2011 Canadian Election Thread

[Slava]

Originally Posted by IliketoPuck

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.

I do think its great, and there are a lot of people who will be able to take advantage of it. I do wonder how much this costs the government? $20k/yr with no tax implications is a lot of money and adds up pretty quickly. For young people this could be enough to almost eliminate bothering with an RRSP (if you have a wife and can afford the $20k/yr).

[CaptainCrunch]

Originally Posted by 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.

I agree and disagree, it’s in the same kind of line as an article that Peter Worthington who I really respect published earlier.

There are two reasons for the accelerated defense spending

1) obviously the deployment to Afghanistan, and it directly links to the second point that I'm going to make that successive governments since Korea were willing to allow the Military to rust out. The out of sight out of mind theory. Suddenly leading into Afghanistan the Canadian Forces were woefully under equipped and actually the men and woman that served over there were put into greater jeopardy then necessary. Now with the end of Afghanistan in sight, a lot of the equipment will have to be replaced. For example the LAV III end of life is accelerated due to the rough environment.

2) Beyond Afghanistan the neglect of the Military by multiple Liberal and one conservative government in particular put the Canadian Forces into crisis mode in terms of equipment. so a lot of the accelerated spending is actually catch up to bring the Canadian Forces up to a fairly close approximation of modern TOE. However the Canadian Forces is still in equipment trouble. The Helicopter replacement program thanks to the Liberals has taken far too long, and the helicopter that was chosen is a cheap imitation of the original that was picked. Our Halifax frigates have effectively reached their half life refurbishment. The Destroyers that we depended on to form independent task forces around are basically done and we need to replace that Command and Control ability. Our Fleet Replenishment ships are end of life to and it’s critical that those be replaced.

In terms of the F-18 replacements, the F-18's are 30 years old and at their end of life, they can't be upgraded anymore from at technology standpoint, and they're starting to develop problems such as cracks in their airframe. Further the maintenance hours/flight hours are starting to accelerate just like they did with the Sea Kings.

I've looked at some of the alternate jets such as the Eurojets, and their costs per plane are similar to the F-35 original price tag but there are no Canadian Economic Benefits.

We also have to realize that the air force will effectively be shrinking with the same mission, when we bought the F-18's we bought I think 130 of them, now with the f-35's we're buying I think 68, so if you're going to buy fewer jets, you have to have greater capability, a higher ability kill ratio, and a better survival rate.

The F-35 because of its multi-role capability, stealth capability, and technology would rank this jet as a better purchase then something like the Super Hornet.

We also have to remember that these are the jets that we need to fly for 20 years, so instead of buying behind the curve, you need to buy ahead of the curve.

Frankly Canada has the disadvantage of having to cover a large country with few assets, so in that term we need to make sure that we have the capability to do it.

We need to prevent future rust out crisis

As a further, if we're going to deploy abroad, we need to make sure that we have the logistics to be able to support our own missions, that means no more renting of foreign planes and ship transport.

We also have to make sure that our forces can follow the mandate of being able to support multiple natural disasters at one time.

In terms of Military spending, Canada is spending 1.3% of their gross domestic product Australia which is in some ways comparable though they focus more heavily on their navy spends 1.8%, but in terms of first world nations, Canada does trail in defense spending.

To be honest Harper has provided a minor miracle in terms of upgrading air lift, and ground forces equipment (New jeeps for example) while not spending what I would consider to be a massive percentage of dollars.

Anyways, I'm hoping this made some sense, it did in my head

[IliketoPuck]

That is exactly where I am coming from on the combination of TFSA/RRSP contributions. Generally speaking if you can put away ~$400 a month and earn a reasonable rate of return on it you should have over a million in 40 years. The combination of TFSA and RRSP contributions far outstrip that ~$400 per month and the TFSA is tax free!

The amount of tax revenue forgone by the government 50 years from now will be something to see.

