McGuinty Junk Economics

21 Replies to “McGuinty Junk Economics”

1. Ezra rational.
   McGuinty(s) emotional.
   Nanos poll has Harper as best “Leader”.
   CPC done when “the people” turn on Harper.

2. Ontario and Quebec provincial debt now exceeds $450 Billion. Sask the only province running in the black. Add total provincial debt and guarantees with the federal government and then extrapolate that number to the size of the USA debt. Canadians should not have this smug attitude that we are doing that much better han our American cousins. WE AREN’T!
   Top that with the American economy’s capacity for innovation and growth compared to Canada’s primary revenue from resource extraction and reflect. After almost 150 years of independance have we changed all that much?

3. Has the idiot MP explained his national responsibility theory to Quebec MPs?

4. Ooops. Typed that before Ezra got to it.

5. Anyone who votes Liberal in Calgary center should be eligible for a free lobotomy. Then again 2/3 of Canadians were pleased that Obama won again, so we don’t even have enough doctors to perform all the operations, so this disease will have to run its course. History has shown the devastation cause by the black plague and future historians will teach about the green plague. Even our own environment minister is now infected. If this rampant disease were to destroy the oil industry we are all finished. Thank God Harper is still mentally sound but his environment minister should be put into isolation so the disease wont spread to other PC members or even Harper. Already too late for 2/3 of Canadians.

6. That’s one of Ezra’s best — he certainly hit all the points I had in mind, and then some.
   Nevertheless, as an Ontarian, I find the McGuintys’ antics utterly embarrassing. Worse still, the stinging rebuke has to come from a Western Canadian — we can’t even put a forward-line’s worth of high-profile third-party critics on the ice to push back against their delinquency, for fear of offending somebody or other’s tender sensibilities. Nauseating, actually, and a threat to national unity in itself.
   In addition to ct’s points, we should also remember that CMHC has something like $600 billion of insured mortgages in its portfolio. Should it become necessary, who’s going to fund any part of that (and with any kind of government outfit, there’s always a monster unfunded liability, actual or contingent, lurking close by)?
   I calculated the other day that the U.S. Government is borrowing something like $9.40 per citizen per day, with political processes paralyzed — and it’s a crisis that’s threatening to bring the world economy down. By contrast, Ontario, which is not, by any stretch of the imagination, a national jurisdiction with any sort of global operational pretensions or obligations, is borrowing $3.58 per citizen per day, with political processes paralyzed — and that’s not a crisis?

7. “Should it become necessary, who’s going to fund any part of that…”
   Talk about pushing the panic button. Are you saying that $600 billion in housing mortgages are going to zero AND that the residual property value is also zero? Are you forgetting that there’s more than a few differences between mortgage qualifications and requirements between Canada and the US?

8. Yeah well the GTA is the source of the infection.
   The electorate is the problem. Much like Chicago relected Jesse Jackson Jr. despite his hospitalisation/non campaign and the general knowledge of the scandal he is the focus of. Now he has been forced to resign his freshly renewed seat in Congress due to being now convicted of corruption…or worse.

9. Ezra is a proud/loyal westerner and Albertan. He calls out the eastern based attitude and political agenda that gave us the crippling NEP and Crow rate taxes.
   I’m really glad he has called out this eastern-urban-left rapacious hubris towards western wealth and our energy sector into the public media/narrative. It really is based in typical commie envy/greed for the wealth and success of a true laissez faire capitalist system.
   It started with Trudeau who tried to bribe the western provinces into the eastern liberal federal centralization/redistribution of wealth and power, with a bribe in the form of fed petty cash put into a western development fund (a western counterpart to the Atlantic opportunity fund – which turned out to be a slush fund for local liberal patrons and partisans). He was really pissed when the west told him to take his petty bribery and stick it in the east when he’s going west. From that point forward Trudeau and the eastern liberal cabal despised the west for their incorruptible political independence and their laissez faire energy sector which provided enough revenues to keep them independent of Ottawa corruption and influence.
   They set about devising a plan to break western independence and make them a reliant vassal of Ottawa, much like the economically reliant east coast. I believe the team PET charged with this task were the core founders of the �Librano� patronage syndicate. PET’s team of statist demons came up with the national energy program which was sold back east as a plan to rationalize fuel costs across Canada, but which, in fact, was the greatest Marxian transfer of wealth stolen from the west directly to eastern partisan benefactors in our history. Some 30 billion dollars was vacuumed out of Alberta�s energy sector to directly subsidize fuel costs in Quebec and Ontario (Liberal strong holds). This precipitated the worst economic winter Alberta experienced since the dirty 30s. Millions unemployed, housing crash, foreclosures everywhere, the near bankruptcy of the Alberta treasury branch (I think this was a main part of the PET plan) and the era of boarded up store fronts and the 1 dollar mortgage turnover.
   Things were bad until the early 80s when Mulroney finally got rid of this malignant soviet wealth transfer program. Alberta remembers who screwed them, so do Albertans and so does Ezra. McGuinty foolishly admitting the eastern left want to nationalize (like all good socialist statists do) Alberta’s constitutionally exclusive resource wealth engine (petro industry) to essentially buy votes back east and shore up the rust belt economies they have created in their own provinces with socialist economic mismanagement.
   So yeah, Ezra remembers and he’s right on the money in calling out this eastern-left envy/greed for western wealth. What will be more telling is to watch for who his most vocal detractors are – CBC? Kinsella? The Star? These will all be people who prefer the kleptonomics soviet wealth redistribution system to a constitutional confederation of independent partners in a confederation. Canada�s counterpart to Obama entitlement zombies

