Credit Check - Who Really Saved Canada's Finances?

[Michael Bluth]

There's a balance that has to be struck. Trudeau at the Federal level and Peterson and Bob Rae at the Ontario Provincial level are examples of tax and spend policies that ran amok.

Exactly. Harper appears to be striking the balance pretty well.

[jdobbin]

Some did....certainly Ontario did...and revenues started to go way up - from 45 billion to about 70 billion. Some of that was due to the North American economy starting to get traction but it was aided by a favourable business climate in Ontario. As a result, Harris was able to make unprecedented investments in both Healthcare and Education. That's what a lot of people miss - within reason cutting taxes smartly usually increases government revenues. Increasing taxes in a way that penalizes business or reducing personal spending power usually decreases government revenues. There's a balance that has to be struck. Trudeau at the Federal level and Peterson and Bob Rae at the Ontario Provincial level are examples of tax and spend policies that ran amok.

I don't don't doubt that tax decrease can increase revenues. Smart tax decreases are especially effective, especially income taxes. To balance the budget though, Ontario added $22 billion to its debt and this came back to haunt the successor OC government.

The offloading to the municipalities of many services was the same thing the Harris government accused the Feds of doing. It was even reported to have distressed Eves to hear some of the stories of what was happening with welfare cuts.

[Keepitsimple]

I don't don't doubt that tax decrease can increase revenues. Smart tax decreases are especially effective, especially income taxes. To balance the budget though, Ontario added $22 billion to its debt and this came back to haunt the successor OC government.

The offloading to the municipalities of many services was the same thing the Harris government accused the Feds of doing. It was even reported to have distressed Eves to hear some of the stories of what was happening with welfare cuts.

When you are so far off your operating budget, you cannot eliminate it all in one year. As Harris went from an operating deficit of 8 or 9 billion a year doen to 6 to 4 to 2 to zero - or whatever the numbers were - of course he added to the debt - when you don't balance the yearly budget, you add to the debt. That's the foolhardiness of what Trudeau started and Bob Rae disastrously tried to emulate - and we are all still paying. As far as Welfare in Ontario, McGuinty has been in power for 5 years and he has not materially changed it so in principle, I guess he agrees with the current level. I agree that the drastic and immediate cuts to Welfare that Harris instituted were a shock and no doubt put some genuinely needy people in a bind but the province was even more genuinely on the brink of bankruptcy. There was no time to wring hands for 3 or 4 years and waffle over decisions. It's easy to look back and say how mean-spirited Harris was - but he knew what had to be done and he did it. The right man at the right time.

[jdobbin]

When you are so far off your operating budget, you cannot eliminate it all in one year. As Harris went from an operating deficit of 8 or 9 billion a year doen to 6 to 4 to 2 to zero - or whatever the numbers were - of course he added to the debt - when you don't balance the yearly budget, you add to the debt. That's the foolhardiness of what Trudeau started and Bob Rae disastrously tried to emulate - and we are all still paying. As far as Welfare in Ontario, McGuinty has been in power for 5 years and he has not materially changed it so in principle, I guess he agrees with the current level. I agree that the drastic and immediate cuts to Welfare that Harris instituted were a shock and no doubt put some genuinely needy people in a bind but the province was even more genuinely on the brink of bankruptcy. There was no time to wring hands for 3 or 4 years and waffle over decisions. It's easy to look back and say how mean-spirited Harris was - but he knew what had to be done and he did it. The right man at the right time.

It was that debt that crippled Eves later on. It was also something that McGuinty had to go back on in terms of a promise in regards to taxation. There simply was not enough revenue to keep up from sliding back and a $6 billion deficit was left.

I think people still wonder if the sale of Ontario Hydro and Highway 407 was not a firesale.

[Argus]

It was that debt that crippled Eves later on. It was also something that McGuinty had to go back on in terms of a promise in regards to taxation. There simply was not enough revenue to keep up from sliding back and a $6 billion deficit was left.

I think people still wonder if the sale of Ontario Hydro and Highway 407 was not a firesale.

McGuinty wildly exaggerated the debt then raised taxes after promising not to. He raised taxes so high and so fast he could have eliminated even his exaggerated deficit almost at once if he had wanted to, but instead he raised spending enormously.

Then he continued to whine about the "tory deficit".

[jdobbin]

McGuinty wildly exaggerated the debt then raised taxes after promising not to. He raised taxes so high and so fast he could have eliminated even his exaggerated deficit almost at once if he had wanted to, but instead he raised spending enormously.

Then he continued to whine about the "tory deficit".

The deficit was independently confirmed in an audit. Erik Peters, the provincial auditor showed how the Tories hide the deficit.

[Keepitsimple]

It was that debt that crippled Eves later on. It was also something that McGuinty had to go back on in terms of a promise in regards to taxation. There simply was not enough revenue to keep up from sliding back and a $6 billion deficit was left.

