Thanks to all of you who have been loyally reading our musings on this space for the past 4+ years on this site. It has gone under more than a couple face-lifts over that time, but has always remained here.
Thursday, September 24, 2009
Tuesday, September 22, 2009
The B.C. government's deficit is expected to accumulate to a whopping $5.5 billion over the next three years. How will the government get us back to budget surpluses? Its only "plan" seems to be the hope that higher tax revenue from greater economic growth will eventually reduce it.
But if history is any guide, B.C.'s stealth-health tax may be the first accelerating tax hike in the battle against the deficit, leaving people standing still while government revenues rise.
Federal finance minister in the Chretien Liberal government, Paul Martin, defeated the federal deficit in the 1990s primarily with tax hikes. The worst was an increase in personal income taxes through a stealth process known as de-indexation. Others included new deficit reduction taxes and higher payroll taxes. The result was stagnating after-tax income for families and skyrocketing revenues for government.
The health tax appears to be the first volley in the same direction here in B.C.
Many British Columbians believe the MSP, or health tax, is an insurance premium paid for health services, similar to the auto premium paid to ICBC. Nothing could be further from the truth. The MSP is a poll tax -- a per-person tax charging a fixed amount per individual. The health tax doesn't go to fund health care in the province anymore than it funds education, roads or anything else -- it goes directly into general revenue. Without a doubt, this tax would have been eliminated long ago had it been named the ‘bureaucrat salary enhancement levy.'
The health tax is going up this year and has the potential to spiral completely out of control as it will rise by the same proportion as the health care budget every year.
Politicians must do what every family does when it hits rough times -- limit spending. To ensure long-term economic growth, it must cut taxes and to start, it must eliminate the health tax.
Monday, September 14, 2009
B.C.'s deficit is spiraling out of control because of a huge increase in spending. If the government spending spree is not brought under control, current and future generations will be left with a legacy of debt and higher taxes.
Why is deficit spending wrong? It creates three problems: higher debt servicing costs; young people left saddled with a financial burden they didn't create; and once the boomer generation retires, there won't be enough taxpayers working to pay the taxes to finance the debt and pay the pension benefits of future retirees. This spending spree endangers the retirement security of the boomer generation.
Debt servicing costs are exploding. By 2011, B.C. taxpayers will be paying $8 million per day to finance the debt. Hard-earned dollars that could go to pay for services people want, or better yet -- left in peoples' pockets -- go to bankers and bondholders to pay the interest on the debt.
We can't expect future generations to take on a massive tax burden for spending they didn't vote for to get things, like billion dollar convention centres or fast ferries, they probably won't want. In 2011, every child born in B.C. will owe more than $11,000. Is it right to leave a fiscal hangover to unborn children to pay for our free-spending ways?
The demographic reality is that we'll have fewer and fewer young people paying into the system through taxes, relative to those taking out. According to Stats BC, the number of people aged 15-24 will drop by 2.5 per cent between 2009 and 2029 while the number of people 65 years and older will almost double. Tomorrows taxpayers left to foot today’s bill will strain under an unsustainable tax burden unless spending is brought under control.
Premier McGuinty, at long last, has agreed to post Ministerial and senior bureaucrat expenses online for the public to view. This will take effect April 1st, 2010.
Better late than never! Taxpayer.com has been advocating for such a change for years and welcomes a positive step towards greater transparency and accountability in Ontario.
We encourage the Premier to follow the example from the City of Toronto over that of the federal government as to how to implement such a change.
Posted by Kevin Gaudet at 11:56 AM
Friday, September 11, 2009
The CTF received this letter from Larry Elford and received his permission to reprint. His assertions are beyond our ability to corroborate, but his insights and comments seemed worth passing on.
If I could speak with my prime minister, here is what I would like to say.
