The 2009 Canadian Budget Thread

[FanIn80]

Canadians didn't have the balls to give the Conservatives a majority Government. We can't sit on our asses and get upset at them for not sticking to their guns, when we elected a minority-led Parliament that makes it 100% impossible for them to do so.

We elected a minority Government, and now we're getting a minority budget. It's that simple.

[Stranger]

I can't remember a politician I've disliked more than Layton. How anyone can see him as a viable leader of this country is beyond me.

[peter12]

Originally Posted by Hesla

I do not get this opinion. If Harper passes a Conservative budget with no deficit and little extra spending then his government falls. Then you would likely have either 1) another minority government with less of a mandate or 2) a Liberal lead coalition

Nothing we can do about it but wait for the next inevitable liberal implosion.

Edit: I am also very sure that Harper does not want much of what is in this budget. Tough to fault him for having to concede a bit to keep the conservatives in power.

Then fail and appeal to the will of the people. Stop playing power politics, stop tight-fisting goverment communication and stop selling out principles just to stay in power.

An election right now would be far, far cheaper than a $54 billion deficit.

[longsuffering]

Originally Posted by albertGQ

Looks like there will be tax cuts for Canadians earning less then $80k per year. That's good for me!!!

While everyone loves to have extra money in the their pockets, it has to be remembered that every $ in tax cuts adds $ to the deficit and national debt, a debt that will have to be repaid at some point.

Is there any concern here about dumping that debt on future taxpayers (or as some like to dramatically say: "our children")?

[Ford Prefect]

Originally Posted by Stranger

I can't remember a politician I've disliked more than Layton. How anyone can see him as a viable leader of this country is beyond me.

Me too. And I had some pretty profound animosity towards Paul Martin. Layton reminds me of a cross between a used car salesman and a cheesy, low grade porn actor. In other words, the ultimate sleaze bag.

[peter12]

Originally Posted by longsuffering

While everyone loves to have extra money in the their pockets, it has to be remembered that every $ in tax cuts adds $ to the deficit and national debt, a debt that will have to be repaid at some point.

Is there any concern here about dumping that debt on future taxpayers (or as some like to dramatically say: "our children")?

Then don't spend so much damn money on projects that have little or no proof that they are effective in the long-term.

Bailing out forestry!? Come on... We are paying them to cut boards for houses that aren't going to get built.

[longsuffering]

Originally Posted by peter12

Then fail and appeal to the will of the people. Stop playing power politics, stop tight-fisting goverment communication and stop selling out principles just to stay in power.

An election right now would be far, far cheaper than a $54 billion deficit.

Bravo.

[Sylvanfan]

Originally Posted by FanIn80

Canadians didn't have the balls to give the Conservatives a majority budget. We can't sit on our asses and get upset at them for not sticking to their guns, when we elected a minority-led Parliament that makes it 100% impossible for them to do so.

We elected a minority Government, and now we're getting a minority budget.

Yeah, for better or worse our current system of having a half arsed winning government who has to try to appeal to everyone more or less results in this type of thing where the budget is middle ground.

On one hand maybe it's good because it reigns in one party from trying to run rampent with their agenda. But on the other hand it doesn't allow them to always make the hard descisions that governments sometimes have to make.

I do wonder though if our system of electing a government forced a winner like it does in the US if more people would get out and vote because if the Conservatives win 51% of the vote...well they won the election and they get 4 years to govern. Maybe that would shake some of the voter apathy in this country.

[Claeren]

I still think the misguided GST cuts have a lot to do with this massive short fall.

(Along with military spending that I agree with but that was too much too fast.)

There were plenty of people (who rightly) protested those cuts saying they were purely political (which they were) and that a cut in income taxes made more sense than a cut in consumption taxes 10 times out of 10.

Consuming beyond our means has been a national (1st world?) problem for far too long and not saving enough has been the otherside of that same problem. Nothing like cutting the tax that encourages consumption!! Yeish.

The 2% in GST is worth what, $12-$14 Billion per year?


