Thursday, March 22, 2018

Ontario’s debt crisis

In all the recent dark and depressing news about governments, and the people who run them, comes a pinprick of light. Small and distant like a far away star in the night sky, but enough to give hope that common sense has not been completely extinguished. 

The twinkle of light comes from Quebec where the provincial government has grasped the self-evident truth that borrowed money is an anchor that can sink the ship if not managed cautiously.

Quebec will announce next week that it will pay $10 billion over the next five years against its provincial debt. It will be the most substantial debt repayment the province has made in more than 50 years and will save taxpayers $1 billion in interest payments over five years.

Imagine that, a government paying down debt instead of leaving it for next generations to pay.

Quebec has been squirrelling away money into a Generations Fund to get larger investment returns than it was paying in debt interest. The money going into the fund was obtained from a series of budget surpluses.

In case anyone in Ontario has forgotten, budget surpluses are created when you manage financial affairs wisely and spend less than you had budgeted.

Almost all Canadian governments, federal, provincial and local, have ratcheted up their debt loads in the last 10 years. Quebec is one of the most indebted, but at least it is confronting the problem.

The extent of Canada’s overall debt problem was outlined by a 2016 Fraser Institute report. It found that combined federal-provincial debt of $834 billion in 2007/2008 increased to a projected $1.3 trillion in 2015/2016. That’s 64.8 per cent of the economy or $35,827 per Canadian.

Interest payments on collective government debt in 2014/2015 totalled an astounding $60.8 billion or 8.1 per cent of total government revenue that year.

How big is that? It is almost as much as spending on primary and secondary education ($62.2 billion in 2012/2013) and more than Canada and Quebec Pension Plan benefit payouts ($50.9 billion).

While Quebec attempts to deal with its debt, Ontario continues to hurtle toward a debt catastrophe. Many of us won’t be around to feel the pain but millennials will.

Ontario’s debt has almost tripled in the last 15 years. It was $110 billion when the Progressive Conservative government presented its last budget in 2003. It is projected to be $312 billion this year and $336 billion in 2019-2020.

Ontario’s debt problem lies not just in the number of dollars it owes. Its changing population is a major negative factor.

Within the next 12 years, the province’s working age population is expected to fall to 60 per cent of the general population. That number was 68 per cent in 2016.

Also the number of Ontario seniors is expected to grow to five million by 2050, twice the current number.

Fewer working people means smaller government revenues, and more older people means increased spending demand for health care and other senior services.

On top of that Ontario’s economic growth is projected to average only two per cent over the next 30 years, lower than the 2.5 per cent seen over the past 20 years.

Ontario’s political leaders have three choices: increase revenues (raise taxes and service fees), cut spending (provide less government service) or continue to let the debt grow even larger.

Most of us face the same three options in our personal lives. However, letting debt grow is not really an option for us because creditors will step in and shut us down. Goodbye big screen TV, goodbye car, goodbye the roof over your head.    

Ontario’s debt crisis will not be solved under our current political system in which the goal is to put a party in power and keep it there no matter what the costs or consequences.

Difficult decisions that will affect all citizens are required to deal with the debt crisis. Decisions made in current hyper-partisan atmosphere never can be successful.

We need a sincere, fully bipartisan approach to getting out of our debt mess. That means electing people willing to work outside partisan political thinking to find the best solutions.

With the June Ontario election campaign underway we need to be talking about this.


Thursday, March 15, 2018

Nobody’s kid sister

The United States just isn’t going to put up with it any more. Tired of forever being screwed over by beady-eyed Canadians and sleazy Mexican drug lords.

Bad, very bad, deals with Canadians and Mexicans have seen factories close and companies relocate out of the U.S. Hundreds of thousands of American jobs lost.

Canadians in particular are slick and brutal, taking advantage of a country 10 times its size. Take, take, take and give nothing in return.

It has to stop, and it will stop with a better North American Free Trade Agreement (NAFTA) which has been a disaster for the poor Americans.

All that is the American bully whine we’ve been hearing since NAFTA renegotiations began last summer.

What really needs to stop is the American grandstanding, manipulating and bullying calculated at getting a NAFTA deal favourable only to them. What also needs to stop is the attitude that Canadians are northern nobodies living in snow holes, fortunate to exist in the shadow of a really smart and generous southern neighbour.

The latest U.S. manipulation of the NAFTA talks are the tariffs on steel (25 per cent) and aluminum (10 per cent). Canada will not be subject to those crushing tariffs - if it signs a NAFTA agreement that the U.S. demands.

That’s not negotiation; that’s gangster-style coercion.

