2011 Canadian Election Thread

[transplant99]

Originally Posted by Slava

Are the Tories actually doing anything until the budget is balanced? Seems like we could shut government down for a few years and not really miss anything. I guess they can come in, cut that pesky little $2.2 Billion to Quebec and then do nothing until the budget balances?

geez that agreement to equalize Quebec with the Maratimes really bothers you doesnt it?

But if the CPC is running a campaign based almost exclusively on the economy and the budget, then by all means thats what they should do when elected.

[WilsonFourTwo]

Originally Posted by transplant99

All fine and dandy...but IMO you dont start making such changes in a recovering economy. It will only make said recovery take even longer.

Things will get better eventually, and likely even as good as things were about 6 years ago. Thats when you start to implement such massive overhauls of this magnitude.

There's the problem though......when the economy is strong, we're afraid to "Take the steam out of the economy". Realistically, there is never going to be a "Good" or "Right" time to implement change. We just have to do it (assuming we're committed to change).

I've seen this cycle a number of times over the past (say) 30 years. The only difference is that every time we dodge the issue, we make it harder and much more painful to deal with at the next opportunity.

If I had to pick a time to implement change, I would actually choose the beginning of an economic cycle. Creating the ground rules and letting the market build around them just seems (intuitively, to me) better than giving existing businesses a bunch of new rules mid-stream. Dunno.

[transplant99]

Originally Posted by WilsonFourTwo

There's the problem though......when the economy is strong, we're afraid to "Take the steam out of the economy". Realistically, there is never going to be a "Good" or "Right" time to implement change. We just have to do it (assuming we're committed to change).

I've seen this cycle a number of times over the past (say) 30 years. The only difference is that every time we dodge the issue, we make it harder and much more painful to deal with at the next opportunity.

If I had to pick a time to implement change, I would actually choose the beginning of an economic cycle. Creating the ground rules and letting the market build around them just seems (intuitively, to me) better than giving existing businesses a bunch of new rules mid-stream. Dunno.

Perhaps...but as has been mentioned its pretty much a part of any parties agenda going forward and I am not advocating not doing it, but doing it ata a time when things are more stable. As good as Canada has weathered the recent meltdown, the country is still heavily tied to the US economy and that wont ever change. When the US finally starts to show solid signs of recovery, and only then, should something as large as C&T be implemented. Otherwise another fail of any magnitude combined with lost jobs because of the new "laws' could send canada into a major recession.

its just not necessary at this time to risk that IMO. Maybe I am overestimating the impact but every single thing I have read about the carbon tax system leads to massive job loss in the first couple years in any scenario...combined with much higher prices on consumer goods because of it and you have a very scary scenario.

[Tinordi]

its just not necessary at this time to risk that IMO. Maybe I am overestimating the impact but every single thing I have read about the carbon tax system leads to massive job loss in the first couple years in any scenario...combined with much higher prices on consumer goods because of it and you have a very scary scenario.

Really?

Almost nothing I've read is saying that and it's my job to evaluate these things. Can you provide some studies that say so?

[crazy_eoj]

Originally Posted by Tinordi

Really?

Almost nothing I've read is saying that and it's my job to evaluate these things. Can you provide some studies that say so?

Taxes always are an impediment to jobs, by their very nature they remove output from the most productive parts of the economy into less productive areas.

When you lose productivity, you lose jobs.

It's really quite obvious at a basic level.

If it wasn't that way, we could just have 100% taxes and let the government create jobs for everyone. And Stalin tried real hard at that, but it really doesn't work in the end.

[Parallex]

^^^ So in other words you can't provide some studies that say so.

[octothorp]

I'm reluctant about the idea of a cap and trade system, but at the same time, I've been reading a lot in the last couple days about how companies are not reinvesting the money saved in their Harper tax cuts but instead building massive cash reserve stockpiles (something like $80 billion since 2008 (mostly under a rate that matches the 18% the Liberals propose), according to stats can).
To me, it seems that artificially forcing an investment in green technologies isn't an ideal way of creating jobs, but it is preferable to having corporations stockpile cash, which does nothing to stimulate the economy. I'd rather that businesses actually reinvest money in new jobs, equipment, etc. of their own accord, but if they're unwilling to do that, the government needs to find ways of incentivizing businesses to reinvest those savings into the economy.

[WilsonFourTwo]

Originally Posted by crazy_eoj

Taxes always are an impediment to jobs, by their very nature they remove output from the most productive parts of the economy into less productive areas.

When you lose productivity, you lose jobs.

It's really quite obvious at a basic level.

If it wasn't that way, we could just have 100% taxes and let the government create jobs for everyone. And Stalin tried real hard at that, but it really doesn't work in the end.