In 2004 I resigned my career of twenty years inside the brokerage industry, mostly working with major bank owned brokerage firms. I resigned because of my failure to have an impact on raising the matter of ethical failures. Failures which I witnessed each and every day within my industry. Ethical failure I found to be standard industry practice, despite codes of ethics, codes of conduct and rules to the contrary. Virtually none of the rules are enforced when they interfere with revenue.
My efforts to support change fell on deaf ears and I failed to bring anything like “best practices” into my own industry. I failed. I left.
I took on personal project to inform and educate the public about financial abuse by people claiming “trusted financial advisor” status. I was dealing in crimes and abuses which earned millions of dollars within every investment office that I knew of.
In 2005, after a fund company employee took his own life, in circumstances of management retaliation so brutal they can only be described as “corporate and legal torture”, I decided that I needed to inform yourself and others of the magnitude of the crimes against Canadians, the ease with which they were perpetrated and the lack of enforcement in Canada. I failed to gain your attention to the matter, and I failed to interest your Parliament in addressing these types of crimes.
At that time I was then dealing with an example where financial abuse of customers had placed over $800 million into the pockets of the investment firm. This case is on file with the standing committee on finance. It failed to raise an eyebrow within your government.
In 2007 or 2008, the market for toxic ABCP investments imploded, catching everyone with their pants down. It left $32 billion missing in action from our Canadian economy. The supposed authorities who now claim to investigate this matter, were in fact well documented participants in the legal tricks that allowed this $32 billion to disappear in the first place.* I ask how you can preside over a system which lets conflicted regulators aid financiers and then allows the same conflicted regulators to investigate the damage done? http://www.investoradvocates.ca/viewtopic.php?f=1&t=140&start=0
I testified in Ottawa to a standing committee on finance on these matters, and yet I still have failed to properly engage those at the top. No change. No response. I failed.
I add up the crimes against Canadians, against our economy, and I conclude that clever, cunning white collar fraudsters are putting more money in their pockets each year in Canada, than the economic damage done by each and every other crime in the entire country, combined. http://www.investoradvocates.ca/viewtopic.php?f=1&t=179
Here is where you have failed as leader. Failed to set aside political self preservation in favor of the public interest. Failed to protect Canadians from abuses by rich and powerful parties. Failed to protect our economy from infection by financial pandemic.
The very best you have done is to hire one securities commission head, to begin work on a new national securities commission. Hired from one of the very securities commissions who participated in the legal “tricks” that allowed each of these crisis to infect Canada. Perhaps will allow them to infect Canada for years to come. Even Richard Nixon was known to say, “you cannot trust the people who made the mess, to clean it up.”
You have failed to understand that allowing the foxes to guard the henhouse is an example of “worst practices”. You have failed to give us anything that looks like “best practices”. You are failing on giving us a modern, honest, unconflicted securities regulation. The industry makes more money on dirty, dishonest, and conflicted.
We deserve better. We deserve a leader who understands this and does not fail to act, when our entire economy, our financial future, and the financial health of Canadians is at daily risk from financial predators.
With respect for your position, you have failed us and you have failed the position.
Each and every Canadian, with exception of fraud artists and banksters, are now paying the price. Fraud artists and banksters are toasting what a great country Canada is to commit white collar crime.
Executive director of www.investoradvocates.ca
(former CFP, CIM, FCSI, Associate Portfolio Manager, retired)
Thursday, September 10, 2009
Canada's Finance Minister today announced the deficit will balloon to $55 billion. He says the budget won't be balanced until 2015. That is 7 years of huge deficits. This is a financial disaster of immense proportions. Who would have thunk that a Harper government would oversee such an spending disaster.
Posted by Kevin Gaudet at 2:41 PM
B.C.'s deficit is spiraling out of control, but not because of what the government wants you to believe. Although the finance minister claims the return to deficit spending is because of a huge fall in revenue, a closer look at the books shows it is actually because of a huge increase in spending.
