Canada's Economic Action Plan - Budget 2009 (subtitle: The Emperor's New Economic Stimulus Package)
January 18, 2011
Feds Tighten Mortgage Financing Rules - Again!
Back in the olden days (early 2010), "Conservative" meant reducing the role
of government in our lives, and reducing government spending. Well, the "Economic Action
Plan", and the backdoor bailout of the Canadian banks via CHMC blew the latter
out the window. Clearly, keeping government hands off our personal investments,
such as mortgages, is also now prime turf for the now neo-liberal "Conservatives"
to run over roughshod. What the heck is going on? How is it that our
Prime Minister can crow about Canada being the most free enterprise nation in the G20
the same day his Finance Minister trots out this
[*dead link: http://www.montrealgazette.com/business/Federal+government+tightens+mortgage+rules+again/4117842/story.html
interventionist nonsense? What's 'free-market' about the feds making it harder
and harder for Canadians to secure mortgages, or home-equity backed financing?
A couple of ideas come to mind. It could be that the feds are anticipating a
fundamental collapse of Canadian real estate values - at least a 25% devaluing in
the short term - and they are trying to cushion Canadians against losing their homes.
However, this government has shown no interest in the well-being of most Canadians
in their 5 years in power so far. Besides, if that was the objective, it could be
covered by a program via CMHC aimed at protecting Canadian mortgage holders for far
less money than the CMHC bank bailout in 2010. So, most likely that's not it.
If Canadians really are borrowing too much, isn't it up to the lenders in a free
market to raise interest rates to reflect the increased risk? That's what they do
for second and third mortgages. But, for some reason, this allegedly pro-free-market
government isn't content with that free-market approach. So, in spite of their
pro-free-market blather for public consumption, this government doesn't trust
Canadians to manage their own investments, nor do they trust the major mortgage
lenders (i.e., the banks) to act in their own best interests either. Well, if you
are the central government, and you don't trust the people, and you don't trust
corporations, and you make arbitrary edicts to control the behaviour of both, well,
we have a name for that system of government - communism.
So, other than creating another housing pricing bubble from now until April 25th,
2011, what is this announcement intended to accomplish? Especially as this is the
second round of tightening in a matter of months. Why not let the free-market
operate, and raise interest rates on mortgages in the next few months if consumer
debt is a serious issue? Perhaps because if Canadian interest rates go up, then
foreign capital will be attracted to Canada, raising the value of the Canadian
dollar. If the loonie soars appreciably higher than the U.S. greenback, that is
presumably bad news for Canadian exporters, i.e., the Tar Sands - as the U.S. may
choose to buy cheaper oil elsewhere. The Harper regime has pretty much wiped out
all other Canadian exporters but the energy sector in their undying allegiance to
the Alberta oil sector. In this context, the continued tightening of the mortgage
rules makes sense. The bad news: continued protection of the Tar Sands export
market means we can expect more of the same in the future. Home ownership will be
reserved for ever smaller fractions of the Canadian population as a result. And
a carbon tax on the Canadian energy sector becomes even less likely.
December 15, 2010
Canadian Consumer Debt - Absurdity for Christmas
The irony was delicious, as it seems the perpetrators themselves were
unaware of the absurdity of their finger-pointing, delivered with straight
faces. Or perhaps it was a masterful piece of misdirection, the pots calling
the kettle black, as the coincidental timing seems slightly suspicious.
It seems that on Monday of this week, the biggest economic issue facing this
country is consumer debt. Curious, as I thought it was the sputtering of
the fictional recovery, or the fact that all that stimulus spending under
the Conservative government's "Economic Action Plan" (a term that rings
increasingly hollow) seems not to have created many jobs at all. Or perhaps
that an allegedly fiscally conservative government has spawned a deficit that
would have sickened the past master of government by deficit, P.E. Trudeau.
