Federal government expects $32B more in red ink as it creates new bank to invest $81B

[Azure]

OTTAWA – The Liberal government expects to amass nearly $32 billion worth of additional red ink over the next five years, as it ratchets up capital spending and creates a new Canada Infrastructure Bank to dramatically overhaul how large projects are planned, funded and delivered across the country.

As the federal financial picture continues to erode – and spending increases – the government acknowledged Tuesday in its fall economic update that it has no timetable for balancing the budget.

Between 2016-17 and 2021-22, the government is expecting to run approximately $130 billion worth of combined deficits.

The new Canada Infrastructure Bank is one of the federal government’s centerpiece items announced in an economic update that downgrades projected growth and forecasts that a worsening financial situation will soon gobble up all of the billions of dollars in fiscal contingency that was included in the spring budget.

http://news.nationalpost.com/news/ca...structure-bank

Infrastructure spending is obviously important, but I think they should invest a lot more into Canadian manufacturing. Lots of small/medium size manufacturing plants that could really expand if they had access to some grants and resources. 10 years from now you could have a much bigger manufacturing footprint.

Hell, get a growing company with huge demands like Tesla up here.

[2Stonedbirds]

[Coach]

Originally Posted by Azure

http://news.nationalpost.com/news/ca...structure-bank

Infrastructure spending is obviously important, but I think they should invest a lot more into Canadian manufacturing. Lots of small/medium size manufacturing plants that could really expand if they had access to some grants and resources. 10 years from now you could have a much bigger manufacturing footprint.

Hell, get a growing company with huge demands like Tesla up here.

Manufacturing what?

As long as people overseas can be paid a fraction of Canadian workers, we just won't be able to compete with many forms of manufacturing.

[bizaro86]

Originally Posted by Azure

Lots of small/medium size manufacturing plants that could really expand if they had access to some grants and resources. 10 years from now you could have a much bigger manufacturing footprint.

Hell, get a growing company with huge demands like Tesla up here.

Subsidies to businesses that wouldn't otherwise be viable without them is a terrible use of tax dollars. It takes money away from productive economic activity and diverts it to things that don't make economic sense.

Maybe we should just give all our money to Bombardier?

[Jacks]

We are racking up staggering amounts of debt very quickly federally and provincially and most people just seem to shrug their shoulders. Stop the madness.

[Finger Cookin]

Is the debt worse because it is counted in dollars instead of in crumbling infrastructure?

[Northendzone]

Originally Posted by Jacks

We are racking up staggering amounts of debt very quickly federally and provincially and most people just seem to shrug their shoulders. Stop the madness.

I just don't foresee however the government can ever get out of debt.

[polak]

Originally Posted by Finger Cookin

Is the debt worse because it is counted in dollars instead of in crumbling infrastructure?

At least if you think of it as building and improving infrastructure youre creating some work while you work on a strategy to Kickstart the economy a bit which might take a while to think of and an even longer time to see returns.

[Jacks]

Originally Posted by Northendzone

I just don't foresee however the government can ever get out of debt.

It takes time and resolve but it can be done. Mulroney started turning the ship around (not fast enough) and Chretien carried on those policies to balance the budget and pay down debt. Harper turned over a balanced (or very nearly balanced) budget to Trudeau after a worldwide recession. Several Premier's have balanced their books after years of deficit. Most memorable are probably Klein and Harris who made fairly drastic cuts after years and years of mismanagement. That's what happens when you let debt pile up, brutal cuts need to be made.

[CorsiHockeyLeague]

Eliminating a structural deficit can be done, sure. Creating a consistent surplus for long enough that you can actually pay down the debt that's been amassed to this point? Much taller order... because inevitably someone's going to win an election against you partly on the platform of spending more.

[GGG]

Originally Posted by CorsiHockeyLeague

Eliminating a structural deficit can be done, sure. Creating a consistent surplus for long enough that you can actually pay down the debt that's been amassed to this point? Much taller order... because inevitably someone's going to win an election against you partly on the platform of spending more.

We could have easily paid off the debt. Each point of GST was worth 7 billion. That's 14 billion per year which should not have been cut it good economic times.

But I do agree that governements lack the political will to tax and spend within their means. The bad news is the oppositions proposal to cut taxes is just as Bad. I suppose the arguememt could be had on who is better at spending money to stimulate the economy the public or the government but both solutions just increase debt.

The one piece of good news here is spending on transportation infrastructure generally pays dividends.

[Frequitude]

Just waiting for some of this money to go towards hole digging. Because hole digging creates jobs right.

[DoubleK]

The infrastructure bank will target large institutional investors to help finance “transformational” projects in Canada and get them built more quickly and at less of a financial risk to taxpayers.

Can someone explain how this is different or better than the traditional P3 delivery model?

P3's nowadays are basically date certain, fixed price, fixed term contracts.

I don't understand how the bank can build them 'more quickly' with 'less risk'.

[doctajones428]

Originally Posted by MattyC

Manufacturing what?

[Alpine Fisher]

I am okay with this.
Canada is accepting 300,000 immigrants in the new year. They will bring with them, skills, and jobs & diversity and will buy new and old houses, and they will provide diversity.

Jobs create themselves just like budgets balance themselves

[afc wimbledon]

Originally Posted by DoubleK

Can someone explain how this is different or better than the traditional P3 delivery model?

P3's nowadays are basically date certain, fixed price, fixed term contracts.

I don't understand how the bank can build them 'more quickly' with 'less risk'.

well it means we don't pay for it up front, we just keep on paying for it forever, but its not debt, that's important, we just have to keep paying the bank to use the bridge/school/road/airport for ever, ain't life grand!

[CrunchBite]

Goverment need to stop spending money we don't have.

[afc wimbledon]

Originally Posted by MattyC

Manufacturing what?

As long as people overseas can be paid a fraction of Canadian workers, we just won't be able to compete with many forms of manufacturing.

Actually robots are even cheaper, the US is stealing manufacturing back from Mexico, but no one works in the new facilities much.

[Bagor]

Originally Posted by Frequitude

Just waiting for some of this money to go towards hole digging. Because hole digging creates jobs right.

Big holes being dug on Parliament Hill.

One of them between West and Centre block for a new 5 storey underground visitor centre. More holes under West Block which now extends to about three levels underground and where parliament is moving to whilst Centre Block gets renovated (which no doubt will include a lot more hole digging).

Going to be an estimated $3bn when all is said and done

[Alpine Fisher]

Where is our infrastructure money for the Green Line LRT?