Tag Archives: big government

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

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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/

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

 

Join By George on Facebook and on Twitter for daily missives that are both provocative and entertaining.

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.

Canadians are Adrift on a Sea of Debt (Part 2 of 2)

The Niagara Independent, November 9, 2018 – Recent government announcements and news reports have provided Canadians with an accounting of how much our Canadian governments are in debt. The current federal government, spending hundreds of billions of dollars, seemingly pays no heed to the size of their annual deficits. Add the sum of all provincial governments’ deficit budgets and one soon realizes that our governments are burying us in a deep, dank financial hole; from which no Canadian alive today will likely climb out. The reported numbers are startling.

In Ottawa, the federal government recorded a shortfall of $19 billion for the last fiscal year, repeating the deficit amount of the previous year. The government reports its federal spending continues to rise and is now $332 billion – $332,000,000,000 – the highest amount of government spending ever recorded.

Finance Minister Bill Morneau and finance officials will be quick to point out that the $332 billion figure is higher than in the past because of a change in accounting practices. But, this explanation does not address the fact that the federal government spending continues to increase.

The trend of overspending in Ottawa has resulted in the government adding almost $20 billion to the national debt in the 2017-18 fiscal year. As of March 31, 2018, Canada’s net debt is $758 billion. PM Justin Trudeau recently indicated his government will not balance the books before the election. Neither he, nor the finance minister, will offer a target date for when the Liberals can commit to a balanced budget.

In late October, an independent report on the state of federal finances assessed that the government will require deeper-than-expected deficits in each of the next few years. Canada’s federal parliamentary budget officer concludes that there is only a 10 per cent chance the federal books will return to balance in 2021-22, and a 30 per cent chance of seeing black ink in 2023-24. Are Canadians left to assume annual deficit budgets are here to stay?

In a recent Financial Post editorial, Fraser Institute economists provided no reassurances about the federal finance minister’s ability to manage budgets. They opine: “Morneau seems unaware of the risks of running deficits during periods of economic growth. Specifically, running deficits outside of recessions (or pronounced slowdowns) risks a permanent imbalance between spending and revenues, like what happened in Canada throughout the 1970s, ’80s and early ’90s. Simply put, it didn’t matter if the economy was growing, slowing or in recession. Ottawa could not balance its budget.”

At the provincial level, assessments based on past and current performances appear just as bleak. Last week, the Fraser Institute issued a report on provincial government debt which underlines “a serious problem.” Deficit budgeting appears to be systemic throughout the country – and especially burdensome in the province of Ontario. The report reveals: “Over the 10-year period from 2007-08 to 2017-18, total net provincial debt grew from $317.3 billion to $645.7 billion for an increase of 104 per cent. In addition, 50 per cent of the net debt belongs to Ontario – a proportion much larger than its population share of 39 per cent.”

Factoring in all of the latest news on our government’s finances, the combined federal and provincial debt currently stands at an astounding $1.4 trillion – a figure that has increased by more than 60 per cent in the past decade.

Canadians often hear Finance Minister Morneau crow that Canada has a very low federal debt-to-GDP ratio of just over 30 per cent. But, again, when factoring in all levels of government collectively, the Canadian governments’ debt-to-GDP in the last 10 years has risen from 69 per cent to 87 per cent.

Lots of figures. Lots of debt. Why should Canadians pay attention? Simply put, our current government spending and the national debt load directly impacts future governments’ abilities to respond to changing circumstances and global pressures. Our governments’ deficit budgeting curtails Canadians’ choices and opportunities – today, and for generations to come.

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/canadians-are-adrift-on-a-sea-of-debt-part-2-of-2/

Identifying “Governmentium”

A research institution announced the discovery of the heaviest element known to science.  The new element has been tentatively named “Governmentium “. Governmentium has 1 neutron, 12 assistant neutrons, 75 deputy neutrons, and 11 assistant deputy neutrons, giving it an atomic mass of 312.

 

These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

 

Since governmentium has no electrons, it is inert. However, it can be detected as it impedes every reaction with which it comes into contact. A minute amount of governmentium causes one reaction to take over 4 days to complete when it would normally take less than a second.

 

Governmentium has a normal half-life of 3 years; it does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, governmentium’s mass will actually increase over time, since each reorganization causes some morons to become neutrons, forming isodopes.

 

This characteristic of moron-promotion leads some scientists to speculate that governmentium is formed whenever morons reach a certain quantity in concentration.  The hypothetical quantity is referred to as “Critical Morass.”

 

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

 

Just the facts on Canadians’ debt & taxes

To begin 2018, the Fraser Institute has provided Canadians with 10 financial facts about our government and its spending that we all need to better comprehend. By George reprints these alarming facts unedited.

 

1. The total tax bill for the average Canadian family will exceed $35,000 in 2017, or 42.5 per cent of their income—more than what the average family spends on housing, food and clothing combined.

