Tag Archives: big government

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.




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”


Fraser Institute study
Financial Post column
News re union protests


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

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.


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.




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?

The cost of Ontario’s public sector pay increases

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 )

10 Facts to Contemplate regarding Ontario’s Election

The day after the night before – and I am both irritated at how the election played out with the public sector unions ruling the day; and I am troubled about what the next 4 years will bring with a Liberal majority government. We all work hard; pay our fair share of taxes; and should expect that the tax money is not being misspent, wasted or unaccounted for. Here are ten facts that were exposed during the election that should give pause to any taxpaying Ontarian.

  1. With its unbridled public sector spending and growth, the Liberal government doubled the Province’s debt in just 10 years. It has grown to a total of $291.9 billion; the debt increases by $400 a second, $25,000 every minute and $1.5 million every hour. This is a fiscally undisciplined, tax-and-spend government.
  2. Ontario is now in a worse fiscal situation than the State of California (that is on the brink of bankruptcy and has had municipalities declare bankruptcy). The Ontario government spent 9.2% of its revenues paying off interest on debt in 2011/2012, more than three times higher than California’s 2.8%. On a per person basis, every Ontarian owes $20,166 compared to $4,282 for every California resident.
  3. It is going to cost Ontario $ 1,000,000,000 ($1 billion) every month to service its debt. That is money going to pay financial institutions and not going to government programs and services like bettering our health care and education.
  4. The Liberals grew the public sector by 17.6 per cent; 300,000 new government sector positions added in the last 10 years. More alarmingly, Ontario teachers, police, firefighters all enjoy pay and pensions that make them the highest paid public sector earners in the world for the jobs they are doing. And today, approximately 40% of our population in Ontario is public sector. One word: unsustainable.
  5. Our healthcare mess is not going to be addressed. There is the never-ending multi-year E-HEALTH development project; the ORNGE air ambulance fiasco; and the establishment of new inefficient LHIN bureaucracies that have cost us billions. This is money that should have gone directly into delivering front line health care. The diagnosis for our Province’s healthcare is anything but hopeful.
  6. The Liberal energy programs and policies will cost us dearly. We already know that our hydro rates will rise 42% in the next few years – and natural gas prices will rise this year by 40%. This is while the Liberals offer subsidized hydro to New York & Michigan. The total cost of Ontario’s subsidies for wind and solar power is $46 billion – which we will continue to pay for the next decade. In the years ahead, our energy costs are going to zap us.
  7. The Liberal’s “election budget” which they will now pass, is digger us further into a hole from which our generation of taxpayers will likely not to climb out of. There’s $29 billion for transit and roads; $11 billion for hospitals; $11 billion for schools, $2.5 billion for corporations; a new pension plan to save us from ourselves, and on, and on, These are 10-year commitments, and with the new debt level and increased monthly debt-financing load, it all adds up to “no chance” of the government hitting its promised, balanced-budget target by 2017-18.
  8. For a government that spends like this one does, it should not be surprising to know Premier Wynne will impose new taxes. We can expect in the years to come the taxes she has already hinted about (prior to the election): raising HST to 14 cents, adding new gas taxes at the pump; and introducing new taxes on employers and employees to pay for a pension plan scheme. All these tax hikes will shakedown more money from our pockets.
  9. And there is no tax relief. When the Liberals brought in the Harmonized Sales Tax in 2010, they extended the reach of the province’s 8% sales tax to a wide range of goods and services to which it did not previously apply. Among those items were the cost of electricity, home heating fuels and gasoline. As the cost of those services rises, all household owners and consumers will be hit over and over again by that 8% provincial sales tax.
  10. Literally billions of dollars have been lost and wasted. The mismanagement and scandals of the last ten years will never be explained. There will be no atonement for E-Health, ORNGE, Green Energy, power plant cancellations, etc. Is it also any wonder when a scandal-plagued government is returned with a majority mandate that people become disengaged with politics and disrespectful of politicians? Is it any wonder, we have become increasingly agitated to pay our taxes?


A no-nonsense approach to big government

Why is it that Canadians are apathetic when it comes to responding to the ills of big government? We accept the unbridled increases in government spending, increases in programs and services, and the unexplainable antics of our politicians and bureaucrats. Without question, we accept taxes; we accept increased taxation and the imposition of new taxes. All of this “big government getting bigger” is greeted by Canadians will nothing more than a shrug.