However, apparently it is none of these, it is the foolish consumer amassing
debt that is the primary culprit of our economic woes. Never mind that this
is precisely what the federal government has been doing, in the name of
jump-starting the recovery.
Canadian consumer debt stands at about $45,000 each (including mortgages,
car payments, etc.).
(
1.5 trillion / 33 million). On the other hand, government debt in Canada
comes to about $21,000 for each of us. (approx.
[Sorry, this website has disappeared "http://www.ndir.com/SI/education/debt.shtml"] $700 billion / 33 million).
Prime Minister Harper (and other government leaders), practice what you preach,
and perhaps you would be more credible.
Then, Bank of Canada Governor, Mark Carney,
[Dead link: http://www.bankofcanada.ca/en/speeches/2010/sp131210.html] warns us
that interest rates are going up in the future
, and we won't be able to afford
the interest payments on our consumer debt when that happens. However, it is Carney
and the Bank of Canada that sets the underlying bank rate which is the base for most consumer
debt that is financed at variable interest rates. Given the sputtering
economic 'recovery' in Canada, and the fears of a Canadian dollar above par with the
U.S. dollar, there seems little fear of the Canadian bank rate rising in the
next year or two. In fact, I can foresee it dropping a quarter-point within the
next year.
Not living comfortably off the public teat, I have a different perspective on
the ballooning of consumer / household debt in Canada. I'm sure some of us really
did take advantage of lower interest rates to finance bargains on bigger houses,
more expensive cars, major appliances, expensive vacations and the like. However,
for many more, as household income (lost jobs, lower wages, reduced hours,
investment income and value of financial assets) took a pounding on all fronts,
for many, consumer debt was how we bridged the financial storm foisted on us by
irresponsible multinational companies (offshoring jobs, fictional and misrepresented
financial derivitive instruments, etc.) and incompetent government regulators.
Those of us that had played by 'the rules' (e.g., investing in RRSPs and 'safe'
market investments) were amongst those hit the hardest in 2008 & 2009. In 2010,
we're a long way from out of the woods.
If the federal government really wants us to do something about our levels of
debt, here are a few ideas.
Let's reduce the tax burden on Canadians before giving more tax breaks to
multi-national corporations that don't reside here, and are only here to exploit
the resources that are the birthright of Canadians.
Let's get rid of the GST/HST, a regressive consumption tax, and replace it with
a carbon tax, which would have the benefit of encouraging reduced greenhouse gas
emissions and doing something positive about climate change.
If you are really worried about the effect of rising interest rates on consumers
(more personal bankruptcies - bad for business, you know), then do something
concrete about it. How about having the Bank of Canada create a new lending
regime for Canadians, instead of for just banks, foreign and domestic? Something
like inverse Canada Savings Bonds (CSB). Instead of selling long-term debt to Canadians at
embarassingly low rates of return for long periods of time (e.g., less than 1%
for ten years), let's create Canadian consumer financing bonds (CCFB).
The CCFB would allow Canadians to transfer their existing consumer debt
to a maximum of $50,000 per individual via a bond they sell to the Bank of
Canada. The rate on the CCFB could be based on the CSB - say + 2% to provide
the BoC with a reasonable rate of return. Based on 2010 CSBs, the CCFB
would carry a rate of 2.65% annually for ten years.
Create a real economic policy for Canada that includes inshoring of jobs,
particularly in manufacturing, so there will be more jobs for Canadians, which
will provide us the income to actually pay off our debts. It is ridiculous that
a resource rich country is simply exporting the commodities and then importing
finished goods, when we could be creating those finished goods within our
borders and employing Canadians as a direct benefit. We have to diversify
our economy beyond energy production, or we will suffer greatly when the rest
of the world curbs its appetite for our tar sands.
Oh, and delivering this news just before Canadians convince themselves to open
their wallets for Christmas spending must have given those in Canada's ailing
retail sector a case of the chills to match the current frigid weather covering
much of the country.
(If you are looking for ways to reduce your expenses and get a grip on your
household finances, please visit our frugality page.