So why not make taxes 0% and everything will be perfect?

[CaptainCrunch]

Originally Posted by WilsonFourTwo

So why not make taxes 0% and everything will be perfect?

Would that mean that I could pay my traffic tickets with a rock?

Maybe we could have a pay by use of services levee for the government.

Everytime you do anything that requires government involvement you get a bill.

Toll booths at your driveway.

Search and rescue bills.

Everytime you go to the doctor you get a bill.

how awesome would it be if you wanted a glass of water you'd have to use the government mandated credit card swipe machine in your kitchen.

The biggest benefit though would be that CBC becomes a PPV channel.

[Tinordi]

Originally Posted by crazy_eoj

Taxes always are an impediment to jobs, by their very nature they remove output from the most productive parts of the economy into less productive areas.

When you lose productivity, you lose jobs.

It's really quite obvious at a basic level.

If it wasn't that way, we could just have 100% taxes and let the government create jobs for everyone. And Stalin tried real hard at that, but it really doesn't work in the end.

Thanks for the economics lesson Hayek.

What I was asking was where were the studies saying that carbon taxes would lead to massive job losses? And actually, there's a thing called the double dividend when evaluating a carbon tax.

If you tax bad behaviour (pollution) and reduce taxes on good behavior (employment - payroll taxes) then you could theoretically get further ahead than you were before when the environmental benefits are quantified in some way.

The point is that it just isn't cut and dry, taxes = job losses = everyone worse off. There's really legitimate public policy reasons to adopt this stuff.

Hell even Alberta has a $5 per tonne carbon price.

[WilsonFourTwo]

Originally Posted by Tinordi

If you tax bad behaviour (pollution) and reduce taxes on good behavior (employment - payroll taxes) then you could theoretically get further ahead than you were before when the environmental benefits are quantified in some way.

Interestingly put. I don't see why a Carbon Tax is any different than Sin Taxes for cigarettes or tobacco.

[Slava]

Originally Posted by transplant99

geez that agreement to equalize Quebec with the Maratimes really bothers you doesnt it?

But if the CPC is running a campaign based almost exclusively on the economy and the budget, then by all means thats what they should do when elected.

It bothers me because its $2.2 billion that wasn't in the budget anywhere and comes to light only when there are votes on the line.

Its not equalization with the Maritimes either. Quebec has had this issue since the early 90's....so if there was no election we wouldn't be seeing anything about this until today.

[Cowboy89]

Originally Posted by octothorp

I'm reluctant about the idea of a cap and trade system, but at the same time, I've been reading a lot in the last couple days about how companies are not reinvesting the money saved in their Harper tax cuts but instead building massive cash reserve stockpiles (something like $80 billion since 2008 (mostly under a rate that matches the 18% the Liberals propose), according to stats can).
To me, it seems that artificially forcing an investment in green technologies isn't an ideal way of creating jobs, but it is preferable to having corporations stockpile cash, which does nothing to stimulate the economy. I'd rather that businesses actually reinvest money in new jobs, equipment, etc. of their own accord, but if they're unwilling to do that, the government needs to find ways of incentivizing businesses to reinvest those savings into the economy.

Corporations stockpiling cash has nothing to do with taxes and has more to do with being cautious in uncertain times. The economy is just starting to firm up in Canada and the US. Corporations will start to deploy capital and make more investments as they feel more comfortable doing so and that has more to do with the World and Canadian economy than it has to do with Stephan Harper or Micheal Ignatieff.

Raising tax rates to 18% doesn't provide more incentive to invest that cash. An arguement could be made that 18% is still a competative number, but that's where the academic debate begins. No one is arguing that a tax rate of 15% vs. 18% means less investment, but rather the effeiciency of the increased investment vs. other policies. That's where the debate lies and if this is an important policy to weigh in how you'll vote in the election try to research economists positions on this and also think about the benefit of an additional $442 per post secondary student will mean for you personally and for the country. That's the policy contrast between the two parties.

[automaton 3]

Originally Posted by WilsonFourTwo

Interestingly put. I don't see why a Carbon Tax is any different than Sin Taxes for cigarettes or tobacco.

There is a choice involved when it comes to cigarettes and tobacco.

The choices are much more limited (and extraordinarily expensive) when it comes to heating our homes and keeping the lights on.

[WilsonFourTwo]

Originally Posted by automaton 3

There is a choice involved when it comes to cigarettes and tobacco.

The choices are much more limited (and extraordinarily expensive) when it comes to heating our homes and keeping the lights on.

But it still provides options and choice while moving towards a societal goal. That's what sin taxes are all about. Since we've decided (rightfully or wrongfully) that we have to watch over the environment, this seems to be a continuation of existing and effective policy.

