Three Contractors and the Fence

Three contractors are bidding to fix a broken fence on Parliament Hill. One is from Ottawa, another is from Toronto, and the third is from Montreal. All three go with a government official to examine the fence.

The Ottawa contractor takes out a tape measure and does some measuring, then works some figures with a pencil. “Well,” he said, “I figure the job will run about $900 ($400 for materials, $400 for my crew, and $100 profit for me).”

The Toronto contractor also did some measuring and figuring, then said, “I can do this job for $700 ($300 for materials, $300 for my crew, and $100 profit for me).”

The Montreal contractor didn’t measure or figure, but leaned over to the government official and whispered, “$2,700.”

The official, incredulous, said, “You didn’t even measure like the other guys! How did you come up with such a high figure?”

The Montreal contractor whispered back, “$1000 for me, $1000 for you, and we hire the guy from Toronto to fix the fence.”

“Done!” replied the government official.  

And that is how our government procurement works.

 

FROM OUR E-BOOK

The joke was selected from Epic Political Jokes & Quotes – the 150-page-plus e-book bursting with funny guffaws, “shaggy-dog” stories and sideways jokes about politicians and politics. Read more about it here. Order your copy here.

This Federal Government Has a Spending Problem

The Niagara Independent, March 15, 2019 — Finance Minister Bill Morneau will be delivering his fourth federal government budget next Wednesday, March 19. Given the news that the government ran a budgetary surplus of $300 million through the first nine months of the fiscal year, many financial analysts and political pundits are expecting the Finance Minister to increase federal spending – yet again.

Avery Shenfeld, chief economist for CIBC, forecasts in a Canadian Press interview: “I’m expecting cheques to go out somewhere. Remember that in the last election the party that won was the one party not promising to balance the budget… The recent sluggishness of the economy is just one more reason to expect a budget that sends out some goodies.”

With the looming election this Fall, Canadians are likely to see Minister Morneau make new (costly) promises relating to a national first-time homeownership initiative and a new national pharmacare program to provide “free” basic drugs for all. Canadians will be told the government can afford these promises based on our strong economic performance and an attractive debt-to-GDP ratio.

Interestingly, the federal finance minister no longer speaks of “deficits” and of “balancing the budget.” His favourite economic metric now is Canada’s “debt-to-GDP ratio” – the federal debt figure divided by Canada’s total economic production.

Pundits believe Bill Morneau will also use this budget address to explain to Canadians that he and the Trudeau Government have a firm hold on federal government finances. His speech is sure to pre-empt the Opposition’s attack of the Liberals fiscal record through the past four years.

As the oft-heard criticism goes, Justin Trudeau ran in 2015 on a promise to stimulate and grow Canada’s economy by spending small, annual deficits of $10 million. Somewhere in the last few years this Liberal plan was abandoned and, today, the Finance Department projects the government is on track to run deficits until the year 2040, which will add approximately $300 billion to the country’s federal debt. (ed. – This is not as bad as it sounds given our debt-to-GDP ratio.)

The Liberals’ continuous deficits are fueled by their unbridled government spending. Federal spending has grown from just under $300 billion annually in the last year of the Harper Conservative government to almost $340 billion for this past fiscal year. In reviewing the post-WWII period in Canada, PM Justin Trudeau has presided over the fourth-largest average annual increase (3.1 per cent) in per person program spending. This unflattering record ranks behind only his father, Pierre Trudeau (4.5 per cent), Lester Pearson (5.3 per cent) and Louis St. Laurent (7.0 per cent). In fact, this Trudeau Government has now recorded two of the three highest-spending years in Canadian history – 2017 and 2018.

To place the current Liberal Government’s fiscal record into context with those of recent Prime Ministers’, both PMs Brian Mulroney and Jean Chrétien recorded average annual per-person spending declines of 0.3 per cent. Over the Stephen Harper Government’s 10 budgets, that government recorded an average annual per-person spending increase of 1.5 per cent.

The difficulty with the Trudeau Government’s continuous overspending is brought into sharp focus in a recent analysis released by the Fraser Institute.  Jason Clemens, co-author of the Institute’s report entitled Prime Ministers and Government Spending, observes, “Wars and recessions clearly affect government spending, but to see this high level of peacetime spending when the economy is also growing could spell trouble for Canadian taxpayers in the future.”