No charge.)
December 4, 2009
Buy America - Too Little, Too Late; Time to Change Course
The rumour mill reports that
[deadlink: http://www.torontosun.com/news/canada/2009/12/04/12038156.html]
a deal on letting Canadian companies get some crumbs from the American stimulus program in return
for giving up the last vestiges of our economic sovereignty is close.
The deal requires that all Canadian provinces and municipalities must
allow U.S. firms equal standing to bid on all contracts from these levels of
government in return for letting Canadian companies bid on Buy America stimulus
contracts. There is no indication that U.S. states or municipalities are
bound to let Canadian companies bid on contracts that are not funded by the
U.S. federal economic stimulus plan, which has
[Dead link: http://www.bloomberg.com/apps/news?pid=20601087&sid=a1ay8OwJEGoQ&pos=3]
pretty much come to an end.
So, in small words, we are pretty much planning on giving up all our future
rights to support our own companies with our tax dollars, in return for the
privilege of letting our companies bid on projects that are all but finished.
Anyone else think that is a bad idea?
Let's try looking forward a little bit instead. In the foreseeable future,
most of the world will emerge from the current recession. The U.S. will be the
laggard, saddled with a humongous federal debt and operating deficit, addicted to
imported oil and natural gas, and as climate change progresses, facing scarcities of
fresh water, lumber and eventually food. The emerging consumer economies will be
China and India, who will be looking for oil and food wherever they can find it as
they face water crises of their own. If and when the U.S. economy does get back
into gear, it will be looking to buy what Canada has to sell. Why position ourselves
to give that away in the foreseeable future in return for an empty promise today?
In recent years, Canada has taken pretty much all the economic pounding the U.S. can deliver.
They have effectively blockaded our softwood lumber, labour, and infrastructure-focused
manufacturing sectors. About all we continue to sell to them at this point is
oil, natural gas and Blackberries. It's time we stopped acting like an immature
colony and like a grown-up country. It's time we established serious trading
relationships with the rest of the world. Historically, when we have a national
vision, we have been world leaders. At the end of WWII,
[*dead lijnk: http://www.saintjohn.nbcc.nb.ca/jervisbay/navy.htmCanada had one of the world's largest
merchant ocean fleets. We could create an industry building state-of-the-art cargo ships,
which could in turn be the base for us to become a global trading nation. We could
use our bountiful fossil energy resources to power innovation now for a day when
such energy sources are scarce and be leaders instead of laggards in the race
to converting to cleaner energy sources as they become economically attractive.
Investing in these kinds of future could create jobs in Canada today, and
lasting prosperity for tomorrow. Wouldn't that be better than the continuous
"committing" of funds (as opposed to actually spending and employing people)
that is being passed off as action on the economic front by our governments today?
September 29, 2009
EI Figures - What They Don't Tell Us
Yesterday (Sept. 28, 2009), government officials and the media played up the story that the
[dead link: http://www.google.com/hostednews/canadianpress/article/ALeqM5iW2b56hJY1qFXqwna_U_F58oMOBQ]
number of Canadians receiving employment insurance (EI) benefits had
[dead link: http://www.statcan.gc.ca/daily-quotidien/090928/dq090928a-eng.htm] declined
from June to July. The implication was that more Canadians have jobs and
happy times are here again, or just around the corner.
Not so fast with the happy button! You see, the figures
from Statistics Canada don't distinguish between people who have stopped
claiming benefits because they now have paying jobs and those who have exhausted
their benefits under the EI regime - a surprisingly short time in the 'have'
provinces like Ontario, Alberta and B.C. Given the duration of the recession to
date, folks who want to work are falling off the eligibility period end, and
likely moving to social assistance. Similarly glossed over was this pertinent bit
of information:
"Despite the decline in July, the number of regular beneficiaries was still 287,400,
or 57.4%, above the level in October 2008." That kind of dwarfs the several hundred
jobs the Economic Action Plan may have created so far.
