Flush Ottawa Spurns Toronto

[dowlingm]

We didn't get anything out of the Liberals $2bn+ surplus in Ontario where the 416 gives them every single seat bar four or five Dippers. But McGuinty holds hands with Miller and tells Harper "you give them your money" even though municipalities *are a provincial creation*.

That said, Canadians are crazy about paying off government debt. Every household and business carries a mortgage or a line of credit especially when, as now, interest rates are low. That's when you build infrastructure - you lock in at basement rates for 20 years. In Europe they don't look at the number, they look at the debt/GDP ratio. If your economy is growing and your debt remains static then your debt/GDP ratio is falling, just like your mortgage is easier to carry if you get a pay raise.

Unfortunately the Americawannabees at the "Canadian Taxpayers Federation" go bananas every time the government runs a surplus and does anything with it other than tax cuts or debt reduction and mostly only tax cuts.

The government should commit to maintaining the debt level on a very slight downward trend but surpluses should go to an infrastructure fund which the provinces and municipalities could apply for - in Europe they call that "Structural Funds".

 

[bar1967]

We didn't get anything out of the Liberals $2bn+ surplus in Ontario where the 416 gives them every single seat bar four or five Dippers. But McGuinty holds hands with Miller and tells Harper "you give them your money" even though municipalities *are a provincial creation*.

That said, Canadians are crazy about paying off government debt. Every household and business carries a mortgage or a line of credit especially when, as now, interest rates are low. That's when you build infrastructure - you lock in at basement rates for 20 years. In Europe they don't look at the number, they look at the debt/GDP ratio. If your economy is growing and your debt remains static then your debt/GDP ratio is falling, just like your mortgage is easier to carry if you get a pay raise.

Unfortunately the Americawannabees at the "Canadian Taxpayers Federation" go bananas every time the government runs a surplus and does anything with it other than tax cuts or debt reduction and mostly only tax cuts.

The government should commit to maintaining the debt level on a very slight downward trend but surpluses should go to an infrastructure fund which the provinces and municipalities could apply for - in Europe they call that "Structural Funds".

I agree 100%%%%%%

 

[unimaginative2]

Debt/GDP is exactly what is used to guide planning, or at least was in the Federal Liberal era. Paul Martin set as a goal the reasonable level of 25% of GDP for the national debt. That seems likely to be achieved by about 2010-12, at which point the government will presumably have a sudden massive windfall as it goes into deficit to maintain that ratio.

 

[afransen]

You actually think we're going to do that, unimaginative? I expect a new target to be set out, if anything, especially with Conservatives at the helm.

It would be great if we were to set up a huge, predictable infrastructure fund by that time (preferably sooner) to spend the windfall. Given that the debt is about $467.3 billion at the moment, if we were to change policy to maintain a 25% debt:GDP ratio, even with a fairly modest estimate of 2% nominal GDP growth per annum allows for about $9 billion deficits. Then again, if we were to toss that much on the infrastructure deficit each year, that would be very healthy...

 

[ShonTron]

Debt/GDP is exactly what is used to guide planning, or at least was in the Federal Liberal era. Paul Martin set as a goal the reasonable level of 25% of GDP for the national debt. That seems likely to be achieved by about 2010-12, at which point the government will presumably have a sudden massive windfall as it goes into deficit to maintain that ratio.

This is what I disliked most about Paul Martin - being infatuated by things like debt/GDP ratios, while I guess makes some sense, doesn't capture anyone's imagination and used this excuse to hold back on the very real infrastructure deficit that is now starting to be addressed, but cities, the bottom of the downloading slide, are still hurting bad. It was tax cuts, debt repayment first, and underestimating surpluses to achieve his goals and minimize calls for spending where it was needed. That said, finally he restored the Canada Social Transfer before losing to Harper, so I'll acknowledge that.

But for all that, I'd take Martin over Harper.

 

[lordmandeep]

well martin did do a good job in the mid 90's to bring Canada back from fiscal bankruptcy...

I don't care who's polices allowed him to do that, but they acting very conservative in cutting the debt...

 

[unimaginative2]

This is what I disliked most about Paul Martin - being infatuated by things like debt/GDP ratios, while I guess makes some sense, doesn't capture anyone's imagination and used this excuse to hold back on the very real infrastructure deficit that is now starting to be addressed, but cities, the bottom of the downloading slide, are still hurting bad. It was tax cuts, debt repayment first, and underestimating surpluses to achieve his goals and minimize calls for spending where it was needed. That said, finally he restored the Canada Social Transfer before losing to Harper, so I'll acknowledge that.

But for all that, I'd take Martin over Harper.