That $12 Billion should have gone to cutting income taxes back then and we should not be sutting taxes at all right now (saving that part of the current deficit).


Tax cuts for business and/or individuals is EXACTLY what Japan tried to do with no effect. Why is it a bad idea that has no effect? Because in a deflationary economy all you are doing is taking money that the government could spend on stimulus and giving it to people/businesses who are up to their eyeballs in debt and worried about their jobs, which means they horde it and spend it on reducing that debt which further reduces spending which further shrinks the economy which further shrinks tax receipts which creates bigger deficits and an even more fearful populace in a vicious cycle until you have racked up one of the biggest debts in the world (as Japan has) all with nothing to show for it.

You have to do everything possible to keep the budget balanced (or close to balance, I would be okay with a $6-$8 Billion deficit for a year or two) while spending BIG on direct stimulus on things like roads, bridges, transit, education, etc. Each of those dollars has a much much much larger multiplier effect in the economy than each dollar of tax cuts.

Also note that when this all does finally turn around super high interest rates will make ever new dollar of debt in to three or four (or more) dollars of debt.


I can see how a minority government might have made the total amount of deficit larger but I still think the Conservatives would be doing the wrong thing and cutting taxes (because that seems to be their only tool, and it is not always a tool that works -- ask George Bush and his trillions in deficits) so it is not the coalition stimulus problem that people should be concerned about, it is the pointless tax cuts that will have to be paid back later by future generations that should concern us and that is ALL conservative party spending.

I am fiscally conservative and hate silly social spending when it becomes wastefull but the Conservatives are not handling this as well as they should and I just do not buy that it is because of the evil liberals/NDP (< for whom I have no love either).



Claeren.

[Cheese]

Not to worry guys...after the next election we will have a majority government again. Youll all be able to chant Iggy Iggy Iggy when he's PM!

[FlamesAddiction]

Originally Posted by Claeren

I still think the misguided GST cuts have a lot to do with this massive short fall.

(Along with military spending that I agree with but that was too much too fast.)

There were plenty of people (who rightly) protested those cuts saying they were purely political (which they were) and that a cut in income taxes made more sense than a cut in consumption taxes 10 times out of 10.

Those GST cuts really were pointless. First of all, the savings for the average person would be very minimal. The average person isn't making huge purchases daily, monthly, or even yearly... so saving a few pennies here and there isn't going to make much of a difference. And that is assuming that the merchants would even keep prices the same after they know that people are willing to pay 2-3% more already since that is what they were paying before the GST cut.

All it really did was limit money going to the public without giving many benefits to many people. It was purely politcal because it's one of those things that sounds good on the surface until you think about it.

[CaptainCrunch]

Originally Posted by Cheese

Not to worry guys...after the next election we will have a majority government again. Youll all be able to chant Iggy Iggy Iggy when he's PM!

El Barfo!!

They guy hasn't done much to impress me yet.

[ken0042]

I guess I simply find the GST cut to be noticeable- and I notice it every day. So it does create a "feel good" type of reduction.

But I agree that in the current situation the money could be better spent elsewhere.

[Thunderball]

Originally Posted by Cheese

Not to worry guys...after the next election we will have a majority government again. Youll all be able to chant Iggy Iggy Iggy when he's PM!

Prime Minister Ignatieff? quite possibly in the next few years.

Majority Government? Never. I don't think either the CPC or Liberals will see one for a long time, unless there's another fundamental shift. The Bloc and NDP seem to have enough support to play permanent spoiler.

Harper has to spend, because if he doesn't, Iggy and the Dufus Twins will spend more.

[peter12]

Originally Posted by Cheese

Not to worry guys...after the next election we will have a majority government again. Youll all be able to chant Iggy Iggy Iggy when he's PM!

Really? Not that Harper is anything special, but you really think an academic with little political savvy who only a few years ago identified himself as American (bad word for Liberals) and never gained the leadership through the democratic will of the party is the magic bullet for Liberal victory?

