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?)

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

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.

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”

In 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.

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

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.

Ever wonder what a pay increase to an Ontario public sector worker (i.e. teacher, firefighter, white-collared bureaucrat) costs a taxpayer? It was recently explained in this manner with a modest sum of $100…

If a public sector employee receives a raise of $100, paying the average of nearly 50% in combined taxes in Ontario, that person would have made a gain of $50 in personal income.

But net gains in taxes come entirely from the private sector, so in order to not fall further behind, the government would have to recover from the private sector the $50 it did not claw back in taxes from the public worker.

Since one in five workers in Ontario is a provincial government employee, that leaves four private sector workers to pay enough in taxes to replenish the public coffers.

While the Ontario public sector worker would have made a net gain of $50 in personal income after taxes, the private sector workers in Ontario must each pay $12.50 in extra taxes to cover that raise, a net loss to them.

Now, this equation only takes into account the Ontario bureaucracy and public sector workers. Consider further that in Canada almost 40 % of the population is part of the public sector comprised of all levels of government.

(ed. – SOURCE: http://www.torontosun.com/2014/06/16/the-public-pays-for-public-sector-wages )