Today's economy

Is the Canadian economy in trouble?

By Kevin Press, BrighterLife.ca

Comments (209)

Image of someone holding Canadian currency.“Conditions in the international financial system are fragile.” That is how the Bank of Canada chose to begin its latest Financial System Review, released on June 14. The report goes on to note that our domestic financial system “continues to be robust.” But that good news comes despite a host of risks to the system and to the Canadian economy, including the eurozone sovereign debt crisis, a slowdown in other advanced economies and potential trouble in the Canadian residential real estate market. Consistent with December’s report, the Bank says the risks facing the Canadian financial system are “high.”

I was in to see Sadiq Adatia, chief investment officer of Sun Life Global Investments, last week so I asked him what he thinks about the outlook for Canada. He wasn’t optimistic. After talking about his confidence in the U.S. recovery, he told me: “Canada is turning a corner too, but in the opposite direction.” We may not see gross domestic product growth above 2% this year.

Adatia sees five problems:

  • Household debt. “We’ve had a great run in our markets, fuelled by consumer spending,” Adatia told me. “Consumers have added a ton of debt to their balance sheets.” Indeed, we learned on June 15 that Canada’s household credit market debt (consumer credit, mortgage and loan debt), measured as a percentage of personal disposable income reached 152% in the first quarter of this year. That’s a new record. Actual borrowing has slowed, but income has too. According to the Bank of Montreal (BMO), the percentage of Canadian households with debt-service ratios above 40% of income – a level considered to be vulnerable by lenders – has risen over 6%. That’s “slightly above the past decade norm,” reports BMO.
  • Housing prices. Adatia thinks a double-digit drop in prices is possible. “We think there’s going to be a pullback across the board,” he said. “Some regions may be hit harder than others, but I think a 5%-to-15% drop is definitely in the cards.” That may be a conservative call. Across Canada, home prices are up 12% relative to where they were before the most recent recession.
  • Global factors. No surprise here: There’s trouble in Europe, a slowdown in China and the U.S. recovery (while it gives Adatia reason for optimism) remains vulnerable to global economic factors. These are all potential threats to Canada. By the way, Adatia does not believe there will be a hard landing in China.
  • Rising interest rates (eventually). Adatia doesn’t expect the Bank of Canada to move on rates this year, but they may start to come up in 2013: “Until we see a better resolution in the eurozone and a stronger U.S. economy, the Bank of Canada is not going to jump out too far ahead, particularly given that the U.S. Federal Reserve has already said it’s not going to raise rates until 2014.” When it happens, higher rates will dampen spending by a lot of highly indebted households.
  • Unemployment. “We’re probably going to see unemployment move up,” said Adatia. “I’m not convinced the employment picture is really as strong as it looks right now.” The four points listed above could each contribute to job losses.

Are we headed down a path similar to the one Americans took toward the end of the last decade? “These are the same things that were going on in the U.S. economy before it faltered,” Adatia told me. “We’re probably where the U.S. was a few years back.” Meanwhile, the U.S. housing market is showing signs of stabilization and according to the Federal Reserve Bank of New York, Americans have slashed their debt by about $100 billion since the fourth quarter of 2011.


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[…] source: Is the Canadian Economy in Trouble? by Kevin Press, Brighter […]

margsview on

I have read several commentaries and they seem to mix theories with ideologies. The Scandinavian governments have historically put their people first, in social programs concerning housing, education and healthcare. But important to that mix was an understanding that the same focused eye should be on prudent regulation of their banking and credit sectors and the influence of large (usually foreign) corporations. Essential to their economic future has been real national growth through governmental/business co-operating in education and skills training that matches actual needs technologically. The Western governments have allowed financial speculation to warp their economies by blindly ignoring the effects of deregulation in many areas, especially the financial sector (today we have banks with unseen debt squeezing taxpayers globally = austerity). Add to this further weakened policies that no longer can now afford to even maintain public services such as education, healthcare or the ‘wild card’, infrastructure needs and you have a volatile recipe. If Europe and the US continue to play the blame game of targeting their public (the weakest component) instead of dealing with their financial and economic unregulated mess then yes, Canada will feel the dramatic effects. Our banks are not totally innocent nor is our government, following expensive foreign military policies when a speculative financial wall looms is skewed but so is secretive entering into shareholder/profit specific trade agreements where the control is wholly directed by the other side. So, the bottom line for me is when will government become their rhetoric and put their real and only asset first —–their taxpaying citizens, the public.

    Doc Rock on

    Well said!.. An absolutely accurate analysis of the situation.. I can’t add to it

    Greg on

    Government does’t want to incur more debt so they pass it on to the average joe. Low interest rates are irresistible to the average person that doesn’t know better. Taxes go up and in order for you to keep your exciting life style without an increase in wages leads to borrowing the difference at low interest rates hence passing the increase in taxes to the person that doesn’t know any better. It’s very subtle at first then snowballs as time goes on. Zero financing for a new car? Got have have one of those. Low or no downpayment for a new home? Got to have one of those. Cheap credit card rates? Got to have half dozen of those, so on and so on — you get the picture. Before you know it the debt trap is set and the noose around your neck is set and snap goes the debt trap, you have been had. All this is a cycle that just keeps repeating itself over and over again and again. For every new generation that comes along a certain percentage of the population falls for it every time; that is just the way it is. Stay out of debt as much as possible and beat them at their own game.

Doc Rock on

Our “Economy” isn’t a real economy. It’s based on socialism. We have marketing boards, commissions, regulators, all designed to keep prices at artificial levels for the benefit of a mysterious few…
That’s why milk and eggs are so expensive here, and yet even with a high level of poverty, rather than given to soup kitchens, fresh milk gets dumped every day..
Just today, the main supplier of natural gas here, wanted to even the prices over the whole area it serves, and was willing to take a hit in the profits, essentially meaning prices weren’t going to increase in the low-cost areas, but in areas that paid 30% more, such as more inaccessible locations like Vancouver Island, the prices would have dropped by that much (30%). The *company* wanted to do this..However, the government “regulators” just said NEIN! They said that *despite no rate increase in in other areas, these areas would now be effectively subsidizing the previously high rate areas* !
Fricken maroons…. sheesh…..

    Kevin on

    I completely disagree. Letting the market dictate everything is just a nice way of saying let the ultra rich do what they want. Let them take away protections to keep our people better off. Let them take away protections of our natural resources. Let our short sighted leaders sell off our resources to the highest bidder for cash that we will never see, then watch jobs disappear as foreign control moves us out of jobs in our own country and destroys our environment in the process. We need to protect ourselves from the big money before it’s too late. Stop listening to these so called think tanks like the Fraser committee. They are paid to lie to you. Protect your country before we don’t have one worth saving.

      Doc Rock on

      But that’s the whole problem! The boards are NOT protecting ANYBODY.. If they would do what they were designed to do then fine, but just like in ultra socialist countries, they end up hurting the very ones they are designed to protect.. How is making people throw away fresh milk helping? How is making everybody in outlying areas pay 30% more for natural gas, helping? And how is 3$ a dozen eggs, or 6$ a gallon mik helping anyone?

      Kevin on

      How can you say that? privatization has been destroying nations for years. Ask someone from China how they feel about the air qualiy over there. Ask someone from one of the right to work states how those jobs are working out for them. Ask many people in the states how easy it is to make a claim to get an operation covered by one of these private companies. Once you hand something public to the profiteers, the public becomes a slave to greedy shareholders and cost slashing CEO’s who know nothing of the public good. They do know how to build palaces for themselves though.

      Kinoli on

      Kevin, you need to google “Austrian Economics”. You’ve been brainwashed by too many of the mainstream Kaynsian Economists into actually thinking collectivism/socialism is the answer to our problems. Individual liberty is the answer my friend. Privatization is the only proven method of success. Why do you think the US grew out of nothing into the great power that it is? Because of very little regulations, private entrepreneurs following their dreams. It’s on its way out now because of all the regulations and government control and taxation that has been put upon private citizens and companies over the past 50 or so years.

      Just curious who convinced you that privatization in China has caused all of their pollution? It doesn’t take a rocket scientist to know that an industrial nation of its size with 1.3 billion citizens will obviously have a lot of pollution. But lets blame it on privatization because it fits your agenda better.

      Doc Rock on

      I never said I agree with, or even about, about privatization… It does not work anymore, either, because of the soulless profit-at-all-costs approach that corporations have adopted. My point was rather, that these boards are not doing what they were originally intended to do. They have been around for so long now that all the loopholes have long been discovered, and implemented to the benefit of he few…

      Kevin on

      I guess what I’m saying is even though state run organizations are imperfect, at least they have the right idea in mind. Stronger checks and balances are needed. However the answer for poorly run farm is not to to take the farmer’s keys and toss them to the wolves.

B.Rich on

Its funny what the press tell you, and what is really happening.
My business has doubled every year for 5 yrs, we are now expanding to the states.
Most people I know are overpaying their mortgages, to knock down debt.
Smart people pay off their credit cards and don’t let themselves get into trouble
Only problem I see is Govt overspending on unnecessary things, like themselves
other than that…
Canada is doing just fine

b on

Where in Canada do you find a $20 WATERMELON !!!
Who is crazy enough to pay for even one. They should all rot right in the store.

    Doc Rock on

    Every full watermelon is at LEAST $20, except at the very height of summer.. They’re pretty heavy, you know…

Jack on

Personal and government debt, yes, this is the problem. But no one here seems to understand the CORE of the problem. Take a bank, any bank, in Canada. What limits how much money they can LEND? Is it how much money they actually HAVE in the bank from depositors? No, if that was the limiting factor, NONE of our current fiscal problems, domestic or government would exist.

Banks can lend any amount they choose without limit. How can that be? If you had money and you had a request from a relative to lend some of it, you would be limited by how much money you had. Seems logical, no? Could you loan money to that relative in excess of how much money you had? No?

Yes, you would be limited in how much money you could lend by how much money you actually had.

So, how is it that banks CAN, LEND AND LEND AND LEND?

You must watch this video. http://www.youtube.com/watch?v=J6TDBGYrTNA&feature=related It will blow you away. And look, BOTH major parties were involved in selling us down the river to the banksters. AND, those leading the minor parties just HAVE to know the truth of the situation and they do nothing. WHY?????????????

We are a rich nation in ALL aspects, how could we possibly be in s much debt. My Visa debt limit keeps getting raised, year after year,, up to 25 thousand dollars. That is crazy, I am not a businessman, why would I need that much lending capacity,,, ON VISA at that? And hey, where does that money come from if I maxed out my card? The bank, (CIBC) just creates it out of thin air.

The crazy thing IS, Canada has a Central Bank that is wholly owned by Canadians. Why is money created out of thin air by the issuing of credit? Why doesn’t Canada just create the money itself without owing it to ANYONE?

That’s how it used to work and that’s how Canada financed Universal Health Care.

THAT’s the real problem and we need to find politicians who promise to give our country back to us.

    Doc Rock on

    I think the thing that should worry ALL Canadians is why are we not doing better, and what are the Baksters doing to us? In the US, the source of the problem is obvious.. the “Federal Reserve”, a private coalition of banks, that take printed bills from the US treasury for NOTHING, and loan them back to the government at interest!
    We in Canada have NO such moneysucker.. our country only prints what it spends.. so, we should be doing much much better, no?
    No? Why?.. Could it possibly be reckless spending by the federal and provincial governments?

CJH on

what is screwed up is that as a business owner, we have $300K worth of micro-machining equipment shut down because we can’t borrow $3000 from the banks.

so when business credit is thawed, maybe you’ll see a recovery, business is definitely not having a great time right now, we can finance equipment all day long, however to get a line of credit to get it working an making money is another story.

the banks are allowed to determine who’s credit worthy, so even government-backed loans are not an option because the banks will not write them.

the same situation happened in 2008 just before the financial collapse, so yes, Canada is headed for rough times.

makeadiff on

This article was published June 20 2012 and is still making the rounds? The facts havent changed though, so the debt prob is still relevant and probably much worse. The last time I checked, the banks were making billion dollar profits. There are at least 5 condo projects in the Yonge corridor between Steeles and Elgin Mills still being built. Where is the money for these coming from? I have a hard time figuring how where all the high paying jobs (70k and above) are? Check out any classifieds and you’ll see what I mean. It takes a while, but I now figured out who’s really getting screwed, just dont know a clean solution.

JEHR on

When Harper came to power one of the first things he did was reduce the Federal portion of HST. Then, however, he felt that each public department of the federal government needed to reduce its spending by 10%. He was also responsible for the resulting loss of jobs in the public sector (total of 19,000).

During a recession, Harper caused unemployment to rise rather than trying to increase employment which would be the best solution to improving the economy. The Public Service have been reduced or altered to suit his neo-liberal ideas. Another of his ideas is to privatize wherever possible and has asked private banks and corporations to contribute to such partnerships. His motto seems to be reduce the public sector and increase the power of the private sector.

I haven’t even mentioned the $114 billion of “liquidity” that he infused into our charted banks after 2008!

With low interest rates for savings and stagnant wages and salaries, the government has contributed the most to our present situation. I guess it is Harper’s turn to fiddle with the economy and whatever happens in the future rests at his door, not with the citizens of Canada.

William W. Bowness on

Another example of sensationalism to attract readers? The headline for this article appears in several places on the internet. The reality is that the Canadian economy is considered by most credible sources to be one of the strongest in the world!

    Greg on

    So we have nothing to bark about right. The system is perfect just the way it is.

Paul Forseth on

The original article was in June 2012. Now we are in January 2013, and the worries that were cited have been lived through and managed by the Ottawa government, fairly sucessfully. Can’t say the same for Provincial governments. USA investors are looking more favourably at Canada, as the USA is in the financial tank, and does not have a system of national governence capable of doing what is necessary proactively. Canada is the USAs largest trading partner and best friend (if they would only treat and respect us that way). In comparison to other countries, Canada is near the top, despite socialistic segments of our society. Canada is not without problems, but in comparison to others, we are doing very well. Our current strength is a strong stable national conservative government that has steered the nation through the international economic storm.

    Greg on

    The US system of medicare is a very corrupt system through lobbyists and a corrupt government. Our system is looked at by the American people as a much better run and and funded system.The US holds sick people as hostages to the medical system just another way to make huge profits. Our system should be overhauled and made to be more efficient. Pharmaceuticals have to be bought under control through more efficient larger purchases. I am scared to go to the States for fear of getting sick down there, have to buy health insurance every time you go down there, not good. We are still very lucky that we live in Canada even as bad as they say our medical system is. If you don’t support our medical system what is left, not too much. I fear the day if and when it comes when every senior kicks in and is requiring some medical attention, this is one that could break the bank. Medical is a huge drain on the tax system and getting more and more expensive every year. What is the Canadian government going to do let us all croak. People taking their kids to the doc for a common cold, doesn’t make sense. The Canadian medical system has built-in ability to be more efficient if allowed to. Our medical system is not allowed to be more efficient either through political nonsense and a judicial system that is dysfunctional.

      Kevin on

      Our medical system isn’t perfect, but it kills the states system.

    Paul B on

    Canada is ‘near the top’ [in terms of quality of life] Because of the ‘socialistic’ aspects of our society. We are a society with a longer life expectancy, a lower infant mortality rate, and a greater level of overall happiness (if its possible to quantifiably measure such a thing) than other developed countries like the US or the UK, because we still have a semblance of a social safety net, so that becoming ill will not bankrupt you, and our public education system ensures a much greater degree of class mobility, as its much easier (but still very difficult) for youth from lower income and working class families to earn professional and graduate level degrees.

    Someone in response to an earlier reposting of mine repeated the old Ronald Reagan era slogan: “Government is the problem.” (until of course there’s an economic downturn, in which case these same pundits cry for a bailout from the government, and then turn around and complain about the ensuing size of government debt). Perhaps one of the silliest false dichotomy arguments that conservatives and neoliberals have set up is ‘are you for or against government?’ The truth is that unless you’re an anarchist or an extreme free market libertarian, you’re not against ‘government’ per se, the real, honest question is rather What should the role of government be?

    The experience of right wing parties in power shows that they are not against “government”. Under the proudest conservatives of recent history, Reagan, Thatcher, Mulroney, Harper, etc, the size of government (something conservatives argue must be diminished) increased dramatically in these areas: the military, prisons, police forces, capacities for domestic surveillance. They declined in areas like: social security (making people more desperate and precarious), education and healthcare. So the real political question is what should the role of government be? For progressives like myself, I would be happy to reduce the capacity of the state to kill, imprison and control people, and put those resources into helping people reach their full human potential, a potential which the ‘free market’ (if there is such a thing) has demonstrated over and over that it is unable to do by itself (by the way, there are more priorities that a society can have other than just making money).