[LChoy]

You should be submitting this as an opinion piece in the National Papers. Very well thought out

Originally Posted by CaptainCrunch

I agree and disagree, its in the same kind of line as an article that Peter Worthington who I really respect published earlier.

There are two reasons for the accelerated defense spending

1) obviously the deployment to Afghanistan, and it directly links to the second point that I'm going to make that successive governments since Korea were willing to allow the Military to rust out. The out of site out of mind theory. Suddenly leading into Afghanistan the Canadian Forces were woefully under equipt and actually the men and woman that served over there were put into greater jeopardy then neccessay. Now with the end of Afghanistan in site, a lot of the equiptment will have to be replaced. For example the LAV III end of life is accelerated due to the rough environment.

2) Beyond Afghanistan the neglect of the Military by multiple Liberal and one conservative government in particular put the Canadian Forces into crisis mode in terms of equiptment. so a lot of the accelerated spending is actually catch up to bring the Canadian Forces up to a fairly close approximation of modern TOE. However the Canadian Forces is still in equiptment trouble. The Helicopter replacement program thanks to the Liberals has taken far to long, and the helicopter that was chosen is a cheap imitation of the original that was picked. Our Halifax frigates have effectively reached their half life referbishment. The Destroyers that we depended on to form independant task forces around are basically done and we need to replace that Command and Control ability. Our Fleet Replentishment ships are end of life to and its critical that tose be replaced.

In terms of the F-18 replacements, the F-18's are 30 years old and at their end of life, they can't be upgraded anymore from at technology standpoint, and they're starting to develop problems such as cracks in their airframe. Further the maintenance hours/flight hours are starting to accelerate just like they did with the Sea Kings.

I've looked at some of the alternate jets such as the Eurojets, and their costs per plane are similar to the F-35 original price tag but there are no Canadian Economic Benefits.

We also have to realize that the airforce will effectively be shrinking with the same mission, when we bought the F-18's we bought I think 130 of them, now with the f-35's we're buying I think 68, so if you're going to buy fewer jets, you have to have greater capability, a higher ability kill ratio, and a better survival rate.

The F-35 because of its multi-role capability, stealth capability, and technolgy would rank this jet as a better purchase then something like the Super Hornet.

We also have to remember that these are the jets that we need to fly for 20 years, so instead of buying behind the curve, you need to buy ahead of the curve.

Frankly Canada has the disadvantage of having to cover a large country with few assets, so in that term we need to make sure that we have the capability to do it.

We need to prevent future rust out crisis

As a further, if we're going to deploy abroad, we need to make sure that we have the logistics to be able to support our own missions, that means no more renting of foreign planes and ship transport.

We also have to make sure that our forces can follow the mandate of being able to support multiple natural disasters at one time.

In terms of Military spending, Canada is spending 1.3% of their gross domestic product Australia which is in some ways comparible though they focus more heavily on their navy spends 1.8%, but in terms of first world nations, Canada does trail in defense spending.

To be honest Harper has provided a minor miracle in terms of upgrading air lift, and ground forces equipment (New jeeps for example) while not spending what I would consider to be a massive percentage of dollars.

Anyways, I'm hoping this made some sense, it did in my head.

[CaptainCrunch]

man did my spelling suck the first time out, I think I need to run it through word and fix it

[Cowboy89]

Originally Posted by Slava

I do think its great, and there are a lot of people who will be able to take advantage of it. I do wonder how much this costs the government? $20k/yr with no tax implications is a lot of money and adds up pretty quickly. For young people this could be enough to almost eliminate bothering with an RRSP (if you have a wife and can afford the $20k/yr).

Agreed. I would love to see the RRSP get abolished by allowing greater contribution room in a TFSA. That way future governments can't get at the returns on that money by any means. As we discussed earlier there's going to be a program shortfall due to simple demographics. As someone in my 20s I'm starting to think tax-deferred growth isn't really much of a benefit knowing that tax rates likely will be higher when I withdraw from my RRSP and it will be taxed fully as income as opposed to capital gains or dividends. I would prefer $25,000 in annual contribution room to the TFSA and wind down RRSPs.

