Federal, provincial and household debt push Canada’s debt-to-GDP ratio over 280 percent
The national federal debt is currently in excess of $675 billion, about 30 percent of our annual Gross Domestic Product of $2.14 trillion or what’s referred to in fiscal policy-speak as ratio of debt-to-GDP.
And this federal debt-to-GDP metric, combined with low interest rates is how Finance Minister Bill Morneau justifies continued deficit spending to the tune of nearly $100 billion more over the next four years.
“Our intent is to make those investments and to do it in a way that will help us grow our economy,” said Morneau on Monday of the continued red ink noted in his government’s fall fiscal update for the country.
According to Finance department figures, on the current trajectory of government revenues and spending, our GDP ratio that will settle down slightly from this budget’s 31 percent, to 29.8 percent in 2023-24.
But weighing only federal debt against gross domestic product to gauge Ottawa’s borrowing safe zone is problematic, because that debt is only part of the picture.
Add in outstanding provincial and territorial borrowing and Canada’s debt-to-GDP almost doubles to nearly 60 percent, or around $1.2 trillion.
As far back as in June, even the International Monetary Fund cautioned that jurisdictional borrowing in Canada needs to be addressed in its Economic Outlook.
“Provincial governments should do more to create more spending room…ensur(ing) that both levels of government have enough room to respond in case of a downturn,” reads IMF’s report.
“Reducing debt faster would provide more options to handle future challenges, such as those related to aging and weak productivity growth.”
Ian Lee, a business professor and faculty chair at Carleton’s Sprott School of Business, said in addition to sub-sovereign and provincial debt, Canadian household debt should also be cause for concern.
“We’ve got really overextended consumers, about two trillion dollars in debt,” he said. “We know exports are down, manufacturing has been in steady collapse since the 1970s, so what is the anchor or the driver that is going to drive us forward?”
Consumer debt in Canada topped $2.25 trillion at the end June, of which nearly $1.5 trillion is tied up in mortgages. Add this on top of federal and sub-sovereign Canadian debt and the country’s aggregate debt-to-GDP ratio sky-rockets to 281 percent.
“And housing and real estate is completely tapped out and they’re extremely over-indebted and so where’s the next big growth going to come from? I can’t see it,” added Lee.
While the Canadian economy recorded 400,000 net new jobs for 2019, November employment numbers from Statistics Canada indicated 71,000 people got pink slips a month before Christmas and that declines were experienced “in manufacturing and natural resources, as well as in the services-producing sector.”
The Liberal cabinet has promised to cut cell phone bills for Canadians by 25 percent, which according to CRTC would potentially save Canadians anywhere from $11 to $25 monthly, first reported by Blacklock’s Reporter.
The Canadian Radio Television and Telecommunications Commission released a report that the average Canadian spends about $101 a month on the cell phone plans. The agency released a report entitled, Communications Monitoring Report 2019 found that the average cost is $50.25 a month for a basic 5G plan with higher rates in rural areas.
“Larger households may have higher expenditures for these services, e.g. purchasing more internet data,” wrote the Commission: “The data presented here does not allow for analysis of individual expenditures on communications services.”
“Canadians shouldn’t have to choose between having a cellphone and heating their homes,” said Trudeau, one of his main campaign promises last year was to lower cell phone bills by 25 percent.
“As Canadians we pay some of the highest prices in the world for cellphone services while Canadian telecom companies are among the most profitable in the developed world,” the Liberal Party stated in their platform Forward: A Real Plan For The Middle Class. “To help lower monthly cellphone bills and bring costs in line with what people pay in other countries, we will move forward with cutting the cost of these services by 25 percent in the next two years using the government’s regulatory powers.”
During their Throne Speech on December 5, the cabinet repeated their pledge to lower cell phone costs for Canadians. On December 13, they sent a Mandate Letter to the Department of Industry demanding the rates drop by 2021. “If within two years this price is not achieved, you can expand the mobile network operators’ qualifying rules as the CRTC mandate on affordable pricing,” read the letter.
At the communications committee in 2018 Members of the Senate expressed their dissatisfaction with the CRTC’s ability to advocate on behalf of consumers. “Like a lot of Canadians, I’m very frustrated with telecommunications in this country,” said Conservative Senator Michael MacDonald. “It’s outrageously expensive for data. It’s basically a cartel, let’s face it. It’s a small oligarchy.