 

2. While the federal government has claimed it “cut taxes for middle-class Canadians everywhere,” the reality is that 81 per cent of middle-class families in Canada are paying higher federal income taxes under the government’s personal income tax changes—on average, $840 more a year.

 

3. More than 60 per cent of lower-income families (those in the bottom 20 per cent of earners) in Canada now pay higher federal income taxes because of the federal government’s tax changes.

 

4. And that does not include the impact of the federal carbon tax mandate, the coming CPP payroll tax increase, the lowering of tax-free savings account contribution limits, or the proposed changes to the tax treatment of incorporated small businesses.

 

5. Canada’s high and increasing personal income tax rates on its best and brightest workers have made the country uncompetitive compared to other developed countries. The federal government increased the top federal tax rate to 33 per cent from 29 per cent, and increases to top provincial rates have been made in Ontario, Alberta, British Columbia and other provinces. Seven of our 10 provinces now have a top combined federal-provincial rate above 50 per cent.

 

6. The top 20 per cent of income-earners in Canada—families with an annual income greater than $186,875— will pay 64 percent of all personal income taxes and 56 percent of all taxes (i.e. income, payroll taxes, sales taxes and property taxes, etc.).

 

7. As if this isn’t enough, the federal government has failed to achieve its election promise to run $10 billion deficits in its first two years and thereafter balance the budget. Instead, since coming into office, it has run deficits of $18 billion in 2016 and $20 billion this year, additional deficits of almost $80 billion are forecast over the next five years. There’s no immediate plan to balance the budget.

 

8. Large annual deficits mean government debt in Canada is ballooning. Federal net debt increased to $727 billion in 2016-17 with provincial net debt collectively at $633 billion. All told, federal and provincial debt currently stands at $1.4 trillion and has increased by more than 60 per cent in the past decade.

 

9. Prime Minister Trudeau is on track to increase per-person federal debt more than any other prime minister in Canadian history who didn’t face a world war or economic recession.

 

10. The federal government has claimed deficit spending will help grow the economy through expenditures such as the promised $100 billion in infrastructure investment over the next 10 years. But only $6.6 billion of that will be spent in 2017 (only about a third of the $20 billion deficit), and less than 11 per cent of the $100 billion will be spent on projects that have the potential to strengthen the economy.

 

The original Fraser Institute post can be found here:

https://www.fraserinstitute.org/blogs/ten-year-end-facts-canadians-need-to-know

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

 

The Dead Horse Theory

dead-horseThis theory is sometimes referred to as “Government’s Political Correctness.” Here’s the predicament:

 

The tribal wisdom of the Plains Indians, passed on from generation to generation, says that “When you discover that you are riding a dead horse, the best strategy is to dismount, then get another horse.” However, in Government, more advanced strategies are often employed, such as:

  • buying a stronger whip
  • changing riders
  • appointing a committee to study the horse
  • arranging to visit other countries to see how other cultures ride dead horses
  • lowering the standards so that dead horses can be included
  • reclassifying the dead horse as “Living-impaired”
  • hiring outside contractors to ride the dead horse
  • harnessing several dead horses together to increase speed
  • providing additional funding and/or training to increase the dead horse’s performance
  • doing a productivity study to see if lighter riders would improve the dead horse’s performance
  • declaring that, as the dead horse does not have to be fed, it is less costly, carries lower overhead and therefore contributes substantially more to the bottom line of the economy than do some other horses
  • rewriting the expected performance requirements for all horses
  • (and, the choicest strategy) promoting the dead horse to a supervisory position

Government officials will also look to the root causes of the predicament before taking any action, i.e. what kind of parents it had, the horse’s colour, his socioeconomic background, perhaps the horse was bullied, or his mother was single, etc.

It is no wonder that, for some time now, government workers’ saddest refrain has been: It’s been so lonely in the saddle since my horse died…

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

10 quotes on bureaucracy

You will never understand bureaucracies until you understand that for bureaucrats procedure is everything and outcomes are nothing. – Thomas Sowell

 

Bureaucracy is a giant mechanism operated by pygmies. – Honore de Balzac

 

The only thing that saves us from the bureaucracy is its inefficiency. – Eugene J. McCarthy

 

Bureaucracy is the death of all sound work. – Albert Einstein

 

Bureaucracy is the art of making the possible impossible. – Javier Pascual Salcedo

 

Every revolution evaporates and leaves behind only the slime of a new bureaucracy. – Franz Kafka

 

Any change is resisted because bureaucrats have a vested interest in the chaos in which they exist. – Richard M. Nixon

 

Bureaucracy, the rule of no one, has become the modern form of despotism. – Mary McCarthy

 

Bureaucracy defends the status quo long past the time when the quo has lost its status. – Laurence Peter

 

Bureaucracy gives birth to itself and then expects maternity benefits. – Dale Dauten

 

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

10 Proverbs for Our Elected Politicians

On this Canada’s budget day, a day when we can expect our federal government to find new ways to intrude into our daily lives and mess about in our future prospects, By George reprints this priceless and timeless list of proverbs for elected politicians – of all stripes, in every level of government.

