Harper Announces $13.8 billion Budget Surplus

[August1991]

With all the ceremony of an election stump speech, Prime Minister Stephen Harper announced Thursday that a $13.8-billion surplus - one which exceeded the federal government's own projections - will go towards paying down the debt.

...

Ottawa reduced the national debt last year by $14 billion, shaving $725 million off its annual interest payments, said Harper, who added the savings will be passed along to taxpayers in the form of continued cuts to personal income taxes.

CP

WTF? $725 million on $14 billion means a (nominal) interest rate of about 5.2%. IOW, the federal government is paying back debt at 5.2% by taxing Canadians who, for the most part, have mortgages with interest rates around 6%. This is fiscal madness.

Moreover, to pay back the debt, the federal government is reducing the liquidity of Canada's capital markets since less government paper will be circulating. Critical benchmark rates set by government bonds will not be as accurate.

Worse however is what Harper failed to mention. Program spending increased by 8% in 2006-07 and is projected to increase by 6% in 2007-08. Link.

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Somebody on the Left really should call to account Harper and the Conservatives on this charade. Harper presents himself as a good, prudent economic manager because he is paying down the federal debt as if Canada were a family preparing for retirement. Nonsense. Harper and his government may retire one day, but Canada never will.

Prudent management of government finances is not measured by paying down debt. It's measured by what government buys. On this, Harper has been profligate and a spendthrift. Harper is blowing the wad on military toys.

Edited September 27, 2007 by August1991

[Higgly]

The Conservatives did a lot of finger-pointing at the Liberals when they had surpluses.

I voted for paying down the debt, but a little voice keeps saying in my ear.... This is Jim Flaherty. The guy who said he'd balanced Ontario's budget just before the last Ontario election and was actually over 5 billion in debt. And now we have a federal election on the horizon. Remember folks. This is Jim Flaherty we're talking about.

[AngusThermopyle]

Harper is blowing the wad on military toys.

What a silly thing to say.

Do you believe that we didn't have to replace any equipment? You figure this stuff just magically lasts forever? Or perhaps you are some one who thinks we shouldn't have a military at all? The only reason (apart from inflation) it costs so much is that the Liberals attempted to systematically dismantle the military for many years. Now all we're doing is trying to play "catch up" as far as equipment goes.

[jdobbin]

Somebody on the Left really should call to account Harper and the Conservatives on this charade. Harper presents himself as a good, prudent economic manager because he is paying down the federal debt as if Canada were a family preparing for retirement. Nonsense. Harper and his government may retire one day, but Canada never will.

Prudent management of government finances is not measured by paying down debt. It's measured by what government buys. On this, Harper has been profligate and a spendthrift. Harper is blowing the wad on military toys.

The spending continues unabated on a wide variety of programs. Tax cuts over two years are still not as good as Goodale's last budget according to the Canadian Taxpayers Federation.

And all those on the right wing who hoped for a multi-billion tax cut right now because of the surplus are out of luck.

[Topaz]

Like it or not, if the Libs, never reduced spending and pick the military at the time to reduce spending, Harper wouldn't have such a surplus!!! The future, still remains unknown as far as how far in debt we will be by buying all this military equipment that we may not need after Afghanistan. I, for one, would like to know the final price tag on all this military equipment and the price tag we are spending on this country and what is happening to all the money we are sending over there. I also think, part of the surplus comes from the EI, which is in the billions. Why not cut back on the EI premium?

[Higgly]

The military spending was definitely necessary. The question is, for what sort of mission? Come one guys. Those helicopters . We have borders to defend and people to take care of here. Look at the Arctic.

[AngusThermopyle]

The future, still remains unknown as far as how far in debt we will be by buying all this military equipment that we may not need after Afghanistan.

You may be right you know.

After we leave Afghanistan there is a very good chance that world peace will spontaneously break out.

(That was just a tiny bit sarcastic, for those who may not have caught that.)

[jennie]

The military spending was definitely necessary. The question is, for what sort of mission? Come one guys. Those helicopters . We have borders to defend and people to take care of here. Look at the Arctic.

Start seriously paying down Canada's mortgage, and our land and other liabilities to Indigenous Peoples, protecting our human environment in the process.

Start adjusting and realigning industries. I heard good news about national research-marketing partnerships.

Canada is poised for international success, with the right kind of support.

It is just a matter of vision toward the human environment of the generations to come. I think that works as a common focus. How can it not?

Otherwise we would be intentionally planning for our own extinction.

(to self:Wow, that thought went wild ... where did that come from? oh well ... let's see what people think. )

btw I voted Pay down the debt.

Edited September 27, 2007 by jennie

[Higgly]

I am watching Flaherty on the Business News Network right now and he has just taken credit on behalf of the Harper Feds for the Toronto subway extension This thing was in operation before Harper took office.