Yet, should we not expect more if we are providing the tacit approval for our government’s habitual overspending? We are a Nation living beyond its means with every fiscal deficit, satisfied to have our politicians make decisions on our country’s financial and economic fate with no thought as to how the taxpayers’ will pay for their promises.


This siren cry comes on the day when the federal government delivers its annual budget. As a Canadian who does care for our current standard of living and that of our children’s, I would like to expect the government be more accountable and responsible with our country’s books. The federal Conservatives have done an adequate job managing our economy through a series of serious, rough patches with the world markets. However, they are responsible for raising our federal debt as a result of continuous deficit financing. They are also responsible for growing our Ottawa bureaucratic corps to an unprecedented size.


So, from this frustrated Canadian’s vantage point, here are three principles that our governments would do well to adopt. Think about this no-nonsense approach when Finance Minister Jim Flaherty delivers his statement today.

  • Commit to no more than what can be paid for. When you finds yourself in a hole, you should stop digging… no more deficit spending… no more living on credit… balance the numbers and begin to pay our own way. We must stop spending the next generation of Canadians’ money.
  • Right size our government. Cut unnecessary programs and services and resist all urges to further government intrusions into public and business affairs. Also, make an earnest attempt to cut the paper-pushing, middle-management of the federal bureaucracy. (“Ottawa fat-cats” need to be put on leash and put on a diet.) Right-sizing our government in the year 2014, means cutting the bureaucracy, and cutting programming and services.
  • Practice full public accountability. The public has a right to know where public money is spent. So, open the books of MPs, DMs, government agencies, everyone (the misappropriation of funds isn’t restricted to the Senate of Canada). Also, report the real costs of government promises – from the next tax credit to woo suburban voters, to the next ice breaker or jet fighter. And give Parliament the time and resources to properly review government expenditures, line-by-line. 

Read more like-minded rants as I grind my axe in By George posts tagged “big government.”


Big Government = Big Costs (Taxes)

It’s budget week with federal Finance Minister Jim Flaherty poised on Tuesday afternoon to deliver another financial statement on the country’s fortunes (and its debts). It is time for Canadians to reflect, ever so briefly, on our Nation’s economy and our government’s interventionist actions in an attempt to improve our lot.

For us at By George, it is time to chime in with our sad refrain about accountable government, responsible spending and a reduced bureaucratic corps. This libertarian theme is one that readers of By George Journal will recognize.   

Our big government and its big debt

Is it not time to demand accountability?

The Costs of our Big Governments

More on Big Government

Welcome to Canuckistan


With respect to Mr. Flaherty’s act as the master federal magician, the Canadian Taxpayers Federation’s latest plea to balance the budget and take steps to be more responsible with government spending could not be made any clearer. Here are the facts as assembled by the CTF:

       Canada’s federal debt is growing at a rate of $863 per second. That’s $52,000 per minute and $3.1 million per hour. This level of borrowing is costing Canadians not just the principal, but interest each year. In fact, the federal government spends $31 billion per year just paying the annual interest on the debt.

       Between 1997 and 2008 the federal government was running surplus budgets and paying down our debt. Every cent and more of that $105 billion paid-off during the decade has now been re-borrowed and spent. Canada’s federal debt has risen from $457 billion in 2008 to over $600 billion.

CTF urges the Finance Minister to curb government spending and balance the federal budget as promised this fiscal year, 2014-15.  To read more on the CTF’s plea to the federal government, click here: Balance the Budget


Sage Political Advice

OLYMPUS DIGITAL CAMERAHere’s sound counsel for our politicians today:


The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt. People must again learn to work instead of living on public assistance.

 ~ a quote from Roman statesman, Cicero, in the year 55 BC.


Obviously, we’ve learned nothing in thousands of years.


Or, we simply ignore history and are destined to repeat it.

A Striking Analogy: The Taming of Wild Pigs

There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the professor noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter.


The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country’s government and install a new communist regime.  In the midst of his story, he looked at the professor and asked a strange question. He asked: “Do you know how to catch wild pigs?”


The professor thought it was a joke and asked for the punch line.  The young man said that it was no joke. “You catch wild pigs by finding a suitable place in the woods and putting corn on the ground.  The pigs find it and begin to come every day to eat the free corn.


“When they are used to coming every day, you put a fence down one side of the place where they are used to coming.  When they get used to the fence, they begin to eat the corn again and you put up another side of the fence.  “They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.  “The pigs, which are used to the free corn, start to come through the gate to eat that free corn again.


