficits, then back to surplus.

Whoa! So he delivered the promises for three years in just one year! Amazing!

[Grey Fox]

Trudeau sounds more and more like his father - delivers a 29.4 billion dollar deficit.  Projects deficits for the next five years.

http://www.cbc.ca/news/politics/federal-budget-2016-main-1.3501802

Are you okay?

[Barrister]

Trudeau sounds more and more like his father - delivers a 29.4 billion dollar deficit.  Projects deficits for the next five years.

http://www.cbc.ca/news/politics/federal-budget-2016-main-1.3501802

Are you okay?

I've been better.

[viper37]

He gave back the union fund tax credits, something that is very useful to finance tax evasion, laundering money, creating war funds for the unions and creating jobs abroad.  Shame on Trudeau for political pandering.

And of course, he continues to treat SMB owners as second class citizens in this country.  Well, sorry, that's not true.  French speakers are 2nd class citizens, SMB owners are the worst of the worst.  Big corporations will pay less taxes than SMBs in a few years if this keeps going on.  Well, it's currently the case, given the tax shelters they can use.

Part time students are getting fucked in the ass, once again, by their government.  This time, the Federal one.  Great.

No more tax credits for sport and cultural activities, let's subsidize inneficient production instead.  These people can get us a lot of support/money, so why not help them, hey?

[Grey Fox]

Trudeau sounds more and more like his father - delivers a 29.4 billion dollar deficit.  Projects deficits for the next five years.

http://www.cbc.ca/news/politics/federal-budget-2016-main-1.3501802

Are you okay?

I've been better.

[Barrister]

So total Federal debt is just over $600B right now.  Trudeau is going to add over $100B to that number in just five years, all in a time when the Canadian economy is growing.

[Grey Fox]

It's not important.

[Barrister]

It's not important.

[Drakken]

So, BB, when are you planning to become a PC candidate for Backwater-Glengarry-Somewhere? Because the bad faith is astounding.

If we listened to Viper at face value it's like Trudeau will bring down Canada to become a second-world country like Chile. He is a walking right-wing strawman. But you, you are not a rabid, CHOI-FM everyone-is-an-idiot-but-us-Quebec City-citizens right-winger caricature, you are capable of good sense.

So let's ignore that Canada is a AAA-rated borrower with a 86% debt-to-GDP ratio, even lower than the US, and a manageable debt size. Most importantly, let's ignore the wishes of the plebes who were fed up with a decade of sacrifices imposed (not asked, imposed) by the Conservative with nothing to show in return than a government bombastically proclaiming being the greatest administrators ever, with a zero-deficit they even didn't structurally reach and and tax cuts benefiting only those parts of the electorate with the highest incomes.

Borrowing is not bad per se, if made for sound reasons. The deficit announced is neither structural nor used to pay current expenditures, but for reinvigorating our society at the middle-class level with long-term investments to help give average families some breathing space, thus more spending power, and help boost this stagnating economy.

So tell me, BB, what would you want the Liberal government to do? NOT a crypto-Conservative government in red clothing, but a Trudeau government?

On a more general level, guys, get over it. Get the Milwaukee protocol. Trudeau is not Allende, and the Conservatives have lost the election it fair and square. They have lost because the voters have had the luxury to see what the Reform Party Conservatives was proposing as an ideal society, and after ten years of living through it under a Harper Conservative experiment of Canadian social reenginering of what Canadian values should be, they decided they had enough.

[Valmy]

even lower than the US

Oh are we the standard for having a reasonable level of debt now

[Drakken]

Oh are we the standard for having a reasonable level of debt now

For all the troubles of the Congress threatening to deny raising the debt ceilings and your ginormous borrowing needs, you are not nowhere near becoming a Greek tragedy. So yes, we can compare.

[Barrister]

So, BB, when are you planning to become a PC candidate for Backwater-Glengarry-Somewhere? Because the bad faith is astounding. If we listened to Viper at face value it's like Trudeau will bring down Canada to become a second-world country like Chile or Hungary.

Let's all ignore that Canada is a AAA-rated borrower with a 86% debt-to-GDP ratio, even lower than the US, and a manageable debt size. Most importantly, let's ignore the wishes of the plebes who were fed up with a decade of sacrifices imposed (not asked, imposed) by the Conservative with nothing to show in return than a government bombastically proclaiming being the greatest administrators ever, with a zero-deficit they even didn't structurally reach and and tax cuts benefiting only those parts of the electorate with the highest incomes.

Borrowing is not bad per se, if made for sound reasons. The deficit announced is neither structural nor used to pay current expenditures, but for both long-term investments to help give average families some breathing space, thus more spending power, and helping boost this stagnating economy.