 

  1. Law is a necessary evil.
  2. Pass as few laws as possible, consistent with the demands of justice and the maintenance of order.
  3. Where custom is sufficient, there is no need for law.
  4. Do not pass laws that cannot, or will not, be enforced, for such breed contempt for both the law and the State.
  5. Penalties must be minimally sufficient to deter infractions, given adequate enforcement. Less renders the law ineffective; more inflicts unnecessary pain.
  6. There is an inverse proportion between the severity necessary to deter infractions and the certainty of punishment.
  7. Enshrine your principles in constitutions, codify your common sense in laws, and leave the rest to regulation.
  8. Even more than on your wisdom, the legitimacy of the State depends on your integrity.
  9. In public life, integrity requires not only an honest heart but an honest face.
  10. Your primary object must always be not the satisfaction of your constituents but the continued legitimacy of the State, for upon that depends the welfare, even the survival, of us all.

 

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

 

WSJ: Provincial Debt Unsustainable

The sirens are now going off south of the border that Canada’s provincial governments (namely Ontario and Quebec) are spending beyond their means and endangering their future taxpayers to a mounting tax headache.

Here is the Wall Street Journal’s news column: Canada’s Budget Watchdog Says Provincial Debt Unsustainable

The WSJ writes:

Canada’s budget watchdog Tuesday warned that the federal government’s push toward a budget balance masks a serious fiscal threat at the subnational level, where the country’s provincial governments are accumulating debt at an unsustainable pace.

The Canadian provinces’ fiscal performance has deteriorated since the onset of the global financial crisis, and the Office of the Parliamentary Budget Officer has issued other warnings on provincial government debt. But its latest report comes after major bond credit-rating firms this month downgraded their ratings on Canada’s most populous province, Ontario, and neighboring Manitoba.

In this article, WSJ identifies the largest culprits of Canadian debt.

Ontario and Quebec, the two biggest provinces by population, are carrying the biggest debt loads, with net debt-to-GDP ratios of roughly 39% and 49%, respectively. Quebec, after taking some austerity measures, projects a balanced budget this year.

Elsewhere, in Canada’s Financial Post, a headline today reads:
With twice the debt of California, Ontario is now the world’s most indebted sub-sovereign borrower

FP puts Ontario’s debt pile nightmare into context:

While Ontario’s population is about one third of California’s, its debt load is more than double that of the biggest U.S. state.

Is it not time for Ontarians to demand more of Premier Wynne and her Liberal Government than their tax-and-spend-and-spend-some-more approach to the province’s finances?

(ed. – Surely, we won’t accept that the answer is to wine and complain that the federal government must give Ontario more tax transfers? Should we not start with the notion that we begin to live within our means?)

Big Gov Stats

Public administration expert Donald Savoie calls ‘em as he sees ‘em.

In a recent study he has published, Savoie views the federal public service as (ed. -get ready for this vivid imagery!!)“a big whale that can’t swim.”

The whale-like simile is on account of the federal government having too many management layers and oversight bodies and spending far too much time churning out performance and accountability reports.

Fact: Canada’s public service has seven levels of executives. There are 6,500 executives at the first five levels (Ex 1-5) with associate deputy ministers and deputy ministers at the top of the heap.

Fact: The assistant deputy ministers – known as Ex 4s and Ex 5s – earn between $179,000 and $200,000 a year. Of the now more than 400 ADMs we have in the federal service, about seven of them a year will be promoted into deputy minister ranks.

This is an alarming number, given that the role of ADMs became smaller as the executive cadre grew over the past 25 years.

Overall, Savoie reveals, the executive numbers of the federal bureaucracy has soared nearly 50 per cent in the last 25 years, outpacing 12-per-cent growth in the overall public service. The big surge came in the 2000s when the size of the bureaucracy grew 35 per cent. The number of ADMs shot up 49 per cent while the numbers of those at Ex 1 to 3 levels jumped 68 per cent. The number of deputy ministers, led by new associate deputy minister positions, increased 25 per cent over the past decade.