This NAFTA nonsense has been going on too long. It is obvious that the U.S. is not interested in a balanced deal that is fair and that works for all three North American partners. They want a deal totally in their favour.

It’s time to end this waste time. Usher the American negotiators to the door and boot them into the street.

There have been predictions of disaster for Canada if the 25-year-old NAFTA is not renewed. The sky will fall.

Perhaps it will, perhaps it will not.

The Conference Board of Canada predicts a 0.5 per cent economic decline if NAFTA is ended and a loss of about 85,000 jobs. That is a modest impact that would be followed by some recovery.

Whatever, Canadians would survive. We always have and incidentally, while surviving we have contributed enormously to U.S. success in many fields.

We have had a large presence in their news and entertainment industry: Sudbury boy Alex Trebek (Jeopardy), Donald Sutherland, Peter Jennings (ABC News), David Frum, Justin Bieber. This list stretches beyond memory capabilities.

In sport, we gave the Americans hockey, lacrosse, and yes, baseball and basketball. And, not to forget the board game Trivial Pursuit.

In technology and invention it was us who came up with the telephone, walkie-talkies, snowmobiles, alkaline batteries, Canadarm and the Robertson screwdriver. A female Canadian invented the Wonderbra.

Millions of American children have been nourished on Pablum and peanut butter, both invented by Canadians. In the field of medicine, we created insulin, child resistance medicine bottles, the heart pacemaker, open heart surgery, T-cell receptors and other major steps in cancer immunology.

A country with those successes, though never bragged about, should be able to get along nicely without a one-sided NAFTA deal. There are many other countries with which to do fair trade deals. Also, other places to sell our oil, which has been flowing to the U.S. at bargain basement prices.

Our federal government should not cave in to the U.S. coercion on NAFTA.

Chrystia Freeland, our foreign affairs minister, strikes me as someone who is not easily pushed around. I don’t know much about her except what I see, hear and read in the news. I do know she is a former financial journalist once based in Moscow.

She also is the author of the best seller Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.

She is banned from Russia because she wrote pieces sharply critical of Russian president Vladimir Putin. (That alone puts her several heads taller than Humpty Trumpty).

Hopefully Freeland and her team will deliver the message that Canadians are not simpleton drawers of water and hewers of wood. We’ve got good products and good brains for doing business in the much bigger world outside the U.S.

We’re all grown up now, and won’t tolerate being treated like someone’s little sister.


Escaping Winter's Madness

There are few refuges during a brutal winter; so few places to hide and stay calm and warm.

It’s not the weather that has made this winter brutal. It has had its violent ups and downs but it is winter weather we have been getting used to over the past few years.

No, it’s not weather that has made this winter so distressing and cruel. It is the swelling madness in the world around us. It is depressing.

Hunkered down in his Maine hideaway horror author Stephen King Tweeted the other day:

“Somewhere in America there must be a bar for depressed people featuring Unhappy Hour.”

The craziness is everywhere.

In Syria they can’t bury the bodies of the women and children fast enough as government and Russian warplanes relentlessly rain down bombs and rockets.

In Ontario, Patrick Brown and the Conservatives continue to rip the party apart like a pack of wild dogs.

In the U.S. they want to arm teachers to stop the school massacres occurring roughly once a week. If that doesn’t work, perhaps they’ll arm the students, offering them bonus grades and National Rifle Association discounts on textbooks.

In Canada we have been treated to the Bollywood performances of the prime minister and his family on a taxpayer funded vacation in India. Wow, that white sherwani with golden threads, the kurta shirts, the embroidered saris and the garlands of flowers strung around their necks!

And, those awesome bhangra dance moves! Our prime minister certainly can preen and dance.

Wonder who is getting the bill for all those costumes?

And, wasn’t it just a few months ago that there was raging controversy in this country over cultural appropriation? Several media editors lost their jobs because of it.

When winter madness becomes too much, there is only one escape: The  movie theatre.

I am a reluctant movie goer because today’s films often are too much bang-bang, boom-boom special effects efforts. Much gunfire and explosions but little in the way of real story.

February actually was a good month for the movies. There were some meaningful movies with stories that carried important messages.

The first I saw was Wonder about a boy with a facial deformity who is ostracized and bullied at school because of his different looks. In the end he wins an award at graduation and receives a standing ovation.

The message: Treat people with understanding and respect despite their looks, or their race, creed or colour.

Then there was Black Panther the mega-hit with lots of sci-fi stuff and special effects but some important messages. The film is elevating, raising up black people, women and African countries that the U.S. president has called s-holes.