I think people still wonder if the sale of Ontario Hydro and Highway 407 was not a firesale.

You need to understand the difference between Debt and the Deficit. The deficit is what you owe at the end of the year - how much more expenses than revenues.....and that is added to the "debt" - and that is what we have to pay interest on - year after year. The accumulated debt for Canada is just short of haly a triullion dollars - agiain, thanks mainly to Mr. Trudeau. In ontario, I'm not sure what the debt is but I( think it's somewhat over 100 Billion.

[jdobbin]

You need to understand the difference between Debt and the Deficit. The deficit is what you owe at the end of the year - how much more expenses than revenues.....and that is added to the "debt" - and that is what we have to pay interest on - year after year. The accumulated debt for Canada is just short of haly a triullion dollars - agiain, thanks mainly to Mr. Trudeau. In ontario, I'm not sure what the debt is but I( think it's somewhat over 100 Billion.

Debt payments placed a $6 billion deficit burden on the government according to the provincial auditor. The lower taxes, increased spending and slowly recovering economy also contributed but debt payments placed a huge strain on government finance.

Edited December 24, 2007 by jdobbin

[Michael Bluth]

You need to understand the difference between Debt and the Deficit. The deficit is what you owe at the end of the year - how much more expenses than revenues.....and that is added to the "debt" - and that is what we have to pay interest on - year after year.

There is no attempt at understanding.

It's all a matter of misrepresentation coupled with outright lies.

Another term of Liberal government in the mid-80s and Canada would have fallen off the debt cliff.

Thankfully we are headed in the right direction.

Interesting how Steph sidestepped any issue as to how he would pay for all his promises and maintain a surplus budget.

Will the Liberals be honest enough to tell Canadians they are planning on yearly budget deficits?

[Keepitsimple]

Debt payments placed a $6 billion deficit burden on the government according to the provincial auditor. The lower taxes, increased spending and slowly recovering economy also contributed but debt payments placed a huge strain on government finance.

You just don't seem to acknowledge that the "debt" was run up by the Peterson and Rae governments because they ran fiscal deficits every year they were in power. As for the supposed $5.8 billion dollar deficit inherited by the MsGuinty government - most of that was smoke and mirrors - the actual deficit was closer to 2 billion - which was quickly disposed of with McGuinty's $2.5 billion tax increase with the Health "premium". I say smoke and mirrors because McGuinty chose to ignore the $800 million dollars that the Feds gave Ontario as compensation for the SARS epidemic - which happened during the Eves reign. McGuinty also did some fancy book-keeping to the tune of about $2 billion that brought Hydro's debt onjto the government ledger - a practise that had not been done before. You'll also notice that the booming economy has increased Ontario's revenues by about $20 billion but it's pretty well all been spent. I just hope we don't have a major downturn because McGuinty has not left any room....but all in all, I can't complain too much - he's done a better job that Peterson and Rae. We'll see how things go over the next coupole of years.

[jdobbin]

You just don't seem to acknowledge that the "debt" was run up by the Peterson and Rae governments because they ran fiscal deficits every year they were in power. As for the supposed $5.8 billion dollar deficit inherited by the MsGuinty government - most of that was smoke and mirrors - the actual deficit was closer to 2 billion - which was quickly disposed of with McGuinty's $2.5 billion tax increase with the Health "premium". I say smoke and mirrors because McGuinty chose to ignore the $800 million dollars that the Feds gave Ontario as compensation for the SARS epidemic - which happened during the Eves reign. McGuinty also did some fancy book-keeping to the tune of about $2 billion that brought Hydro's debt onjto the government ledger - a practise that had not been done before. You'll also notice that the booming economy has increased Ontario's revenues by about $20 billion but it's pretty well all been spent. I just hope we don't have a major downturn because McGuinty has not left any room....but all in all, I can't complain too much - he's done a better job that Peterson and Rae. We'll see how things go over the next coupole of years.

I never said that Peterson and Rae didn't have deficits. However, the deficits started before Peterson was in power. It was Peterson's government that balanced the budget in 1989-90. The downturn in the economy the year after that hurt the government and they were back in deficit but Peterson's government was considered one of the more fiscally responsible governments in many years in Ontario.

As for the smoke and mirrors, I don't think I would have described the independent auditors report a lie.

Edited December 24, 2007 by jdobbin

[kitchenerlrt]

IMO, Mr. Martin saved Canada's finances. He created balanced budgets, eliminated our deficit, and also reduced our debt quite a bit.

[Michael Bluth]

IMO, Mr. Martin saved Canada's finances. He created balanced budgets, eliminated our deficit, and also reduced our debt quite a bit.

Thanks to the FTA, NAFTA, the GST, deregulation and the elimination of the operating deficit.

Paulie was a very good Finance Minister, but he didn't save Canada's finances.

Too bad he was such an utterly incompetent PM.