[Tinordi]

Originally Posted by automaton 3

There is a choice involved when it comes to cigarettes and tobacco.

The choices are much more limited (and extraordinarily expensive) when it comes to heating our homes and keeping the lights on.

Yup it's going to cost more at least initially to wean us off an unsustainable fuel source. That's the whole point.

[MarchHare]

Any comments on the CPC's big announcement from earlier today, increasing the TFSA limit to $10,000 annually from $5,000?

Personally, I'm a huge fan of the TFSA program (and currently contribute the $5k annual limit), but I don't see how this proposed change benefits anyone but the ultra super rich. My wife and I have no kids and a combined household income of over $135k/year, we own a modest downtown condo, have zero credit card debt, and only own one vehicle, all of which mean we have more disposable income than probably 95% of Canadian families. Despite all these advantages, though, we're still not in a position to invest more into our TFSAs than we are currently. Even if we had additional disposable income that we specifically wanted to invest, we'd use that money to top up our RRSP contributions rather than increasing our TFSA investments.

So I'm really not sure what to make of Harper's announcement. Were there so many people complaining that the current TFSA limit was too low? How many Canadians are even contributing the maximum $5k annual limit now?

[Slava]

Originally Posted by MarchHare

Any comments on the CPC's big announcement from earlier today, increasing the TFSA limit to $10,000 annually from $5,000?

Personally, I'm a huge fan of the TFSA program (and currently contribute the $5k annual limit), but I don't see how this proposed change benefits anyone but the ultra super rich. My wife and I have no kids and a combined household income of over $135k/year, we own a modest downtown condo, have zero credit card debt, and only own one vehicle, all of which mean we have more disposable income than probably 95% of Canadian families. Despite all these advantages, though, we're still not in a position to invest more into our TFSAs than we are currently. Even if we had additional disposable income that we specifically wanted to invest, we'd use that money to top up our RRSP contributions rather than increasing our TFSA investments.

So I'm really not sure what to make of Harper's announcement. Were there so many people complaining that the current TFSA limit was too low? How many Canadians are even contributing the maximum $5k annual limit now?

I love the idea, but not only is this not feasible for a lot of people, its again an issue of this taking place years away from now.

[MarchHare]

Hey CaptainCrunch, what are your thoughts on this article?

The author is critical of the proposed F-35 purchase, but not for the usual hippie anti-military-spending reasons we normally see. His thesis is that if the new fighters suffer a cost overrun beyond The Harper Government's projections (quite likely), then there may be a shortage of future defense money available for equipment purchases required by other branches of the Canadian Forces.

We are essentially taking the F-35 on faith. It's still just undergoing test flights, and despite government assurances, it's hard to predict what its off-the-assembly-line price will be. We don't know what we might have gotten had we gone with a plane from a competing manufacturer, because we haven't pushed to find out. This might be the greatest single budget gamble Canada has ever taken in peacetime.

That's why it's a mistake to keep talking about the F-35 in isolation. The greatest risk here may be to Canada's aged navy, which is desperately in need of rebuilding. Any slowdown in ship replacement – quite likely if the F-35 goes well over budget—threatens to cripple this country's single most important strategic asset.

[...]

How ironic, then if the rush to get the F-35 by 2016 leads to an enormous budget miscalculation that comes to overshadow and damage what is almost certainly an even more important and far-reaching naval initiative.

That's why it's not just civilians upset that the planes could end up costing more than $100 million each, but it makes a good many people in uniform nervous as well.

[IliketoPuck]

Originally Posted by MarchHare

Any comments on the CPC's big announcement from earlier today, increasing the TFSA limit to $10,000 annually from $5,000?

Personally, I'm a huge fan of the TFSA program (and currently contribute the $5k annual limit), but I don't see how this proposed change benefits anyone but the ultra super rich. My wife and I have no kids and a combined household income of over $135k/year, we own a modest downtown condo, have zero credit card debt, and only own one vehicle, all of which mean we have more disposable income than probably 95% of Canadian families. Despite all these advantages, though, we're still not in a position to invest more into our TFSAs than we are currently. Even if we had additional disposable income that we specifically wanted to invest, we'd use that money to top up our RRSP contributions rather than increasing our TFSA investments.

So I'm really not sure what to make of Harper's announcement. Were there so many people complaining that the current TFSA limit was too low? How many Canadians are even contributing the maximum $5k annual limit now?

I think it is a great idea for the people that can take advantage. No one is saying that you have to max out your TFSA every year, but being able to compound up to 10k per year tax free sounds great to me.

Any idea if the 10k will be applied retroactively? I would love to be able to throw another 15 into my TFSA this year.