On a more general level, guys, get over it. Get the Milwaukee protocol. Trudeau is not Allende, and the Conservatives have lost the election it fair and square. They have lost because the voters have had the luxury to see what the Reform Party Conservatives was proposing as an ideal society, and after ten years of living through it under a Harper Conservative-ideal society they decided they had enough.

Bad faith??? I think I've been very consistent in my commitment to wanting balanced budgets and good governance.  I never said Trudeau was Allende - I said he was like his father - who also ran up huge deficits.  I'm not saying it's a coup - Trudeau won the election fair and square.  But I certainly am entitled to complain about what he's doing!

Yes "borrowing to make infrastructure investments" is what Trudeau promised.  I disagree with it, but there's a logical defence to it.

But the $29.4 billion dollar deficit is not all going to infrastructure.  Instead Trudeau is introducing a number of huge increases in spending on social services.  These are expenses that will not occur year after year, which is why his 'three years of deficits and then back to black' plan is now 'deficits for the forseeable future'.

He's spending billions more on child care benefits, billions more on first nations, reversing the OAS changes (which will costs billions per year down the road).

And all of this, may I add, while the Canadian economy is growing, not shrinking.  This is no time for Keynesian stimulus.

And my big worry is that he is 'normalizing' budget deficits again.  After the painful cuts of the 1990s it had finally reached the point where Canadians expected their government to balance the books, and even the NDP was promising a balanced budget.  All that hard work out the window.

[Drakken]

Bad faith??? I think I've been very consistent in my commitment to wanting balanced budgets and good governance.  I never said Trudeau was Allende - I said he was like his father - who also ran up huge deficits.  I'm not saying it's a coup - Trudeau won the election fair and square.  But I certainly am entitled to complain about what he's doing!

And me, to confront you with what seemed to me like bad faith, by accusing Trudeau of being 'like his father' a mere six months after his election and especially without having two energy crisises to tread through, like his father.

Yes "borrowing to make infrastructure investments" is what Trudeau promised.  I disagree with it, but there's a logical defence to it.

Let's agree to disagree. We have different positions on this, both valid.

But the $29.4 billion dollar deficit is not all going to infrastructure.  Instead Trudeau is introducing a number of huge increases in spending on social services.  These are expenses that will not occur year after year, which is why his 'three years of deficits and then back to black' plan is now 'deficits for the forseeable future'.

He is increasing spending on social services, because that's what a LOT of electors and community-level service groups have been claimoring for. The decade-long dirt of input from the Federal level during the Conservative government and the lingering structural pauperisation of the common middle-class have created some real, tangible needs that needed to be addressed. The voters asked for it, they have promised they would, and they deliver it.

We won't fault a government for respecting their core electoral promises, will we?

He's spending billions more on child care benefits, billions more on first nations, reversing the OAS changes (which will costs billions per year down the road).

Well... yes. Middle-class families and senior citizens have become structurally and consistently poorer with passing years and they needed the relief. Hell, even to me they even haven't gone far enough, as lower middle-class citizens, with or without family, frankly need some tax relief too.

And all of this, may I add, while the Canadian economy is growing, not shrinking.  This is no time for Keynesian stimulus.

On the contrary, it is the best time to increase spending. A growing economy means increased tax revenues to soften the blunt of these multi-year spending increases over the longer term, while leaving a bit more leeway to balance the budget. The problem is, we both know, economy growth remains a prediction. This growth might not last or be as high as the economists had predicted...

And my big worry is that he is 'normalizing' budget deficits again.  After the painful cuts of the 1990s it had finally reached the point where Canadians expected their government to balance the books, and even the NDP was promising a balanced budget.  All that hard work out the window.

So this is the core of the issue...

Truth be told, I don't believe budget deficits are a bad thing in themselves. Government budgets are not private estates. Neither, I believe, is needing to balance the books bad in itself on the other side of the spectrum.

The problem was, under Harper it was threatening to become an obsessive goal for pure chest-thumping electoral gain while being detrimental to the overall well-being of Canadian citizens and completely detached of the experience of the common voter. We were asked, again and again and again, the bear the brunt of all these sacrifices with no real tangle benefit in return (except the HST decrease which I frankly applauded... until it was stolen from us under Charest by a corresponding QST hike) than a bunch of MPs proudly proclaiming they had balanced the books... when they in fact have not.

So to my point of view it is not a 'danger' but a realignment of priorities. It was the time for some breathing space.

[viper37]

It's not important.

it creates inflation, which decrease your spending power.  It's like having a wage reduction.  Combine this with the effect of our low dollar, and people like you and I, middle class, will be screwed for years to come.