Edited September 27, 2007 by Higgly

[Fortunata]

And yet......

Environment Canada budget cuts threaten wildlife programs

..

Sources say the budget cuts are as follows:

* The Environmental Monitoring and Assessment Network, which observes changes in ecosystems, has lost 80 per cent of its budget.

* The Migratory Bird Program, which monitors the health of bird populations, has seen its budget cut by 50 per cent.

* The budget for the National Wildlife Areas, a program that protects nationally significant habitats for wildlife and birds, has been slashed from $1.9 million to zero.

..

http://www.cbc.ca/canada/story/2007/09/18/...anada-cuts.html

John Baird was on tv the next day blaming the previous government. Of course.

[trex]

the money belongs to the people of canada. it should be used to rebuild our cities, roads, open the womens shelters again, reduce childhood poverty which is actually growing.

not for the fat cat bankers.

if/when the world economy crash and money become worthless, those countries with huge debt will simply pull out ther erasers and forget about it. then canada will look silly for all we've done with the surpluses

[ScottSA]

the money belongs to the people of canada. it should be used to rebuild our cities, roads, open the womens shelters again, reduce childhood poverty which is actually growing.

not for the fat cat bankers.

if/when the world economy crash and money become worthless, those countries with huge debt will simply pull out ther erasers and forget about it. then canada will look silly for all we've done with the surpluses

Go away.

[geoffrey]

the money belongs to the people of canada.

Your right. And it should be refunded, in cash, to those that paid.

I, nor anyone else in Canada, gave the government the mandate to take more than they need, and then spend the surplus as they please.

Personally, I could use the money against my debt more than the government can use it against theres.

That money belongs to you and I. Surpluses are inexcusable. I want my money back.

[trex]

Go away.

wheres the army guy to keep telling me about all the wonderful debaters here. such meaningful content

[mikedavid00]

Your right. And it should be refunded, in cash, to those that paid.

I, nor anyone else in Canada, gave the government the mandate to take more than they need, and then spend the surplus as they please.

Personally, I could use the money against my debt more than the government can use it against theres.

That money belongs to you and I. Surpluses are inexcusable. I want my money back.

But what about the healthcare system?

It's borken. It's not working and we are forced to use it. The gov't has extra money, yet is not properly funding a healtchare system that is beyond their control.

The gov't has an obligation to that doesn't it?

Or maybe the gov't should get out of the healthcare business all together.

I remember on a radio show the Ontario health minister said "I'm the CEO of a 25 billion dollar corperation". That is not cool.

[old_bold&cold]

the money belongs to the people of canada. it should be used to rebuild our cities, roads, open the womens shelters again, reduce childhood poverty which is actually growing.

not for the fat cat bankers.

if/when the world economy crash and money become worthless, those countries with huge debt will simply pull out ther erasers and forget about it. then canada will look silly for all we've done with the surpluses

Your whole out look reminds me of a early adulesent child. You do not have a firm grasp on what the world today is about. You say things like world economy crashing and all money being worthless, as it that could or would ever happen. In early high school we talked about such theoretical things and we were supposed to learn from them. But it seems you only attened the classes where assignments were given and never completed them. I must also ask you why you think our cities need rebuilding? We do not have the inner city problems of the large USA cities. Even Toronto which is bad by Canadian standards is not ghettoise like Detroit etc. Also I must ask you where do you find a shortage of womens shelters in Canada, as I do know there are many here in Ottawa, but they are not adverised, but authorities have that info, and seldom are they totally out of resources. Also child poverty can be better addressed by family values and resources. We have many programs to help those in the lower incomes to get needed education and better job skills. I am not sure if all these programs are full when they start, but if so yes maybe more programs should then be budgeted.

Maybe you can tell me just what your ideas are to address the things you say need fixing?

Edited October 10, 2007 by old_bold&cold

[fellowtraveller]

I can understand a billion or two, but I've been overtaxed $13 billion.

That is ridiculous, I'm not in the banking business and don't have the inclination to continaully extend personal loans to my government.

Give me back my share, now.

Then reduce taxes to realistic levels.

Edited September 27, 2007 by fellowtraveller

[fellowtraveller]

But what about the healthcare system?

It's borken.

Is that the same as throwing up?

[mikedavid00]

Is that the same as throwing up?

Well I'm saying that we currently have a shattered system of healthcare where citizens are dying on waiting lists and there is unusual long time to wait for organs. Times that are not seen in other 1st world countires but only in Canada.

The 14B can fund 2 hospitals in all cities accross Canada. These are fully equiped hospitals and the extra tax revenue can go to staffing of these hospitals.

Don't you see? as long our polticians are playing corporation, we will always have to spend extra money on flawed social programs and it will never end along with our inflation.

