And The Budget Will Balance Itself

Jack Mintz;

The good ship “Federal Budget” looks like it is about to hit the rocks. Expect a broken promise as the federal debt/GDP ratio rises with moribund growth in the first half of 2020.
 
What could also happen is something that we have not seen for some time: federal program spending outstripping revenues. This is called the primary (or operational) deficit when a government not only can’t cover debt interest payments (totalling $23.9 billion in 2018/9) but also its program expenses.
 
A primary deficit has not appeared since the fiscal years 2009/10 and 2010/11 when a severe global financial recession took place. For two decades prior to 2009, we had only federal primary surpluses. Even in the latter Mulroney years with a deep 1990-91 recession, Canada ran a primary surplus. The real story was profligate spending during the Pierre Trudeau years resulting in a string of primary deficits starting in 1975/76 for over 12 years, even during robust growth years. […]
 
And this looks to happen in 2020

33 Replies to “And The Budget Will Balance Itself”

      1. Yep…only a canadian would look at Trudy and decide that he would make a good leader. Twice!

        As long as Alberta and Saskatchewan remain on this ship of fools we deserve every bit of misery that rains down on us.

      2. Ray, you are correct…unfortunately…but still correct.
        Would you hire Le Dauphin to run a Subway Sandwich shop?
        Our genius Finance Minister, the captain of industry? What great experience he had; at the company his daddy built.

        1. The avg Cdn is terribly low info. Heck I know friends who’s kids voted Trudeau because generous family allowance…
          I’m mostly immune to this as I live isolated on a lake north of Kirkland Lake & come income tax time since 2015 I have arranged my $ so not to be a net contributing taxpayer.

          That said, I wouldn’t hire Blackie to cut my lawn.
          Morneau has a financial background however being Fin Min is way above his capabilities.

        2. Yeah, the finance minister and his family made millions on contracting insurance business from the federal government. There is nothing intrinsically wrong with that, only the part where this guy thinks that he know stuff.
          No government, no millions.

    1. No. Clever, scheming criminals, funneling the entire C.A.N.A.D.A.s money into their own pockets.

      Oust this government by any means possible. Arrest them. Forensically audit their families and business associates.

  1. Don’t confuse Bill Moroneau with mathematics. You are going to give him a headache.

    1. Moron’s solution will be to just print MO MONEY to pay the bills.

      It’s worked everywhere else, what could possibly go wrong?

      MMT is on the way, there will be a country that tries it as the grand experiment. And we all know how Blackie wants to be the UN puppet………

      1. I don’t like the way things are going under these looney liberals.
        Just when I am getting to turn my RRSP’s into a RIF.

  2. Just use the $500 million divided by $327 million equals $1 million math.

    Lefty math is easy, not accurate, but easy.

  3. Thatchers Theorum in practice.

    Someone could write an historical record of this and call it “Running out of other people’s money”.

    But you know what happens now right?

    Same as last time.
    Cuts to defense and transfers, but oddly that “program” run out of the PMO is untouchable.

  4. The story isn’t spending, although that is happening. It is a collapse of revenue.

    Remember that Mulroney increased taxes. He cut some, but not enough. The Federal government and provincial governments at the time were increasing taxes and seeing a decrease in revenues, the Laffer curve that everyone laughs at. The Liberals under Chretien cut spending and brought the deficit under control. And as things started turning around, governments decreased taxes and saw economic growth.

    The Trudeau Liberals increased taxes on everyone, they also increased regulatory costs, as did all the provinces. The Chinese money flows have masked the harm that has been done to the economy. That is slowing down and suddenly the Canadian economy has to live on what it generates, and it can’t.

    This started when the dollar fell a few years ago, and we haven’t seen the end of the readjustment of the Canadian economy. I’ve seen doubling of costs of the inputs to my business, which I pass on to my customers. Every week there is news of some regulatory imposition that will simply increase costs. The only thing keeping it going has been the influx of Chinese cash. That activity has masked the true state of the economies, so provinces and the Federal government have been imposing costs on that flow. Now the flow has dried up, the costs remain, and we will see a continued slowdown.

    It seems that the solution to the continuous incompetent meddling in the lives of the first nations that has destroyed their communities and lives is to apply the same continuous incompetent meddling to everyone. Make us all equally miserable and hopeless.

    1. Sorry, but you have hit the nail on the head and driven it straight through the board.

    2. Make us all equally miserable and hopeless.

      Welcome to communism. Equality of that sort has always been one of its goals.

      1. The Trudeau Charter states we are all equal before and under the law. Any challenges to Charter dictates are interpreted by the non-elected body called the Supreme Court of Canada. How close is that to skirting communism?

    3. The carbon tax will go up a lot.

      The rebates will go up a little bit.

      This will let Trudeau say more money is going out in rebates than ever before.

      Look for the carbon tax to be equivalent to a 25% sales tax.