10. cgh, 11:40a.m.–
    You’re quite right, almost as always — and your track record is much better than mine (all of which is a compliment, actually).
    But let’s say, hypothetically, ten percent is at absolute risk (CMHC is an insurance company after all (government-run, at that), which, by definition means that some percentage of its portfolio, after all the risk pooling, zzzzz…, etc.) and is subject to pay-out; if nothing was at risk, you wouldn’t need…
    That would be $60 billion, which would put some kind of dent in somebody’s deficit elimination plan, I’m guessing, unless it’s been accounted for in the budget (which I doubt, without, admittedly, having checked).
    ct’s point, as I interpret it, is simply that Ontario’s and Quebec’s debt is over $450 billion (which I’m guessing doesn’t include a whole lot of contingent liabilities), not all of which is “at risk” by any means — and neither is all of the U.S. Government’s debt, of course.
    I hope you can agree with me, though, that things are seriously heading in the wrong direction, particularly in Ontario — which doesn’t have its own monetary authority (like the U.S. Federal Reserve) to, you know, get them out of a tight spot.

11. Eastern/western is a bit too simplistic.
    It’s an attitude of entitlement rooted in British paternalism from whence we came. The country was created under this Monarchist model,and some groups had to be “protected” ….”for their own good”. Over time the number of groups subtly expanded( for political gain). Very few saw this for what it was.
    There are people across the country who feel cosy with government involved in our lives “to manage things”. East/west really doesn’t matter. They are comfortable and they’re everywhere. Lord knows they still scratch their heads when they examine their paycheques however!
    Of course if they are not trying to better themselves ie start a buisness they never run into the wall of bureaucracy there “to manage things”.
    From a maritime fisherman dealing with quotas, to western oil/logging permits (for what?)the hurdles are immense. And they all see the issue; the industrious pay, so that parasites eat for free.And as we’ve seen recently, tax money is treated like it isn’t even real. Just throw it around, there’s more where it came from.
    There just isn’t enough push back.

12. Alberta has it’s own version of the McGuinty disease: they voted for Allison Redford and the corrupt Progressive Conservative Party, last election. Their selling points are the usual: schools, hospitals, social services – everything that government can do for you. Please vote for us as you will “get” to have to work for what you want otherwise, or the schools will be torn down if you vote Wildrose.
    This province is broke. The PC’s spent it all and now are reversing Klein’s policy of “no debt” for this resource run province. I have a framed “Ralph Buck” on my wall of the first (and last I guess) “dividend” check ever issued by this province.
    Of course, I invest (like all the Canadian public sector union pension plans do) in resource and related companies (including their financiers – the banks) to fund my RRSP/TFSA “pension”.
    That’s why I find it hypocritical of public sector unions/politicians et al outside and inside the two biggest energy supplying provinces who seem to feel that coal/oil/gas is somehow “dirty”, when it fuels CHEAP power for manufacturing elsewhere in this country, or export income and that we pay taxes to the federal government with to fund “Equalization” with. You are welcome, Canada.
    It’s really strange that even our Big City mayors in Calgary and Edmonton are infected with the socialist/marxist bent in the land of entreprenurial endeavor. They are divorced from reality, but then they house a lot of people who think electricity comes out of the wall switch and gasoline comes out of a gas pump at CO-Op.