Clemens explains, “The past few years have seen rapid and historic increases in deficit-financed government spending in Ottawa, at a time when the economy is growing. Higher spending often leads to higher deficits and more debt that ultimately must be paid by taxpayers, which is why current spending levels represent a burden to current and future taxpayers.”

But on Wednesday Canadians will not hear about these facts – about the challenges presented by continuous deficit spending. Instead, Finance Minister Morneau will tell us about the Liberals’ attractive election promises. He will reassure us with an accounting of the country’s favourable debt-to-GDP ratio. Yet, as the Fraser Institute’s report suggests, it may be best to remember that all this government overspending does not add up for Canadians’ fiscal future.

 

Chris George is an Ottawa-based government affairs advisor and wordsmith, president of CG&A COMMUNICATIONS. Contact: ChrisG.George@gmail.com

LINK: https://niagaraindependent.ca/this-federal-government-has-a-spending-problem/

The Fall Economic Statement: “An Inadequate Response”

Federal Finance Minister Bill Morneau has faced criticism for admitting the Liberals financial plan will probably lead to an indefinite number of deficit budgets. 

The Niagara Independent, November 30, 2018 – For months leading up to the Liberals’ fall economic statement, Finance Minister Bill Morneau indicated his statement would respond to the recent U.S. corporate tax cuts that had eliminated any tax advantages for Canadian businesses and investors. Morneau stated he could not reduce corporate tax rates for Canadians, as they would cost the government too much, but he would have measures to address the newfound disadvantages experienced by the Canadian business community.

On Nov. 21, the finance minister brought forward his plan offering $17.6 billion of new investment incentives over six years to the country’s business community – something that he concedes will commit the federal government to an indefinite number of deficit budgets.

MP Pierre Polievre, Conservative finance critic, was quick to criticize the Liberal government’s embrace of long-term deficit financing. “Not only did they break their promise, not only will they fail to balance the budget, as they said, but they now admit that under their plan the budget will never be balanced… in other words, they are putting our future in a reckless state of danger by spending our tomorrow on their today.”

Kevin Page, president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, also voiced concern with the new spending, “We’re deficit-financing the corporate sector.” The former federal parliamentary budget officer observed, “This is a financial statement that responds to the business community.”

Though the finance minister’s statement may have been designed to encourage the business community, there has been a noticeable lack of enthusiasm for the government’s plan from the country’s foremost economic analysts. The reaction is best summarized by Jack Mintz, president’s fellow at the School of Public Policy, University of Calgary, who stated “I think this is a really inadequate response.”

Mintz wrote in a Financial Post column: “This fiscal update does the minimum possible to ensure Canada attracts more private investment and entrepreneurship. It makes some attempt by allowing temporary accelerated depreciation. But that is wholly lacking in addressing the serious competitiveness, innovation and productivity issues facing Canada arising from burdensome regulations, our inability to get goods to tidewater, new levies on carbon, property and payroll, and high personal taxes on families and highly skilled, high-income workers.”

Others agree with Mintz’s analysis. Craig Alexander, partner and chief economist for Deloitte confided, “It’s not going to lead economic forecasters like myself to really change our economic outlook.” The Canadian Chamber of Commerce CEO Perrin Beatty stated, “There should have been specific reference to the situation we’re facing in our energy sector and a commitment to get our resources to market. I’m disappointed as well that there isn’t a clear strategy to bring the books back into balance.”

The loudest criticism was heard in the west. Don Braid in his Calgary Herald column captured Albertans’ heightened frustration: “Ottawa offers no specific help for Alberta’s oil price crisis.” He argued the federal economic measures are inadequate for the immediate support needed for the western economy, “There is no money for rail cars, no locomotives, nothing to speed up pipeline construction and no specific industry targeted measures.” Braid then quoted Alberta Finance Minister Ceci as saying “Ottawa is living on a different economic planet.”

Albertans punctuated their disapproval a day after the finance minister’s economic statement when thousands of protestors took to the streets of Calgary to greet Prime Minister Justin Trudeau. There were loud boos as well as chants of “Build that pipe.” This inhospitable reception prompted the PM to shorten his day’s itinerary (and he retreated back to the Capital instead of carrying on to join the Grey Cup festivities in Edmonton.)