      Greg on

      You are partially right of course. The Reagan years did see a very strong US economy for 19 straight years with his Reaganomics. With less government economic intervention, there was more private enterprise with investments that were allowed or should I say tolerated. As businesses are allowed to profit and hire more employees to generate even more profits the whole of the society does better. Smother the businessman and everybody loses. Profit or greed are not dirty words. When governments run out of the financial resources to fulfill their promises they have to go to the private sector to get more money. Governments do not create wealth they destroy wealth. Businessmen are a feisty group and will try to survive under the most of difficult socialistic regimes. But when taxed to the 9’s will just cry uncle and give up. The strength of any free world economy is its commerce. Governments do not create wealth that is not their purpose, they only exist to manage the wealth of the country. Like any private business if not well managed they will go broke. Any socialistic regime that taxes the private system to death is doomed to fall. To kill the goose that laid the golden egg is in my opinion not a good idea. This pie in the sky money tree don’t exist, but in the mind of a true hard core socialist it does. Laws of economics prevent the prescription of taxing the so-called rich to death and still having a viable functioning financial system. Holle in France is going to find out in the next little while. Sure you can tax the rich and drive them out of the country and what will you have left is poor people; it is insane philosophy. The economy is like a car engine with taxable hp. The more you smother it and not let it breathe or give it the wrong fuel it will sputter and backfire and die. You try to fuel the economy and feed what is thrives on, the proper fuel and don’t smother and it will perform with enthusiasm. Obama is doing the dead opposite of Reagan, and he will put the US economy in a death spiral. Nobody wins. I don’t give a hoot about the US or the EU but I do care what happens to me in Canada. The corrupt Fed and the US government are not just destroying their economy, they are destroying the world economy. What’s going to happen when your credit card doesn’t work anymore or you can’t get any credit at the bank like in the Depression of the 30’s? We in Canada and the rest of the world have no choice but to go along for the ride. Technically speaking the US had a 1930’s crash in 2008. Ben Bernanke chairman of the Fed supplied liquidity to the banks to keep them solvent; it was the right thing to do no doubt. This has given us here in Canada a chance with low interest rates to get out of debt or at lest pay it down, but of course not. Most Canadians see this as an opportunity to get what — you guessed it — farther in debt. Jim Flannery must be shaking his head. This is a debt trap, not unlike in 1980 or has everybody forgot. But like you have written there are far more important things than just money. You are right but how are you going to finance all this. It’s just not one thing that is the problem it is a multitude of things that may or may not all come together and form the perfect storm. We are very insulated here in Canada to what is really going out there in the real world. You can just bury your head in the sand or just click off reality and be happy. I think I like that plan.

thaingu on

I find it interesting that there are a lot of comments about government spending, yet very few comments are addressing household/consumer debt. The idea here is households are spending a little too much. There are parallels to be drawn between how the Americans were doing before the crisis and how Canadians are spending right now. With bleaker economic forecasts (falling house prices, rise in interest rates, higher unemployment, slow economic growth), households SHOULD NOT BE TAKING ON MORE DEBT. You cannot directly equate household debt with high tax rates in Canada. You have lower tax rate in the USA and look what happened (debt over debt, bankruptcies, etc.). I think one should look over one’s finances more closely or get some guidance in doing so before blaming the government. Besides, there is a likelihood that if Canadians had a lower tax rate, Canadians would be buying larger houses instead of condos, BMWs rather than a Ford Focus (i.e. canadians might just be indebted just as much, with more, oftentimes, unnecessary luxuries). I think Canadians should really focus on how they spend their hard earned dollars, but I do agree that government can do better at how they spend and fund certain programs.

By the way, full privatization of education and health care DOES NOT WORK! Canadians should not strive to have these two sectors become like in the USA… College students shouldn’t be coming out of school with over $100K indebted. Private health care or two-tier health care? Guess what: it EXISTS ALREADY. Canada has the third-highest level of privatization of health care in developed countries (behind the USA and Switzerland). You open up the door wider for private health care, Canada will approach a system that is similar to the one in the USA, where you either cannot pay for your health care bills and go bankrupt, you become grossly indebted because of medical bills, or you can’t get care because you don’t have insurance. People who want to open up the doors wider to private health care are either those who can truly afford private health cares (millionaires), some doctors (note: not all doctors!) or private entities who can potentially profit greatly from it, and those who think they can afford it (but really, they cannot). All lower-class and middle-class (and even some lower-upper-class) Canadians WILL NOT BE ABLE TO AFFORD PRIVATE HEALTH CARE! It’s more expensive than people think!

That’s my 2 cents on this. Feel free to comment.
thank you for reading.

    Greg on

    In my opinion I think that you have half the answer solved in the equation. If I had confidence in government’s ability to manage the system properly I would say you’re right. Problem being the medical system is not run like a business. I don’t think that they even have a business plan that I know of. A partially private and government run system might get us the tax payer a better bang for the buck. Or maybe just the threat of privatizing the system would work. They constantly scream for more and more money for various reasons. Not all bad reasons; new and expensive technology’s not a bad thing. There are very hard working people in the system that don’t get the respect they deserve and there are the slackers. It goes both ways; there are minorities in our society that abuse the system. I think a small user fee would go a long way to stop some of the abuse. No system runs a 100% efficient. A completely private system is not the answer but a partial system might work better; I don’t really know. The medical system is becoming a two tiered system as we speak. The US system is as corrupt as their financial system. Two things you don’t do in the US: don’t get sick or get old. The answer to the problems are as complex as the medical system is itself. We do have a medical system that serves the public better than the US. Could it be better? Of course. There is abuse on both sides of the equation.

    Greg on

    The article that you refer to is to me just talking heads. Canada’s taxation system is repressive. The government debt is everybody’s debt. The government is you and me pure and simple. We the tax payers did not vote for this deficit but we are stuck with it. The fiat currency system is built on debt. The majority of people have debts of course. Can you buy a house with just the cash in your bank account of course not. The government owns you. You are born in Canada as a citizen of Canada. You are born into debt, no doubt your parents had a mortgage on their home, borrowed money for a car so on and so on. The fiat currency system gives everybody the impression that they have more money than they really do. Credit is very powerful if used properly, problem being most people don’t know how to use it properly. Like any tool if not used properly it will be very inefficient. Government staff the money managers of our fiat currency system are not skilled in managing credit so we all suffer the consequences as a whole. The US has both the banksters and the Obama government not having any skills in handling this very powerful tool. Fiat currency with the reserve currency of the world is ultimate power. And we all know ultimate power corrupts. Our government debt here in Canada is not the real problem. The media propaganda is basically keeping our minds off the real problems: the US and EU. Their debts are mathematically impossible to pay off without inflation or default. Canada is not the problem or personal debt, in Canada this is totally under control. We do not have a war on the go or a totally broken financial system like the US. The US since the second world war has frittered their wealth away, so sad. We are tied to these losers big time. Fiat currencies have throughout history all collapsed. And we are going to be the exception? I don’t think sooooo. Problem in Canada the average person looked at lower interest rate to borrow more money, needless to say that this a golden opportunity get out of debt not get deeper in debt. The ones that bought more debt at cheaper rates are going to get whacke. Remember the 80’s. People have a short memory. Credit cards and the banksters are your enemies pure and simple. Beat them at their own game and don’t borrow their fiat currency at any rate if you can help it. Get rid of debt!!!! and they will not win.

todd on

This article is so poorly researched. Since the writer above failed to discuss any measures taken to curb housing, employment and debt issues in Canada you have to look for it yourself. The Government of Canada has taken step to work towards as ‘soft-landing’ in the housing market, job growth appears to be slow but this depends where you look, skilled workers vs. general employment. Employment trends are depended on region as well – Canada’s widely dispersed geographically. I expected more when reading this article but it is as if the writer simply regurgitated the ‘words’ from a particular interview.

ABC on

From the tone of several posters, the individual that creates a business is “bad” because he/she profits off of the backs of workers. Government is good because is is “us” and therefore efficient. Sounds like Karl Marx to me. Government is not efficient. A business that is not efficient is ultimately doomed and replaced by one that is more efficient. Some posters assume that every person in business is “rich”. Some are, most aren’t. There is a significant portion of our society that believes they are “owed” a good standard of living because they are breathing. Post secondary education should be free; many graduates of University have believed their professors that their degree is a automatic path to the good life. We have an abundance of Liberal Arts degrees and Fine Arts degrees with far less demand than supply. Yet we continue to produce more each year who then clamor that the solution is more Government funding for programs that might offer work to Liberal Arts and Fine Arts graduates. Currently in Canada, tax revenues pay for over 75% of the cost of tuition. Why aren’t we doing a better job of aligning market needs with educational programs? The answer is that Governments aren’t very efficient at spending money. If you want to get ahead in this world, you need to stop waiting for Government to give you what you would like to have.

ENNO on

THIS COUNTRY IS INSANE AND IM NEVER GOING TO LOOK FOR WORK…IM NOW 19 YEARS OLD OAN AM GOING ON WELFARE FOR THE NEXT 40 YEARS THANK YOU….

    Greg on

    Why?

Paul B on

Wow, some crazy right wing comments here! Whenever I wonder why we still have a Federal Conservative government in Canada that can arbitrarily shut down parliament and favours fighter jets over properly funded health care, I am reminded by reading some of the wacky ideas here. One of my favourites: “We weren’t taxed like this 100 years ago!!” Sure buddy, we also didn’t have universal healthcare, K-12 education, post secondary education that’s far more affordable than the US, etc, etc. What was the life expectancy back in 1912-1913 again? What happened when you got sick? If you didn’t belong to old money?

Than again, as some others said, “Privatize everything!!” Here’s the purpose of privatization as it has consistently played out across the world from Canada to South Africa: sleazy politicians hand over a public service to their buddies in business who make a fortune, as the money that formerly went to paying public sector workers a living wage, is instead redirected to shareholders and the top managers (and some to the politicians in the form of campaign contributions). Meanwhile the outsourced workers now earn minimum wage, providing a scaled back service that is determined by the concerns of profitability rather than providing a useful service to the public.

Real average incomes adjusted for inflation in Canada have stagnated since the early 80s. The only reason they haven’t fallen is because people are working longer hours on average than ever before. Why is this the case? We are witnessing a tremendous distribution in wealth from the majority of the population to the top 0.1%. Don’t take my word for it, do some research for yourself on Statistics Canada and the data tables on income prove this out (hmm, why is the Conservative government drastically cutting back on data collection and analysis?).

    Kinoli on

    Paul B, your comment shows a statist attitude and one who thinks the government is the solution to our problems when it actually is the problem. You mention that the government does a lot more than it did 100 years ago, so that is why we need this heavy tax burden. However, you forget to realize that not everyone in our society wants the government to manage every aspect of our lives, unlike yourself.

    People also say we should privatize everything, isn’t it obvious when every day we learn about a new politician caught up in some scandal and the rampant mismanagement of our hard-earned money. Government waste is enormous in crown corporations where funds are guaranteed. Private companies don’t have that luxury and therefore are way more efficiently run and better producers (assuming they don’t get any special govt perks).

    The solution definitely is not more government. The problem is the government. We need a less powerful government, this would do many things, it would keep more money in the hands of producers (private citizens and their companies), so they can work and hire more people. It would reduce the effect of lobby groups (If the government is limited, they can only have so much effect on our lives), it would also return back more of our liberty/freedoms that we have handed over to our babysitters (govt).

    Even if it’s a democratic government, it is still mob rule. Just because the mob votes to take more of my money doesn’t make it right. Limit their power and we all win.

    I’ll leave you with a couple quotes to gnaw on…

    “The best argument against Democracy is a five minute conversation with the average voter.”
    – Winston Churchhill

    “Democracy is just two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.”
    – Benjamin Franklin

      Greg on

      I agree with your analysis of the situation. We all have no choice with government which we all do need, but with the size of inefficient government. The taxpayer is handed the bill no matter what the size of government is. So that being said, the smaller the better for all of us. In short order we will all benefit with more jobs. Let businesses survive with less bureaucracy. Governments are meddling in something they have no idea how it works (business). Socialists are the ones in our society that have no idea how business operates and should not be allowed to get involved in any business decisions at all. The socialists that I personally know, which are a lot people, are not stupid people but uninformed as to financing. All work for the other guy so they have no exposure to business at all, and most of the people take no interest in financing at all. They all vote for socialist programs that they think will help them personally. They all vote for more taxes which makes them feel fizzy all over, but even the mention of profits from the private sector and it is like fingers on a chalk board. That’s the crux of the real problem. They continually bite the hand that feeds them. Their favorite subject is to run down their employer, private or government. Definition of money is attitude and most socialists have bad attitudes (the ones that I know personally). I’m not very respected for my views on the subject but I know I am right and I am not going to change my opinion. It is very difficult to do business in a socialist state. A lot of socialists have never worked a hard day in their entire lives and really have no idea how the real money is made or could care less.

    Greg on

    Well I understand your point of view on the subject. Just a few facts I’ll present to you. You are absolutely right about wages are Stagnate while government salaries have gone up past inflation and private sector wages. A real win for the public sector workers. A federal public civil servant makes $114,000 a year on average. A private sector doesn.t make that, not the ones the I know. I am happy for them, I think everyone should make that kind of a wage. I hold no prejudice to them. Civil Servants should be proud to make that kind of an income with nice big fat pensions at the expense of the public tax payers. The public trough should be expanded to include all of us. I think this is a great plan. Everyone should be getting a government check.this will work. The US and Greece thinks it’s a great plan. Ben Bernanke will accommodate even if the Federal Reserve has to print money to fiance the public trough . Not a problem. We will see how this all works out over the next little while.

soundsteve on

I just realized that this site is owned/operated by Sunlife Financial; I would like to know why, after making 5 different comments, the 2 comments where I suggest that people lower their consumption and debt as well as questioning that the financial system is rigged to allow ‘big money’ to not be responsible for their financial crimes (2008 banking fraud with no one behind bars) are still awaiting moderation? Is this an open forum or are you limiting discourse so that narratives that are critical of ‘big finance’ are not permitted? So much for free speech; I doubt that you’ll post this based on your holding back the other comments. I look forward to this statement being proved false but this now reeks of moderation based on ideologies that the moderators only agree on. Not too far off Fox News… Jeers to your narrow mindedness. I won’t waste my time here any longer. I await being proven wrong that you are not open to having your ‘masters’ in big finance being criticized but I’m not holding my breath…. How right Noam Chomsky was. How sad your moderation appears to be…

sgoldie41 on

Well, to my understandingly is layoff the workers is not an answer because economy speaking, those layoff workers will be a less consumer spending and as about income tax is bad because they say rich are getting richer and income tax should rise higher on rich not higher on poor and middle class!!

    Greg on

    Most wage earners private or public don’t know where the money really comes from or care. Governments are not run like private businesses. They’re run by voters who elect them. Most voters will vote for who ever gives them the best deal of course. More entitlement programs the better. The bill for this will be handed to the tax payer public or private. When the bill gets to be too big and the tax payer can not bear the bill anymore like in Greece and the US Ben Bernanke will just print more money. The perfect storm is brewing as we speak with the financial crisis the banksters stealing all the money and huge socialism issues will in my opinion collapse the whole system in short order. Just these two issues alone are enough to collapse the gravy train. The States is in worse shape than Europe as the world is about to find out. No place to run and hide. Canada unfortunately can’t get out of the way of this tsunami of debt nor the rest of the world. Hang on, we are going for a ride, we have box seats.

irish911 on

We need financial watchdogs like Carney to tell governments and consumers to lay off the borrowing. There is some evidence that is happening right across Canada.As for taxes, I have little to complain about. In my retirement, I save 60% of my pension and payroll taxes are at a respectable 12% for my income bracket.

Chev on

Re cutting government spending and taxes.

1. Taxing consumption is regressive. If all your tax revenue comes from sales taxes, then the poor are hit disproportionally hard. They spend all their money. The rich get to save some.

2. Our tax rates aren’t high compared to Europe. Since the Reagan/Thatcher/Mulroney era, income inequality has increased in the Anglo countries. Less so in other areas like Japan, Continental Europe. Former bank of Canada governor Carney stated recently that he thought income inequality was the biggest problem Canada faced.

3. It’s 2013 soon. Do people here want to cut health care for all? Other govt. expenditures are UI. welfare and education – not so easy to cut those especially with people out of work.