Black Panther is a movie created by black people and starring black people but it is a movie that applies to all people. Our colour doesn’t matter. We are all people working to solve problems to create a better world.

I also saw The Butler, an older movie about a White House butler during the 1960s civil rights wars in the U.S. It is a story that shows just how far we have progressed in trying the eliminate racial prejudice.

I’m glad I went to the movies. Because after seeing these three I was no longer looking for a bar that offered Unhappy Hour.

The movies left me with the feeling that despite the world’s current descent into madness, there is hope. They showed how real people have overcome bigotry, bullying, plain stupidity and over time have continued to make the world a better place.

Progress in making the world a better place has slowed for now because too many political leaders are narcissistic, not-too-bright duds. That will change, however, when more of us realise we must stop accepting mediocrity and start electing real leaders.

That will happen. Real people will begin electing wise leaders who will help build understanding and tolerance, and work relentlessly for the common good, not just for themselves, their party or a political pressure group.

As the superhero of Black Panther tells the United Nations in the film’s final scene:

“In times of crises, the wise build bridges, while the foolish build walls.”


Thursday, March 8, 2018

And, the winner is . . .

Interesting things are missed when there is so much news happening around the world.

The Valentine’s Day school massacre in Florida, the prime minister’s Indian debacle, this winter’s weird weather (snow in Rome and San Diego!) have consumed newspage and newscast space recently.

Little noticed was the 20TH annual Teddy Awards, given out each February to our governments’ most wasteful spenders.

The Teddies are pig statues awarded by the Canadian Taxpayers Federation (CTF). They are named for a guy who was fired as head of the Canada Labour Relations Board for dubious expense claims, including a $700 lunch for two. (Hey, the lunch was in Paris, which can be pricey!)

This year the federal category Teddy was awarded to the Department of Canadian Heritage, which built a Canada 150 outdoor skating rink on Parliament Hill at a cost of $8.2 million. That works out to $100,000 a day for the time the rink was open.

The rink was  widely criticized because of its strict rules, including no food or drink on the ice, no cell phones, no hockey sticks or pucks, no figure skating, and no children in arms. An exception to the hockey prohibition was Hockey on the Hill, a peewee tournament for kids across Canada but that was cancelled and moved to an indoor arena because the weather was considered too cold.

Skaters were limited to 45 minutes skating time and required to book times online.

Just a hard slapshot away from the  multi-million dollar rink is the Rideau Canal Skateway, Canada’s most renowned outdoor rink.

There were impressive runners up in the federal Teddy category: Health Canada for spending $100,000 a year for the minister’s Twitter account, and Finance Canada for blowing $192,000 to advertise the federal budget, which received hours of news media coverage.

Canada Revenue won the 2017 award for moving an employee from Richmond Hill to Belleville at a cost of $538,000. Of that amount $340,000 was for “price protection” on the employee’s $3.4 million house and $168,000 was for real estate fees.

Ontario’s Wynne government won this year’s provincial category Teddy for its vote-getting strategy to reduce our electricity bills. The province borrowed money to reduce electricity bills for a few years, but the provincial auditor-general has said the sleight of hand will cost taxpayers an additional $39 billion in the end.

Last year the Ontario government was awarded a Lifetime Achievement Teddy for its “long track record of mismanaging the province’s energy policy.” The provincial auditor general has reported that between 2006 and 2014 Ontario consumers have paid $37 billion above market price for energy because of the government’s mismanagement of energy policy.

This year’s provincial category runner up was the head of Engage Nova Scotia who earns $163,000 year despite, according to the CTF, not being able to explain what Engage Nova Scotia does. It is financially supported by the province’s Liberal government and the boss is a former Nova Scotia Liberal leader.

The annual Teddy awards are impressive because there is never a dearth of potential nominees in all levels of government across Canada.

 “Sadly, we are never short on nominees, as governments seem to be very good at finding new ways to waste money,” said Aaron Wudrick, a CTF director.

Canada  of course is not the only country where taxpayers money is washed down the sewers of bureaucratic stupidity. In Washington, D.C., Housing Secretary Ben Carson ordered a $31,000 custom hardwood dining set for his office. The order was placed about the same time Carson was circulating plans to slash his department’s programs for the homeless, elderly and the poor.

And, the U.S. National Parks Service paid $65,473 for a study to figure out what bugs do at night when a light is turned on.

Anyone in cottage country could have supplied the answer: when sitting outside on your deck never turn on a light or you’ll be bombarded by a million insects.

That 65 grand could have been better used to get the answers to more important questions like “How many bureaucrats does it take to screw in a light bulb?

Oh well, it’s only taxpayer money.