13. Eastern Paul said: “It’s an attitude of entitlement rooted in British paternalism from whence we came. The country was created under this Monarchist model, and some groups had to be “protected” ….”for their own good”. Over time the number of groups subtly expanded( for political gain). Very few saw this for what it was.”
    Well Trudeaupian sovietism and Librano corruption (eastern based hinterlands are subservient vassals to be exploited for the “Me-first” eastern elite) may have had its roots in Monarchist colonial classism, landed gentry cultural Darwinism and elitist paternalism attitudes, but it took on a “1984” perspective when self appointed soviet dictator PET attempted to make Canada into a soviet styled federation with an eastern political elite at the helm.
    He devised plans to make Canada’s out-lying regions perennially dependent on Ottawa through economic dependence and kleptocratic wealth redistribution. The west was the golden goose which provided the funding for establishing an Ontario-Quebec patronage brokerage – globalist banking cartels in Paris and London provided the loans to float this new Canadian collective soviet (obviously salivating over the endless interest charges and chattel opportunities this massive insurmountable debt would create)
    That said, eastern politically connected interests have exploited the west for well over a century. Western political and economic independence was born as a solution to this on-going rape of their productivity by politically protected eastern interests – like CNR land expropriation to eastern banking/finance monopolies pillaging western farmers, to Wheat board market monopoly and subsidy on goods travelling west, tax on goods travelling east – to the NEP theft of provincial resource revenues and Chretien’s electoral exploitation of Alberta as a national threat. Alberta’s relationship with Ottawa and the east has been historically abusive.

14. It isn’t just “the central east”, now BC (another “original” Confederation subsidy hog) is into the extortion game. How many longshoreman’s strikes have interfered with western grain shipments? Now they want an unconstitutional tax grab of Alberta/Saskatchewan resources to “protect” that “pristine” clear cut property they scream about. That’s after they ship their own natural gas SE through Alberta to “their ” market, the USA.
    According to them, pipelines regularly explode, crack and spill/erupt their product into the environment every day. Or so we’re led to believe.
    BC is so petty and hard up for cash, that when I was drilling gas wells in NE BC, my company got a letter from the BC government demanding that I pay them PST on my vehicle, for the prorated days that I spent working in their province, which in those days was pretty much all the time. Meanwhile, their trades were building my house in Calgary (no work in BC) and we were short handed.
    I never paid them. They never sent another letter.

15. If only we could just isolate Ontario.
    The reality is that Ontario has become the single largest liability to ALL of Canada.
    Once the Harris government gave up on fighting for real economic constraint and responsible governance it was all over. When McGuinty came along to add his input … it was effectively a demolition of the ON economic engine.
    Quebec is a non-entity in real terms because nobody needs what they have to contribute and all outside of the french fiefdom have written them off.
    Other provinces continue to bumble along as always …. but the primary threat we face as Canadians comes from the failed Ontario.
    Of course there is another threat growing in the west under the influence of Alyson Redford.

16. David, I agree with you; there is some portion of CMHC’s portfolio which is always at risk on an ongoing basis. I will go even further that it rises, not simply with the interest rate, but with the rate of increase of the interest rate.
    That said, what needs also to be acknowledged, is that CMHC is run on a profit-making basis. If we are going to posit that CMHC has poorly or undefined liabilities, then we have to offset that against the net revenues it has generated over time. What would the absence of those revenues have required in terms of higher taxatin or greater federal debt and debt service charges? I don’t know, but it could be calculated, and I’m betting the number is not small.
    I would suggest a second aspect to all this. The larger an insurance company is, and that’s what CMHC is, the larger the risks it can absorb safely. This generally results in lower rates. I would suggest then that on balance, CMHC offers a large net benefit with respect to mortgage insurance because of its size that no private insurance company in Canada could readily achieve.
    Now as to your main point, there isn’t the slightest question that Ontario and Quebec’s finances are headed entirely in the wrong direction. The Liberals bought the last three elections with generous settlements with the public sector unions. Now the butcher’s bill has come due, and it’s not pretty. Quebec deals with its problems by sniveling to the feds that they are being short-changed. Ontario has no such option and has to clean up its own mess.
    What Ontario desperately needs and what it has not had since the 1990s is an industrial strategy. Harris never had one and McGuinty never had one. They both relied on the booming auto industry to keep provincial growth ticking along at 6-7 per cent. McGuinty’s one attempt at this was the Green Energy Act. However, his government was ignoring the fact that the industrial takeoff never happens with green energy and that such strategies are crashing and burning all over the world.
    More generally, yes, David, I almost always find myself in agreement with your posts. At some point however, you and I need to have a real offline discussion about energy, technology and Ontario Hydro.