[Slava]

Claeren, there are a couple of points to consider here though:

A) Carney came out today and says that the risk of deflation is not very high. I have held that view as well, and think that the chances are that we avoid this.

B) I'm confused as to how you see large spending things like infrastructure without a larger deficit than $6-8 Billion.

C) Inflation will no doubt be a product of this spending, but when you consider the alternative that is an outcome that we can tolerate. Yes interest rates will rise; however that is a foregone conclusion when we are at historic lows at this point. Inflation would be a good thing in the short term actually as the consumer confidence that would spur would be far greater than any stimulus package.

D) Part of my issue comes with the whole "fiscal conservative" label. I consider myself a fiscal conservative as well, but governments have gotten something entirely wrong. In the private sector every business carries some debt for capital projects; but in Alberta specifically there is a mania without financing anything at the government level that defies logic. If we are going to build a hospital today it should be financed for years to come as we will use it for years to come. Does that mean that the government is in debt? Sure. The alternative though is like trying to buy a home without a mortgage because you never want to have a negative balance sheet...its just foolish!

[Slava]

Originally Posted by peter12

Really? Not that Harper is anything special, but you really think an academic with little political savvy who only a few years ago identified himself as American (bad word for Liberals) and never gained the leadership through the democratic will of the party is the magic bullet for Liberal victory?

Well he is the interim leader who will face a leadership review in May...once that review is complete than he will have faced the democratic will of the party...does that satisfy you?

[peter12]

Originally Posted by Slava

Well he is the interim leader who will face a leadership review in May...once that review is complete than he will have faced the democratic will of the party...does that satisfy you?

Leadership review, not a full-on leadership convention. No, it won't satisfy me. Ignatieff was a political contingency, nothing more.

[Cowboy89]

Originally Posted by Slava

Claeren, there are a couple of points to consider here though:

A) Carney came out today and says that the risk of deflation is not very high. I have held that view as well, and think that the chances are that we avoid this.

B) I'm confused as to how you see large spending things like infrastructure without a larger deficit than $6-8 Billion.

C) Inflation will no doubt be a product of this spending, but when you consider the alternative that is an outcome that we can tolerate. Yes interest rates will rise; however that is a foregone conclusion when we are at historic lows at this point. Inflation would be a good thing in the short term actually as the consumer confidence that would spur would be far greater than any stimulus package.

D) Part of my issue comes with the whole "fiscal conservative" label. I consider myself a fiscal conservative as well, but governments have gotten something entirely wrong. In the private sector every business carries some debt for capital projects; but in Alberta specifically there is a mania without financing anything at the government level that defies logic. If we are going to build a hospital today it should be financed for years to come as we will use it for years to come. Does that mean that the government is in debt? Sure. The alternative though is like trying to buy a home without a mortgage because you never want to have a negative balance sheet...its just foolish!

Finance 101, why is this? And to answer your own question, ask yourself why the government cannot get the same benefits out of debt that the private sector can.

[Thunderball]

Originally Posted by Slava

D) Part of my issue comes with the whole "fiscal conservative" label. I consider myself a fiscal conservative as well, but governments have gotten something entirely wrong. In the private sector every business carries some debt for capital projects; but in Alberta specifically there is a mania without financing anything at the government level that defies logic. If we are going to build a hospital today it should be financed for years to come as we will use it for years to come. Does that mean that the government is in debt? Sure. The alternative though is like trying to buy a home without a mortgage because you never want to have a negative balance sheet...its just foolish!

Agreed. Somewhere along the way, Klein, Stelmach and co. demonstrated a clear lack of understanding, boosted by lack-witted rural masses conned into believing any government debt is bad. Only they are incompetent enough to suggest cutting programs at this stage. That is most definitely the way to a prolonged recession.

However back to the other side of the coin, I do think Canada's inferiority complex is showing a bit. Are we in a bad situation? Sure. Is it in the same ballpark as the US, or the UK, or much of the rest of the world? No... but spending and cuts to this magnitude suggest we're on the verge of nationalizing banks, or bailing out mortgage companies like other countries forced into multibillion dollar spending sprees.