4. Would you prefer a society like the US? Great if you’re rich. Horrible if you’re poor.

George Suart on

Most of these comments are idiotic. We live in the best country in the world! Would you prefer he US, Egypt, France.
It’s time Canadians stop complaining! George

    Greg on

    Hello George. You are absolutely right. And we would like to keep it this way forever. But we do have forces that would like to have that changed in there favor. Keeping these forces as bay is a full time job and the Canadian government has done a fairly good job. Things could always be better and a whole lot worse.The problem with Greece is that they got to Government top heavy with trying to satisfy the socialist. I hope that our government does not follow the same path. I think with Greece’s and the US example we don’t go that route. Governments don’t function well when they run out of everybody else s money. They can only tax the private sector and working people so much and it start’s to collapse. They have to start to borrow huge sums of money to keep it all going like Ben the federal reserve in the states. No fault of our government these banksters will drag the whole world down to there level. Greed is King and hope that they do not win at the expense of the rest of the world. They sucked all the money out of the bushiness and now there going after the tax payer to satisfy there greed. The US has to get rid of the Federal Reserve to gain control of there economy with Obama this is not going to happen, they and the rest of us are pretty much doomed. Canada can get our economy is order but with the US and Europe I don’t think that Canada stands much of change to reverse this bomb shell just by ourselves. We can only do so much to defuse the situation here in Canada the rest is up to the Central banks of the world.

soundsteve on

Wow. Reading the comments here I am not surprised that the ‘Harper Government’ gets into office speaking of fiscal austerity when, in fact, they are ratcheting up public debt by doing things like buying warplanes, which are about the most useless waste of tax money imaginable. If you think we are taxed too high then why don’t you talk to an American who lost their home after health problems and no health insurance. If you complain about gas taxes then why don’t you ask why the oil companies basically pay NO taxes. It’s you fools who pay their share while they run off with a big sack of money. It’s all about money and power and the rich don’t pay their share of the cost of things like health care, keeping roads paved and police and fire services. Sure, the rich pay taxes (some pay none via tax loopholes) but they pay proportionally far less than an average working stooge. If you want to know how much of a two-tier system we live in (one with rules for us and the other with rules for the wealthy) then ask yourself why, after the largest crime in history (the US banking fraud perpetrated by the bankers and hedge funds) why not a single person is behind bars? We don’t live in a socialist system – far from it. We have what is basically a corporate feudal system that verges on fascist at present with a thin veneer of freedom and democracy. Want to be free of the system? Stop buying things you don’t need on your credit card. The greatest tool we have to protest the inequities in our system is our freedom to choose to not over consume. And stop complaining about gas prices. Gas is still under priced and over subsidized. I got rid of my car 3 years ago and don’t miss it. I had to move to a house in the city so it involved a lifestyle change but I’ve never been happier and never curse taxes and big oil while filling up the tank of old technology. Re: comments like ‘socialism’, I suggest you look up what that term really means. What we have is what Europe has, ‘social democratic’ governments. There’s a big difference.

bruce Beaumont on

I’m 88 now and all my lifetime it has been public policy to make the willing horse pull the load. eg tax policy “the harder you work the more you pay” The compulsary 40(44) hour week equals deprivation and want in the midst of plenty. Income tax: The principal difference between income tax and a fine is who levies it. eg you work your butt off and are assessed $10,000. in tax. If you commit some felony and are fined $10.000. the latter is to be a deterrent what’s the difference? We tax earning the same regardless of how they are spent. The person who lives frugally and invests in his (her) country’s future pays the same tax as the one who squanders it on a lavish living. Solution “tax consumption”. Under our system imports incur only HST while government gets revenue from the workers, companies as well as the HST on domestic production. Again tax consumption.

    soundsteve on

    Yes!!! Tax consumption!

Saul on

The Government must collect taxes in order to pay for the Social Programs, but at the same times the government has the responsibility of managing the Tax Revenue wisely. Consumers must be respossible with their debts, it is common sense.

    Greg on

    All money’s to run government come from private business and corporations sources. When governments take to much from the private business and corporations to pay for entitlement programs nobody wins. Government destroys wealth and doesn’t create wealth. They are the managers of wealth and when the managers of wealth the (government) don’t do such a job of managing like any private business they go broke. Most business’s go broke 90% of the time because of poor management skills. All politicians are elected on popularity bases not financial skills, we lose. As we are about to find out in the next little while. Canada is going the way of Greece, not good.

      soundsteve on

      Wealth does not come from private business and corporations. Wealth is generated by the workforce and corporations are a government-created charter to organize labour and capital with the incentive of private owners being able to profit disproportionately off their management and ownership via their capital investment, labour pool and marketplace relationship. Government does not steal. Government is you and I and everyone in our society — it is the means by which we have organized our social management. ‘Government’ is the roads you drive on, the hospital you use when you need it (hopefully you don’t need it!), and all the systems that make a society operate. There is so much criticism of government run systems as inefficient, etc, yet when these systems are privatized they almost always end up costing more while the workers end up being paid less due to the profit motive via private ownership. All systems need constant tweaking and adjustment, especially in the modern world which changes so quickly, so there is always reason to be critical of how things are managed (public and private) but to see this thread as an issue of black/white, government bad/private business good is just a tad naive. And Canada is not going the way of Greece – far from it.

Greg on

What most people fail to realize is that the government is passing there increase spending to the average person through taxation, so don’t be wondering why you are poorer at the end of the month. Take in to account all of your expenses and you would be shocked at how much of it is taxes upfront or hidden. I personally don’t have any debts but I don’t own much ether, so make a choice of have more or be out of debt, some choice. Just my thoughts. The government has very slowly over years of taxation increases taken your wealth from all of us and spent is Inefficiency at all of expense. Pretty smart people at the government level and are payed by guess who us suckers and payed very well indeed, that as it should be if we the tax payer just sit back let this happen.

    soundsteve on

    I like your comment and your philosophy. Seven years ago I had a 3000 square foot home, two cars and all the toys I wanted. I came to the realization that my possessions owned me, not the other way around, and so I sold and gave away many of my things, sold the house and the cars and moved into a much smaller home in the city. I use my bike and public transit (cabs when needed), and live much more simply — and I’ve never been happier. I went from having a mountain of debt, which I worked like crazy to pay for, to having a very tiny mortgage. My home taxes and heating bills are a fraction of what they used to be on the ‘monster home’ and car expenses are a thing of the past. I hear a lot of people complaining about their perceived entitlement to consume without taxation. This is just so selfish, which seems to the North American sickness. I’ve found that riding public transit really puts me in touch with feeling like I am part of community and society and my fellow humans versus single car operation, which atomizes and makes one selfish. Sure, the bus can sometimes be frustrating but I can also read while someone else drives whereas the car requires your full attention to operate. Living ‘smaller’ is the reality of our future. North Americans need to leave their morbidly obese lifestyles behind but clearly many people will refuse to let go and rethink.

Rocky Racoon on

General Strike Against Austerity Make the Banks Pay for Mess they Made. Tax RSX transactions everything else is why not stocks?
RR

Max on

I am really happy to have come across this site and finally seen Canadians who see things as they really are and not the vast majority of hopelessly, naive, ignorant and complacent Canadians who really believe all the BS about this being one of the best places to live. The government needs to increase corporate taxes since they have refused to create more full time jobs despite all the tax cuts.This is one of the major reasons for the hardship people are now experiencing.

Kinoli on

Just an additional thought here… I’m curious what people think would be a more acceptable taxation amount. How much should the government take from you in order to do what it needs to do? Answer this knowing that if it is any lower than it is now then it will be forced to do less than it does now. If it is any higher then it will obviously be able to do more for you and society.

The Nazi’s refused to tax its citizens over 25% of their wealth, believing that any more than that would be a form of slavery. Yet our socialist mentality is ok with up to around 50% including income tax, sales tax, gas tax, etc.

My belief is that the govt has no right to any of your wealth since they do not own you. The more privatization of aspects of our society would make it run a lot more efficient and less corruption. Whenever you read the news the majority of what you hear is that so-and-so public servant was caught up in some corruption scandal. It seems to happen daily. Yet they get discharged and get a healthy pension out of it. If things are privatized, then any business that has corruption will lose most of its customers overnight, hence, they will try to prevent corruption at all cost. Also, they will want to save money and try to operate way more efficiently than our bloated govt does.

Before 1917 our govt didn’t tax anyone, they operated on user fees and import fees. Seems like the fairest option. Does the Canadian Govt own you? Does it own your wealth? It shouldn’t. Is your neighbor in need? Then help them out, It’s not the govt’s role to fix all our problems. We have become so passive that we actually allow our govt to steal half of our wealth from us at the threat of a gun and imprisonment. We’ve all become tax slaves!

Charles on

In response to Jacob and in support of Rheal, allow me to comment. This is the first time I have ever ventured to post a comment on any site and will likely be the only time I do. I simply do not have time to do so, but I feel compelled to do so.

I am part of that sector of society that earn “90k” a year. Allow me to share some of the “fine print” from my paycheque, namely, deductions. My gross bi-weekly pay yesterday was $3,295.90. That works out to $85,693.40/yr before any overtime. I believe this is what you are referring to as, “earning,” Jacob?

My deductions include CPP, EI (which being an essential service I will never have an opportunity to collect, although I am glad it is there for those who REALLY need it), pension deductions (yes, government workers do have to pay out of pocket towards their pensions, 10% of net pay in fact. Try losing 10% of your take home each week knowing if you die your spouse only gets HALF of your pension and when both die no surviving family gets anything, even if you paid into it for 30 years), among other things.

To save you the trouble I have done the math. My year to date earnings are $91, 318.04. Sounds like a lot, right? Well after the aforementioned deductions, the actual take home works out to $58,983.72. Now divide THAT by 52 weeks and you have $1,134.30/week to feed a family of two adults and four children (groceries are around $300/week as a bag of milk alone is $4.59, and no, we don’t each steak daily. We had our once-a-year trip to Pizza Hut the other week for my birthday and it cost $85 with a generous tip) , pay for heat (we live in northern Ontario and use oil, wood, and electricity at an average cost of $144.23/week on equal billing because we can’t afford to pay for oil per fill up), pay home and vehicle insurance (finally got a second vehicle after 20 years of marriage with just one, and our other vehicle is 10 years old with over 208,000kms, $76.92/week), property taxes ($50/week), and incidentals like a dog (shots, occasional kennel, food $16.15/week), phone, and other bare necessities and we have just enough to pay our mortgage and buy incidentals like gas (which is typically $.10/L more than the next nearest city 1 hour away) for our vehicles, clothing for ourselves, and maybe birthday presents (and no, our children do not get Ipads unless they save and buy their own).

With all of that being said, we are fed, clothed, sheltered, and care for one another. We are blessed and thankful that I make what I make.

Maybe this will open some eyes and help those who believe that earning $45/hr makes one “ecstatic.”

Jacob, no malice towards you at all. You may well be a nice young man and I wish you the best.

Regards,
Charles

SK on

Take care of those you love.

There really is nothing else to be done now.

The system cannot survive much longer.

Scary thought. But it’s happened many times before.

toronto on

I was a teller at a bank all of last year (in toronto), I saw the amount of debt that people carry, mortgages and OSAP excluded, so only credit cards.. the majority of people, and I mean vast majority, spend their credit on life necessities.

for example, someone comes to Canada promised a better life, they obviously do not qualify for any sort of welfare (in spite of what many people think) they are somehow pre approved for a credit card at basically every financial institution in the country, they make minimum wage, and end up seeing a paycheque of approximatley 1400 a month net income IF they have FT hours which is RARE of 1400 a month, if they are living in a suburb of Toronto rent is 900 and that is being very lenient for a one bedroom, 121 dollars to use the ridiculously horrible mass transit here, and theyre left with what? 300 for groceries. god forbid u buy a beer….i was in PA and was buying beer at a bar for less than it would be at the beer store here. in madrid, barcelona, rome, even paris, it costs a euro – 1.50EUR to take the mass transit systems….which torontos pales in comparison to. if i sit down in a bar i spend 10$ on a beer, 6.00CAD + 13% HST + outrageous liquor tax + 15% tip = 10$. Even if you are making 45K a year in Toronto it is near impossible to scrape by. if you get a car then you have ridiculous insurance rates (my monthly rate is twice as high as the ANNUAL rate in say Pennsylvania, NYS, TX, and matches the annual rate in Spain, France, and Portugal). dont get me started on rent.

You can say our unemployment is not that high, but the amount of FT jobs is minimal. If you think the big screen TV makes a difference, it doesnt, the big screen TV anyone can save up for a little bit, its the day to day expenses that obliterate your income.

And the problem isnt taxation, its what we are taxed on. I’m sorry but liquor, and tobacco are not the greatest evils in the world, starvation is and many cannot afford to feed their families. Also who came up with the genious idea to show the pretax amount in stores? What do I care how much the store gets off my money, they can figure that out on their own later…maybe theyll be able to hire a few accountants to help them do so thus creating jobs. Same with income tax, the only two countries in the West that do this are Canada and the US. Show me what I’m paying in a store, not the pre tax amount, tell me how much I’m making after tax so I can make out my payments. sure some people can calculate this, myself included, but the vast majority cannot.

And less point: the real estate market cannot pop, I hear a million “analysts” making these judgements, saying that real estate prices are artificially high. BUT PEOPLE ARE CONTINUING TO BUY PROPERTY, like no tomorrow, condos, houses, everything. Supply and demand, realistically, there is a greater demand than supply hence demonstrating why real estate prices are the way they are, so it will NOT burst any time soon.

    toronto on

    sorry i neglected to mention, if I am handing over more tax to the government, i expect to see services in return, better healthcare being one of them (and I am completely opposed to any measure of private healthcare) the educational system too is ridiculously under funded, mass stransit, prescription drugs, and reasonable rent and utilities.

    Can someone please explain how in France, where IT tax is 10% lower than here on average, education (including post secondary) is entirely free (with the exception of economics which costs 2000EUR annually) mass transit is 10x better and half the price. intercity transit is infinitely better, at half the price, car insurance doubles our MONTHLY rates but on the ANNUAL level. Free healthcare is provided, in a much better system than here. And even in PARIS, rated the (I believe) 12th or 16th most expensive city in the world, u can sit in a bar, get a glass of wine or beer for cheaper than in Toronto, and a meal is roughly the same price. When I went grocery shopping there to feed two people cost me roughly 50EUR a week (including spirits wine and beer) Here for one person I pay 100 if lucky without any alcoholic beverages (God forbid I include that it would brign the price up two fold).

    and dont even get me started on tobacco (11.05CAD a pack for quite possibly the worst cigarettes, taste and healthwise, worldwide, even in Paris I only paid 6 or 7 EUR, eastern Europe a carton cost less than a pack here)

      soundsteve on

      Where to begin with your comments. Clearly you seem to be an immigrant yourself and have lived, or at least traveled elsewhere. Taxation is a complicated matter and I think you are viewing it too simplistically. Canada used to have the sort of tax you wish for – a manufacturers tax that taxed goods before they went on the tore shelves. The GST replaced this tax nearly 20 years ago and shifted taxation from corporations to the consumer. Most taxation in the western world has been going this way for years. You repeatedly criticize Toronto’s transit system and then note that Paris has better mass transit. Yes, this is true. Paris, like most European cities is far denser than Toronto’s urban sprawl and if you wish for a $900/month apartment then you surely are commuting to a low density suburban area. Paris gets a lot of subsidy from the federal government for its transit system — Toronto gets nothing. Canada loves to take money from its urban areas to subsidize the vast hinterlands and the people who live in the middle of nowhere yet demand services that are equal to those who live in cities. This is ridiculous and these policies see urban ares like Toronto massively subsidizing rural areas via one sided tax policies that suck money out of cities. You speak of the cost of a beer in Paris as 1.50 euros versus Toronto at $10; Where in Paris do you find this beer price? I’ve never paid less than 6euros for a beer in Paris but I can show you bars in Toronto where you can pay $4-5; You also complain about cigarette prices being too high in Canada. Good. Make them cost even more. I don’t smoke and it makes no difference to me but when you get lung cancer you will cost our health care system hundreds of thousands of dollars so your cigarettes still don’t cost enough.
      While I understand your frustration please don’t confuse your perceived entitlements with equal taxation and social policy. If you like Paris and Barcelona so much then why not go back there? I am sick of people moving to this country and complaining about it. Go back to where you hail from if it’s so bad here. If you complain, then make valid arguments, not ones based on why cigarettes cost more than you wish they did.

Paul on

I think that a change in the money system is required here and sorry but a gold or bimetalic based system won’t cut it as the new money since it can still be hoarded and manipulated. I think that we need to drop the requirement of creating government debt each time new money is created (government spends money). It would still be dilutive to the money already out there but society would not be shackled with having to constantly pay back this money (plus interest) until ultimately the system reaches its breaking point in crisis (about every 100 years or so).

Mike on

There are a LOT of comments here in regards to excessive taxes and government mismanagement of such contributing to consumer debt. While increased taxes and lower incomes obviously means there is less in your pocket at the end of the day, the household debt referred to by Sadiq Adatia is indicative of people living outside their means. In other words, the majority of people with huge levels of household debt don’t have it because they have had to finance groceries and heating fuel. They have it because they have taken advantage of record low interest rates to buy huge houses they can’t afford, cars they don’t need, big screen TVs, leaf blowers, hot tubs, and so on and so on and so on. There is no evidence to suggest that if these folks were less taxed, they would be more conservative with their money. All evidence suggests they use that to simply accumulate more debt and more stuff. While lowering taxes and increasing government accountability is all well and good, people still need to take responsibility for their actions and stop buying crap they don’t need.

