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

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calvin-coolidge

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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.

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/

The Inequity of Canada’s Equalization Payments

The Niagara Independent – June 29, 2018 – As Parliament recessed for the summer, news leaked out that the Trudeau Government quietly renewed the current federal equalization formula for provinces through the year 2024.

In the 584-pages of 2018 budget documentation, Finance Minister Bill Morneau had buried a provision that extended the existing equalization formula, providing no formal notices to provinces or the public. With the passage of the omnibus budget legislation, stealthily, Morneau unilaterally assured the renewal of the federal-provincial equalization arrangement — to the huge benefit of Quebec, and over the vocal protests of Newfoundland and Labrador, and the western provinces of Saskatchewan and Alberta.

The federal government’s equalization payments are a complex redistribution of federal tax dollars to “have-not” provinces – those provinces requiring assistance to maintain their public services. Equalization is written into subsection 36(2) of the Canadian constitution to ensure provincial governments have “sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.”

Federal equalization dollars are not funds for specific use, but dollars that get placed into the general revenue of “have-not” provinces. The payments have no strings attached. (These payments are not to be confused with the explicit federal transfers to provinces for health, social programs, and infrastructure expenditure programs.)

The federal payments this fiscal year are nearly $19 Billion. Provinces are receiving these amounts: PEI $419 Million, NS $1.9 Billion, NB $1.9 Billon, ON $963 Million, MB $2.0 Billion and QB receives $11.7 Billion. With the current equalization formula, Quebec receives more than 60 per cent of the total paid out. The “have” provinces, Newfoundland and Labrador, B.C., Alberta, and Saskatchewan receive no equalization payments.

The current redistribution of federal tax dollars has prompted calls for a re-calculation of the equalization formula.

  • Tom Osborne, finance minister from Newfoundland and Labrador, says, “When you see other provinces with a smaller geography and a much larger population and are receiving a large portion of equalization payments, I challenge anybody to explain to me how Newfoundland and Labrador is still considered a ‘have’ province.”
  • Alberta Premier Rachel Notley states, “It’s disadvantaging Alberta,” and Opposition Leader Jason Kenney says, “This is a slap in the face to Alberta. It means we will continue to be forced, even when times are bad in Alberta, forced to subsidize public services in other parts of the country where politicians have been trying to block out pipelines and impair our energy industry.”
  • Saskatchewan Premier Scott Moe states, “There are provinces across the nation looking to have this discussion. This is obviously a flawed program.”

In the end, the Trudeau Government ignored these calls for a review by the provincial leaders.

The arguments over the equalization payouts are fanning regional tensions between western provinces and Quebec, particularly this year when Quebecers helped to cancel the Energy East pipeline project. As Alberta Conservative Leader Jason Kenny points out, “We’ve been sending Albertans’ tax dollars to politicians who have opposed our energy industry, which helps to create the wealth transferred through equalization.”

Reflecting westerners’ frustrations, Don Braid, Calgary Herald’s political editorialist, observes “rarely has there been a sneakier ploy… The closest for sheer nose-thumbing gall may be the 1980 meeting of Pierre Trudeau’s cabinet in Lake Louise, to discuss details of the National Energy Program.”

The inequity of the federal equalization formula is underscored when considering the total amounts of federal payments to provinces since 1957 — the year these annual payments were introduced.

NL – $ 25 B

PEI – $ 10 B

NS – $ 47 B

NB – $ 46 B

QB – $ 221 B

ON – $ 19 B

MB – $ 50 B

SK – $ 8 B

AB – $ 92 M

BC – $ 3 B

The figures reveal that in the last 61 years Quebec has received more than half of all equalization dollars. Now the Trudeau Government has assured Quebec receives its cash bonanza for another five years. Saskatchewan Premier Scott Moe is blunt about the unfairness of it all: “Five years of zeroes for Saskatchewan, Alberta, Newfoundland, while Quebec keeps receiving $50-$60 Billion.”

 

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

LINK:  https://niagaraindependent.ca/the-inequity-of-canadas-equalization-payments/

 

 

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.