Finance Minister Jim Flaherty Resigns

[On Guard for Thee]

Because when Martin got done he had a surplus.

[Mighty AC]

The Liberals paid down some small portion of the national debt with two main 'strategies': by making provinces assume costs for core programs like healthcare/slashing defence costs and by taking advanatge of lower interest rates on the debt(rates they lucked into).

They just transferred debt to other levels of govt and fooled a lot of people, including you apparently.

Oh, and Alberta has had a pretty crappy real estae market as compared to Canada since 2007, and still the economy prospers in spite of that. Real estate markets in Canada are very regional.

The Libs made cuts but also benefited from the new revenue generated by the Mulroney created GST. It was a hated tax but it was necessary at the time.

Despite complaining about the level of Paul Martin's spending the Harper government upped that level by multiple times the rate of inflation for several years during the start of their reign. At the same time he increased the size of his cabinet. Harper had blown the surplus before the recession hit, all in an attempt to buy a majority. If the phrase "Tax and spend Liberals" can be used, I guess the phrase "Borrow and spend Conservatives" also fits.

Edited March 27, 2014 by Mighty AC

[On Guard for Thee]

That's correct, everybody likes to give Hareper a bye for blowing the surplus because of the bad news of '08. Truth is he had already squandered it, and it just went downhill from there. As you point out, the largest cabinet in the history of this country. And now look, he's been caught ferrying his political "bag men" around the country on our airplanes.

[Accountability Now]

Harper had blown the surplus before the recession hit, all in an attempt to buy a majority.

It appears that you and On Guard aren't quite up to speed with the actual timeline of the global financial crisis and Harpers' surpluses. Take a look at the timeline below.

http://www.theguardian.com/business/2012/aug/07/credit-crunch-boom-bust-timeline

The crisis started in 2007 with the US housing bust. Harper still had a 9.6 billion surplus year in 2007. In 2008 the crisis got worse with Freddie Mac, Fannie Mae, and Lehmans....and in that year Harper had a small deficit of 5.8 b. It wasn't until 2009....well into the crisis that Harper posted a substantial deficit. The deficits every year since 2009 have decreased and now we're looking at surpluses.

Long story short....you are mistaken about spending the surplus before the crisis.

Edited March 27, 2014 by Accountability Now

[On Guard for Thee]

The '08 budget already had a 5.8 billion deficit built in. Just to remeing you, the budgets are rolled out more or less at the first of the year, not the end.

[Smallc]

And if you'll read above, the crisis actually started before that.

[Accountability Now]

The '08 budget already had a 5.8 billion deficit built in. Just to remeing you, the budgets are rolled out more or less at the first of the year, not the end.

The 2008 budget was presented on February 27, 2008. The start of the housing bubble burst was 2006/2007. The recession was well under way. As per the 2008-2009 financial report:

"The recession resulted in more support being provided to Canadians in 200809 through higher Employment Insurance (EI) benefits and over $1 billion in personal income tax reductions as part of Canada's Economic Action Plan. As well, the recession has resulted in a weakening in tax collections."

https://www.fin.gc.ca/afr-rfa/2009/afr-rfa09_1-eng.asp#highlights

[cybercoma]

And if you'll read above, the crisis actually started before that.

Not according to Stephen Harper himself it didn't.

[Boges]

Less than a week after retiring BMO decided to lower it's 5 year fixed mortgage rate to 2.99%.

If anyone remembers, last year they tried to lower their rate to sub 3% and Flaherty gave them a stern talking to, that resulted in them relenting.

http://www.theglobeandmail.com/report-on-business/bmo-slashes-key-mortgage-rate/article17688398/

[Smallc]

Not according to Stephen Harper himself it didn't.

Well he's wrong.