Here are numbers relating to the federal ADMs as compiled by the Ottawa Citizen:

54: Average age of Ex-4s and Ex-5s
20: Average years worked in the public service
12: Years spent as executive before promoted to ADM
40: Percentage of ADMS who are women
50: Percentage who held three of their last four jobs in the same department
87: Percentage of ADMs in the National Capital Region
42: Percentage of ADMs who work in programs, services or operations
15: Percentage of ADMs who work in central agencies
8: Percentage working in policy
3: Percentage working in communications
7: Average number who get promoted to deputy minister annually
10: Percentage who retire each year
59: Average age at retirement

The full Ottawa Citizen article on ADMs can be seen here: ADM’s role diminished as top executives have become too insular and inexperienced – study

Equalization Payments and Ontario

Equalization payments are Canadian governments’ grand design to ensure all its citizens can live in a Province that will have the resources necessary to deliver similar levels of public services. This system has the Federal Government redistribute payments from those Provinces that are richer to those Provinces that are poorer. So, tax money is taken from the “Have-Provinces” and given to the “Have Not-Provinces” (sort of like a Robin Hood).

(An important note to make here is that, even with this redistribution of wealth, citizens across Canada do not enjoy similar levels of service. It falls to the respective Have-Not Provinces to responsibly administer the equalization payments received in order to meet their health care, education and infrastructure demands.)

This year, Ottawa will pay $17.3 billion, unconditionally, to six have-not provinces for the fiscal year that began on April 1. They are the Provinces of Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Ontario and Manitoba.

Did you know?? 20 cents of every dollar that is raised by federal government taxes goes directly and unconditionally to Provinces – and this amount is at a 20-year high.

Ontario will get $20.4 billion from Ottawa in 2015-16 for health, social services and equalization (this total is up $1.3 billion from $19.2 billion last year). When looking at the increases paid to Ontario, the equalization payment to this largest of Canada’s Provinces has risen 88% since federal Conservatives have been governing the redistribution of payments in 2006.

Yet, for the Ontario Government, which has now recorded 10 years of deficits and are being squeezed by $11 billion of debt payments annually – of course, the equalization cheques are never enough. The Provincial Government refers to federal payments as inadequate and the Ontario Premier has repeatedly openly criticized the Federal Government for not giving Ontarians their fair share.

Surprisingly, many Ontarians think they are being short-changed with the whole equalization scheme. A recent poll found that 48% of Ontarians insisted their province paid into the pot when, in fact, it does not.

Yet the debt hole that the Ontario Liberal Government has dug for itself is so deep that it will take years of austerity for this Have-Not Province to turn things around. How bad is it? Well consider these four facts:

  • The McGuinty – Wynne Liberals have increased Ontario’s public debt to almost $300 billion, or by 115% since taking power in 2003.
  • The Liberals are raising spending by $2.4 billion this year – offering no specifics on how they plan to reduce the deficit.
  • With this year’s $10.5 billion deficit announcement, the province’s debt is still on track to balloon to $325 billion by 2018 (that is $23,000 per person in Ontario).
  • Ontarians pay $11 Billion per year for to service their interest on the Province’s debt. in 2014/15, more than nine cents of every revenue dollar collected in Ontario goes to debt interest payments and not towards government programs or tax reductions.

With this type of spending piled onto the out-of-control debt levels, no amounts of increased equalization payments will be enough to sustain the Ontario Government (mis)management of its economy.

 

Ontario’s public sector bounty

On the heels of the damning report from CFIB of earlier this week that revealed there was a growing disparity between private and public sector salaries and benefits, there comes a new Fraser Institute study that exposes just how wide the pay gap has become in Ontario.

The Fraser Institute released today: “How Compensation Spending Consumes Provincial Government Resources in Ontario.”   It notes the following facts:

  • Compensation for Ontario Government workers skyrocketed by 47% in less than a decade with the many generous public sector settlements awarded by the Liberal Government.
  • The 47% increase in salary and benefits for Ontario public sector workers grew at a significantly faster rate than either inflation (15.1%) or the provincial economy.
  • Overall program spending (the amount Ontario spends every year after paying interest on debt and not including capital investments) rose 42% during that same period, from about $80 billion to over $115 billion. Spending on things other than compensation rose 39 per cent. And the number of government jobs increased by about 11%.
  • Now, in Ontario, because of the high public sector pay and benefits awarded, up to three-quarters of all new spending on programs goes to cover staff pay.
  • Prior to the 2008 recession, the Liberals doled out generous increases to teachers, doctors and other stakeholders. (Since 2008, compensation increases have slowed with the Government trying to come to terms with the year-over-year deficit. Today, the annual deficit is at $12.5 billion, which is amplified as a result of declining revenues in the Province’s slowing economy).

Lead author Charles Lammam made the point in releasing the report just because we are spending more on provincial bureaucrats does not translate to Ontarians getting more bang for the buck.

“It’s not entirely from new nurses, police officers, teachers or whatever… our analysis suggests it’s not necessarily going to improve new or better quality services in the province. When governments spend more it doesn’t necessarily translate into more and better services.”

This is precisely the rub. The ever-increasing costs of big government’s bloated workforce and out-of-control spending is at the heart of the arguments in many of By George’s previous “big government” posts.