F. Folks on

Why is it Canadians are so incredibly ignorant and naive about the laws of economics, the “dismal science” as the lunatic Keynes called it? He is the one chiefly responsible for the mess the world is in, i.e. broke, including, yes, Canada. Even a average dimwit knows he cannot run up his credit card indefinitely without consequences.

And why do most Canadians think naively that government has the answer. Wake up, you idiots, government IS THE PROBLEM!

There is a sad Greece-like day of reckoning coming to this country unless the sheeple demand the government adopt the system of economics patterned after the Austrian School of Ludwig von Mises.

    Kinoli on

    I couldn’t agree more. The problem is we have dumb voters and they vote for the politicians who promise to spend other peoples money. Can you really see that changing? I can’t. I always vote for the person who is going to do the least. Meaning, they need less of my money to be in office. I’m still holding my breath for a strong libertarian party to emerge in this country.

      Nick Ettema on

      It goes a lot deeper than that, even. Voters, especially where I live, vote entirely on shallow grounds, and often on a single issue that they want in their favor, even if they know nothing else about the candidate.. Furthermore, voters here prefer to vote *against* candidates, rather than for them, even if (again) they know nothing about them ..every year we have press fueled “scandals”, which are used as an excuse to kick out the incumbent..such as a premier hiring a friend to build his balcony – for real…. I kid you not, that was a “scandal”. The really BAD scandals, however, are different, for instance, let’s say, *if* a sitting Premier caused an accident while drinking… and got arrested for it… these kinds of things would be swept under the rug and within a couple of days the story, and any followups, would never appear in the press again.. in the same province where a year or two later, Madd (reportedly) had to move out of their offices due to having their funding cut.. … and somewhere this actually happened…
      The point is that voters, in my part of Canada , anyways, pay NO attention to the issues, or the record or behavior of the candidate (except if they, spurred on by the press, want to kick them out…), and one even got elected on a campaign slogan of “vote for me on Image, not issues”.. He got *elected* !

      I m so ashamed of my fellow citizens…

    P.P. on

    Maybe you didn’t learn about the same Keynesian economics that I did. The problem isn’t with Keynesian spending by government to balance out the low points in the private business cycle. The problem is an unwillingness by politicians to show fiscal discipline and pay back/save up to recover the account balance when the economy is in an upswing. Instead, during the upswing, the politicians pay off whoever they are beholden to – corporate and income tax rate drops from the right wing, or more social programs from the left wing. Keynesian economics work fine, but politicians show no more fiscal discipline than the Canadians (whose debt loads this article warns about) that are electing them.

    For at least four decades, Canadian (and most developed countries’) government finances and deficit spending have been based upon the assumption that the economy will continue to grow, leading to increasing tax revenues to support increasing debt maintenance. That’s the problem and it has nothing to do with Keynesian economic theory. It does have a lot to do with a complete misunderstanding and abuse of Keynesian economic theory.

Mike on

“Taxation with out representation” this is what we have in Canada today and that is historically a very dangerous game to play on the people (any people). History will repeat…read about the birth of the United States of America.

BrianL on

The taxes in the US are lower than in Canada but the taxpayers there hate taxes more than here. It is not how much the taxes are, it is how much value the taxpayers perceive they are getting in return. In the US it is nil while in Canada it is much higher.

While in law school I happened upon the transcripts of the post wwII war crimes trial. The dean of the school was a judge at the time so received a complete set of transcripts. I vowed to read all of the volumes before graduation but failed. However in the first volume near the beginning the prosecution was trying to establish how the German public could buy into the regime and one response was that the regime determined could not tax the public more than 25% as anything above that would be considered slavery and they’d be voted out of office or overthrown in a revolt. To the end of the war they never taxed more than the 25%.

They also applauded the US education system and felt that when instituted it will like in the US within a couple of generations have complete control over the minds of the children and have educated them to truly believe that their governmental system is the best of any style.

Reading the transcripts made me wonder what the world could have been like if the regime was not as prejudiced and warlike. And, to think more about under the systems we live and how we do not question the actions of our officials as much especially, since the end of the ’40s.

I’ve only been in Canada for some 16 years but amaze how quickly the public has become less active in questioning and holding government accountable for spending and being transparent. The society is becoming more Americanized in shrugging its shoulders in surrender that there is nothing each can do and therefore one might as not try.

Mike on

Over 50% of every dollar collected in forced taxation goes to paying the interest on the debt, the majority of which accumulated after 1974 when the Finance Ministry stopped issuing money debt free via the Bank of Canada and instead started borrowing new money into existence from international banksters at interest. Government could teach the mob a thing or two about doing it old school.

Rus_Van_Winkle on

It is our fiat money system and the Banks ability to churn out digital credits (fractional reserve system) with no accountability that is the root cause. The high velocity of money can be attributed to deleterious inflation (hidden tax). What incentive do people have to save money when your buying power is constantly eroded? Answer: NONE! All talk about consumer debt, or government spending is superficial gloss. If you think that the bank puts real money on the line for your car loan don’t kid yourself… add to that their ability to aggregate debt into complex derivatives and you have a system with no accountability. So yeah, people are in debt beyond belief, but the system is designed for that to happen.

Crescent on

Privatise public Services like health care and education! This is not a solution but a prescription for disaster! Look what happened when Ontario tried to privatise hydro – rates went up, services went down. A for profit system can not take care of social, civic, goals; it’s like asking a fox to guard the hen house. Rather we need to demand our governments to manage our money responsibly, open up forensic audits on all politicians, require quarterly performance reports on public goals and performance ratios. We needd to demand our governments need public approval over spending or budgets so they don’t vote in salary for life compensationm them selves, or engage in a war they can not win, or spend money we don’t have on large scale, white elephant, public mass entertainment schemes like the olympics that shift public wealth to private wealth, or wasteful spending on smart meters. Politicians should have to how us the budget for prior approval, then stick to it. Then we would have an efficient social services and minimise waste, and prevent corruption of public wealth to private wealth. Look at income in equality history – it says it alll – we need to reclaim our government for public purposes.

    Kinoli on

    Crescent, so your solution to fixing the public sector is to “demand our government to manage our money responsibly”. Don’t we already do that? You also say that “we need to reclaim our government for public purposes”. Something I’ve learned is never to put your trust in government. It will almost always turn out bad for you if you do. The purpose of government is not to educate our children or manage our hospitals. Leave that to people who know the industry, not bureaucrats. Private industries succeed because they put on the best performance they can to gain your business. The best case against public health care is a 5 minute discussion with a person who has needed to use health care in this country. My point is that the socialized look at government puts the government in a bad place and gives them too much power over us. We need to limit their power and make sure they only touch what they should be touching. They shouldn’t run businesses like the CBC or Air Canada that compete with or limit private companies. Where 1.1 billion of our tax dollars goes to keep the CBC afloat. What a joke. They should be limited in what they can do and get our of our lives. They should only enforce the law in keeping us and our property safe. As long as you rely so heavily on elected bureaucrats, you will always be disappointed, their goals are not to make you happy, but to get re-elected by doing what the majority wants even if you don’t agree with it. Mob rules!

Doug G. on

So simple folks…live within your means,learn to hate debt. Cut up your credit cards, gas cards, dept store cards and only have one CC for emergencies. If you use it, treat it like a debit card….take the amount you spend out of your cheque book. Easy credit is like a drug…..”just say no.” Buy based on need, not want….learn to distinguish the difference. Pay down debt! The only good debt is education and a mortgage…and even that is to be avoided if possible. Drive an older car that you can buy after 2-3 years of depreciation and get it for much less but still has lots of life….or put up with a beater if you can.

Have a reserve fund of whatever you can for emergencies versus living totally from pay cheque to pay cheque (6 months of wages is what they say to have but maybe not always realistic). Invest and save what you can.

Live with way less pressure in your life without a debt cloud hanging over you!

    Tereza Martins on

    The priorities are screwed up , after giving away 30% of your income and paying outrageous prices for everything people go into debt..Surprise!

      6packmuscles on

      Not everyone in debt uses there cc to buy frivolous things, its easy in a theoretical model to say, only spend what you can afford, until those emergencies happen. Yes there are most who just use there cc to buy the latest iphone or tv or go on those trips they “need” to have.

Nick Ettema on

I have seen a lot of comments about the consumer debt problem.. which exists, I assue you.. and it has been largely foist upon the population by the financial sector (with near 0 % interest) and the large chains who have been tripping over themselves to sweettalk anyone, even those on a fixed income, to sign up for credit..
The main missed point is, what has all this credit been used for?.. More and more, it’s been for basic necessities , and strangely enough, the media has not pointed that out.. Because of this, when the SHTF, it’s going to be a disaster.. How are the collection agencies going to repossess food, or clothing, or gas?
We are in serious trouble…

Mr. David Linge on

What I don’t get is: I have never had a credit card nor do I ever want one. The very next day after the finance minister warned Canadians they are taking on too much debt, BOTH big chain stores I shopped at “reps” walking around the store trying to get me to sign up with their (store name here) VISA or MC. My motto is: If I can’t afford to pay for it all at once, I don’t really need it”.

JP on

It is not taxes – taxes is just government spending – nor is it consumer spending. There is no good or bad way to send money. Debt is just one tool for the rich to extract resources from the poor. (Hopefully for the long term common good)

If you lowered taxes to zero the economy would not let you keep all the extra income, unless all that the government provides was legislated as mandatory consumption.

At it’s limit a job can only be expected to provide the minimum for an individual to survive one more day. If you had the choice of surviving one more day or refusing to work what would you do? Only through complex arrangements, etc, etc we agree that people should live above the minimum resulting in extra consumption which others can then live off of, competing to provide the best deal for this extra consumption.

All this to say wealth is shared within a country for the common and long term good because a cohesive political framework is in place. Through complex arrangements we agree to share out the wealth of our country. with some goal of a future we are all working towards.

Global transfers of wealth (I don’t mean currency that is just a method of wealth transfer) allows global players to exploit countries to siphon wealth into a club (or whatever) of global actors.

We have created a global economy without any political framework to support it. The result is competition to the level of survival. It is not sustainable, it consumes everything including itself.

harrisman712 on

What people also need to realize is that the high-borrowing consumerism which is part of this deficit we’ve got ourselves into is not for everyone. Sure, your neighbour can afford a big-screen TV or a mortgage on a nicer house, but you can’t. So don’t, it’s not within your means, YOU ARE NOT ABLE TO BUY THESE THINGS, YOU DO NOT MAKE ENOUGH MONEY. David Cameron, the PM of the UK, implored the middle and lower-income population (i.e. the majority) to pay back their outstanding debts. There are reasons that upper-income people can buy these things: THEY MAKE ENOUGH MONEY! So accept it, change your situation so you CAN finance these consumer desires, or simply accept that richer people can afford to have or buy more than you and that’s that. Repair the economy personally, and the system begins to recover.

    Kevin on

    So funny, we have more economic pressures than ever. Our wages have been frozen by giant companies that pocket billions per year. Meanwhile these companies are charging more and more for the goods and services they provide. These companies pay off our politicians or castrate their power with giant Trade organizations that protect the tilted system. Drug companies, Oil , whoever…greed is ruling, time to rein them in. But wait…who can stop them at this point…Keep waiting for the trickle down guys.

Brandon on

It’s the evil American corporations like WAL-MART that is killing our economy in Canada.

    GrandPa on

    it’s not Wal-Mart at fault…. it’s their customers!

PapPy on

There’s too many folks spending money on Gravy when the Potatoes aren’t even paid for. Canucks on average have been living too high off the hog for too long. Pensions for civil servants will be the final straw for our countrys debtload.

    6packmuscle on

    I am not a right wing person politically, I do make a good salary at my career; that being said I think people need to wake-up to some stark realizations. You need to take care of yourself, get your bills and debts paid off or paid off as much as possible, forget about worrying about taking a vacation every two minutes to some exotic location and focus on getting your life in order, the sooner you can get that done, the better off you will be.

    Im not economic wizard, but I do believe that if you can get yourself to the point where you have low or no debt and the ability to accelerate payments on your home, you can reasonably pay off your home decades earlier.

    Once you have paid off your mortgage and have zero or low debt you can weather any storm the eco

Canadian Beaver on

His guess is as good as mine….. That should tell you something…..

john robinett on

The U.S. Federal Reserve is a private company, if you would like information on it, contact Texas congressman Ron Paul he will tell you all about it as he has been telling everyone for over 30 years. Their process of printing money is no different than if you and I were to conterfiat money in our garage.
google for your pleasure:
-Ron Paul
-Bilderberg Group
– Federal Reserve Act 1913
you may also find in your research that a Federal Tax system is illegal per the constitution in the U.S. and in Canada as well.
Have a good day…………come join the Revolution…..it’s on it’s way to Canada also!!!!!!

Griff. on

“You have to wait your turn in this life. There is nothing wrong with the Canadian currency that is any different from any other. People invest in business, where, they get a fair return on that investment. Nobody wastes their savings!”

Marg on

Our economy was in excellent shape when Harper got in so it was able to stand it’s ground when the world went crazy a few years later. slowly undoing what was done. Time to get out

Andy from the city with a heart of gold on

“gold and silver PRICES” that is.

Look up,

Oh, Canada, Our Bought and Sold Out Land.

It’s a little tedious and boring, but very informative and speaks directly to the Canadian situation.

Also look up.

Peter Schiff
Gerald Celente
Max Keiser
Adrian Salbuchi

Way back in 2000,2001,2002 they were telling us that the whole enchilada was overcooked and about to burst into flames. They told us what’s wrong and how to fix it. But no one listened.

They also told us to buy gold and silver AND TAKE DELIVERY. That at a time when silver was some 5 dollars and gold was 250. Try getting THAT kind of return in your RRSP or 401K.

The thing is, all the elements that were in place to cause this appreciation in precious metals, RELATIVE to the perceived value of paper money are still in effect ONLY WORSE. All politicians, with notable exceptions, are just kicking the can down the road for their successors to deal with. Their successors won’t do anything differently and will be left holding the bag.

The one notable exception is Dr Ron Paul who has been beating the sound money (based on gold) drum for most of his life. Dr Ron Paul is running for the Republican nomination for the presidential race. Never heard of him? Not surprised at that, the mainstream media has been given their marching orders to ignore and exclude him.

Do a search for Dr Paul on YouTube and be prepared to be astonished.

    Kinoli on

    Andy, you are correct about Ron Paul. He is the only one who would attempt to fix the problems of overspending and wasteful government but the establishment/banking elites wants Romney in so they can continue on with the status quo of the Federal Reserve, fractional reserve banking and quantitative easing (aka: printing money causing everyones paper money savings to become devalued). Ron Paul wants to tie the dollar to gold again, and have the market place dictate the value of the dollar rather than some elite bankers at the Federal Reserve who’s interest isn’t the American people but the profits of their own banking alliance. It’s sad as I was hoping people would wake up and see Ron Paul is the only one who wouldn’t kick the can down the road anymore but start fixing the problems. Gold prices seem high, but I think it’s necessary to buy and I’m sure the govt will screw things up even more, so buy it because its just going to keep going up.

    sleelofwpg on

    Hear that. Wish I had bought way back then. But back then I was young, stupid, broke and didn’t expect to live to a ripe age, so why bother. Not that my age is ripe now, but it is to late for me. No retirement for me.

Andy from the city with a heart of gold on

So, how did Canada start our system of universal health care? At a time when Canada printed it’s own money without having to BORROW it from private banks and then have to pay it back WITH INTEREST. Where do those PRIVATE banks get the money to loan to Canada/Canadians? From savings account deposits? Uh uh. They just make an entry into the books, they CREATE it out of thin air. Then they loan it to us AT INTEREST. Where does the money come from to pay the interest? Well,,, the private banks, again, create it out of thin air. And on and on. IT’S A PONZI SCHEME.

We went from printing our own money with NO debt or interest to be paid back in the early 70s. If you look at the chart, Canada’s national debt was low and stable and flat for many decades. Then it took off. Someone sold us out to the banksters and we adopted the Canadian version of the Federal Reserve.

Look up, MONEY AS DEBT.

Also, THE AMERICAN DREAM, FULL LENGTH VERSION.

And, WEB OF DEBT.

Canadians, per capita are in more debt than Americans. But we don’t spend much of that on foreign wars and other adventures. The US military and industrial complex has some 400 military bases in over 100 countries. That’s expensive and it’s an economic, political and military EMPIRE that is on the verge of imploding.

Here it comes, guys and gals, the REAL disaster of 2012.

In addition, Israel has been agitating for the US to invade Iran on trumped up charges (like Iraqi WMDs) of making a bomb. If this happens, RUSSIA and CHINA will get involved. Think WW3 and this time, there are thousands of nukes on multiple sides.