Yet, the government and Finance Minister Morneau persist with their economic approach. Facing his own sea of protestors in downtown Calgary this week, Morneau stated: “I want you to know that we are going to work to be as supportive as we can.”

 

Chris George is an Ottawa-based government affairs advisor and wordsmith, president of CG&A COMMUNICATIONS. Contact: ChrisG.George@gmail.com

LINK:  https://niagaraindependent.ca/the-fall-economic-statement-an-inadequate-response/

The Fall Economic Statement: Increased Spending. Deficits. Mounting Debt.

Canadian Finance Minister Bill Morneau presented his Fall Economic Statement this week.

The Niagara Independent, November 23, 2018 – In his fall economic statement, federal finance minister Bill Morneau mused: “We could have ignored the concerns of business leaders, decided not to make the investments and the changes that are part of the fall economic statement, and we would have had a lower deficit as a result. To do so would be neither a rational response, nor a responsible one.”

Minister Morneau summed up his address with the observation, “Because our economy is doing well, we also have the fiscal room to follow through on the commitments we made”; which, in essence, was offering some reassurances to Canadian businesses and to taxpayers that the Liberal government has a firm handle on the country’s finances.

The finance minister announced $17.6 billion of new spending over the next six years to boost Canadian business investment and economic activity. In response to the attractive tax cuts south of the border, the minister’s statement highlighted $16 billion of tax breaks for business. The biggest portion of this commitment is the $14.4 billion earmarked to allow businesses to write off some types of machinery and equipment more quickly.

It is evident that the government’s increase of billions of dollars of federal spending is to help corporate Canada better respond to the new business and investment realities of the North American marketplace. It is also evident with this economic statement that the government has abandoned its fiscal plan and is now fully committed to deficit financing – indefinitely.

In the 2015 federal election, the Liberal’s campaign promise was to incur deficits of no more than $10 billion and to balance the books by 2019. Instead, the Trudeau Government has been overspending by nearly $20 billion annually and will have added $75 billion to the national debt over its four-year term.

This additional spending adds to Canada’s debt, which will rise to $688 billion this fiscal year – and it is expected to climb to $765 billion by 2023-2024. By that time, the annual cost of servicing the federal government’s debt will total more than $34 billion a year in interest, or nearly $3 billion of interest per month.

MP Pierre Polievre, Conservative Party finance critic, sounded the alarm when he said, “Not only did they break their promise, not only will they fail to balance the budget, as they said, but they now admit that under their plan the budget will never be balanced. There is no time period into the future where they are even committing to a situation where the debt stops growing.”

In her analysis on BNN, B.C.’s former Liberal finance minister Carole Taylor provided some recent historical context stating, “What worries me as a former finance minister is you can’t be blasé about how you’re ever going to get back to balance, when you’re running deficits that are so enormous. If you think back to [Jean Chretien] and [Paul Martin], and how hard it was for them to work out of the difficult situation they were in at that time. They had to cut everything – cut transfers to provinces, cut programming, cut, cut, cut … I’m telling you, we’re setting up a situation here. If we’re talking $18 billion to $19 billion deficits, that’s going to be very difficult to crawl out of.”

Yet in his post-statement CBC interviews, Minister Morneau insisted, “The economy is doing better than most Canadians would have thought. So $17 and a half billion to grow the economy is pretty significant. The commitment is to create jobs, to invest for the future.”

Next week: Corporate Canada’s response to this Fall Economic Statement

Chris George is an Ottawa-based government affairs advisor and wordsmith, president of CG&A COMMUNICATIONS. Contact: ChrisG.George@gmail.com

LINK: https://niagaraindependent.ca/the-fall-economic-statement-increased-spending-deficits-mounting-debt/

5 taxing memes

On this the day of the fiscal update announcement in Ottawa, here are five of By George’s favourite memes on the subject of taxes. Seriously, it is not a funny matter…

taxes

bg232

taxes4

calvin-coolidge

churchill

 

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You can zap your friends with these memes by right clicking on these images and copy/save to Facebook, Twitter or into an email.

Chris George, providing reliable PR counsel and effective advocacy. Need a go-to writer and experienced communicator? Call 613-983-0801 @ CG&A COMMUNICATIONS.