B.C.'s new budget, released on September 1, shows the deficit spiraling to $2.8 billion in 2009-10. B.C.'s finance minister said this is because "we are facing a loss of $2 billion in expected revenues in the current fiscal year." How interesting it is, then, to look at the B.C. budget and see expected revenues falling by only $720 million in the current fiscal year. Darn those pesky numbers.
So if revenues aren't down by as much as the government says, just what is sending B.C.'s deficit to new heights? Out of control spending. Government spending has skyrocketed to $40 billion in 2009, up $2 billion from 2008. If the government had held spending at 2008 levels, the deficit would have been $642 million, not all that much more than the original estimate. So the massive $2.8 billion deficit is a result of a spending blow out, not falling revenue.
Dropping the fiscal fantasy shows the B.C. government has a spending problem, not a revenue problem. If we care about the well-being of our children and grandchildren and want to leave them with something other than a legacy of debt and higher taxes, we need to turn the direction of government spending around, get rid of the deficit, and start reducing the debt.
Wednesday, September 09, 2009
If a domed stadium in Regina cost $500 million including land costs and was split between the three levels of government, it would be pricey indeed. This would be a cost of $5 for every Canadian, $172 for Saskatchewan residents outside Regina, and $985 for every man, woman, and child in Saskatchewan. That final total is equivalent to two years of season's tickets!
Now that Greyhound is threatening to remove routes from northern Ontario, Saskatchewan's NDP has suggested that Saskatchewan Transportation Company should take over some of the bus routes. At least they are only talking about potentially profitable routes for the provincial crown corporation. However, one commenter on the Leader-Post article may have put it best: "if Greyhound can't make a profit how can STC?"
The CTF has a pay stub for the first time revealing MP pension pay. Former two-time MP Garth Turner has provided the Canadian Taxpayers Federation with a copy of his MP Pension pay stub. It reveals he received $26,417 in 2009 dollars.
In providing the information Mr. Turner asked the CTF to post the following:
"I've provided this evidence of my pension for almost nine years' service in the House of Commons for a reason. Not to say it is too high or too low, that I deserve it or not, or to suggest how the system should be changed. I fully understand how privileged I've been to be an MP, and how the compensation for being in Parliament exceeds what most families have to live on.
"I do this because the system needs more transparency. I had a beef with the CTF when my pension was misstated. They got it wrong and to their credit have corrected it. Meanwhile, I certainly have nothing to hide. This money comes to me from Canadian taxpayers, of which I am one."
The CTF will continue its campaign against lavish MPs pensions. Transparency can only advance our efforts.
Posted by Kevin Gaudet at 7:24 AM
Tuesday, September 08, 2009
Can't get enough of the discussion around harmonizing provincial sales taxes? Here are a few reports for your bedtime reading...
1) 2001 University of New Brunswick - The Effect of the Harmonized Sales Tax on Consumer Prices in Atlantic Canada
2) 2005 Mount Allison University - An Analysis of the Impact of Harmonized Sales Tax on Provincial Revenues in Atlantic Canada
5) 2006 University of Toronto - Coordinating Federal and Provincial Sales Taxes: Lessons from the Canadian Experience
6) 2007 University of Toronto - The Economic Impacts of Value Added Taxation: Evidence from the HST Provinces
7) 2007 C.D. Howe Institute - Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax
8) 2008 C.D. Howe Institute - Slicing the Pie: Federal Assistance for Provincial Sales Tax Reform
9) 2009 Ontario Chamber of Commerce report - Made in Ontario: The Case for Sales Tax Harmonization
Friday, September 04, 2009
Thursday, September 03, 2009
Our board member Karen Selick explains in the Globe and Mail...
Bicycle-store owner Igor Kenk may or may not eventually be found guilty of theft. Certainly, the 2,865 used bicycles seized by police in a high-profile raid on his Toronto premises last year need some explaining, especially after 573 of them were returned to people who proved rightful ownership. But Mr. Kenk's criminal trial on 100 criminal counts related to stolen bicycles and drugs won't begin for at least six months.