The extra money is 3%. Infaltion could be 3%, population increase could be 3% (including childbirth). So there is their excuse right there not to give it back.

The gov't needs to severly downsize, privatize healthcare, and stop immigration or they're always going to take our money.

[Leafless]

Is that the same as throwing up?

There is no 'right' to government health care.

[geoffrey]

Worse however is what Harper failed to mention. Program spending increased by 8% in 2006-07 and is projected to increase by 6% in 2007-08.

8%? 8%?!?!? Nearly four times the rate of inflation?! I'm sick of it. You elect a conservative and you get a massive spending increase. What to do, what to do?

No one can afford it. We suffer from low productivity, low foreign investment... all things a big tax cut could help. And instead, the government increases spending by 8% and has a surplus nearly 2% of the whole damned GDP. How can we afford it?!?!

It's borken. It's not working and we are forced to use it. The gov't has extra money, yet is not properly funding a healtchare system that is beyond their control.

Surpluses are more important to media loving Canadians than health care, so that's why we are at where we are at.

[capricorn]

Responding to a reporter, Flaherty said the GST will not be reduced in the next Throne speech. He reminded us the promise was 1% cut if elected (done) and another 1% five years into the mandate, so not until 2011. Yuck!!!

Sure I would love a personal income tax cut. Who wouldn't. But hold on a minute. That $14B surplus did not materialize simply from individual taxpayers. The corporate sector also paid into it. If individuals get a tax cut would corporations not expect the same? I would think so. IMO that would seem fair.

Can you imagine the opposition's reaction if individuals and CORPORATE taxpayers received tax cuts? To the moon and back!!

In any case, all this conjecture is moot. The government has little choice in the matter because, by law, the surplus must be used to pay down the debt. Only interest saved on the debt can go to tax cuts. And that leaves very little for tax relief.

His announcement means the end-of-year fiscal windfall is no longer available for program spending. The money must, by law, go into national debt-reduction and the interest savings - about $725 million - will go to tax cuts.

http://cnews.canoe.ca/CNEWS/Canada/2007/09...4531404-cp.html

I agree with paying down the debt. I believe that each generation is supposed to work to increase our standard of living and leave a better Canada for future generations. This is one measure we can take and make ourselves proud.

[August1991]

8%? 8%?!?!? Nearly four times the rate of inflation?! I'm sick of it. You elect a conservative and you get a massive spending increase. What to do, what to do?

No one can afford it. We suffer from low productivity, low foreign investment... all things a big tax cut could help. And instead, the government increases spending by 8% and has a surplus nearly 2% of the whole damned GDP. How can we afford it?!?!

It's amazing, when you think about it.

Harper presents himself as careful and prudent, the media presents Harper and Flaherty as slightly to the Left of Attila the Hun, and yet these guys are spending gobs of cash, taking bigger chunks of what Canada produces.

I've run out of metaphors to describe this. I'm left with Harper/Flaherty joining you for your grocery shopping, filling up their cart and then claiming to be prudent because they used your CIBC debit card rather than your Visa card to pay for their cart. And what's in their cart? Alot of metal plates and dishes and a knife or two.

----

Canada's low productivity? That's truly sad. We are a country with every advantage possible to imagine - good, trustworthy institutions to define property rights and to conduct business under contract law - almost every natural resource possible in a seller's market and a world that needs them - a people fundamentally generous of spirit. We're the smart kid of rich parents who is an underachiever. Canada is a failure.

The military spending was definitely necessary.

If military is a necessity, then Harper should have the political courage to explain what in the budget is less of a "necessity" and where he's going to cut spending.

Political courage? The role of a politician is to lead.

Edited September 28, 2007 by August1991

[trex]

Are you by any chance a child of Downs syndrome, or retarded in any way? Your whole out look reminds me of a early adulesent child. You do not have a firm grasp on what the world today is about. You say things like world economy crashing and all money being worthless, as it that could or would ever happen. In early high school we talked about such theoretical things and we were supposed to learn from them. But it seems you only attened the classes where assignments were given and never completed them. I must also ask you why you think our cities need rebuilding? We do not have the inner city problems of the large USA cities. Even Toronto which is bad by Canadian standards is not ghettoise like Detroit etc. Also I must ask you where do you find a shortage of womens shelters in Canada, as I do know there are many here in Ottawa, but they are not adverised, but authorities have that info, and seldom are they totally out of resources. Also child poverty can be better addressed by family values and resources. We have many programs to help those in the lower incomes to get needed education and better job skills. I am not sure if all these programs are full when they start, but if so yes maybe more programs should then be budgeted.

Maybe you can tell me just what your ideas are to address the things you say need fixing?

...

Edited October 2, 2007 by tbud

[trex]

...

Edited October 2, 2007 by tbud