Or, China could simply stop lending money to the U S of A. All that funny money printed in the last 30 years will come home to roost and the Americans will feel a sickening, monetary collapse. We do 75% of our trade south of the border. Americans won’t be able to afford our stuff and we will suffer a similar collapse. UNTIL, of course, Canada devalues our currency to match the US dollar. Where in turn many trading partners will scramble to do the same. It’ll be a race to the bottom.

People, gold and silver process have been in a holding pattern for over a year. It’s a last opportunity to buy REAL money before the SHTF.

Les on

Stop all this foollish talk about our govermnent taking our money. The people who are in debt trouble would still be in debt trouble if they were not taxed. Stop the crying and take responsibility for your own spending problems. Last thing we want is to be under the thumb of big business like south of the border,

Michael Webster on

Canada is truly a land for the rich. If it were not for its medical system most poor people would give up and emigrate.

    sleelofwpg on

    Were it not for our horribly inefficient medical system we wouldn’t be devoting near half of our taxes to propping it up. Just because a cow is sacred, don’t mean it works. Our system doesn’t come withing shouting distance of the top 20 compared to the world, much less “the best” the sacred cowers go on about.

      Xander Bekkett on

      This is for “sleelofwpg on August 27, 2012″
      You say: “Our system doesn’t come withing shouting distance of the top 20 compared to the world”.
      Could you please supply the list of “the top 20″ systems as compared to our system and mention where ours ranks.

      colin on

      Having retired to Canada after 17 yearsin the USA, all I can add is be carefull what you wish for. Health insurance cost for myself and my wife was $1200.00 PER MONTH. If you don’t belong to a big company or government that’s what you can expect. As far a service here it has proven to be much more efficient than that in the states. I lived in three different states both east and west and the story was the same.

no on

oh really? i was in couple of house sales office on tuesday and wednesday people were fighting over a spot that they wanted to buy .. people sit on the drive way, standing around the office, inside filled and can’t get a spot to buy.. and what are you saying ?? i don’t get it.. just get real.. want Canadian to be American? tough one …

    sleelofwpg on

    Yeah. Rewind to before the State’s real Estate bubble burst and you would have heard people saying the same thing.

chacalcdn on

Economist are weathervanes their predictions are like the wind but mostly full of it lol :-)

Amadea on

What a bunch of whiners! You are living in the best country in the world. You do not have to duck bombs every time you walk outside. You do not have to watch your children playing with land mines and blowing themselves to pieces. You do not have to compete for scarce food. Your taxes are high because you keep demanding things from the government. People of today want the government to “do something!!!” (foot stamping, included), instead of doing it for themselves. John F. Kennedy said it best: Ask not what your country can do for you; ask what you can do for your country. PS: If you don’t like it here … go live somewhere else.

    nic on

    Ive tried moving elsewhere, but its nearly impossible…. It’s been a year since I’ve applied for citizenship elsewhere.

    hammerhead007 on

    You sound like one of those Canadians brainwashed by all the propoganda. Oh the nation is so great, bragging about our so called free medical care which isn’t free at all. The country over taxes on everything from liquor to airfare to property and income tax. Not too mention always trying to introduce new taxes out of thin air.

      Xander Bekkett on

      This comment is for “hammerhead007 on August 30″
      Canada is NOT the best country to live in – It’s the only the second best and it’s NOT the highest in taxation – It’s 11th and NO healthcare is NOT free – It’s expensive _ But EVERYONE is covered, no one has to go shopping for the best deal they can find (you know, like you do for that “perfect” cell phone contact), and no one has to declare bankruptcy or loose a home or their life savings, or decide whether to get both or only one severed finger re-attached based on ability to pay. Buy the way, my son, his wife and three children (living in the U.S.) pay $2800.00 per month (after taxes) for health insurance equivalent to what Canadians get and there is a deductable and cap on benefits – I’m guessing you pay about 1/10th of that amount. ObamaCare will reduce that amount somewhat by 1014.
      Canada (The Great White North) weathered the financial collapse (2008-2009) better than ANY other country (because of Government policy) AND our crime level is lower than the U.S. I suggest you move to a country more suited to your needs.

    Misspogo on

    Yes, me too, would love to move to Florida, but nearly impossible, have to wait for retirement…maybe then I can spend few months there,,,,maybe…

Jean-Luc on

It’s stupid people buying things they don’t need with money they don’t have.

Fern mssis on

I agree with vee campbell’s comment, I can’t afford gas just to drive my kids to daycare and activities. I am cutting back on clothins and things I used to be able to afford before for expensive toys and dining out, I guess next I have to downsize from van to mini car….

Jeffery on

Yes, when I visit Canada from the US twice a year, I am so surprised how expensive things are. Don’t get me wrong I love Canada and it is a beautiful place to visit, but I always wondered how the middle class was able to stay afloat with such high prices and their taxes???

    Nick Ettema on

    To Jefferey.. the answer is, well, they don’t.. at least the lower middle class..that is PRECISELY where the overuse of credit has manifested itself.. as I mentioned in my previous comment, a great deal of this “easy” credit is used for transportation . food, rent or “robbing peter to pay paul” style mortgage payments.. and basic utilities.. when rents average 900 for a small apartment, 200 for electricity, and milk is more expensive than gas, and eggs are 3$ a dozen, and a watermelon is 20 dollars.. it doesn’t take long to spend your wage packet…

    indybindy on

    Umm and the United States and their middle class are in great shape are they? The mind boggles that someone could visit from the current disaster that is the US with its totally disappearing middle class and comment about the status of the middle class in Canada. This from a citizen of the country that had/has given such control of its destiny over to a bunch of immoral and corrupt bankers and CEOs that they virtually crashed th world economy. Yep, write a book on how to do things right. It will be a short one.

Con Black on

Is the Canadian economy in trouble ?
that would be

YUP

Doug Thoms on

Canadian real estate is FAR too high right now. In Vancouver, where I live, a one-level 2 bedroom house is between $1MILLION – $3MILLION. Sickening. The city allows developers to buy up land, build crappy condos, and let them sit empty for YEARS until they either fall down or get sold (often BOTH). Meanwhile, the rental market hasn’t had ANY new units built in over a DECADE. City planners have got to stop this practice. It is ruining the city, and trashing the city budget, since people MOVE OUT and nobody MOVES IN. Can’t tax an EMPTY HOUSE.

Andrea on

If you want to know the real condition of the economy, ask the average man on the street — never an economist. The average man feels the pinches, whereas the average economist is afraid to make the situation worse by announcing the truth.

    Ukie on

    Absolutely right!

      Matrix on

      Unless you are Nouriel Roubini

    sleelofwpg on

    Yup. Not a bouquet of roses for those of us working half the year to pay the various levels of taxes to have them piddled away by bureaucrats and the Oh-So-Efficient public Unions.

beyondprophecy on

Canada’s fortuity (to date) is simply a product of luck not planning.

The manufacturing sector was long gutted out and almost 60% of the working population hold jobs directly or indirectly funded by the government. From liquor, beer and casinos, health system, electricity, schools, law enforcement, fire-fighting, licensing and on and on most are supported by public sector jobs while the population ages swiftly with almost zero population growth.

The levels of government, municipal, provincial and federal agencies AND their private sector suppliers IS the Canadian economy.

Since the government claws back much of what it pays out in wages, it is a “buck passing around the circle” economy – almost closed loop. The private sector is reduced to fast food and retail paying miserable wages.

This uber-nanny state model did absorb the initial punch of the 2008 meltdown but as the global collapse continues dark clouds are on the horizon.

I would say the Canadian economy is a snow-ball in flight and will certainly encounter the wall of reality – soon.

The mode of collapse will be the correction of real-estate, which has been used as a cash machine by most over the past decade or so and when the inevitable happens many will be submerged and taken out of the economic equation..

Then again, perhaps the CanuckLuck will hold.

    Gil on

    Luck? I don’t think so. Canadian economic policies of the late 90’s early 2000’s are the reason we didn’t give out 40 yr loans with no down payment!

      Nick Ettema on

      Sorry.. Mr BeyondProphecy had it right first time.. Canada is one great welfare state.. and that’s not the fault of the recipients either.. opportunity is restricted here. PRECISELY because of the reasons that you have given.. If you wanted to start a business in the USA, even if you had a bad or *no* business plan, or poor credit, that wasn’t an impediment.. Somebody would have given you a loan, or more likely, a grant from the government, more often than not.. More often than not these business failed.. but some did not.
      Here though.. even a watertight business plan gets turned down.. There were FEW grants for new businesses, and of the ones that existed, they hardly covered the first few years.. Couple that with much higher commercial property leases, and a far less concentration of population (10% of the US), meaning that with any business the saturation point gets reached far earlier, unless you are located in the most urban centers, such as Montreal or Toronto where the leases are prohibitive.. and you can why so many businesses here hardly ever get off the ground.
      And then there';s our EXPENSIVE education system.. A full time job at5 minimum wage is required to pay the cost through college or university, and full time work is hardly conducive to proper studies.
      Unskilled work is hard to come by, as there are far more unskilled laborers than jobs.. even if it were possible to get by on the minimum wage, which , at least where I live, just barely pays average rent costs..
      Because of all this, MANY people are living in a subsidized manner, either fully subsidized , like provincial welfare, or disabled allowance rolls, or temporary unemployment insurance. It is the tight purse of the banks and government policies, that have kept us out of the soup earlier, and are likely now going to be responsible for our collapse…

Sandra B. on

“…the U.S. Federal Reserve has already said it’s not going to raise rates until 2014.”
The U.S. Federal Reserve is actually a private financial institution, it is NOT a government entity — It does not operate in the interest of the public good.
So please drop the “U.S.” part. It’s as federal as Federal Express. You may as well call it Federal Reserve Inc.

    GRIM on

    What are you talking about??? The President of the United States appoints the 7 members of the board to 14 year terms. If this was not a US government institution how could the board members be appointed by the US president? You logic or lack thereof is astouding:

    The Federal Reserve has both governmental and somewhat private parts.

    The Federal Reserve system was setup by Congress with the Federal Reserve Act of 1913. The Federal Reserve system operates in accordance with law, which is Title 12 U.S.C Chapter 3. http://www.law.cornell.edu/uscode/html/u…

    The entire system is controlled by the Board of Governors. The Board of Governors is a 100% government agency. Each member of the Board is appointed by the President and approved by the Senate. Board members are not allowed to be officers, directors, or employees of any bank, banking institution, or trust company. In fact, Board members are typically economics professors or at least hold doctorates in economics.

    There are 12 district banks and 25 branches in the Federal Reserve. The Reserve Banks serve banks, the U.S. Treasury, and, indirectly, the public. A Reserve Bank is often called a “banker’s bank,” storing currency and coin, and processing checks and electronic payments. Reserve Banks also supervise commercial banks in their regions. As the bank for the U.S. government, Reserve Banks handle the Treasury’s payments, sell government securities and assist with the Treasury’s cash management and investment activities. Reserve Banks conduct research on regional, national, and international economic issues.

    The Federal Reserve district banks are setup SIMILAR to private corporations, but they are not. They are setup to be independent of the government but to operate within it. Nationally chartered banks, like Bank of America, N.A., are required by law to become members of the Federal Reserve system. State chartered banks may become members if they meet certain requirements. A bank becomes a member by SUBSCRIBING to shares in one of the district banks. The amount of shares a member bank must subscribe to is set BY LAW to a percentage of the member bank’s capital. The member bank cannot subscribe to any more or any less than the specified amount. Additionally, the stock DOES NOT CONFER ANY RIGHTS OF OWNERSHIP beyond the par value of the stock and a 6% annual dividend. If a Federal Reserve bank was dissolved, once the member banks were paid back their subscription amounts plus any unpaid dividend, all other assets and liabilities would become the responsibility of the U.S. Department of Treasury. This is in accordance to law.

    Each district bank is controlled in its day-to-day operations by a board of directors. Six of the nine members of the board are selected by the member banks. However, those six board members cannot be officers, directors, or employees of any bank and three of those board members are not allowed to even own stock in any bank. Three of the nine board members are selected by the Board of Governors and the six selected by member banks are subject to the approval of the Board of Governors. Each member bank gets ONE VOTE per board member regardless of how many shares of district bank stock they are subscribed to. Other than that single vote, stock ownership has no additional power.

    In accordance to law, private individuals, corporations, and foreign governments are not allowed to own federal reserve stock. In fact, the Board of Governors can demand surrender of Federal Reserve stock at any time.

    BTW, the Federal Reserve is absolutely constitutional. The Constitution states in Article 1 Section 8, in part, “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;…”
    So, it is one of the powers of Congress to coin money and to regulate its value.

    Later in that SAME SECTION, the Constitution states, “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” That basically means that Congress can enact laws in order to execute the powers given to it. That also means it can DELEGATE those powers. That is EXACTLY what Congress did when it enacted the Federal Reserve act.

      Kinoli on

      Yeah, the United States Constitution declares, in Article I, Section 10, “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts”. Yet currently they are not allowed to use anything other than their fiat currency (which isn’t backed by gold or silver) that is created by the federal reserve. So it’s not like the constitution means much anymore anyways (sadly).

      Highlander1 on

      Dear Grim

      Before you empty your “brain” about what you believe the Fed Resserve to be, I suggest that you conduct some research into its inception and crooked politics involved surrounding its start. Namely, read the following books that have rigourously researched it and published the findings:

      A Study of the Federal Reserve and Its Secrets by Eustace Clarence Mullins

      The Secrets of the Federal Reserve by Eustace Mullins

      Tragedy & Hope: A History of the World in Our Time by Carroll Quigley

      The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin

      Then, perhaps, you will begin to understand how this fraud was purpatrated on the People of the USA by a European Fraudster and his American puppet underlings.

      sleelofwpg on

      Yeah. That same constitution that says you are supposed to have annual operating budgets but it’s been how longs since one was actually brought down. And how is that “not incurring debt” part working out for you too?

      steven on

      I would like to add “The Creature from Jekyll Island” as an excellent book on the formation of the Fed. Does anyone realize the United States has been bankrupt since 1933 and been working under Emergency powers ever since?
      Central banks and single currencies are destabilizing, destructive mechanisms and tools, its plain and simple.

      oot der hoos on

      The President only picks bank industry insiders to regulate the banking system.
      The twelve regional reserve banks are privately owned. Those regional banks are, so called, regulated by the Federal Reserve. In practice, it is more like the New York reserve bank tells the Fed what to do.

      It is government managed collusion and it got extended to zero interest money for derivative and bond, share and commodity ownership investment banking, instead of just boring commercial banking, since Glass-Steagall was repealed.

      http://www.factcheck.org/2008/03/federal-reserve-bank-ownership/

G. Nont on

So when does the sheen on Mark Carney start to wear off? No one has much respect for the Minister of Finance (who has made no hard decisions and is still coasting on Paul Martin’s work from the 1990s!!), but how long will the media and pundits continue to pander to the supposed “brilliance” of Mr. Carney?

Doubling interest rates now would significantly increase the income of many Canadians – most of whom receive some fixed income and many of whom (think seniors) have nothing but fixed income; it would fix the insurance industry (I’m sure Sun Life would like to see some lower bond prices – it might help with their “new business strain” as it’s called); and it would do less to depress markets and much less damage overall than what happened in 2008 – which was mostly caused by cheap money.

Because setting a responsible price for money continues to not happen it leads one to wonder why? What is the real purpose behind artificially low rates? Are banks really teetering on the edge of catastrophe? (possibly) Is this policy just stealth recapitalization (well not so stealthy) of the banks? (especially the “strong” ones in Canada and Germany). Is it policymaker fears of bankrupting the already over-indebted ? (going to happen anyway) Is the power structure just robbing all the savers to pay the debtors” Probably at bit of all that – especially the latter. Think of the corporate elite, financial capitalists, and speculators who loaned out the money and took on the debt (not mortgage holders they are pawns … the mortgages have been resold as “financial products” and in any case only have economic importance an asset of the banks). Now think of who saved it carefully. Which group has more influence and power?

Banks need cheap money and expensive houses; people need money that has value and affordable housing. Who’s going to get what they want?

    B Warnes on

    For the record, Mark Carney is not the Canadian Minister of Finance. He is the Governor of the Bank of Canada and Jim Flaherty is the Finance Minister. He took over the post of governor from David Dodge in 2008.

      Michael G on

      For the record, I did not say Carney is the Minister of Finance, but back to the point… Flaherty and the Harper Government had a chance to do the right thing in 2009, when R/E and the economy were well on the road to a healthy reset. Instead, in support of their corporate masters, we got 40 year mortgages, near zero interest rates, the Canadian twist on liar loans, and no money down (through line of credit loans).