“I’m not convinced the CRTC has the fortitude to take on these cartels and the consumers are losing because of it,” said MacDonald. “What’s the solution, besides going to the CRTC? Is it relevant anymore in terms of serving the public interest? I’m convinced it is not serving the public interest.”
The Post Millennial reported late last year that many Canadians are now finding loopholes to get comparable American phone plans that cost a third of the price and don’t charge for roaming or long distant calling in North America.
Trudeau cabinet’s Bill Blair has revealed that their gun control plan will be rolled out in a “multi-step process” which will include the prohibition of the sale of assault weapons.
While the Trudeau government aims to prohibit assault weapons quickly, other measures, they say, will take more time, including the partial handgun ban that will require talks between the federal and provincial governments, according to Public Safety Minister Bill Blair.
Trudeau had specifically called for the banning of “military-style assault weapons” during his 2019 campaign, with a primary focus on weapons that farmers “did not” need that were designed to kill “the largest number of people in the shortest amount of time.”
Blair went on to tell reporters Tuesday that his government will implement their agenda on firearms as the steps become ready to implement by the federal government or by the country’s minority parliament.
“Our work is to reduce the supply of guns getting into the hands of criminals, but you also have to interdict the demand for those guns,” he said. “We have just gone through, for many communities across Canada, a very difficult summer last year. And so we want to make sure we are there for those communities and work in those communities to make substantive changes and investments that will help to keep them safe,” Blair told The Globe and Mail in Winnipeg.
Blair said that new rules being put in place “could be accomplished in the near term,” going on to say that programs like an assault weapon buyback “will take a little bit more time.”
When Prime Minister Trudeau was asked in September about those who would not want to participate in a gun buy-back and “making law-abiding citizens into criminals,” Trudeau did not give a direct answer.
Prime Minister Justin Trudeau has been criticized for splashing out on gourmet doughnuts this week in Winnipeg, Manitoba, according to Global News.
The doughnuts in question were purchased at Oh Doughnuts, which, as discovered by True North Centre, cost an eye-watering $47 per dozen.
The owners of the restaurant, however, said that the $47 doughnuts were their “most elaborate, fancy doughnuts… which they didn’t get. They just got regular variety doughnuts.”
As well as this, the doughnut shop stated that Trudeau ordered the product online, resulting in a ten percent price decrease.
This, compared, to Canada’s favourite doughnut shop Tim Hortons, who sells doughnuts for less than ten dollars per dozen, will lead to questions about Trudeau’s inclination to fork out taxpayer money on unnecessary expenses for himself and his Liberal team, all while his government fights veterans and Indigenous people in court over money.
Justin Trudeau is in Winnipeg for a cabinet retreat where he re-groups with his executive in preparation for the upcoming parliament. Trudeau’s retreats have often been stamped as needlessly expensive. Take, for instance, the Liberal cabinet’s trip to St. John’s Newfoundland, where Trudeau visited the theatre, leaving Canadians to foot the tab.
As well as this, in 2018 Trudeau splurged on a cabinet retreat to Vancouver Island amid the on-going wild fire crisis in the province at the time.
Malaysia is intending to ship 150 containers of illegal waste back to the countries of origin. These countries include Australia, the United Kingdom, France, and Canada.
Malaysia’s Environment Minister Yeo Be Yin, told reporters that “it is not about money, it’s about dignity. When people dump garbage into your country, you are not supposed to pay them to send it back, you expect them to send it back by themselves.”
Yin further added that Malaysia will “stick to this line, we are going to send it back, and we are going to make people who export here and the shipping liners pay for it.”
Yin ended her speech by saying that this new policy “was unprecedented … we will hold the people to be responsible for their actions. They should be paying for the logistics.”
Yin’s comments may be seen as a provocation in what has been described as a “garbage war” by those in the media. Previously, tension rose as Canada sent non-recyclable trash to the Philippines that had been labelled as recyclable. Now, Malaysia is upset for similar reasons.
The garbage dispute between Canada and the Philippines got so bad that the leader of the country threatened to declare war if Canada did not allow the return of the garbage.