Even the statement that the number of people making initial claims being down is
tarnished by the reality that one has to have had a job in the previous month to
qualify as such a statistic. With over 1.6 million of us now officially unemployed,
the pool of people to be made unemployed is shrinking significantly. The official
unemployed does NOT include those deemed self-employed (often a euphemism for those
not working but do not qualify for EI benefits) or those that have given up actively
looking for employment. In other words, no matter how bad the numbers look, the
reality is actually worse.
To understand what's really at play, we need to look at the figures for
the labour market unemployment rate and the labour participation rate. Those
[dead link: http://www40.statcan.gc.ca/l01/cst01/indi02a-eng.htm] figures from
Statistics Canada> put the lie to the implied good news. In fact, the unemployment
rate went UP, not down, by 0.1% from July to August, and up by 2.5% from the previous year.
The total number of people employed has fallen by 1.7% from August 2008 to August 2009.
It would be nice if a government that campaigned on being open, transparent and
accountable would just put the real numbers about their Economic Action Plan results and
the real data about unemployment out in the public domain in an unvarnished manner instead
of cherry-picking their data and presenting it without context via the media.
Perhaps we should pay government MPs, cabinet members and the staff of the PMO via
these programs and see if that would help improve the delivery on these payments of
OUR money to a "timely and effective" level. Seems simple enough to me - if we want
government stimulus money to work, it has to get into the economy.
The reason the economic stimulus package isn’t getting any traction is because there
isn’t any significant money flowing yet. Just rehashed and repackaged announcements
after re-announcements after announcements. This approach is not creating any jobs
(which was made clear by
[Sorry, Calgary Herald has removed this article: http://www.calgaryherald.com/business/fp/beneficiaries+jump/1631191/story.html]
yesterday’s unemployment statistics).
As near as I can tell, these are the real cornerstones of the Canadian government’s
economic stimulus plan.
x Ensure as few people as possible qualify for EI benefits, and maintaining
disparities by region in the face of a global downturn. This should increase the
number of personal bankruptcies, leading to more work for accountants, lawyers and bailiffs.
x Delay as much as possible with bureaucracies, inter-government squabbles, requirements
for tri-partite funding, and case-by-case review of proposals any actual disbursement of funds
under the Building Canada Fund or the Economic Stimulus Package, relying instead on “announcement
effect” tactics and hoping the economy recovers before too much of this promised money actually
gets spent. This creates additional work for several bureaucrats at the federal level and each
provincial government, as well as additional work for some civic employees generating more
funding proposals and responding to future queries about those proposals.
x Continue funding attack ads, creating work for those creating the ads and revenue
for Canadian media outlets.
x Not take a hard line against back-door protectionist strategies in play in the U.S.,
encouraging Canadian companies to move operations and jobs to the U.S. to qualify for
contracts under the U.S. economic stimulus package, which actually is moving money into
the economy, while ensuring U.S. companies have full access to the Canadian market.
x Support large U.S. companies with bailouts (Chrysler, GM) while denying similar
support to Canadian firms in the auto parts sector, forestry sector, etc.
x Force Canadian workers to take pay cuts to compensate for the decades of
incompetence in the Detroit 3’s bloated ‘management’ ranks.
Even Canadians can figure out that when they are losing their jobs and personal
bankruptcies are soaring, the alleged economic stimulus package is not working for Canadians.
Anyone else find it ironic that the CPC is currently running television ads castigating the
Leader of the Opposition for not having an economic plan (which is not his job in the
Parliamentary system), while clearly the government has no vision, strategy or plan for
dealing with the current economic downturn and rising numbers of unemployed Canadians
(which is their job)?