      Doowleb on

      Had they done what you suggest in 2009, the ‘gimme’ leftist voters would have toppled the minority government.
      Then Canadian finances would mirror the disaster taking place in the US.
      Also..the commenter who stated that the current government is still relying on the successes of Paul Martin.
      He raided the unemployment coffers of over 50 billion and cut billions more from equalization payments. *Voila!* a balanced budget that was actually theft. The cuts in equalization payments were craftily blamed on Mike Harris by the libs and their media friends.

    dufhb kfjgljethj on

    Amen and Amen!

      FAHRENHIET 451 on

      I am quite amused by many of the comments made here, particularly those by the apparently well-off middle upper class. It is not that I don’t sympathize with their position on being overtaxed, but I cannot help but feel they know nothing of real-life burdens. Let me interject, I believe in capitalism, strongly and orderly controlled capitalism. All this whining about taxes makes me ill to a degree. People talk about fairness in taxation!!! There is no such thing as fair taxes only who is capable. The people with the most wealth and income seem to always be the ones crying loudest “foul, unfair, I deserve it!” HOGWASH. The wealth of a nation is built upon the natural resources and the backs of the lowest level workers in the world. The resources belong to all of us and without the soldiers there are no generals, capitalist, communist, or monarchist. Buffet has seen the light in the USA and he is correct. The only way to solve our financial crisis is to grow up and tax the wealthiest in a severe and rapid fashion. People don’t need five homes or three yachts or god knows what. Isn’t it enough to be able to see a shirt in the shop window and know that you can have it? We, none of us, deserves to have luxury at the expense of someone else living in poverty. The current capitalist system is no different than the defunct communist system. Both preyed upon the masses to fuel the excess of a few. Yes, our system is tyrannical as well. Those that seek wealth at all costs in the false belief that they deserve it are tyrants. Taxation is not the issue. How it is spent and where it comes from is. Laws can be passed to govern the ultimate wealth held by any individual. Salaries can be regulated to better share the wealth of a nation, spreading the perceived unfair tax burden over more individuals making it more palatable.
      In summation, are we in trouble? Yes. Will we fix it? I doubt it. Why? People are selfish. Maybe it would be a good idea to remember this folks. Take care of your brother and he will surely take care of you.

      Kinoli on

      to FAHRENHIET, it is obvious that you have been brainwashed into hating the idea of capitalism. Just so you know, capitalism has the ability to create wealthy people. In order to become wealthy in a capitalist society, one generally has to take some risks of their own time and capital. Sometimes it pays off but oftentimes it does not. A guy like Steve Jobs who was one of the wealthiest men on the planet, you would tell me shouldn’t have had all that wealth and should have been taxed to death. So you are saying the risks he took to start the business in his garage and forgo looking for a job elsewhere didn’t mean anything and anyone could do his job. Also the benefit to society that he created for us, is undervalued. A man is worth what our society is willing to pay him, People liked the products Steve Jobs and his company created, so we were willing to give him our own capital for the products he created, that is true capitalism and there is nothing wrong with that. If you tax people too much, they will just leave for a less taxed location. I’ve definitely thought about it.

      But you would say that the wealth of a nation is being stolen by him, a wealthy individual. What a joke. There is no such thing as the wealth of a nation. I don’t own the oil sands. Besides a nation is only something of fiction, it is a man made division of invisible boundaries to separate men from each other. The reason people have trouble with taxation is that it destroys capital and steals it from the producers in society. This is why I push for privatizing nearly everything, because it shows the value in things and causes people to work for their success and gives people an incentive to want to succeed in their endeavours.

      Try this example on for instance. If we privatized education, meaning the government would drastically reduce our taxes, maybe 20% because they wouldn’t deal with it anymore. Their would be schools all over each city, you would send your kids to the school around you that had the best test scores, where students were behaved the best, etc. This means that each school would do their best to get the best teachers (paying them better even), have the best services and equipment so they can earn your business. The bad schools would loose customers because they aren’t innovating and keeping up with the rest. That is true capitalism and their is nothing wrong with that. Right now when the govt runs these things, we fight over how much money we can get out of the tax payers to fund these things and they are always under funded and schools are in disrepair all over the world because of it. Also, they pump more money into the failing schools and they just keep failing. Governments can’t fix our problems.

      TAXATION = THEFT

    Sleel on

    Hahahaha. Paul Martin’s work. That would be downloading the Federal Deficit onto the Provinces during his tenure so they had to jack taxes and calling it his slaying of the Deficit Dragon. Yup, real hard work that letting the Provinces do all his “work” for him

      fahrenheit 451 on

      Kinoli. it appears you are the brainwashed individual here. I sincerely believe capitalism is the most effective means by which people are motivated. take two examples, yourself and a child earning cookies, both doing for your masters what they expect and “hoping” for a cookie and wealth respectively.The mother doesn’t turn the grocery budget over to the child for for any monumental success and the leaders of our country should not turn over the well being of the nation to a handful of individuals for their monumental success either. Incentives need not be “I am the richest man in the world” scenarios. Winning a gold medal in the Olympic games doesn’t stop an athlete from trying to be the best person they can be in anything they choose. Winning great wealth need not be the main legacy a person leaves when he is gone and no one needs a billion dollars to do great good. I am telling you, once there is no engine the car doesn’t run anymore. Whether you beat the car to death with a hammer, starve it for fuel or oxygen, or jut don’t put enough money into to keep it running smoothly it will fail. This represents the same balances that must go into any economic system. There will always be greater and lesser forces in all things, it is balance that hold them together. Too much socialism and you fail, too much capitalism and you fail.

    oot der hoos on

    I agree. I dismiss Mark Carney of GoldmanSachs-Canada, and printer-extraordinaire, Mario Draghi of Goldman Sachs-Europe.

    Xander Bekkett on

    When the name “Mark Carney” precedes AND follows mention of the “Minister of Finance” one can assume YOU thought “Mark Carney” was the Minister of Finance in the absence of the said Ministers name.
    However, perhaps I should have realized that you were just unable to construct a coherent sentence.
    Your turn (I’ve got more)

    Greg on

    The greedy banksters in the US basically have caused the financial problems being in bed with Bush US government. In combination have created the perfect storm. Canada and the rest of the world had nothing or very little to do with the financial crises, yet we all are going for a ride. Canadians not having the reserve currency status are pretty much innocent bystanders in this whole mess. Lucky for Canada we can’t print money like the US saved us since 2008. Not having the reserve currency status gives us no control over our money supply so we have to have a responsible government. That being said doesn’t help us in this kind of a situation. All credit is US based whether we like it or not. Our hands are tied we can’t do anything. As far as debt the public sheep will of course borrow their limit if given a chance. Human nature to live beyond your means. The banksters are very smart and of course use this to their advantage. Remember the 80’s. They lent out cheap money and Allan Greenspan just reeled them like fish on a line. Great business plan. It worked then and it will work again. People have short memories. Debt has been throughout history the best way to get free money. Any bankster worth their salt knows how this works and it works every time you do it. Do not get caught up in the debt trap, it is nasty as we are about to find out in the next little while. Being fiscally responsible will definitely help but just the same will you will possibly lose your job no matter what you do. Mathematically impossible for the US to pay off its debt gone pass the point of no return. So just print money. Works for a while until the crap hits the fan. NOT OUR FAULT!!!

    Kevin on

    I think that increasing interest rates would be a huge mistake at this point. People are over extended. If rates were raised even moderately it would be the 1970’s all over again. The rates were high in the 70’s, but the principal owed was lower. Banks would be collecting houses for fun if rates went up significantly. Gas prices are high. Food prices high. Wages are not rising. Insurance costs are high. Tuition costs are criminal. People are just becoming indentured servants to banks and big companies. People take the credit, they didn’t need it as much in the past.

      bruce Beaumont on

      Government has a vested interest in debt first they get interest on the paper money they pand second the banks make a lot of profit lending it and all the taxes it generates

Don on

I am so tired of hearing about consumer debt. We have out of control spending from the federal and provincial governments and all they do is raise our taxes to pay for it. Out of every after tax dollar Canadians must buy goods and services only to be taxed again. I suggest it’s our governments who force Canadians to take on debt ot keep their heads above water.

    Judy on

    I so agree with Don’s coment………it is our government that is drowning us!!!!

      LisaK on

      Isn’t it easy to continuously blame the governement? How much personal debt do you carry? You KNOW that debt is a huge problem. Blame the governement all you want, but take responsibility for the debt YOU have, and pay it off. This is something you can change!

      kinoli on

      LisaK, what do you expect, when they steal half our income from us. And most of our friends and family just think its normal for them to do that because all the rest of the western world does the same thing, forgetting that 100 years ago the government didn’t take in any income tax from its citizens. If I had that other half of my income, my mortgage likely wouldn’t exist. Just saying.

      6packmuscle on

      I still would put part of the blame for consumer debt on the banks, they always seem to give out money to anyone, even if they can’t pay. I don’t want to fully blame the banks, people do NEED to start taking proper responsibility for there own actions too.

      Robert on

      Canadians pay income tax some of the highest in the world, then everything they buy is taxed too. Then booze, gasoline (when they have extensive domestic oil) they pay more tax on top of all of this. Government you do not need MORE tax money – get rid of debt and your won’t be need so much of our money. Then you will see true progress.

      Leo on

      I wouldn’t mind paying the current level of taxes if the government did something positive with it. Like subsidize education expenses, lower public transportation costs, etc…

      Jed on

      @judy –

      I agree in part, our government is drowning us and mismanaging funds. Government has mismanaged money as long as I can remember. Consumer debt at 161% is new.

      Everywhere I look I see people working at fast-food places with iphones (the most expensive smartphone you can buy right now). You see people in new cars, huge houses and eating out all the time. When I go to the store I see people buying large amounts of pre-packaged expensive items.

      I have many friends whom I wonder if they don’t sell coke on the side to support their life-styles. I can’t figure out where they get their stuff from until I consider credit.

      I live with the cash I make from my job. I do not use my credit card unless I have to, and then I pay it immediately (plane tickets, car rentals etc). I am proud to say that my debt ratio is 42% (STILL above the 25% recommended) Once I pay off my car it will be inline with recommended values.

      This article isn’t about the government spending money, it’s about people living beyond their means because they are competing with other people and are CONSTANTLY marketed to using very sophisticated mechanisms.

      I shop way less than everyone I know. I might look cheap to you, but I save money every month, eat steak all the time, buy wine from the good section of the store and vacation with cash. I don’t waste money on clothes, cars, art, and other necessities that have been over sold to us.

      Listen to the radio or watch TV and you’ll see people trying to sell you new cars all the time, buy a new bed every 8 years now, up-size your house so you’ll have more room, and pay 60 bucks a month to put your junk into storage forever, never to be looked at again. Don’t forget to make sure you have the largest data plan on your phones so you can watch all those funny cat videos anytime/anywhere and all the movie channels on your cable package so you’re not bored ever LOL.

      Seriously, you can EASILY get this under control if you **JUST STOP SHOPPING**.

      Make lists, buy what you need and learn to cook for god’s sake! Invite your friends over instead of going out, EVERYONE will thank you :)

      I know this was a rant, but really, the only reason people have 161% debt loads is because of advertising and people’s keep up with the Jones’ attitudes.

      Get rid of those, and you will control your debt.

      Kevin on

      Has any noticed the price of gas in 2013? Has anyone noticed that people are are having to have both spouses work to make a decent living anymore? Were your parents better off?

    Fenwick on

    Horsefeathers.

      janice gougeon on

      HORSEFEATHERS??? JEEEEZUSS DALTON YOU ARE ABSOLUTELY EVERYWHERE.

    far on

    I so agree with Don’s comments…the taxes are killing people…especially middle class…you don’t get any allowances to support your household because you are not eligible, yet taxes are deducted from your salary, you pay taxes on everything you buy, on utilities, on property etc….taxes taxes and taxes everywhere

      vee campbell on

      The taxes and the gas prices are killing us. I gave up smoking and drinking, luxuries I can’t afford. Looks like driving my car is next to go, can’t afford gas. Hopefully it gets no worse.

      martin on

      The fact of overspending by the Feds and the Provinces are setting the stage for the population to follow suit. Set the example you are supposed to set, our municipalities are forced to have a balanced budget, no fudging, and if we all learned that lesson, when the pot is empty, there is no more, we would all be better off. Don’t spend beyond your means!

    Ellen O'Day on

    There is a good article in Money Sense pointing out the credit issue is overblown not because it does not exist, but due to its distribution. Rather than being spread across the board it is concentrated in about 20% of the population. The other 80% have relatively low credit hence credit issue will not destabilize the economy if they were to occur.

      oot der hoos on

      That is what Alan Greenspan and the Bernank said before their banks were sunk by that portion of the populace.
      So I say you are wrong, and government revenues will plunge like Greece, after the Canadian credit bubble bursts.

    Shawn on

    Don is right on. Do the people of Canada not realize that we are giving our government our well and hard earned tax dollars to trust them to spend it correctly/ethically Now all we hear is the promised jobs arent there, our infrastructure is going to pieces, Factories that i would have never have would imagined going anywhere suddenly picking up and moving to another country while our government sits and watches it happen?. When will we as a society say “enough is enough, we are not getting the bang for our buck so to speak? Other nations would have mass protests for less and we sit idly by and watch it all from the cheap seats. What happens when we cant even afford that?

      kinoli on

      This is socialism at its finest. Stop voting for socialists. Just vote for the guy who will steal the least of your money and things might look a little brighter. Still waiting on a libertarian party to emerge in this country!

      babette on

      I agree with Don and others re. the BANKS wilfully (governments are puppets/traitors) rendering us all paupers. Read: The Global Economic Crisis by M. Chossudovsky for enlightenment on what the IMF and banks in general have in store for the populations of the world.

      They want our very last cent (uh, make that nickel).

      Good Luck All!

      jdmullen on

      Kinoli, you have the only solution that works.

      Stop voting for socialists, the more revenue a government has to play with the more corrupt it will be.
      Vote for the guy that commits to balance the budget and reduce government revenues. The will cut costs.

      Three more focus areas: health, education, and energy, all three of which are grossly inefficient monopolies and need to be restructured. There is no good reason why we can’t cut health costs in half or secondary education costs by 2/3, because we have the technology to do it. Innovation could make it so 20 years sooner.

      We can use the internet to cut university tuition costs in half. We can use the internet to cut health care costs in half. Make preventive medicine the standard in Canada, use only generic “necessary” drugs. Canadians would have 10% of their income back in their pockets, our kids will have children, and enjoy them more, and Canada would stop relying on immigration to stave off an aging population.

      Make intelligent innovation a priority to reduce energy costs (invest in safe/modern nuclear and fracking technologies / improved gas distribution anyone?)

      Kaitlyn K on

      @jdmullen

      You want to talk about monopolies that need to be trimmed, let’s look at the military. The billions that are going to be poured down the drain for those overpriced jets could do a lot. It’s classic “broken window fallacy”, every dollar of it.

    Alan on

    Anyone who tries to fix that gets roasted for cutting social services. Can’t have “free” medical care and a billion other services without high taxes. I’m OK nuking both, but most people just don’t get it.

      6packmuscle on

      I am only 35 years old myself and if under your idea the government told me that in in 1 or 2 years I would have to take on more burden of paying my own way I could deal with that, I am younger, however anyone over 55 should be exempt from this type of fundamental change to our system.

      The biggest problem to solving our problems is our warped principles in the west. We will kill ourselves to make more money and give up all the most important aspects of life for something we can’t take with us.

    jj lee on

    If the goverment let everybody keep the tax money we would have an incredible global boom.

    joe on

    Not to mention the banks broke records for most money made this year.

    ScottHfx on

    This guy is completely whacko. He says Canada is now, where the US was a few years back? What fairyland is he living in, and what justifies a guy so out-of-touch comment on matters so important? Canada debt about 64 billion. US debt 16 trillion. Does anyone see similarity with that amount. NO. USA is printing money like no ones business. Maybe he should go back to school. I learned 25 years ago in University Economics that printing money is recipe for disaster, and will cause massive inflation and economic collapse etc. I guess the basic principals of economics are now being ignored by the Obama administration and guys like this article quotes?

      Kinoli on

      Scott, I see what your saying about us being better off than the US, agreed. However, we are all in a pickle because we are all tied so much to the, soon to be hyper inflated US dollar. We all use it to trade oil around the world, once countries start trading in Gold, the prosperity game is over for the US and that will trickle down to pretty much every other nation including our own, especially our own as we trade so much with them. Also, we do have a massive debt, your figures are wrong, we are at about $600 billion in debt and it raises about $1k every second. That’s a lot of doe for 35 million people.

      The problem is too much public spending. If we were to privatize as much of this waist as we can then our government wouldn’t need as much of our money and competition would be good for driving down prices also, efficiency in these industries would rise. Things like health-care and education should be privatized. Foreign aid, subsidies and grants should be stopped, it is simply theft from one group of people to give to another group of people. How immoral is that? It sounds a lot like socialism to me.