Our bloated bureaucracy exposed (yet again)

The Canadian Federation of Independent Business’ (CFIB) released a telling report yesterday on private vs public sector jobs that confirms yet again the increasing advantage our government workers enjoy with their salaries and benefits.

The CFIB report “Wage Watch” exposes the bloated bureaucracy in Canada, documenting a 10%-15% “wage gap” between higher paid public sector workers and their private sector counterparts performing the same jobs.

The findings show workers in the private sector earn $8,150 a year less than their public sector counterparts, and work six hours more per week – for working the same job. The report notes that there is “a huge wage and benefits advantage for public sector workers over the rest of us.”

The Canadian public sector includes 3.6 million employees, which represents more than one in five jobs. With the math as it is, every 4 working Canadians are taxed extra to pay for the fifth government worker.

The CFIB comparisons use the National Household Survey, which represent average full-time employment earnings for more than 7.2 million Canadians. Important to note – the report excludes jobs such as police officers, firefighters, government deputy ministers, university professors and military personnel, for which there is no private sector equivalent (ed. – if the salaries and benefits of these occupations were included, expect the gap to be even greater!).

At 2010 pay levels, the gap is biggest in the federal government, where employees hold a salary premium of 13 per cent, which swells to 33.2 per cent when you factor in benefits.

This “overpayment” of Canada’s bloated public sector costs taxpayers $20-billion annually. For cash-strapped governments that is money that could be used to build roads, bridges and schools, fund health care or energy programs.

CFIB spokesperson Marilyn Braun-Pollon stated in media reports yesterday, “Our research findings point to huge wage and benefits advantages for public sector workers over the rest of us. It’s the elephant in the room when it comes to setting public policy across the country.”

“There aren’t the same market forces in the public sector. The government has monopoly power. Canadians in the private sector see their tax dollars paying for these wages and benefits that they can only dream of. Policy-makers need to start reining in these misaligned costs.”

The ever-rising costs of big government is a train-wreck-in-the-making that By George has been pining away on for years…. in articles tagged “big government”

The highest of costs we pay for big government

biggovernmentIn speaking from the standpoint of a libertarian, we must be ever-weary of those who argue for government controls, education and intervention “to fix” a societal problem. Most often, the programs and services conjured up will inevitably encroach on a citizen’s rights much like the proverbial camel’s-nose-in-the-tent. Big government will beget bigger government – values and rights be damned.

In Canada today, big government attempts to deliver cradle to grave counsel and services. We are now paying for public institutions that hold pre-schoolers to seniors, and for government services that “manage” all problems within our communities. We pay dearly for the barrage of public information we are subjected to on every issue under the sun. All of this government activity is developed and run with no respect to what may be differing views and values of individuals.

The most recent, egregious case of this Big-Brother-knows-best approach to life is the Government of Ontario’s ramrodding the new sex ed curriculum into primary school classrooms without an open public consultation.

In this case, there are a few (government sponsored) interest groups who applaud the government actions. For instance, People for Education, a public education advocacy group, supports an updated curriculum stating that there is “strong” evidence indicating that age-appropriate education has impact. PFE executive director Annie Kidder commented on the new curriculum, “The evidence is very strong and pretty unequivocal that talking to kids about a whole range of information to do with their bodies and relationships (early on) makes a difference in terms of their ability to keep themselves safe, to have healthy relationships.”

Ms. Kidder’s observation may well be universally acknowledged today. However, what is most upsetting for Ontario parents is not the fact there is a dialogue about sex in schools, but rather the sexual content that has been chosen to be taught at younger-than-ever-aged school children. This frustration can be seen in the wording of the petition launched by Ontario Catholic parents group Parents as First Educators that reads: “We do not believe that prepubescent children should be overloaded with explicit information about sex,” and demands “an end to plans” to update the sex-ed curriculum. “The values of self-control, morals and marriage are not considered in this program and the emotional consequences of loveless sex, with no commitment, are not addressed.”

At question is the same sex-ed curriculum that the Ontario Liberal government previously attempted to update in 2010 – until it backed off after backlash from religious leaders. So there is no doubt about what is being talked about, this new sex-ed program will teach kids about use of body parts in Grade 1 (age 6), homosexuality and same-sex marriages in Grade 3 (age 8), encourage discussions about puberty and exploring masturbation in Grade 6 (age 11), and talk about preventing sexually transmitted diseases, and oral and anal sex in Grade 7 (age12).

And there is a great deal more to this controversial program by the Ontario Government.

Campaign Life Coalition is but one group in the Province that has raised the siren cry that this curriculum was written while Ben Leven was the Education Department’s Deputy Minister. They point out that this fact is most disturbing:

     It’s important to consider the fact that this curriculum was also written under the direction of an alleged child pornographer, Mr. Benjamin Levin. He was the Deputy Education Minister at the time, serving under then Education Minister Kathleen Wynne. Levin was charged by police with 7 counts of making and distributing child pornography.