I should hope so! Martin reduced the deficit without eliminating Medicare, like all of the provincial premiers and most Finance bureaucrats were demanding. I can say this until I'm blue in the face and nobody will listen to me, but he didn't somehow deliberately underestimate surpluses. Every year we had those surpluses, we had growth that was significantly above what the average of private sector forcasters was predicting. If we had endured a recession, those surpluses would have evaporated quickly, but still left us with a comfortable balanced budget, rather than spiralling into debt if we spent to the wire like the opposition parties were demanding.

 

[lordmandeep]

its better to be in surplus, it leaves you in a good situation if your economy tanks...

If you spend spend spend and go into massive debt and then your economy tanks, most of those massive infrastructure projects that are u/c from the new spending would either be stooped, reduced or changed around.


the solution, take a good amount around 3-5 billion a year and give it soley to new transit projects across the country...

In 4 years that is 12-20 billion and that is quite a huge amount...


Its possible every year as the govt revenues grows and they always have 2-3 billion that is being spent on other useless crap...

 

[Hydrogen]

I should hope so! Martin reduced the deficit without eliminating Medicare, like all of the provincial premiers and most Finance bureaucrats were demanding. I can say this until I'm blue in the face and nobody will listen to me, but he didn't somehow deliberately underestimate surpluses. Every year we had those surpluses, we had growth that was significantly above what the average of private sector forcasters was predicting. If we had endured a recession, those surpluses would have evaporated quickly, but still left us with a comfortable balanced budget, rather than spiralling into debt if we spent to the wire like the opposition parties were demanding.

While I agree with what you are saying, I would not place all the credit with Martin on the issue of Medicare. He did keep a pretty open mind with respect to opening it up to private interests. He floated the idea on some occasions as a means of see whether Canadians would accept such a move. Needless to say, there were other members of caucaus who saw such a move as political suicide, and let him know.

Otherwise, you are correct. We were lucky in Canada. A solid economy and sound cost-cutting measures (not all of them thrilled me) gave some of us something we thought we were going to lose: a solvent country. I think we were quite fortunate in having the right government at the right time. That's why we get to squabble about a string of surpluses and not deficits. That's nice.

 

[Admiral Beez]

I don't believe it is appropriate for a politician to give people the shaft simply because they didn't vote for him.

But this always happens. Look at how well Harper is treating Quebec, since those folks voted for him. On the other hand, most of Ontario and Eastern Canada did not vote for him, and their treatment shows this. A politician has but one motivation, getting elected and then re-elected. If Ontario has no interest in ever voting for him, the politician will send favours elsewhere.

Usually, IMO, this comes down to having a representative from your riding in the government, as opposed to the opposition. Quebecers are begining to understand this, as having your rep always from the Bloc means that you'll never have a say at the federal cabinet table.

As for what Harper could do to help Toronto, IIRC any money Harper sent would have to first go to the Ontario government as they manage the cities. McGuinty would quickly take the money for himself.

 

[unimaginative2]

But this always happens. Look at how well Harper is treating Quebec, since those folks voted for him. On the other hand, most of Ontario and Eastern Canada did not vote for him, and their treatment shows this. A politician has but one motivation, getting elected and then re-elected. If Ontario has no interest in ever voting for him, the politician will send favours elsewhere.

Except for the federal Liberals, who perhaps foolishly try to win everybody's vote everywhere. They constantly adopt policies and reject others simply because they don't want to upset potential voters in places like Alberta, even though there isn't a remote chance of ever winning a seat there.

 

[lordmandeep]

you mean Martins liberals did that...

Chretien knew better then that..

 

[unimaginative2]

To a certain extent, yes, though Chretien still did it to some extent. Martin got a really bad case of it. He wanted to win every riding in the country, which is great in theory, but impossible in practice.

 

[allabootmatt]

This is not, and has never been about, rewarding the people who vote for you. Loyalty is not what gets you attention in Canada, but disloyalty is; Ontario parks its votes with the Liberals (esp. Toronto), which is the worst possible thing to do. They take us for granted, and the other parties don't even bother. You get results by swinging. Hence Quebec.

 

[lordmandeep]

considering how popular the liberals got when Martin got in office they would have won a landslide victory...


However Martin self destroyed himself really by calling that inquiry. It was the right thing to do however he can have just brought the police in arrested a couple of people and that would have been the end of that. Instead it became one of the biggest corruption scandals ever. There have been bigger ones but few were as damaging...


Chretien was a mediocre leader but he was a masterful politician... He would have easily gotten out of that mess....

Hence Quebec.

Really i really wished they separated....