      Kevin on

      I can’t disagree with you more. Private companies are in business to make money at your expense. True that we pay too much in tax, at least we get something for it. Private companies would simply hire CEO’s who know nothing but but how to cut expenses and outsource good paying labour to peasant labour. Pocket huge cash when the stock goes up (temporarily of course) then move on to cripple someone else. Free market capitalism is a lie told by the rich to fool the voting poor. Wake up people!

      Tom Brown on

      Hopefully your research between September 20th and today has revealed that you were a little off in your calculation of Canada’s debt. As in, you quoted about 10% of what Canada’s national debt actually is. (Actual=$600+billion; your number=$64 billion). The number you quoted is actually closer to our national annual DEFICIT than our national debt. Maybe you’re confusing principal with interest. Debt=principal; deficit=interest (minimum payment on your credit card, for example). Now, factor in provincial debt, municipal debt, corporate debt, student debt, and finally household debt. Canada’s REAL debt to GDP ratio: about 300%. Many in the mainstream press and also in political circles are publicly worried about Japan, whose present debt to GDP ratio is only about 230%, and where it’s believed could easily be the site of the next world financial panic as a result. Perhaps those same worrying folks should actually be worrying about Canada eventually becoming the next ‘black swan’ which starts the financial panic anew, instead of Japan, which appears remarkably resilient when compared to truthful data about our own beloved Canada.

      Furthermore, Greece, which has just been declared a ‘developing nation’ by the IMF–IE Greece has been reclassified as a third-world country now–has a debt to GDP ratio of under 200%.

      Contrary to what most folks believe–that prices of assets like stocks, bonds, mutual funds, etc., simply increase over time, for no apparent reason, or perhaps they believe that traditional supply and demand models still exist–contrary to that, most of the value in financial markets is actually derived from confidence levels. As in, if people are feeling confident, they go out and spend and/or invest, and then asset values rise. When most people in Canada spend, they do it by charging their purchase to a credit card, or home equity line of credit. Still others delude themselves into thinking that by paying off their credit card with their HELOC, they are actually just ‘tapping into’ the equity of their most prized asset–their home. And home values will never go down, right? “Like my grandpa always said, invest in land–they’re not making any more…the price will just keep going up!” Wow, money for nothing!

      So what happens to the confidence that causes people to go out and indebt themselves, when all of a sudden they realize that the entire financial and monetary system they participate in every day is actually a giant, worldwide ponzi scheme, engineered by a very small number of Keynes-influenced politicians, who are actually just agents for the true controllers of the world–the internationally connected, tightly-knit and secretive banking organizations, who have written their ponzi-scheme economic systems right into all the laws of nearly every nation on earth? Ever ask yourself why it is the law that you MUST conduct all your financial transactions using government (banker)-sanctioned bits of paper, or alternatively, electronic digits? Why can’t you transact using any medium you choose? They didn’t talk about that in public school or university, did they?

      Translation: when people wake up, and realize that what they thought was money is actually just printed bits of paper, or worse, electronic digits on a screen, what will their reaction be? How will markets react? What will happen to all the worthless digits and bits of paper then? The answer is that there will be a gigantic rush into assets which have real value, such as farmland, water resources, timber, minerals (such as precious metals, which have been used as money for millenia, but whose true nature has been disguised by bankers so that you will continue to use their ponzi paper). Unfortunately for most

      No need to speculate on what the answer is. Instead, forget all the hogwash that you have been taught, from indoctrinated teachers who never questioned a single thing in their entire lives. Forget what those teachers referred you to–textbooks which were published by the companies owned by the same private interests as those who own the banks who created the worthless currency in the first place!

      -Weimar Germany, early 1920s. What happened there? (look it up)

      -Zimbabwe, mid 2000s to present. What happened there? (look that up too)

      -Argentina, repeatedly, and about every ten years, for several decades (talk to some Argentinians about what keeps happening there…it’s happening again, RIGHT NOW!)

      -By what process, and under what conditions is currency (what you call ‘money’) created? (look it up, getting the picture?)

      -What does ‘fractional reserve lending’ mean?

      -Why does the media that you watch on the big networks never talk about how currency is created, or why? Why do those same media actively dissuade their viewers from learning about those ‘barbarous relics’ called gold and silver?

      Start putting the pieces together, please, I implore all of you.

      Most people I speak to about these issues seem to have an irrational idea that somehow your government has your best interests at heart. I have no idea what these people are basing their opinions on–other than official propaganda that they have been bombarded with their entire lives. Maybe you should also look up what the beloved Pierre Elliot Trudeau, along with his accomplice, BoC Governor Gerald Bouey managed to set up without anyone noticing in 1974. Ever since, Canada has become more and more bogged down in a debt that will never (is designed to never) be repaid. Governments, in the direct employ of their masters, the international banking cartel, have managed to pull the wool over just about everyone’s eyes.

      Even against the backdrop of perpetual tyranny, which I have only begun to touch upon here, small but dedicated groups are fighting against the ignorance which plagues so many. Ever wonder about all those things in the world that just don’t make sense? Your gut instinct was right. There is something very wrong with the world. It is called banking. Banking, as an industry, is parasitical. It is not required for us to be able to survive. And yet it has infiltrated all levels of society, in every country, to the extent that most think that abolishing banking would be like cutting off their own leg. Instead, think of it more as removing a cancerous tumour!

      When I speak of the evil plans of the international banking cartel, obviously I’m not talking about your sister the bank teller, or your friend the retail branch manager. Those people are good people, for the most part–they are just like you and me. They were taught in the same schools, by the same indoctrinated and largely ignorant teachers, who were themselves also taught in the same school system by other ignorant and indoctrinated folks. People are not bad. By their nature, I believe most are good. But people, perhaps because of this innate goodness, can’t imagine that there are others who are not like them. Ignorance is bliss until you wake up one day and are living in a true totalitarian state–with no more freedom of any kind, only misery and drudgery. This is what the international bankers are after. Once you delve into reality in the course of your upcoming research on these topics, you will understand that this is not a random plan…it is co-ordinated, and it has its roots in events which took place decades, if not centuries ago. Bankers want a one-world government, the better to turn everyone into an equal debt slave to them.

      I AM talking about those in the highest positions of power. Those who value only an increase in their power, and a removal of all freedoms from you and me. Don’t forget, bankers could not operate without lawyers. And lawyers could not operate without the law which they reference. And the law is written by politicians (who are most often lawyers themselves, or sometimes bankers too). So, who votes in those legislators? (or more to the point, who doesn’t vote at all, thinking that their vote won’t make a difference?–you’re probably right, seeing as the last federal election’s results were completely fraudulent–not that it would matter one iota which party was elected). To change the system is no small task. It starts by taking away the power of those in control. Get out of the debt game. Stop using credit cards. Stop using banks, for that matter, as much as you can. And then, start talking to your ‘elected’ ‘representatives’. Loudly, and consistently, about the fact that we are taxed to death, and that most of that tax (your blood, sweat and tears) goes to pay the INTEREST ON THE NATIONAL, PROVINCIAL AND MUNICIPAL DEBTS RACKED UP IN ORDER TO ENRICH PRIVATE BANKING INTERESTS!!!!! Did you authorize your ‘elected’ ‘representatives’ to spend all that money on a bunch of crap that we don’t need as a nation? No, you didn’t. But they are spending it anyway. That’s how they get elected. Promise money they don’t have to people they don’t know, in the hopes of buying votes. And so far, it has been working flawlessly. And the added benefit to politicians and bankers: their actions continue to divide Canadians, creating a fertile ground for future ‘issues’ upon which new elections can be fought.

      My point is, without digging deeper, without questioning, you will never know how bad it’s going to get, and therefore be able to prepare yourself against the economic and social storm which is coming. The storm began in 2008 in the USA housing collapse. The bankers and politicians have papered over the problem with ‘quantitative easing’ ever since. Another name for quantitative easing is ‘currency debasement’ or ‘currency devaluation’. Unless you take it upon yourself to learn what all this means, and act against it, you will continue to trust everything you hear on the big tv networks, radio stations, and everything you read in so-called ‘informed opinion’ pieces in major newspapers and magazines. You will only be getting the information which benefits those in power, since they set all agendas. Bankers decide what you will read, hear, and watch. Because by doing so, they can control your thoughts, attitudes, emotions and therefore your actions, whether you admit it or not.

      Break free of the matrix into which you have been placed. Seek alternative media sources. Re-learn history, not the history which has been revised to suit the purposes of those who think they are your masters. Wanna stay a sheep forever? Here is an analogy for you then: A sheep’s wool is grown and sheared once per year. During this early part of the sheep’s life, it is happy, healthy, well fed, cared for. Then, when the sheep gets old or sick, it is quickly slaughtered, since it has outlived its usefulness and would cut down on the farm’s profits if it were cared for in its old age. Same thing happens to dairy cows–they are milked and milked and milked, and then one day turned into burgers when they can’t give any more milk.

      You feeling like you can provide wool and milk to your slave masters forever, or do you think one day you will get tired and be sent to slaughter? Perhaps you believe that you will enjoy receiving a pension well into your old age? Wow, ignorance is bliss.

      THEY ARE NOT YOUR MASTERS! YOU ARE YOUR OWN MASTER!

      WAKE UP CANADA, BEFORE IT’S TOO LATE TO DO ANYTHING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      (My apologies for the length of this post. please post it in its entirety–I fear for my fellow Canadians, and they need to be able to act freely upon real information. They need to hear something other than propaganda, otherwise many will end up destitute, watching as their family and friends suffer and possibly even die as a result of extremely poor economic conditions. Here in Canada, many live inside a bubble of contentment, just as all those sheep and dairy cows do until it’s time to head to the slaughterhouse)

    Rheal L. Gagne on

    Well said Don the government is always responsible for the debt load Canadians takes on..Since 1985 the Canadian worker as been losing to inflation and taxes..My Father worked for $3.00 an hour in the 1960 and raised a family of thirteen and my Mother never work outside the home..the buying power of $3.00 an hour in the 1960 is equal to $45.00 hours//that was a mining job..Today at $45.00 an hour would be almost impossible to raise a family..The Canadian Government as been on an offensive attack on the Canadian Families since 1985 the reason was to get cheat labor from foreign countries..Yes we can blame it on the Government but what are we willing to do,

      Jacob on

      If you can’t really raise a family on $45/hr I feel bad for you. You might need to review your spending habits. I bet an extremely large chunk of the country would be ecstatic to be earning $90k a year.

      Alleah on

      Thats a ridiculous statement. $45 an hour not enough to raise a family on? Maybe it’s not enough to raise a group of brand name zombies. But to feed, clothe, house and entertain a small group of human beings? By far enough. I think you need to redefine necessity in your own life, dude.

      Doc Rock on

      $He actually said “the buying power of $3.00 an hour in the 1960 is equal to $45.00 hour today” and that $45 an hour is not enough to raise a family, where epon the knee jerkers came out with various statements like $ 90 grand should be enough for anyone.

      So how much is that really? Well, back when wages were $3 an hour there were almost NO clawbacks.. I recall it was very little a couple of dollars per check, maybe $21 for each 2 week paycheck.. But $45 an hour, now? It’s above the tax line for a single person.. also, a single person would have, if they were in full time work, and paying union dues, health premiums, unemployment payments, pension plan contributions , (all plans, I might add, that are going , or are already bankrupted by successive governments pilfering them for their own ends), provincial tax, federal tax, and he really is earning 16$ per hour.. Now consider that a one bedroom house cost $1800 to $2200 PM to rent, ANYWHERE in western Canada where I live, and until recently it was cheaper to get a mortgage and just “walk away” if you felt liked moving, than to rent, our food costs are the highest in the world, ($3 for a tomato, $3-6 for a loaf of bread, I wanted to buy a watermelon one day and the smallest I could find was $30), gas like the rest of Canada is commonly 5- $6 a gallon, and his statement makes more sense,,,

      David on

      Real simply put – we overspend and live beyond our means
      If you had 2 people making $22.50/hr each the family would have an after-tax of around $62,000 to $65,000 a year
      That means a house worth $300K with a mortgage of $1500 plus all other expenses including $500 a month for kid stuff, $800 for the parents to spend and savings of between $4K and $7K depending on the province. Now if they sock money into an RRSP their savings rate could double and work toward their retirement
      We are spoiled as a nation and need to reassess and stop blaming government, other people, the magical bunny whatever – just vote with your wallet and tighten up long-term and the personal debt crisis will go away (and so will a lot of the stupid SUV’s, Mercedes, 2nd and 3rd not needed vehicles etc

      Pam on

      We are a family of 4 living in Alberta. I worked for ten yrs before we had kids so we could pay our house off early and I could stay home. Since then the value of our house has gone from $80k to $360K. My partner makes close to $60k a year. It would be very challenging to start a family now . We lived very simply, rarely ate out, went camping for 1 week every year, drove old cars, shopped at thrift stores and grew our veg and fruit. We have no debt and have savings.
      I feel for the generations following us.

      Wang on

      agree with you. i am 27 and make only 80k and i can’t afford to go out and only eat $5 bucks lunches. weekend only can play computer at home. can’t afford gf. I don’t smoke, drink and cancelled car insurance now taking bus to work. only 2 people at home and my mom doesn’t work much and i pay 1400 a month for mortgage, all the utilities other bills, and end of the year pay 25000 back mortage as well, my mom cover me dinner mostly. what can i say, i am asian. pretty traditional i guess. hard to save up to buy my own place. place is 370k and paying for 2 years now still like over 10 years to go. by then i am old. thinking about work in other province to make more money. BC doesn’t pay very well. my advise. don’t buy a place too young and be glad you have a father in the house who can make money. i am glad my mom brought me up and made me decent person so now i have to do my part. but yeah tax sucks.

      Greg on

      If your are making 80k a year you don’t really have any serious problems. Your problem is that you don’t allocate your funds properly. I wish I had your problem. The tax load on 80k is your biggest problem. You’ll have to find a way to reduce your tax load RRSPs or some tax saving investments. Anything over 32k a year in Canada is under attack and the government feels that anything over that is excessive and will help relieve you of your burden. All socialist governments throughout the world feel that they should be the only ones that have all the money. They will relieve you of all that responsibility of spending the excess funds required to live on and go to work. It’s not a problem to convince the population that are not making more than paycheck to paycheck that you are the bad guy. They will vote for whoever is going to attack your excess wealth no matter how hard you worked for it. Somehow they believe you are ripping somebody off and or not paying your fair share of taxes. How could these people know the truth unless they are exposed to the unjust accusations. Or just plain jealous of your success. That being said the difference between the US and Canada is the military. Common knowledge the US cannot have a war on the go and finance medical system at the same time just not financially possible. In Canada they don’t send us to fight a war and have you killed they just take all your money. It is almost impossible to get so-called rich in Canada because of our repressive tax system. Go and make 200k in one calendar year and see how much you are allowed to keep for yourself you will be surprised at the results. The harder you work and earn the more you are punished. I am in the construction business in B.C. and the income stream is very erratic, boom/bust. The years that you make a lot of money, most of it goes up in smoke for taxes, but those that are lean they leave you alone. Try and get some financial help from our charter banking system and they run. The two systems work together to keep you suppressed The good old welfare state at its best. Takes the fun right out of it. I have been in business in B.C. for over forty years and have been exposed to the system and it is well crafted. There is no way that you can get your head above the water line. Over time the system is getting more efficient at being more inefficient. I have no idea what is like in the rest of the world but we are a rich country. Well I guess I would not want to be the in the rest of the world.

      Kaitlyn K on

      $45/h is twice my family income. How much I would LOVE to make that much before I retire.

      Leon W Evans on

      You have a serious problem if you are making 80K at 27 and still think you don’t make enough. Some people are in their 50s and don’t make 80K.

      Other provinces won’t make a difference because the problem is your family.

      Justin on

      I disagree with 45$/hr not being enough. My wife and I are newly married, with myself going to university and wife not working due to a chronic illness, and yet we live completely happy and content (no debt at all, I should add- school, car, anything) on less than 45k per year. I only work part time (20-25 hours/week) and make the equivalent of about 22.5$/hr in full time hours and we are more than able to support ourselves and have some extras. we also live in Regina, Sk, which has some of the highest housing/rent prices in Canada, especially relative to average wage for anyone not working in the oil patch.

      The key to not being in debt is living within your means. I’d love a little bit nicer car (we drive used 2005 Matrix), more eating out, a little more travel, more Tim hortons, but we know right now we can’t. We’ve been so trained to want more and more and more and be hardcore consumers right down to paying 6$ for 10cents worth of popcorn at a movie or 2$ for 3cents worth of coffee at Tim hortons that we think we NEED more.