[Mighty AC]

Let's follow the quotes:

Oct 10, 2008 - "This country will not go into recession next year and will lead the G7 countries." - Prime Minister Stephen Harper

Oct 12, 2008 - "If you don't want a carbon tax and tax increases and a deficit and recession, the only way to ensure that is the case is to vote for the Conservative party." - Prime Minister Stephen Harper

Nov 23, 2008 - "We may well be in a technical recession." - Finance Minister Jim Flaherty

Nov 23, 2008 - "The most recent private-sector forecasts suggest the strong possibility of a technical recession at the end of this year and beginning of next." - Prime Minister Stephen Harper

Edited March 27, 2014 by Mighty AC

[Mighty AC]

The 2008 budget was presented on February 27, 2008. The start of the housing bubble burst was 2006/2007. The recession was well under way. As per the 2008-2009 financial report:

"The recession resulted in more support being provided to Canadians in 200809 through higher Employment Insurance (EI) benefits and over $1 billion in personal income tax reductions as part of Canada's Economic Action Plan. As well, the recession has resulted in a weakening in tax collections."

https://www.fin.gc.ca/afr-rfa/2009/afr-rfa09_1-eng.asp#highlights

The recession began in Canada in November of 2008. The Harper government had already erased the surplus by that point through record Federal spending. Like I said, he complained about Paul Martin's spending, yet went on to increase it by several times the rate of inflation each of his first few years.

[Boges]

It's a neat bit of hindsight to say that Harper should have predicted the economic meltdown. Even if he did an election campaign was not the place to start introducing policy that would lead to historically high deficits.

The Liberals certainly weren't campaigning on helping the economy as they were proposing a punitive carbon tax.

Now the CPC stubbornly didn't want to admit that the Global economy was in shambles in December 2008 by releasing that economic statement, and I suppose the opposition attempting a coupe, historically, was a good thing because it forced the CPCs hand.

[Boges]

The recession began in Canada in November of 2008. The Harper government had already erased the surplus by that point through record Federal spending. Like I said, he complained about Paul Martin's spending, yet went on to increase it by several times the rate of inflation each of his first few years.

The actual start of a recession can't be determined until months after the fact. Did you expect Harper to tell everyone the economy would take a nose dive in 2009?

[Mighty AC]

No he was saying what he needed to in order to win an election, despite the fact that all the big financial institutions were forecasting the impending down turn. The point I was making though is that the Harper government had already blown through the surplus and was running a deficit before the recession started in Canada. This was achieved through runaway spending.

[Boges]

No he was saying what he needed to in order to win an election, despite the fact that all the big financial institutions were forecasting the impending down turn. The point I was making though is that the Harper government had already blown through the surplus and was running a deficit before the recession started in Canada. This was achieved through runaway spending.

Even if that's true, it wasn't the type of deficit that would take 5 or 6 years to climb out of. The $50 billion plus deficits were a result of the Economic Action Plan that the opposition demanded.

Obama did the same thing and is lauded for it, yet they're still hopelessly in debt.

[Mighty AC]

The Liberals certainly weren't campaigning on helping the economy as they were proposing a punitive carbon tax.

As it turns out revenue neutral carbon taxes are economic boosters. http://www.dailykos.com/story/2014/03/19/1286032/-New-Study-Revenue-Neutral-Carbon-Tax-Would-BOOST-the-Economy-While-Slashing-CO2-Emissions I'd say we didn't dodge an economic bullet but rather took one right in the chest.

Although some critics claim a carbon tax would damage the economy, Sweden’s carbon tax is a hefty $140 per tonne of carbon pollution. Since the carbon tax was introduced, Sweden’s economy has grown by more than 100 per cent, and the country recently ranked fourth in the world on economic competitiveness.

http://www.boomerwarrior.org/2014/03/lets-put-price-carbon-fee-dividend/?fb_action_ids=10152083845008335&fb_action_types=news.publishes&fb_ref=pub-standard&fb_source=aggregation&fb_aggregation_id=288381481237582

[Boges]

Well considering the price of Oil plummeted in the wake of the 2008 economic meltdown, If I remember correctly it got as low at $30/barrel in 2009, the shift from income taxes to carbon taxes would have resulted in a short term plummet in the revenue of the Federal Coffers.

The articles you post are current arguments for a carbon tax. In this thread we appear to talking about the events in late 2008.

Want to have an argument about a carbon tax today, let's hear it from JT first.