Meanwhile, the Ontario Attorney-General's office has decided to skip the niceties of waiting for the trial. This week, they brought a separate court application to confiscate not only the remaining 2,292 bicycles but also Mr. Kenk's $700,000 shop and two trucks. The government is proceeding under the Civil Remedies Act, which the province enacted in 2001.
Why not wait and see if there's a conviction? Simple. The provincial law makes it much easier than federal law to confiscate a suspect's property.
Wednesday, September 02, 2009
Most pontificating over the issue of a fall election has been based on hearsay, intuition, and well, dice-rolling. Such speculation is brought on when journalists spend too much time in a relatively empty room called “Summer in Ottawa”. For a change, let consider this (if we care to) from a logical perspective.
First, lets operate from the asumption that all leaders and parties appoach election timing from the perspective of self-preservation and/or potential gain. Next, lets examine the motivations behind each leader and party.
Gilles Duceppe and the Bloc Quebecois: The Bloc has had much of its polling success based on its steadfast opposition to, and demonize of the Harper government while simultaneously accusing the Liberals of spinelessness for not doing the same. Many of the Bloc’s Montreal-area MPs are nervous about a relatively resurgent Liberal Party there and would thus not favour an election right now, but from a higher (ie: leader’s) perspective, the potential net gain of several currently Conservative seats would offset this. While that’s cold comfort to those Montreal MPs, their leader decides how they vote in Canadian politics.
As the Bloc has staked its ground on being Quebec’s bulkward against the Harper Hoard of the Western Steppes, he has little wiggle room out of his vote of no confidence.
Michael Ignatieff and the Liberal Party: Chantal Hebert, as usual, provides some of the best punditry (I’m assuming she spent her summer outside of Ottawa) on the predicament of Team Iggy. With his statements on withdrawing support for the government, he would loose face beyond recovery if he were to re-nag and return to the Dion and post-coalition era of abstentions and false threats. At this point, the Count is beyond the point of no return, baring an unfathomable climb-down. While polling numbers indicate that Ignatieff has a chance of forming a minority, anecdotal evidence leans towards a 3rd Conservative minority. That is not necessarily a loss for Ignatieff however; as Harper may wish to leave on a winning note following the vote and clear the way for new - and if Iggy’s dreams are fulfilled, less capable - leader.
Jack Layton and the (New?) Democratic Party: The NDP has made itself the leftist bulkward in English Canada, playing a similar role that the Bloc plays in Quebec. If there’s one thing you can say for them, its that their consistent, both in what they stand for and in how they vote, which is against everything. With reports and rumors wirling that a deal could be be in the works to keep the government afloat, one has to consider what is on the table. With Layton having proclaimed himself the immobile human shield of the English Canadian left, it is hard to see how any compromise would be enough to appease his core supporters. If however; by some chance Monsieur Layton could force the the government onto a course of Keynesianism, massive deficit spending and a retreat from most of its long held positions, he may be able to look his supporters in the face and say…“coalition?”
Stephen Harper and the Conservative Party: Harper has only one motivation to want an election, and that is to win a majority government. Since that is not in the cards (barring, events?), he has no interest in having one, but is still confronted with the reality of having to deal directly with the NDP. While one would be inclined to see a lot of similarities in the practical policy applications of the government today if one wipes away party labels, continued moves leftward would only continue to inflame the base of his party. Harper has managed to hold his troops together in the face of adopting a plethora of Liberal demands in the last budget, but acceding to the NDP’s more rigorous cookbook may prove a bridge too far. Further, meeting the NDP’s demands would simply keep the government in office for a short period of time, but would likely come with zero guarantee of passing its legislation. In essence, this would leave only the Executive branch of government in power while the legislature hangs in limbo. When faced with a brief life extension leading to eventual defeat in a non-confidence vote months later, coupled with stomaching even more opposition policy on one hand, and facing the electorate for a renewed minority mandate on the other, the choice becomes clear.
Posted by Derek Fildebrandt at 10:14 AM