“You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom.  They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.”


The young man then told the professor that is exactly what he sees happening in America (ed. – It occurred decades ago in Canada). The government keeps pushing us toward socialism and keeps spreading the free corn. While we continually lose our freedoms, just a little at a time.


There are two truths to remember:

1.      There is no such thing as a free lunch and

2.      You can never hire someone to provide a service for you cheaper than you can do it yourself.  

If you see that all of this wonderful government ‘help’ is a problem confronting the future of democracy in America, you might want to send this analogy onto your friends.

(ed. – This account was from our e-mailbag. Thank you to Claude Bennett for sharing this thought-provoking missive.)


Our big government and its big debt

The Throne Speech yesterday stated the Canadian Federal Government will be getting serious about curbing its out-of-control spending habits. (That’s good. It’s about time!)


It is a fact that, today, we have the largest federal bureaucracy that we have ever had. And to maintain the bulging size of government and its programs, the government overspends at an alarming rate – the worst that it has ever spent. The federal government’s annual deficit spending is digging us deeper down into a hole that many of us will not live long enough to climb out of. Here are the numbers:  Canada’s federal debt is growing at a rate of $863 per second – $52,000 per minute – $3.1 million per hour.


Between 1997 and 2008 the federal government under the guidance of PM Jean Chretien and Finance Minister Paul Martin was running surplus budgets and paying down our debt. However, I find it unfathomable (as a fiscal conservative) that the Conservative Government of Stephen Harper has raised Canada’s federal debt from $457 billion in 2008 to over $600 billion. Since 2008, the Conservative government has borrowed $161 billion, bringing the federal government’s debt burden to $618 billion.


Recently released figures from the federal government reveal that the total debt outstanding in Canada at the end of June 2013 was $5.408 trillion. The numbers for last fiscal year tell us that, from July 1, 2012 to the end of June 2013, the total debt outstanding in Canada increased by $306 Billion. For that 365 day period the total debt outstanding in Canada increased at a rate of $838 Million per day.


Need we worry when we hear these facts? These bald numbers mean little to the average “I’m-living-paycheque-to-paycheque” Canadian. However, we should realize this: that the mounting figures signal a sorry fiscal state. The average Canadian couldn’t rack his credit cards this high! Yet, Canadians are now strapped with huge hangover costs of a Big Government that has spent for years (and decades previous) like a drunken sailor.


So, there is reason to be hopeful with what Stephen Harper shared with us in the Throne Speech. Just perhaps our chief economist PM and his much-celebrated Finance Minister have come to realize their spending spree must end.

More in the By George Journal on the ugly truths of Big Government  

10 quotes on government spending

  • “Government does not tax to get the money it needs; government always finds a need for the money it gets.” – Ronald Reagan
  • “The real goal should be reduced government spending, rather than balanced budgets achieved by ever-rising tax rates to cover ever-rising spending.” – Thomas Sowell
  • “Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.” – Ron Paul
  • “Government does not have a revenue problem; government has a spending problem… it is time that we begin to fine tune our focus and decide what the priority of government ought to be.” – Marsha Blackburn
  • “Increased government spending can provide a temporary stimulus to demand and output, but in the longer run higher levels of government spending crowd out private investment or required higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.” – Martin Feldstein
  • “Borrowing and spending is not the way to prosperity.” – Paul Ryan
  • “Economy does not lie in sparing money, but in spending it wisely.” – Thomas Huxley
  • “Lower taxes, less government spending on domestic programs and fewer regulations mean a better economy for everybody.” – Larry Elder
  • “Government is taking 40 percent of the GDP. And that’s at the state, local and federal level… Look, at some point, you cease being a free economy, and you become a government economy.” – Mitt Romney
  • “Deficits are a problem… the problem is not the size of the deficit, it’s the size of government’s claim on our economy.” – Ronald Reagan


Is it not time to demand accountability?

       Let’s review our nagging, on-going dialogue about big government and the call for accountability with our governments’ spending practices. Here’s an equation that Canadians should know well enough, especially after having just completed their income tax filing this week.  


Big Government* = Ever-Increasing Taxes

(* – synonymous with out-of-control-spending, mismanaged budgets and bulging bureaucracies)


       Many will claim this is nothing but a cynical and simplistic view of our Canadian governments. Perhaps so. It is certainly cynical for it smacks of irritation for what is transpiring here in Canada – and elsewhere in debt-ladened United States and Europe.