I suppose the other rub is that some people only invest in an RRSP because of the refund cheque in May. Maybe moving completely to a TFSA would actually discourage retirement savings by the less financially motivated because the system would make it easier to withdraw money before retirement and they wouldn't get instant gratification from a tax refund.

[IliketoPuck]

@Cowboy

It is definitely the pay me now or pay me later debate between TFSA and RRSP contributions with respect to taxes. I'm not sure where I come out on it, since it is likely as you mentioned that taxes will be higher in the future to help pay for the aging Canadian population. Currently the tax deferral from RRSPs is nice, but is it worth the short run tax break versus having a higher TFSA contribution limit?

The real rub for the Canadian government is not being able to get at the money in the TFSAs and tax them. I can see the government really balking at a higher contribution limit because as years go by the compounding of those contributions will escalate the amount of funds that can't be taxable to a point where it would be felt in the government coffers. And nothing gets the government more upset than not being able to get at your money.

[Cowboy89]

Originally Posted by IliketoPuck

@Cowboy

It is definitely the pay me now or pay me later debate between TFSA and RRSP contributions with respect to taxes. I'm not sure where I come out on it, since it is likely as you mentioned that taxes will be higher in the future to help pay for the aging Canadian population. Currently the tax deferral from RRSPs is nice, but is it worth the short run tax break versus having a higher TFSA contribution limit?

With the current system in place my priority of investment funds goes:

TSFA, RRSP, and then excess goes to my taxable accounts. But lately with the realization that I'm already in the highest tax bracket on marginal income, and all my RRSP and TFSA contribution room is full, my retirement income is likely to be in the highest tax bracket as well. In which case my RRSP might be more of a tax bomb having to pay tax on it fully as income and at a likely higher tax rate than current rates. I'm thinking Capital Gains and dividend tax credits might be cheaper from a tax perspective than a RRSP.

[IliketoPuck]

Offshore accounts only being somewhat facetious.

It is possible that you could incorporate yourself, and then be able to distribute your income from your corporation to yourself in the form of dividends which might reduce your taxes a bit. As a consultant this is what I've done and been able to reduce my taxes quite a bit.

If the RRSP reduction on your taxable income isn't relevant to your tax bracket it might be worthwhile to ride your gains/losses from the market if you think the future tax rates are going to be that prohibitive on you.

[IliketoPuck]

I guess in a simpler look at things you have to figure out if the present value of your investments etc after taxes is worth more down the road than the compounded gains in your RRSP after tax when you retire, quite the crystal ball you would need in that case.

But if you are sitting comfortably at your current income level, you will likely have a nice retirement either way

[Byrns]

Originally Posted by CaptainCrunch

I agree and disagree, it’s in the same kind of line as an article that Peter Worthington who I really respect published earlier.

There are two reasons for the accelerated defense spending

1) obviously the deployment to Afghanistan, and it directly links to the second point that I'm going to make that successive governments since Korea were willing to allow the Military to rust out. The out of sight out of mind theory. Suddenly leading into Afghanistan the Canadian Forces were woefully under equipped and actually the men and woman that served over there were put into greater jeopardy then necessary. Now with the end of Afghanistan in sight, a lot of the equipment will have to be replaced. For example the LAV III end of life is accelerated due to the rough environment.

2) Beyond Afghanistan the neglect of the Military by multiple Liberal and one conservative government in particular put the Canadian Forces into crisis mode in terms of equipment. so a lot of the accelerated spending is actually catch up to bring the Canadian Forces up to a fairly close approximation of modern TOE. However the Canadian Forces is still in equipment trouble. The Helicopter replacement program thanks to the Liberals has taken far too long, and the helicopter that was chosen is a cheap imitation of the original that was picked. Our Halifax frigates have effectively reached their half life refurbishment. The Destroyers that we depended on to form independent task forces around are basically done and we need to replace that Command and Control ability. Our Fleet Replenishment ships are end of life to and it’s critical that those be replaced.