      1. If Ontario, Saskatchewan and Alberta lose their carbon tax challenge at the “independent”* Supreme Court of Canada then I assume that those provinces will enact their own carbon tax schemes to replace the federal backstop. Then the federal government gets bupkis except for the gst because the provinces will receive and redistribute the carbon tax revenues.

        *yes, after Beverly McLauchlin’s antics, some of their bizarre rulings and SNC, I absolutely do question all Canadian courts independence and political/regional bias.

  5. My thoughts on the last federal election were that there would be a book written in the future titled – Canada 2019 : How To Win An Election But Lose a Country

    Perhaps there is another book idea – How To Wreck A National Economy In 10 Easy Steps
    Chapter 1 – enact excessive regulation with constantly changing goalposts
    Chapter 2 – chase away foreign investment
    Chapter 3 – spend like there’s no tomorrow
    Chapter 4 – cave in to every progressive protester and activist, don’t enforce laws
    Chapter 5 – corrupt the legal and judicial system
    Chapter 6 – support corrupt corporations
    Chapter 7 – alienate an economically important region by shackling and strangling their resource economy (Alberta, Saskatchewan, non-urban Western Canada )
    Chapter 8 – Canoodle with Quebec separatists to maintain power
    Chapter 9 – Piss of major trade partners, repeatedly
    Chapter 10 – Tax, tax, tax every business and person not part of the crony capitalist Liberal Party “family”

    1. The Coles Notes Condensed Study Guide for Canadians combining the two books about how to break up Canada and wreck the economy will be titled –

      Keep Voting Liberal, You Daft Pricks !!

      One chapter, one sentence

  6. This is by design, the UN Agenda is to bankrupt Western nations, most are resisting but we have Trudeau charging into the breach full debt ahead.
    Meanwhile foreign nations and the UN are swimming in Canadian tax dollars, foreign investment is scrambling to get out and we have a PM zoolander who I am sure, has no clue what is happening to the country. Totally incompetent and not in the game.
    He & his government need to be removed, the sooner the better.

    1. we have a PM zoolander who I am sure, has no clue what is happening to the country

      I suspect that he does, but, like his father, couldn’t care less. Suffering and misery are for little people.

  7. “Many economists have forewarned that the federal government should ensure it has enough gunpowder”

    That’s an interesting metaphor considering their almighty fear of guns not in the hands of their bodyguards.
    These mofo’s have a two point plan: print money and increase immigration forever.

  8. This debt run-up with no recession, financial shock or war. Now we have to use the credit card to pay the credit card bill.
    Just like his daddy did for years and years, running up more nominal debt than the two world wars combined.
    The benefit? More intrusive government as Peter Brimelow said of PET; government didn’t care what you did in your bedroom.
    Just every other room in the house. Plain and simple they’ve lost control of spending. What did Stephen Harper call it?
    STRUCTURAL DEFICITS HAVE TURNED INTO PRIMARY DEFICITS WHERE PROGRAMMED SPENDING HAS TO BORROWED FOR.
    Except in the case of the spawn, no burgeoning baby boomer generation working if off for you, the opposite in fact.
    Now they want our energy policy to be dictated by the kleptocratic UN and their statist stooges at the IPCC.
    How will they deal with it? Three hints, the first two don’t count.
    By raising more tax of course with so many options, while simultaneously staunching revenues:
    – kill TFSAs
    – tax primary residences especially their mortgage helper suites (already underway imho).
    – hammer employee and moving expenses (did I mention, already underway?)
    – raise GST
    – carbon tax resources out of existence
    – and so much more…..
    – and we asked for it, at least some of us who do believe budgets balance themselves and good people like gay pride parades

  9. The average immigrate (usually a single mom) with 4 kids on social assistance is clearing over $3500 a month. If they live in social housing their rent is approx. $120 to $375. All they pay for is the electricity. The simply ones usually can’t pay their rent on time because they blow their budget on car leases that are over $500, insurance $300 and all their other entitlements they deserve in Trudeauland. Drive through a complex in your local town and check out the cars, its absolutely insane. The question is really how long can the gov sustain giving away this much money, already in Alberta Kenny is cutting $54 million from the maintenance budget, doors will be closing. Rough times ahead folks.

  10. Better get your thinking clear.
    What rules will our New Country adhere to?
    Cause we are soon to find our choices very limited.
    Independence or bankruptcy.
    Which shall you gift to your children?
    My take is Independence and we own Canada Nothing as they have hosed us 20 billion/year for long enough to cover all/any benefits.
    The money “invested” in Healthcare,pensions and such is gone.
    Forget pensions we paid for,we will never see them.
    Stolen and squandered.
    You value that imaginary “Owed” pension so much move to Canada and demand it.
    Course we could maintain a “residence” in Can Ahh Duh to collect any handouts..just like Quebec.

    Independence may be thrust upon us far sooner than we think.
    Or we can sit back and accept Ottawa’s conjecture that we owe “our share” of the debt they have incurred.
    Cause “free Healthcare” .

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