       It is a sad reality that today, because of our Big Government, Canadian families are spending more money on taxes than on food, clothing, and shelter combined.  The Fraser Institute reported earlier this week that in 2012, 42.7 per cent of an average family’s income went towards taxes (including all types of taxes imposed by federal, provincial, and local governments). Canadians spent less than that – 36.9 per cent – on food, clothing, and shelter combined. Read this for yourself: SAD.

       Today we brace ourselves for Ontario’s budget announcements. Really, what more can the McGuinty/Wynne Government throw at Ontarians? This sorry Government has a record that screams mismanagement: ORNGE scandal, eHealth Ontario boondoogle, a $585 million price tag to cancel a gas plant during the past election. Then there are the costs of the Liberal’s Green Energy Act that will smack Ontarians with energy hikes of 40–50% in the next few years. Under the Liberal era, Ontarians’ debt load has almost doubled to $250-billion – and in a few years, we will be suffering worst fates than Greece’s current financial mess. With this quagmire, what can we expect as far as Ontario taxes are concerned? The only relief we might be spared today is due to the fact an election is in the wind. So, the Liberals will settle for kicking the can a little further down the road…

       Our By George question to ponder: Why are Canadians so apathetic when it comes to demanding fiscal responsibility of their politicians and their governments?

       Our point is simply that there needs to be greater accountability. As Big Government gets bigger – accountability is becoming critical.  There would be few complaints in paying “our fair share” of taxes if Canadians were witness to responsible government spending and a fiscal accountability within both political and bureaucratic circles. What is agitating for many, though, is the knowledge that there are gross wastes in government spending and we only know a small fraction of the whole story.

       Today our national debt has climbed over $600 billion. Every day Canadians are paying more to service that debt. We live with growing, multiple levels of bureaucracies, over-governed and over-regulated. Our government has never been bigger – and it keeps getting bigger.  Is it not time to discuss government accountability and a fiscally responsible approach to digging out?  Is it not time to start questioning where our taxes are going and demanding answers from both our politicians and bureaucrats?

The Costs of our Big Governments

It has become annoying that our political leaders today take no notice of just how big and intrusive Government has become for Canadians. It is equally irritating that they do not recognize (and, in many instances, try to rationalize) just how much government costs its citizens.


Government has become too big, too costly. FACT: our Federal Government oversees the largest and most expensive federal bureaucracy Canada has ever known. What is most troubling is that the government has grown under a Conservative watch – and these “able fiscal managers” have done little to trim the rank and file, done little to curb government spending.


Another FACT: This past weekend, Ontarians were presented a new Liberal Premier whose answer to our Province’s ailments is to increase government activity. Kathleen Wynne is about to give us more of the same of Dalton McGuinty’s fiscal policies – the same policies that ballooned Ontario’s debt, sunk its credit rating and labeled the Province: “Have-Not”. Wynne is all about tax and spend; her agenda is greater dollars to health care and transportation projects, new universally delivered programs for both drugs and child care – and a balanced budget? Very Liberal-esque.


FACT: Increased government comes at a cost. Given our federal and provincial governments spend more than they tax, the governments are deferring the payments for today’s services and programs to future taxpayers: our children and grandchildren.  Simple question:  When will Canadians wake up to this fact?


As a splash of cold water to the face, By George Journal offers a few observations from Ronald Reagan’s January 1981 inauguration speech. Here’s a refreshing view on the role of government that should be heeded by our political leaders today. Reagan’s bons mots:

  • “…great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children’s future for the temporary convenience of the present…. to continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.”
  • “You and I, as individuals, can, by borrowing beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation?”
  • “We are a nation that has a government—not the other way around. And this makes us special among the nations of the Earth. Our government has no power except that granted to it by the people. It is time to check and reverse the growth of government which shows no signs of having grown beyond the consent of the governed.”
  • “It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.”


Here’s a final observation about the exorbitant costs of government today – and the fact that nobody has their eyes on the till when it comes to spending taxpayers’ dollars. This is but one tangible example of the unfathomable costs of government taken from our headlines this week (there are so many similar examples of government expense that go unreported and unnoticed). Think about what you could do with a million dollars.  $1,000,000.   Now, take a look at the latest from Ottawa:  It cost taxpayers exactly $1,061,448 to ship armour-plated limousines to India last year for Prime Minister Stephen Harper’s official visit, documents from the Department of National Defence have revealed. – National Post