In terms of the F-18 replacements, the F-18's are 30 years old and at their end of life, they can't be upgraded anymore from at technology standpoint, and they're starting to develop problems such as cracks in their airframe. Further the maintenance hours/flight hours are starting to accelerate just like they did with the Sea Kings.

I've looked at some of the alternate jets such as the Eurojets, and their costs per plane are similar to the F-35 original price tag but there are no Canadian Economic Benefits.

We also have to realize that the air force will effectively be shrinking with the same mission, when we bought the F-18's we bought I think 130 of them, now with the f-35's we're buying I think 68, so if you're going to buy fewer jets, you have to have greater capability, a higher ability kill ratio, and a better survival rate.

The F-35 because of its multi-role capability, stealth capability, and technology would rank this jet as a better purchase then something like the Super Hornet.

We also have to remember that these are the jets that we need to fly for 20 years, so instead of buying behind the curve, you need to buy ahead of the curve.

Frankly Canada has the disadvantage of having to cover a large country with few assets, so in that term we need to make sure that we have the capability to do it.

We need to prevent future rust out crisis

As a further, if we're going to deploy abroad, we need to make sure that we have the logistics to be able to support our own missions, that means no more renting of foreign planes and ship transport.

We also have to make sure that our forces can follow the mandate of being able to support multiple natural disasters at one time.

In terms of Military spending, Canada is spending 1.3% of their gross domestic product Australia which is in some ways comparable though they focus more heavily on their navy spends 1.8%, but in terms of first world nations, Canada does trail in defense spending.

To be honest Harper has provided a minor miracle in terms of upgrading air lift, and ground forces equipment (New jeeps for example) while not spending what I would consider to be a massive percentage of dollars.

Anyways, I'm hoping this made some sense, it did in my head

I'm still not convinced that Canada requires a stealth aircraft based on our historical conflicts. We typically involve ourselves in NATO/UN coalitions with the support of the Americans. Canada isn't a unilateral aggressor, and if someone (Russia or USA) chooses to invade us we cannot stop them with 65 F35s.

Personally I think the money would be better spent purchasing a combination of new Super Hornets (our pilots and mechanics are already trained), drones, and helicopters.

[IliketoPuck]

Originally Posted by Byrns

I'm still not convinced that Canada requires a stealth aircraft based on our historical conflicts. We typically involve ourselves in NATO/UN coalitions with the support of the Americans. Canada isn't a unilateral aggressor, and if someone (Russia or USA) chooses to invade us we cannot stop them with 65 F35s.

Personally I think the money would be better spent purchasing a combination of new Super Hornets (our pilots and mechanics are already trained), drones, and helicopters.

If Russia or the States want to invade us we can't stop them anyways.

[CaptainCrunch]

Originally Posted by Byrns

I'm still not convinced that Canada requires a stealth aircraft based on our historical conflicts. We typically involve ourselves in NATO/UN coalitions with the support of the Americans. Canada isn't a unilateral aggressor, and if someone (Russia or USA) chooses to invade us we cannot stop them with 65 F35s.

Personally I think the money would be better spent purchasing a combination of new Super Hornets (our pilots and mechanics are already trained), drones, and helicopters.

As Canada is taking a more active role in international combat zones, it works to our advantage to be able to use our pilots and our planes when possible. With the technology acceleration of aircraft and anti aircraft technology caused by the aggressive sale of these products by the Russians and the Chinese in combination with the fact that your only buying combat aircraft once every 20 years, you do have to purchase ahead of the curve instead of behind or at the curve. Purchasing the Super hornet and utilizing it for 20 years would be purchasing behind the curve.

Also its not like you can just buy the Super Hornet and just toss your pilots and ground crews into that plane straight from the Hornet.