     Levin was charged by police with 7 counts of making and distributing child pornography. Although the man has not yet been proven guilty in a court of law, many people are questioning whether “grooming” could have been a reason for introducing these explicit subjects at such delicate ages. If the allegations are true, could it be that the curriculum was designed to “prime” children, so as to make them sexually available?

     When it is found that an alleged pedophile was in charge of writing what many parents perceive to be graphic, age-inappropriate Sex Ed curriculum, parents cannot be blamed for wanting no part of the curriculum. Should warning bells be going off when we learn that an alleged pedophile oversaw the writing of curriculum which gets 6 year olds talking about their genitals, encourages kids to masturbate, and wants to get 13 year olds thinking about oral sex and anal sex?

     The safety of children is too important to ignore Levin’s hand in this curriculum.

Although the current Education Minister states that Ben Levin was not directly involved in developing the curriculum, is there any doubt why parents who have not seen the curriculum, nor have had any opportunity to comment on it, would be concerned? Premier Kathleen Wynne is belligerently adamant in the face of parents’ anxiousness that this sex ed curriculum will be in Ontario primary schools starting in September 2015.

Ontario’s sex-ed curriculum is an excellent case in point for libertarians’ concerns about Canadians’ increasing dependency on government. It is exactly the price we pay for accepting Big Brother’s “helping hands.” Individual’s rights and values are wholly compromised and there is little to no recourse for the average citizen. It is the highest of costs we pay for big government.

41

SOURCES:

http://www.cfra.com/news/2015/02/18/ontario-premier-says-new-sexed-curriculum-online-within-weeks
http://www.campaignlifecoalition.com/index.php?p=Sex_Ed_curriculum
http://www.torontosun.com/2015/02/18/levin-not-involved-in-new-sex-ed-curriculum-sandals

Ontario public sector: our fat cats

Did we need further proof that Ontario’s public sector enjoys much more than “the rest of us”? Not really, though here it is: a Fraser Institute study just released says that “Government workers in Ontario receive higher wages and likely more generous non-wage benefits than their private sector counterparts.”

Niels Veldhuis, president of the Fraser Institute, says in a released statement: “As the Ontario government grapples with a $12.5 billion deficit, it has identified government-sector compensation as a way to restrain spending. Indeed, in light of ongoing collective bargaining negotiations, now is an opportune time to scrutinize the compensation of government employees, which consumes over half of program spending”

The main finding of the study reveals that, on average, government workers in Ontario, including federal, provincial, and local government workers, receive 11.5 per cent higher wages than comparable workers in the private sector.

And wages are only part of an employee’s total compensation. Non-wage benefits — including pensions, early retirement and job security — can represent an important portion of an overall compensation package. Here we find our fat cats have a cushy life indeed. Here are the non-wage benefits the Fraser Institute study examines:

  • Pensions: In 2013, 77.3 per cent of government workers in Ontario were covered by a registered pension plan compared to only 25.6 per cent in the private sector. Of those covered, 97.1 per cent of government workers enjoyed defined-benefit pensions (i.e., guaranteeing a certain level of benefits in retirement) compared to 46.9 per cent of private-sector workers.
  • Early retirement: Between 2009 and 2013, Ontario government workers retired 1.4 years earlier, on average, than the province’s private-sector workers.
  • Job security: In 2013, 3.8 per cent of those employed in the private sector experienced job loss in Ontario, compared to only 0.8 per cent of those employed by government.
  • Absence rates: Full-time employees in the province’s private sector were absent due to personal reasons for an average of 7.2 days in 2013; the average government worker was absent 10.4 days.

In a Financial Post piece economists Charles Lammam and Niels Veldhuis make the point that the fat public sector pay cheques are both “unfair and unsustainable”. They write:

The Ontario government is currently deep in negotiations with public sector unions including those representing bureaucrats, teachers, and police officers. On compensation costs, finance minister Charles Sousa said: “We must continue to provide for net zeros in the negotiations … to ensure that we continue to curb our spending.”
      As Sousa’s government stares in the face of a $12.5-billion deficit and mounting debt, any belt-tightening initiative must involve the compensation of government employees, which consumes more than half of provincial government program spending. And it’s not just an issue for the provincial government. Municipalities also pay wages and benefits to government workers above those of comparable private sector positions.
      This is about more than just economics. It’s unfair for government workers to receive a premium paid for by private sector workers who receive less overall compensation for similar work.