[Barrister]

Andrew Coyne: Federal budget 2016 is one from the 1970s, to address problems of 1980s

Andrew Coyne | March 22, 2016 | Last Updated: Mar 23 11:54 AM ET
More from Andrew Coyne | @acoyne


Behold: a budget from the 1970s, to meet the problems of the 1980s.

That the Trudeau government was eager to spend a great deal we may take as a given. It is a government made up of people with an abiding faith in the centrality of government to the national economy and of the efficacy of government in resolving every ill.

Problem: to justify such an extraordinary burst of spending as this budget projects, the government needed some kind of crisis. A recession, perhaps? Alas, the economy is not in recession. There was some hope of one, during the election, when the Liberals unveiled their platform. But since then, growth has rebounded, as the budget itself explains in some detail. ("Non-energy sector output regained momentum ... stronger exports ... solid gains in real manufacturing sales," etc. etc.)

So instead the budget returns to an earlier Liberal theme: the forlorn Canadian middle class, struggling to get by, working harder for less pay while watching all of the income gains going to the top 1 per cent. Which is a perfectly splendid description of the state of things in the 1980s and early 1990s. It was true then that median incomes were declining — not surprisingly, as that period was bracketed by the two worst recessions since the Depression. Likewise, the incomes of those at the very top indeed grew faster than the other 99 per cent — in that period.

But neither has been true since then. In the last two decades median household incomes have grown by 20 per cent after inflation. The share of income going to the top 1 per cent has been falling steadily since 2006, and is no higher now than it was in 1998. The Liberals are importing the problems of three decades ago into the present. In short, the budget's whole premise is a fraud.

A fairer concern is what happens from now on. The factors that drove income growth in recent decades — a growing supply of workers, and rising oil prices — are unlikely to be present in future. Instead, we will need to bring about a sustained increase in national productivity.

What does the budget propose to do about this? As mentioned, it proposes to spend a great deal: adjusted for inflation and population growth, likely the largest two-year increase in spending, outside of recession, since 1972-1973. There were larger increases in the early 1980s, and 2009-10 alone beat every record. But those were recession years. By contrast, the current plunge into deficit is almost wholly discretionary.

Compare the spending track laid out in the 2015 budget, just a year ago. For 2015-16, it projected program spending of $263.2 billion. The current figure: $270.9 billion, an increase of nearly $8 billion. Indeed, it's $3.5 billion more than the finance minister said it would be just a month ago.

But that's just the warm-up act. For 2016-17, last year's budget projected spending of $274.3 billion. The current estimate: $291.4 billion — an increase of $17 billion. For 2017-18, projected spending has gone from the $282.7 billion projected last year to $304.6 billion today. All told, that's nearly $40 billion in new spending over two years.

How much of that is to be invested in infrastructure, the Liberals' promised elixir for sluggish productivity? Accepting the Liberals' own expansive definition of "infrastructure," i.e. virtually everything, it adds up to barely a quarter of that sum: $4 billion this year, $7.3 billion the next. And how much will that add to growth? Again, accepting the budget's own figures as gospel: two-tenths of one per cent of GDP the first year, four-tenths the second. Where the economy might have grown, in nominal terms, by 4.7 per cent and 4.3 per cent, it will instead grow by 4.9 and 4.7 per cent. Happy days are here again.

Needless to say, this is not what the voters were sold last October. Not only is the deficit, at nearly $30 billion, three times what the Liberals ran on. Not only do they no longer promise to balance the budget by the end of their term (the deficit for fiscal 2021 is now projected at $14 billion); not only does the budget offer no timeline for when it will be returned to balance; it doesn't even offer a timeline for when it will offer a timeline. "The Government will set a timeline for balancing the budget when growth is forecast to remain on a sustainably higher track." Translation: if deficits fail to produce the promised higher growth, the government will go on running deficits.

The Liberals' latest promise is that the debt-to-GDP ratio, which once was promised to decline in every year, will now be lower five years from now than it is today. But even to meet that not-very-exacting benchmark may prove difficult, given the forces the Liberals have set in motion. While transfers to the provinces are projected to stay on much the same track set by the Harper government — or are the costs of the promised "new Health Accord" still to be added? — the rapid growth in transfers to persons, for things like the new Canada Child Benefit, and to organizations (e.g. universities) means that the government's own operating expenses have to basically flatline for years to come. Good luck with that.

But why worry? Assuming we can go another five years without a recession, seven years after the last, and assuming no large or sustained increase in interest rates from their current historic lows, the debt may very well stay under control. But then I imagine people assumed much the same in 1972.

http://news.nationalpost.com/news/canada/canadian-politics/andrew-coyne-federal-budget-2016-is-one-from-the-1970s-to-address-problems-of-1980s

Good summary of what's wrong with this budget.