The super hornet is a significantly different aircraft then the CF-18 that we fly now. The airframe, powerplant, avionics, ECM, weapons deployment system, weapons load outs, and handling are different. For all purposes the transition would be the same whether you bought the super hornet or you bought the F-35

[CaptainCrunch]

Just the visual differences

[Frequitude]

Been out of town for a week. Took a while to catch up to you guys. I love the new debate format.

Harper releases Conservative platform, would eliminate deficit by 2014

Prime Minister Stephen Harper unveiled his party's election platform Friday morning, promising a Conservative government would eliminate the deficit a year earlier than planned by reducing the cost of government.

The five-point, $6.6-billion platform unveiled Friday outlined the Conservatives' vision for the next four years, focusing on job creation through tax reduction.

"Conservatives understand you cannot tax your way to prosperity, you cannot create jobs by raising taxes," Harper said.

It also includes the Conservative Party plan to cut per-vote subsidies to political parties over a three-year period.

The five main priorities of the campaign platform are jobs creation, supporting families, eliminating the deficit, getting tough on crime, and investing in the North.

I've been out of touch with the campaigns while away, but I really like this shift to the deficit and economy compared to all the stupid promises the parties were throwing out early on. The 5 points are things that matter to me.

And purely for entertainment purposes, I also love that he's brought back reductions in per-vote party subsidies! Can't wait to see what that grenade does.

[WilsonFourTwo]

Originally Posted by IliketoPuck

If Russia or the States want to invade us we can't stop them anyways.

We asked the British to leave us alone, and they did. It might just work a second time.

[Parallex]

Hrm... okey...

Two weeks ago as part of their budget the Harper government projected a $300-million deficit in 2014-2015 and a surplus of $4.2-billion in 2015-2016... and now today the Harper government projects a $3.7-billion surplus in 2014-2015 and an $8.2-billion surplus in 2015-2016. Apparently this is all going to magically happen while increasing program spending and also reducing gov't revenue streams (Kinda like paying off your credit card by buying more stuff and taking a paycut).

Hmmmmm, I wonder what changed in the last 14 days ... If elections improve the economic outlook this much we ought to have them every month! We'll be pain free debt free by September no doubt.

[calculoso]

Originally Posted by Parallex

Hrm... okey...

Two weeks ago as part of their budget the Harper government projected a $300-million deficit in 2014-2015 and a surplus of $4.2-billion in 2015-2016... and now today the Harper government projects a $3.7-billion surplus in 2014-2015 and an $8.2-billion surplus in 2015-2016. Apparently this is all going to magically happen while increasing program spending and also reducing gov't revenue streams (Kinda like paying off your credit card by buying more stuff and taking a paycut).

Hmmmmm, I wonder what changed in the last 14 days ... If elections improve the economic outlook this much we ought to have them every month! We'll be pain free debt free by September no doubt.

Haven't looked at the numbers, but how much of the NDP-influenced spending was removed?

[Cowboy89]

Originally Posted by calculoso

Haven't looked at the numbers, but how much of the NDP-influenced spending was removed?

Good point, for a summary of how much NDP style thinking would cost this country take a look at:

http://www.policyalternatives.ca/SoY...uCanBudget.htm

I think where they severly miss the mark is they underestimate the negative impact on jobs that higher taxation and environmental measures would bring and they overestimate the benefits to employment that some of their policies would being.

[Parallex]

Originally Posted by calculoso

Haven't looked at the numbers, but how much of the NDP-influenced spending was removed?

How much was projected out to 2014-2015 (that isn't also in the Tory Platform)? Not much by my recollection... the biggest ticket item that the press characterized as an NDP incentive was $400-million to extend home energy retrofit grants but that was only for the upcoming fiscal year and didn't extend into 2014-2015 or 2015-2016 IIRC. One way or the other he was being dishonest either in the budget, in the platform, or both.

It's pandering voodoo economics. That or Stephan Harper has turned into a time-travelling illusionist that can make $8,000,000,000.00 appear out of thin air.