Edited March 27, 2014 by Boges

[TimG]

As it turns out revenue neutral carbon taxes are economic boosters.

This should be no surprise because in consumer consumption taxes are preferable to other types from taxes. However, the issue with carbon taxes is they really make no difference to behavior at politically acceptable levels. i.e. they are a wonderful way to pretend one is doing something about CO2 while doing nothing.

That said, large carbon taxes levied at industrial users can change behavior by directing investment away from energy intensive industries towards less intensive industries resulting in job losses and economic dislocation. In a geographically diverse country like Canada this will play one region against another and make them political poison.

The other point to remember is the demand for products that are produced by energy intensive industry does not go away - all it means is the CO2 will be emitted in countries that have no quasi-religious obsession with the substance and the earths atmosphere will end up in the same place it would have been without said tax. In fact, the environment will likely end up worse off because of real pollution which is much worse in third world countries.

Edited March 27, 2014 by TimG

[Accountability Now]

The recession began in Canada in November of 2008. The Harper government had already erased the surplus by that point through record Federal spending. Like I said, he complained about Paul Martin's spending, yet went on to increase it by several times the rate of inflation each of his first few years.

No...the major downturn was in November of 2008 but the actual slowdown/decrease in economic activity started in 2007 before the 2008 budget came out. That's why we see a minor deficit of 5B in 2008 and the much larger one in 2009. Of course, anyone making budgets were also aware of the housing bubble issue in the US which started in 2006 and hit the fan in 2007

Edited March 27, 2014 by Accountability Now

[Mighty AC]

No...the major downturn was in November of 2008 but the actual slowdown/decrease in economic activity started in 2007 before the 2008 budget came out. That's why we see a minor deficit of 5B in 2008 and the much larger one in 2009. Of course, anyone making budgets were also aware of the housing bubble issue in the US which started in 2006 and hit the fan in 2007

I do see a tiny dip in economic activity in late 07 after large increases, however the federal government did not experience a loss of tax revenue until 2009. http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/govt02a-eng.htm

Harper had already managed to create a small deficit through billions in new spending, prior to a loss of government revenue.

Edited March 27, 2014 by Mighty AC

[Mighty AC]

This should be no surprise because in consumer consumption taxes are preferable to other types from taxes. However, the issue with carbon taxes is they really make no difference to behavior at politically acceptable levels. i.e. they are a wonderful way to pretend one is doing something about CO2 while doing nothing.

Since introducing a carbon tax BC has lowered greenhouse gas emissions 2x faster than the rest of the country while also outpacing the Canadian average in GDP growth.

[Boges]

Yet they throw temper tantrums over the HST and Smart Meters

BTW the HST was a defacto Carbon Tax.

Another defacto Carbon tax in the Gas Tax "Revenue Tool" that Ontario Premiere Kathleen Wynne has recently backed off on.

Edited March 27, 2014 by Boges

[Keepitsimple]

This should be no surprise because in consumer consumption taxes are preferable to other types from taxes. However, the issue with carbon taxes is they really make no difference to behavior at politically acceptable levels. i.e. they are a wonderful way to pretend one is doing something about CO2 while doing nothing.

That said, large carbon taxes levied at industrial users can change behavior by directing investment away from energy intensive industries towards less intensive industries resulting in job losses and economic dislocation. In a geographically diverse country like Canada this will play one region against another and make them political poison.

The other point to remember is the demand for products that are produced by energy intensive industry does not go away - all it means is the CO2 will be emitted in countries that have no quasi-religious obsession with the substance and the earths atmosphere will end up in the same place it would have been without said tax. In fact, the environment will likely end up worse off because of real pollution which is much worse in third world countries.

That puts things so very well.......if I was a little smarter, I would have used the same words.

[TimG]

Since introducing a carbon tax BC has lowered greenhouse gas emissions 2x faster than the rest of the country while also outpacing the Canadian average in GDP growth.

Correlation does not imply causation. Also - the carbon tax specifically exempted large industrial emitters and public institutions which makes a causal relationship with the emission drop even less plausible. Edited March 27, 2014 by TimG