2009.04.19 - Canadian Infrastructure Stimulus Package Revisited
In late March (2009), Prime Minister Harper and his Conservative Cabinet Ministers said
the money was ready to flow on April 1st. So, anybody out there on Main Street been hired to
do any of this work yet? No? Well, perhaps that's because the money is not flowing. Not on
April 1st, and not as of April 17th. In reality, it's not going to flow until sometime in the
summer, as the application deadline under the new arrangement is May 1st.
According to [yet another Chronicle Herald dead link: http://thechronicleherald.ca/NovaScotia/1116113.html]
this article (April 11th), "No one can say how accessing the stimulus package will hurt future applications
for water, sewer, roads and other infrastructure projects because the terms for the fund haven’t been
clearly decided by Ottawa and the provinces."
Another complicating factor could be that the Web site that is supposed to have the information
(bcfcc-fccvc.infrastructure.gc.ca) keeps failing on time-out errors.
Let's see, we have 11 senior government bureaucracies
trying to agree on how to distribute money under a plan that has be philosophical anathema to
the current federal government in power that is supposed to be the main contributor. So, each provincial
government is producing it's own version of the program. In the meantime,
municipal governments across the country are squabbling internally over how to grab a piece
of the alleged action, and appear to be neglecting more realistic approaches to dealing with
immediate issues in the scramble to re-image their wish lists as 'shovel-ready' or fitting the
new one-page application form for funding. (I was going to show the Ontario version of the form,
but its on-line version is unavailable.)
Atlantic mayors are sounding much the same message, [yet another Chronicle Herald dead link:
http://thechronicleherald.ca/Metro/1117504.html]
calling on the Harper government to provide details regarding the application and approval process.
For Canada, it looks like "business" as usual. Remember, they're from the government, and they're
here to help you.
2009.04.02 - G20 Meeting Update
Well, that was a waste of London Police overtime, leaders' time and media airtime and ink.
Leaders promised not to revert to national economic protectionism. That's not going to last.
One analyst I watched said Canada will suffer the most of the G20 as a result of new protectionist
measures by other countries. Bzzzt, wrong, thanks for playing. Canada's largest trading partner
is the U.S., who have routinely beaten Canada up with protectionist measures in spite of NAFTA,
GATT and WTO decisions in Canada's favour on a variety of trade areas. Canada is now at the point
where all we have left to export (for foreign currencies) are things that those countries can't
actually get within their own borders. The U.S. buys our oil, natural gas and electricity
because they can't produce enough in house. China buys our wheat because they can't produce
enough within their borders. Japan buys our wood and minerals because they have to protect their
existing forest and can't produce that much iron and other minerals for manufacturing at home.
The U.S. might try to pull the remains of their auto sector back inside their borders, but Canada
buys almost as many cars and trucks as we produce, so we can manage that as a zero-sum game if we
choose to do so. The reality is, if Canada is worried about trade, the easiest thing for us to do
is announce a policy of response-only protectionism. If you close your borders to our products,
we'll return the favour (any Korean automakers listening?). We import primarily manufactured goods,
so our response could be to incent domestic manufacturers and create jobs as a response to measures
by other nations.
However, if you are a Canadian manufacturer, or are thinking about becoming one, make sure you
are bulletproof from the get-go, because you've a lot working against you. 1) Don't count on a
currency arbitrage advantage - by summer 2011, I expect the Canadian dollar will be worth more than
the American dollar. 2) Our federal government does not believe in supporting Canadian businesses;
we only bail out wholly-owned American companies. 3) The Canadian banks. While being praised today
for their inherent conservatism, this is the same characteristic that has historically sent
Canadian businesses to the U.S. to seek venture capital. Don't expect that to change, and credit in
the U.S. is still tight. 4) Canadian consumers won't pay a nickel to support a local business
instead of Wal-Mart selling lead-painted, melamine-filled Chinese products.
On climate change, we got a non-statement.
More money for the IMF. Before you decide that's a significant accomplishment, do a careful
review of what the IMF has accomplished for its nominal clients and on major projects it has funded.