      Yes, if you all the nice things- house, car, long vacations, 5 TVs and computers, eating out lots, etc- than at least 90k is a must. But with less than half of that, my wife and are able to live more than happy even with paying for school and higher than average medical expenses. We’re only 23 and married for a year. Living happy doesn’t mean you have to have all that you ‘think’ you want. I know for a fact we could live on this income with a few kids. Although it would be hard and we hope to make more some day just like anybody else, but doable. Just means sacrifices to things you want. Don’t buy the maximum house you can ‘afford’, don’t buy the maximum car, don’t buy the most expensive clothes, make your own coffee, make your own healthy and cheaper food. When spending money makes you happy, there’s a good chance you’ll end up in some debt.

      Sheryl Crow said it pretty good in Soak up the Sun: “it’s not having what you want, it’s wanting what you’ve got”

      Michael J Brooks on

      I think Rheal L. Gagne meant a family of 13 on $45./per ?, he said his father made $3.00 an hour and supported a family of 13. Idk maybe I’m putting words in his responses?, sometimes ppl make mistakes I know I’ve made a boat load or two. On that note just how much would one have to make to support a family of 13 ? O.o

    Dan on

    The Canadian Government doesn’t understand “tax saturation” where more and higher taxes kill the economy
    and growth. We Canadians put up with higher taxes than we should, and don’t revolt on tax hikes like US consumers do.

    Michael Warhurst on

    The government debt is far from troublesome and government is far from the problem. You folks have been reading too much wingnut right wing claptrap. The grossly overvalued Canadian dollar and the facile attitude of Harper to Canadian corporations unemploying Canadians so they can employ slave wage labour in China not to mention the vast quantities of wealth Harper has seen fit to facilitate transfering from working class folks to corporations who either stick it in the bank, give disgustingly huge bonuses to executives, or move manufacturing to slave wage jurisdictions with no environmental protections. Economic growth does not come by giving corporations and the wealthy elites huge tax breaks. Businesses hire and the economy works well when the consumer (middle) class spends money. Harper has taken a good situation where the government had a 16 billion dollar surplus and made it into the largest deficit in Canadian history – the previous record holder was Mulroney. The debt could be paid in full tomorrow and the federal government doesn’t need to tax or borrow to spend money and Harper has facilitated the irresponsibly high value of the Canadian dollar. The problem is Harper and the economic saboteurs who are moving manufacturing out of the country.
    In the history of humanity there has never been a country which overvalued its currency and exported all of its manufacturing and survived economically – yet this is exactly what Harper et al have done.

      Greg on

      All these talking heads in Canada about deficits aren’t going to matter to much next year.These deficits that are thrown around are only a numbers game. This is all over control. Debts are a form of control created by the central banksters. This well orchestrated game that Ben Bernanke is playing is all about control through debts. When the bond markets and derivatives collapse the amount owed won’t matter, it is all over, period. US and Europe have gone past the point of no return. Numbers do not matter anymore. Confidence in the game is the whole ball of wax. When the derivatives become unbalanced and they soon will be. Game Over. The 1% will still be the 1% this will never change. Law of economics, somebody has to be the 1% no matter what happens. Stats show that only 1% of the people of the world basically knows what’s going on and only 1/10 of 1% are actually doing anything about it. Out the the 1/10% there are again a small percentage that have the financial ability to do anything about it. Everyone including most of them in the finical institutions the banksters themselves are going to be blind sided and get fried as they should be, but taking a lot of innocent people with them.

    Nadia on

    Taxes the problem? Most of them go to health care, so let’ start talking about reforming that…are you game for some privatization?

      Heather on

      Right, adding a profit motive always makes things cheaper.

      JJ on

      Privatization is the worst thing to do.

      1) It will gut the Canadian middle class rapidly, as more and more of their income will go to medical costs with less and less purchasing power thus available to support the rest of the economy. Imagine what would happen to anyone with a major disease–they will be bankrupt. Imagine small Canadian towns looking like US towns…

      2) Privatization of a public good undermines the efficiency of the market, as then we would compete head-to-head with Alabama, etc., the so called “right to work” states.

      3) If anyone doubts privatization is bad, just visit the US and speak to people about their fears and costs about healthcare. The US spends about 17% of GDP on healthcare, in Canada this is about 9%.

      Of course the rising healthcare costs has to be a concern. It has to be managed. We can start by being more creative with what we have: for example, we should be more creative and look around the world for solutions, with Taiwan offering lessons, as would other countries like Cuba. Additionally, for medicines that are costly, we should look ahead and manage it by more R&D by the government universities into drugs, and then allowing our generic makers to manufacture them. That is, rather than pay Big Pharma for the “their” drugs, the public universities can discover the next generation at a fraction of the cost.

      Canada is blessed with income from natural resources. With a higher GST, about 8%, we should be able to pay the debt down fast. Once that is done we can bring down the GST. We have fewer problems than people realize, we should do well.

    don on

    We are a Resource Rich Nation! We are the only country who could self contain if anything ever happened, where does that money go? oh i forgot we sold about 15-25 percent of our oil fields to China!! think about it mistakes like that are gonna come back to haunt us..

    B on

    I think the government wants us to spend less so we can give them more! They should stop telling us how to run our personal business and stop their waste of “our” money…

      Brian Poncelet on

      That does not make any sense

    indybindy on

    Yes indeed, our government has run up the debt and that is bad BUT that does not excuse citizens doing the same thing. Blaming the government is not going to get you anywhere when you are drowning it it…so take some personal responsibility.

    Kay Ess on

    I totally agree with the argument that it is government taxes that are taking us down. As the article suggested the house prices are expected to drop 10-15%. What did our city do? Reevaluated the property and increased its value by 15%. Why cant they cut their expenses and spare us the burden.

      bruce Beaumont on

      Politicians can’t cut expences because in our political system the only way to get elected is to promise more than can be delivered.

    Serge on

    I totally agree with you .Our government spent way too much money on travelling and entertaining too many meeting with each other that never seem to fix anything , in short there is to much government and they spend money like there is a never ending supply of it

    Peter Kerr on

    This is rubbish, the only trouble in the real estate market was created on purpose through fear of a U.S. Style bubble as they called it. They made it harder for first time buyers or even people renegotiating their mortgage if they didn’t meet the percentage of equity needed to qualify, people who bought with low down payments and didn’t grow enough equity to qualify for a renewal could be in trouble and now you need a bigger down payment, that of course has caused a bit of a slow down, The employment stats are blowing forecasts out of the Water and they say. Canada is the Saudi Arabia of natural gas and they have huge oil deposits and I am working too much here in Canada and my Union can’t keep up with demands and they are bringing in foreign workers and approaching the native people to encourage them to help fill the jobs….so if there’s a problem in Canada it’s in the minds of those trying to convince you there is a problem. They are like the doomsday crowd a new fear every other day.

      Greg on

      Hello Peter. There will always be a doomsday scenario even in good times. If I were to be any place in the world Canada is the best place to be. Canada is not the problem, actually we are part of the solution. The debts incurred by the rest of the world is the big problem. Can Canada by itself grow out of the rest of the world’s debt problems? I don’t know. Canada didn’t create the problem but we are involved in it whether we like it or not. I am a home-builder in B.C. in the lower mainland. The tightening of m2 money is a result of the US’s money problems. Their problems are spilling over into Canada and we are feeling the pinch. As far as the tar sands and natural gas, we are very lucky to have all this wealth. Tightening up the money supply to the markets I suppose is a necessary evil that has to be done at this time. Still it makes it very tough to survive in this type of market conditions, it could be worse like the US’s and the EU. All the new high-paying jobs are up north, not too many left down here in the lower mainland. These things that are going on the the financial world we have no control over, so to know pretty much how this all is coming down on us I guess really doesn’t matter, since we can’t change anything anyways. I find for me I like to know what is going on in the rest of the financial world and how it is going to play out. If you have your head in the sand and don’t care then if something does happen negatively and you aren’t prepared for it then you have nobody to blame but yourself. The rest of the world’s economies are being hit hard and it is not over by a long shot. Can Canada survive this huge hit? I don’t know. When things start to collapse is the average Joe prepared for it? Of course not. And that is as it should be in the real world. This whole world debt was not created by Canada but we are going to be dragged down by it. It’s showing cracks in the financial system with artificial low interest rates, that’s not normal. This is damaging our banking system long term and is hurting our senior population’s retirement plans. This cannot go on forever. The whole thing is going to collapse and we the average Canadians are just going to be able to watch as this whole thing unfolds. Just a heads up, so to speak.

      Peter Kerr on

      Hi Greg, I wish I had been educated in financial matters, but I am at least able to see signs of what’s going on now, just because I have lived through some Economical cycles. I spoke to my wife and kids before the meltdown and I sold our house and paid down debt and it’s taken me five years to get completely out of it. At the same time, I saved , I rented and saved the downpayment for my current home. I remember when gold went public and when people mortgaged their homes to join the bandwagon, I also remember Russia released its gold and the price went through the floor. I remember real estate speculation was made illegal because people put a down payment on a lot and then sold it for tens of thousands more before a house was even built, that was Toronto and then everyone was desperate to buy before the prices got too high and that drove prices up but then the interest rates went so high thousands lost those homes or just walked away.

      I remember the dot com bubble and the stock market being on fire……all I know is the Banks end up with all the money and all the “equity” you once had but became convinced to borrow against to finance your participation on the current boom became the banks when the boom went bust. So I can smell that now at least and I explained it like that to my family and now we are safer.

      When the oil embargo happened in the late seventies I. Went to the Arctic for nine years and made the most money I ever had, I was young. I now work in Nuclear Plants and other generating plants and refineries and all through this meltdown I have made the most ever, again, but I am old now. But in Canada I could do all this, I just had to be willing. I worked in the furthest east and the furthest west and the furthest north in Canada and I took an apprenticeship at almost forty, nothing was easy but it was a great experience. I love Canada!

      Now, I speak to people and tell them that we have to spend our money locally and buy Canadian and American goods and that costs more than cheap foreign bargains but it will keep my neighbors working and sharing the tax load. I for one feel privileged to pay my taxes and live in a great country with clean streets and parks and all the benefits for people that we have. I grew up with nothing, in slums. I never thought I would make forty thousand but for the last ten years I have paid twice that amount in taxes and I do it by working seven days of the week and twelve hours a day. I can’t keep this up much longer now, I am getting too old and I have teenage sons, can you believe that?
      And. I explain to them that my taxes help the schools and hospitals and people who have little and it is not just my obligation but my honor to do so, Canada took my family in when we had nothing and every door was open all I had to do was reach for it. Now I am very grateful for that and I wish only that I did have the education to manage my earnings better because I might have been able to do more than just pay taxes.

      But, I do believe that this is the cycle again except last time we lost too much and the banks got too greedy because our losses and their gains may have doubled but our recovery is going to take more than twice as long this time and that’s not good for the Economy….
      .unless I am missing something more complicated that happened this time?

    dangermousemh on

    The fanciful notion that in a better time people paid no taxes is nonsense. the US pays practically the same tax rate, has enormous pblic debt and no universal health care. Financially speaking Canada is doing pretty well. There was no time in history during a great middle class golden age that taxes at 100 years ago levels. The greatest periods of middle class expansion was during times of significant progressive investment. The tax rates in the 1950’s were much higher than today. Countries today that pay little in taxes are horrible places to live. Mexico, North Korea, Somalia. These people calling for the halt of government spending are as foolish as they are misinformed.

      Greg on

      Excuse me, who is misinformed?? There are way too many taxes in our economy. Wake up and smell the coffee. You are obviously not in business for yourself.

      Peter Kerr on

      Okay, what if we just called for an end to foolish government spending then, wouldn’t it be better if they spent it wisely? I want more spent on the development of robots that can do heavy lifting and cook like a chef. I want more teachers and health care workers and the end to aging through telemeres and telemarese which is the answer and genetic manipulation of the food supply, a la Woody Allens vision of the future in his Sleeper movie…but if I don’t get these shortly I am going to Fort McMurray where I believe all our goldand taxes are stored and I am going to ask for my share, the accrued value, and then I am heading to Alaska with a dredger to suck up gold from the bottom of the Bering Sea. Any takers?

    Demian on

    Welcome to Socialism…..the death of Liberty. REFUTE SOCIALISM!! DOWN WITH THE NEW WORLD ORDER & GLOBAL SLAVERY!

George on

Most Canadians are aware of the existence of the Bank of Canada (BoC) but beyond that, very few know little more. It is assumed that the BoC is owned by the federal government, i.e. a public asset. Under Section 3(2) of The Bank of Canada Act, the BoC is described as a “body corporate”. Black’s Law dictionary, 6th edition (page 175) defines a body corporate as “a public or private corporation”. In a recent communication received from the BoC, a representative stated that the BoC “is not a public corporation.” The BoC is, therefore, a private corporation! But who owns it?

The Bank is made up of a Governor, Deputy Governor and twelve directors. The directors are chosen by the Minister of Finance with the approval of the Governor in Council and the twelve directors are responsible for the appointment of a Governor and Deputy Governor with the approval of the Governor in Council. The Deputy Minister of Finance is a member of the board but he has no vote!! There is no provision in the BoC Act for the appointment of elected representatives to the board of the Bank. (I think it is safe to assume from this set-up that the duly elected Parliament has no say in the policies and operations of the BoC). The capital of the bank is divided into one hundred thousand shares with a par value of $50.00 each. (Section 17.1 and 17.2) and the shares are held by the Minister on behalf of Her Majesty in right of Canada! (Section 17.3 of the BoC Act.) It would seem that the BoC is owned by the Queen, a foreign head of state and not owned by the Government of Canada. (This fact was also confirmed by an official of the BoC) It is certainly clear however, that the Federal Parliament and the people of Canada do not own it or benefit from its activities.

So what was the purpose behind the creation of the Bank of Canada? The answer to this can be found in the preamble to the BoC Act. It states “Whereas it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices, and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada.” Very noble, but has the BoC lived up to its principles? You decide.

Under Section 18(h), (i) and (j) of the BoC Act “Business and Powers of the Bank”, the Bank may make loans or advances to the Federal or Provincial levels of government. These loans can be for any amount, be secured or unsecured and the Bank is free to charge whatever rate of interest it chooses – presumably even a zero rate of interest. There are a number of restrictions, which apply to these loans, a very few of which have been made in the past. BoC correspondence indicates the Bank has made 19 loan advances to the Federal government and one loan to a Province in the past (3 million dollars to Saskatchewan in 1936). The last loan was made in 1961. BoC correspondence states “it is not the bank’s role to be a source of financing for governments nor a source of financing government deficits.” This would seem to contradict the Bank’s primary purpose as expressed in the preamble and renders Section 18 (h), (i) and (j) as redundant. So why does the BoC act this way? To better understand the actions of the BoC, people need to understand how the existing private debt money system works.

Only the BoC sells government securities – bonds and T-bills. The BoC also “sells” notes at face value to financial institutions for circulation throughout the country. If the Bank of Canada wants a tight monetary policy, the Bank of Canada can limit the amount of money the government can borrow by decreasing the number of securities it sells. The BoC uses other measures to tighten the money supply as well, such as increasing the interest rates and making it more difficult for borrowers to borrow money. Through these actions, a recession is born. The effect is the government receives less in taxes at every level and, of course, the demand for government assistance rises. To compound the problem, the government has no ability to refuse the high interest rates the BoC imposes on it and the taxpayers. The government has no ability to circumvent the decisions of the BoC. All revenue to the government flows through the Receiver General, who happens to be a servant of the BoC and not the government.

The Bank of Canada appears to have other controls over government. While reading the evidence of the Standing Committee on Banking and Finance held in 1939 and Hansard, members of the committee raised the issue of the bank’s control over spending decisions of the government. There was reference to questions by low-profile backbenchers of the House of Commons about why this was so. Or, why any other policy was not being carried out even though it would greatly assist the economy. The response in the House of Commons would indicate that, although the government wished to proceed, the money was not available because of decisions made outside of government! This was confirmed many years later when the governor of the BoC told the government on more than one occasion that Canada was in no position to kick-start the economy. (As if the government could have done it without the blessing of the BoC.)

The reality is that the federal government can’t by pen and paper without the permission of the Bank of Canada, and all money the public considers “waste” is willingly and culpably paid out by the Bank of Canada. When Canada is in a recession (created by the BoC), the Bank of Canada will do nothing to help the country out of it until it considers the timing to be right and the solutions offered are usually a further detriment to the economy over the long run for most of us except those on the “inner circle” who really know what is going on and can profit from it.

The bottom line is that our present situation will not improve, ever, until we have significant reform to our banking and monetary policies. What has happened in this country is a result of lack of knowledge as to how we are being shafted by the present system and it must be changed. We must all make the effort to educate ourselves and our family, friends and neighbours as to the truth behind the financial demise we face today. Again, this is the purpose of this website, to inform and educate. Please take time to read through and understand how we are being robbed under the present system and how we can change it for the benefit of all Canadians.

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