Yet the fat cats are screeching

Yet hundreds of public sector workers from across Ontario gathered at Queen’s Park this week to warn Premier Wynne that any type of government austerity program will result in a strike. Union president Smokey Thomas is quoted as saying: “Come to the bargaining table, get all those Draconian concessions off the table, bargain fairly (and) you will get a contract. Wynne has come with something worse than Tim Hudak or Mike Harris or any right-winger could have ever dreamed up. I truly believe Kathleen Wynne thought ‘we can make OPSEU fold up real fast’ and they were wrong… We didn’t pick this fight but we will damn well finish this fight.”

These union claims of entitlement would be farcical if it wasn’t so real. Ontario Liberals have a lot to answer for as they successfully belled the cat in last year’s election. Recall, Kathleen Wynne and OPSEU (and all other unions across the Province) were in bed with one another to secure a Liberal vote and the return the Ontario Liberals to power. Promises were made. Expectations raised. Votes delivered. Is there any surprise that today unions feel cheated by the Premier and her Liberal Party?

So, the unions are screeching and the Premier is secure to do anything she wants with her 4-year majority. On one hand we have this union-Liberal tango and, on the other hand, we have the growing gap between public and private sectors’ pay and benefits. And Ontario taxpayers are left with a sideline view of this fat cat fight.

Related Posts:

The Ontario debt problem is serious

Ontario’s the 2015 political battleground

By George posts tagged “big government”

SOURCES:

Fraser Institute study
Financial Post column
News re union protests

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The Ontario debt problem is serious

Surprisingly, there are folks who don’t seem to be bothered by the debt load the Ontario government has incurred. For many Ontarians, it just doesn’t matter. But, here’s why it should. Simply put: Interest payments on government debt eat up revenue at the expense of other priorities.

Interest payments on government debt in Canada consume a sizeable share of government revenue, leaving less money for public priorities such as schools, hospitals, highways and lower taxes. This is best explained by the Fraser Institute (an independent, non-partisan Canadian public policy think-tank) – which, by the way, is sounding a siren on Ontario’s debt load.

A recent Fraser Institute study showed that in Ontario, the provincial government in 2013/14 spent $10.6 billion on interest payments, or 9.1 per cent of overall revenue, eclipsing the entire budget for the Ministry of Community and Social Services ($10.1 billion), and nearly topping the province’s total infrastructure spending ($10.8 billion).

“As Ontario struggles to rein in deficits and growing government debt, interest payments chew up big chunks of taxpayer money at the expense of priorities such as health care and education or potential tax cuts,” said Charles Lammam, study co-author and resident scholar in economic policy at the Fraser Institute.

More on this study here: Ontario burdened with debt
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In an earlier report, the Institute calculated that Ontario has more debt than California – the poster child for fiscal irresponsibility.  Here are the numbers: Despite the province’s smaller size, Ontario’s $267.5 billion (Cdn) outstanding government debt is higher than California’s $144.8 billion (US). As a share of the economy, Ontario’s bonded debt (the part of a government’s debt represented by bonds) is 40.9 per cent compared to California’s 7.6 per cent.

Put in another way: Ontario’s debt relative to the size of its economy is more than five times larger than the same measure for California. So, every Ontarian owes $20,166 (Cdn) compared to $3,844 (US) for every California resident.

The Fraser Institute identifies the culprit has been the overspending of the Liberal government over the last decade. Charles Lammam and Mark Milke of the Institute write:
     How governments manage their finances matters a great deal. Spend and borrow too much and the result is a spiral of increasing deficits that create ever higher debt. Then ever-more tax dollars end up spent on debt interest — not on education, healthcare, administering provincial courts, or other areas in which provincial governments are involved.
     In a recent study examining how well Canada’s premiers are managing government spending, taxes, deficits and debt, it turns out Ontario’s Premier Kathleen Wynne has one of the worst records in the country. In contrast, now-departed Newfoundland and Labrador Premier Kathy Dunderdale ranked above all her counterparts on as the most fiscally prudent, in relative terms…
     Wynne has a poor ranking because Ontario’s spending increased faster than economic growth and also more than inflation plus population growth. She also ran the largest average deficit among the premiers and increased government debt…
     Wynne, of course, is the premier of Canada’s largest, most populous province; continued fiscal imprudence on that large of scale is simply reckless.

Finally, the Canadian Taxpayers Federation has listed 10 Facts About the Ontario Debt – facts that should concern us all.

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Radical thoughts (for today) on taxes

A recent article in The Objective Standard quotes the President of the United States making the following observation about taxes:

     “Taxes take from everyone a part of his earnings and force everyone to work for a certain part of his time for the government. . . . I want the people of America to be able to work less for the government—and more for themselves. I want them to have the rewards of their own industry. This is the chief meaning of freedom. Until we can reestablish a condition under which the earnings of the people can be kept by the people, we are bound to suffer a very severe and distinct curtailment of our liberty.”