The media giggle of the event was that PM Harper missed the photo-op. However, that's not the
worst of it. At the rescheduled photo-shoot, other leaders were missing. "So what?" you say. Well,
just consider this - this group just agreed to spend trillions more dollars of our money, and to
impose more regulation on financial institutions - but between all those national leaders, and all
their aides that were undoubtedly present, and the photographer's staff, and the conference staff,
apparently none of them are capable of counting to 20. I feel reassured now, don't you?
After the 2009 Canadian federal budget delivered on January 27, it is clear there is only
one actual conservative party on the federal scene. Unfortunately, the Green Party doesn’t
have any seats in the House of Commons.
[Sorry, article removed by Canadian Press:
http://www.google.com/hostednews/canadianpress/article/ALeqM5izpH89D8XPqmn2IYwIf5pQgM2wMQ]
I am not alone in my disappointment that the CPC
has abandoned what was left of their ideology and principles as they continue down the road
to becoming Liberals.
This was clearly a budget where politics trumped policy, and fear of an election triumphed
over the economy and the interests of Canadians.
It is a budget that shot itself in the foot. Oddly, for a budget marketed with the
catch-phrase “Temporary, Timely and Targeted Stimulus”, its cornerstone is a permanent tax cut
aimed at the middle class – a move generally regarded as having questionable value in having an effect
in the short term, or getting the best bang for the buck in terms of fiscal stimulus for the economy.
That’s not temporary or timely, and the targeting is questionable. It looks like the tax cut is a case
of anachronistic ideology surviving as a sop to voters in case the Conservative Party of Canada
actually had to ride this beast into an election.
Some of this stimulus will be off-set by almost $400 million in cuts to government expenditures.
Another $250 million is for catching up on previously deferred maintenance to federal government
lab facilities, and another $323 million is for repair and restoration of federal government buildings.
There are even some, more cynical than me, that suspect the whole thing is a piece of photo-op puffery.
[dead link: http://www.thesudburystar.com/ArticleDisplay.aspx?e=1410477] An editorial in the Sudbury Star
went so far as to say "The details, of course, will determine whether this budget is chiefly a political
document in which many of the dollars aren't handed out -- so the federal budget can be balanced sooner
-- or whether it is the genuine stimulus that it purports to be."
While there is potential for a few good measures hidden in this cure for insomnia, it’s hard to tell,
as there is a definite lack of detail or substance in this 343-page bundle of fluff and disinformation.
For example, the budget states that EI benefits are being extended from 45 to 50 weeks, neglecting to
mention that in most of the country, those that lose jobs don’t qualify for 45 weeks of benefits now,
simply because of where they live. Then again, at 343 pages, the document itself may count as stimulus
for the paper and printing industry.
The requirement for tri-party funding (municipal, provincial, federal) for major infrastructure
projects is disquieting for two reasons. First, it seems to ignore that there is only one taxpayer
– us – even though we get gouged into three different pots for the convenience of our elected officials.
Second, this is coming from the [dead link: http://www.thesudburystar.com/ArticleDisplay.aspx?e=1410440]
much-criticized federal Building Canada Fund noted for its inability
to move money from government coffers to working projects in a timely manner.
The Building Canada Fund model pretty much guarantees that stimulus funding will not reach a significant
number of workers for many months, and likely considerably more than a year. [2009.02.14 - In fact,
according the the federal government itself, [dead link: http://www.edmontonjournal.com/news/news/1285446/story.html]
only 4% of the funding announced under the program in the past 2 years has
actually left federal coffers. That's the same channel that will be used to move this
supposed stimulus package into the Canadian economy. That’s not timely, though it may appeal
to this government as a form of back-door miserliness; promise the funds for PR purposes, but ensure the
bulk doesn’t actually get spent. [dead link: http://www.trentonian.ca/ArticleDisplay.aspx?e=1417458] Confusion
about the funding model is increasing since the budget was presented, not diminishing.
The budget identifies 13 lucky top priority projects for the infrastructure stimulus funding.