17. David, I agree with you; there is some portion of CMHC’s portfolio which is always at risk on an ongoing basis. I will go even further that it rises, not simply with the interest rate, but with the rate of increase of the interest rate.
    That said, what needs also to be acknowledged, is that CMHC is run on a profit-making basis. If we are going to posit that CMHC has poorly or undefined liabilities, then we have to offset that against the net revenues it has generated over time. What would the absence of those revenues have required in terms of higher taxation or greater federal debt and debt service charges? I don’t know, but it could be calculated, and I’m betting the number is not small.
    I would suggest a second aspect to all this. The larger a company is, the larger the risks it can absorb safely. This generally results in lower rates. I would suggest then that on balance, CMHC offers a large net benefit with respect to mortgages because of its size that no private company in Canada could readily achieve.
    Now as to your main point, there isn’t the slightest question that Ontario and Quebec’s finances are headed entirely in the wrong direction. The Liberals bought the last three elections with generous settlements with the public sector unions. Now the butcher’s bill has come due, and it’s not pretty. Quebec deals with its problems by sniveling to the feds that they are being short-changed. Ontario has no such option and has to clean up its own mess.
    What Ontario desperately needs and what it has not had since the 1990s is an industrial strategy. Harris never had one and McGuinty never had one. They both relied on the booming auto industry to keep provincial growth ticking along at 6-7 per cent. McGuinty’s one attempt at this was the Green Energy Act. However, his government was ignoring the fact that the industrial takeoff never happens with green energy and that such strategies are crashing and burning all over the world.
    More generally, yes, David, I almost always find myself in agreement with your posts. At some point however, you and I need to have a real offline discussion about energy, technology and Ontario Hydro.

18. Ezra knocks another out of the park. Could even qualify as a grand slam.
    He does that so well, he makes it seem easy.

19. Nevertheless, as an Ontarian, I find the McGuintys’ antics utterly embarrassing.
    Posted by: David Southam at November 22, 2012 11:11 AM
    What embarrasses me as an Ontarian is that I have to share the same land mass and the shame of association with those who repeatedly voted for the likes of the the McGuintys.
    I mean, when it comes to political smarts we probably rank slightly below the Palestinian retards who voted for Hammas – but we’ve without a doubt beat them on the ‘proclivity for self-destruction’ scale.

20. PO’ed in AB — Not surprising that you are PO’ed. Given the longevity of the PC dynasty, it is not surprising that they ultimately have been infiltrated by socialists — who could not get into power any other way. What worries me that that self-reliant, independent spirit that exists in the West may be doomed under the efforts of the socialist environmental juggernaut. With funding from agencies like Tides, I think they are taking over city governance, possibly Provincial. And of course they are behind the objections to the Northern Gateway pipeline. I recently heard that Tides had given native groups a huge amount to protest. (Maybe everyone knew this. I did not realize the scale of things. I think we are doomed.

21. Eastern Paul;
    David Southam and Occam both had great points. No David my debt numbers for Ontario and Quebec did not include debt guarntees.
    British paternalism and a monarchist top down mindset has hobbled Canada’s governance for hundreds of years not just since Turdeau. The Americans through off the British yoke and for better or worse charted their own destiny. Canada simply transfered the operating influence of the monarchy to the powers in Montreal and Toronto to continue their funneling of wealth and power to their constituencies. The only change has been the wealth of Alberta that has challenged that hegemony. Turdeau Jr. is simply the last pig at the trough who squeals about the lack of portion size.
    My nephew who grew up in Montreal, a son of western parents, is now working in Calgary. His parents have lived in Montreal and Ottawa for 30 years now. A very intelligent young man who absolutely shocked me by exhibiting an attitude of entitlement for a eastern Canadian intelligensia that are the natural leaders of the country. Eastern Libel intelligence vs Western Red neck wealth. After Reform the east doesn’t care what the west thinks or wants. It is all about how they can continue to take wealth from the west and spend it on their social justice entitlements.