The magazine then states that “obviously those are not the words of Barack Obama, from whom such a statement would be unthinkable.  Although Obama may cite “middle class tax cuts,” he does not seek to cut taxes. President Obama seeks to merely to prevent certain taxes from increasing.”

And, as the editorial points out: “In today’s absurd political lingo, the lack of a tax hike is a “tax cut.””

So, who made the priceless observation above? These words are from former U.S. President Calvin Coolidge in the year 1924. In his speech, President Coolidge pointed out the insanity of class-envy taxes that punish the most successful Americans: “The wage earner . . . makes his contribution, perhaps not directly but indirectly, in the advanced cost of everything he buys. The expenses of government reach everybody.”

The Objective Standard editorial takes the current President to task:  “Obama’s tax-and-spend policies constitute “a very severe and distinct curtailment of our liberty.” It is time for Americans who care about their liberties to recognize that fact, to state it openly, and to advocate their right to the “rewards of their own industry.”

This American commentary applies directly to a few governments north of the border – Ontario’s provincial government the prime culprit of overspending and unconscionable taxation in our country. (ed. – Next week By George will look at the tax-and-spend-and-spend-and-tax-some-more Ontario Liberals and inspect what impact this government may have on the 2015 election.) 

To read the full Objective Standard article, go here.

To read the full speech from President Calvin Coolidge, go here.

 

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Libertarian views on government

For many libertarian-minded people, Ronald Reagan’s observations on government probably comes closest to their perceptions of “government.”  Former U.S. President Reagan stated:  “I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer, just as liberalism is a misnomer for liberals… The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom, and this is a pretty general description also of what libertarianism is.”

Here are a dozen quotes, from some of history’s great thinkers, that best describe the biases libertarians hold against big government – well, government in general:

  • All government is an ugly necessity. – G. K. Chesterton
  • That government is best which governs least. – Henry David Thoreau
  • In a healthy nation there is a kind of dramatic balance between the will of the people and the government, which prevents its degeneration into tyranny. – Albert Einstein
  • Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master. – George Washington
  • Government can’t give us anything without depriving us of something else. – Henry Hazlitt
  • You can’t give the government the power to do good without also giving it the power to do bad – in fact, to do anything it wants. – Henry Browne
  • The government solution to a problem is usually as bad as the problem. – Milton Friedman
  • Government does not solve problems; it subsidizes them. – Ronald Reagan
  • Which is the best government? That which teaches us to govern ourselves. – Johann Wolfgang Von Goethe
  • Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. – Frederic Bastiat
  • For in reason, all government without the consent of the governed is the very definition of slavery. – Jonathan Swift
  • Man is not free unless government is limited. – Ronald Reagan

 

 

 

It seems there is no end to taxing Canadians

Canadians are spending more and more on government. In fact, we are spending more on government than we do on our families!

The Fraser Institute produced a new research study that shows the average family brought in $77,381 in 2013, paying out 41.8 per cent of that in total tax, and 36.1 per cent on life’s necessities such as food, clothes and housing. Compare that to 1961, when the numbers were $5,000, 33.5 per cent and 56.5 per cent, respectively. Check out this video: Families spend more on taxes than food, clothing and shelter combined.

Charles Lammam, resident scholar in economic policy at the Fraser Institute comments, “Over the past five decades, the total tax bill grew much faster than the cost of basic necessities, so now taxes eat up more income than any other single family expense.

“With more money going to the government, families have less to spend on things they care about, to save for education and retirement, and to pay down household debt.”

In releasing the Fraser Institute report, Lammam observes: “While there’s no doubt that taxes help fund important government services, the real issue is the amount of taxes that governments take compared to what we get in return. With almost 42 per cent of income going to taxes, Canadians should ask whether they get the best value for their tax dollars.”

And this is exactly the inquiry picked up by Sun columnist Lorne Gunter who questions the absurd reasoning of entitled politicians, unaccountable bureaucrats and champions of big government spending. Gunter writes in his column “Tax to death”:

“Governments have too much money brought on by nearly unlimited taxing and borrowing power. This almost-limitless stream of cash (coupled with too much faith in the infinite goodness of government) has created a mentality among politicians and public-sector workers that they are doing the work of angels and thus are entitled to gold-plated pay, perks and pensions.”

Gunter points out that today public-sector workers (civil servants as well as teachers, nurses, police officers and others) have higher pay than their private-sector counterparts, plus richer pensions, shorter workdays, better benefits and greater job security.

“Whereas the average family used to spend much more on the basics than on taxes, today it spends way more on taxes. Canadians work far harder to feed, clothe and house public-sector workers than they do to feed, clothe and house their families. There is something horribly distorted about that.”

Hear, hear! It is high time that Canadians begin to curb the gross appetites of big government. The interesting questions to ponder in light of this Fraser Institute report are:

When it comes to taxes in Canada, just what are the limits?

At what point will individuals begin to react and do more than grumble to their accountants?