Of those, 6 are for highways, 2 are for buildings, and there are 1 each for renewable energy,
a train station, a port, a transit project, and waste-water treatment processing.
Somehow, that doesn’t give a sense of vision or innovation.
The alleged ‘green’ infrastructure item is particularly short on details. While there is apparently
a pile of money for this, it is not clear what the requirements are to qualify. Unlike the Building
Canada regular infrastructure funding, no projects are identified as ready for funding. However,
like the Building Canada Fund, costs for the green infrastructure projects do require tripartite funding.
In the best case scenario, money won't flow until after the budget is passed (likely late March),
applications are received and reviewed, two sources of matching funding are proved to be in place per
project, and only then will the federal bureaucracy consider approving each project, on a case by case
basis. After that, the municipality with the project will likely have to go to a tender process to get
competitve quotes on the work, because of the size of the projects. After that, the tenders have to be
evaluated for compliance, and possibly rated against specific objectives (e.g., degree of work performed
locally, quality of references, proposed project schedule, quality of proposed resources).
In my estimation, it will be at least late summer before even the first of this money starts flowing.
It will be well into the autumn before a significant portion of the promised funds can be in place to actually move to the
companies that will actually pave roads or pour concrete, and by then we'll be approaching the end of
construction season. Given that the contractors have to complete an agreed amount of work before they
can invoice, and many municpalities are not noted for speedy payment of large invoices, it is likely
that this money will not hit the streets (so to speak) until at
least the spring of 2010, and probably later. [2009.02.06 -[dead site://www.businessedge.ca/article.cfm/newsID/19382.cfm]
Support for this concern from Canadian big business]
By that time, many economists believe an economic recovery may already be well under way (starting
in the 2nd half of 2009), and government money flooding into the market at that point will produce labour
shortages for many of the skilled construction labour segments. In other words, too late and when we won't
need it. If the federal government could get some of the already approved and committed funds already
sitting in the Building Canada Fund moving, that might yield benefits when they are needed (remember 'timely'?)
and give this government some degree of credibility on this file.
The one theme implicit in this budget that is true to conservative ideals is the concept of self-reliance.
If Canadians are relying on this budget to mitigate the impact of the recession on them, they will be sorely
disappointed. They will be much better served to ignore the whole thing, rein in their expenses,
and take advantage of any additional monies that come their way as savings and investments.
(See our frugality tips on our 'Surviving the New Normal: Recession' page.) That’s
because they will certainly be paying higher taxes in years to come to pay for this spending spree.
I know that runs counter to the ‘spend our way out of recession’ philosophy being espoused in Obamaland,
but as I read between the lines, that’s the message the Harper/Flaherty budget has delivered.
Maybe Ignatieff and the federal Liberals will vote for this. However, I think that once the Canadian and
world business communties really grasp what is - and is not - in this document, they will vote otherwise
with their investment and jobs.
With luck, NAFTA will allow Canadians to benefit from the Obama stimulus package in the U.S.
As usual, what the U.S. does has a bigger impact on Canadians than what our own federal government
foists upon us. However, the softwood lumber issue is probably more instructive as to how the current
Buy America provisions will play out to Canada's detriment.
[2009.02.14 Addendum: On Friday the 13th, 2009, Infrastructure Minister John Baird announced that the
government has decided to remove the requirement for federal environmental assessments as a criteria for
approval of federally-funded infrastructure funding. Nice piece of misdirection; as if environmental
assessments were the delaying factor in repairing rotting municipal infrastructure, and not the inertia of
the Building Canada Fund. Remember last month, when the focus of the stimulus money was to be the backlog
of 'shovel-ready' projects, that presumably already had any required environmental assessments completed?
How does dispensing with environnmental assessments for future projects help move the existing backlog forward?
Stand by for additional CPC boogeymen to be offered up as scapegoats as the
recession deepens while more announced money disappears into the BCF black hole.]
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