Canadian Personal Finance Blog

Archive for May, 2009

An interesting video for the weekend from our friends at Ted.com about whether English is becoming the second language of the world (where most folks speak another language as their mother tongue).

When I grew up in Montreal, I lived through the years of Bill 22 and then Bill 101 which forced immigrant families who did not speak English to go to French schools, so this discussion is interesting to me in many different ways.

English seems to be the standard in aviation already, is it being adopted by other industries in the same way? Is it the language of money? Not sure, but an interesting discussion none the less.

During a week where the federal government disclosed just how enormous the federal budget deficit will be, there were other topics written about by the Financial Blogging world, but this topic alone is a pretty hot topic. 

What could that kind of “money printing” cause in the economy? Jon Chevreau points out in the U.S. it could mean Hyperinflation on the Zimbabwean scale (at least in Dr. Doom’s estimation at least). 

Random Thoughts: Pensions?

• Michael James points out that not only is Nortel not paying severance and cutting their pension pay outs, they are reneging on work already done in Nortel Pensions and Paying in Advance.
• The Canadian Capitalist writes about the Major Changes in the Canada Pension Plan, which in some ways may be good, but are they?
• Preet at Where Does All My Money Go, points out there are hidden fees everywhere in Hard to Borrow Fees. 
• Canadian Financial DIY writes about our aging population and points out that 80 is the new 65 , yikes!
• The Four Pillars celebrated their 2nd blog Birthday, good for them, keep up the good work.
• Larry MacDonald asks about Falling House Prices and Banks, another interesting topic.
• Riscario Insider points out even Billionaires Need Government support.
• Gail Vaz Oxlade points out that spending Cash may cut spending in Cash versus Credit . 

Have a great weekend folks, hopefully the rain will stop, but maybe my grass needs it?

That is the oppositions’ screams today about Finance Minister Jim Flaherty’s miscalculations on the budget deficit for this year. 

I think this is a little extreme, given how screwed up the economy currently is, and how many interesting things are happening in the economy (can we say Perfect Storm?), but it does make for good political fodder, that is for sure. As I stated yesterday, I believe this is a sandbagging technique and in October they will state how they have saved the day and the budget is in fact only $45B instead, we shall see (either that or it will balloon over $60B and hyper-inflation will be the next major topic of conversation).

Stewardship or Charity with Kids

My wife is doing a talk to a group of adults on how to get kids to actually give to charity (by choice). Surprisingly if you simply tell your kids, “You must give $10 to the Church”, they might cough up the money once, but will resent it and more likely never give much again (even as Adults).

Explaining to kids that they don’t just have to donate money, they can donate their time and talents, instead,  is a first step. Getting kids to understand the importance of charity (and how they have so darn much anyhow) and helping those who need help is not easy and if anyone has any good stories about when they tweeked into the importance of Charity (and what age they were at the time), please feel free to include them in the comments section.

If I was having financial problems and went to credit counselling, and told the person helping me that I was overspending how much I made by $10,000 a year, they’d be very upset and tell me I had to change my ways. If I then came back 3 months later and said I miscalculated and that in fact I was going to overspend this year by $50,000 (but that is only an estimate), they’d ask for my credit cards and tell me to seriously think about bankruptcy and/or psychological help on impulse spending.

Record Breaking Deficit!

For the Federal Government take that scenario and multiply it by 1,000,000 and you’ll see where Canada stands now. The Feds announced a slight miscalculation in their deficit and in fact it is $50 Billion not their previous estimates, and they are not sure they are correct now, they’ll tell us in December.

Yes, we are in a Recession and maybe even a Depression, but this will be the largest deficit EVER (even more than the Trudeau and Mulroney Governments did in the 70’s and 80’s), which is astounding. 

Lowering incomes are part of the problems (i.e. deadbeats like me who don’t have income, aren’t paying tax like I did last year), spending MASSIVE money on the auto industry is not helping either, but this is painful. Is it really going to be $50 Billion, my guess is they are sand bagging and will bring it in about $40 Billion and talk about what a great job they did in tough circumstances.

Coughing Up More EI Benefits Too

Stats Canada published their monthly report on Employment Insurance Claims (nope I am not in that stat yet), and those numbers are scarey too. The number of folks collecting EI is up 10.6% from the previous month (not year long, one 30 day period). The number quoted is over 65,000 more claimants in March. 

EI Claims

Remember the government has previously used the EI fund as a buffer for spending using up extra funds, I think they can’t do that any more.

Interesting times in downtown Ottawa.

Just in time for your vacation, Gasoline at $1 per litre is coming to a gas station near you.  What is causing this return to last summer’s prices? No real reason, no huge jump in demand, or huge drop in supply, simply prices wandering their way back up.  If anyone can explain to me why this price increase is happening, I’d be glad to hear it, but for now it seems like Gas companies are looking to fortify their incomes for the summer.

Surely Oil prices must be going up?

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Certainly don’t see anything in that graph that suggests why prices are creeping up, guess the price of Oil doesn’t have much reflection on the price of Gasoline.

Luckily gas prices don’t affect any other prices, like food or the like.

Retirement = Pension + Part Time Job?

The government announced new CPP rules starting in 2012, where if you “retire” early at 60 you won’t have to quit your job to get your CPP payments, which is interesting. The change also comes with a catch, where normally at 60 your CPP benefits are reduced by about 30% (from what you would receive at 65), however under the new plan this reduction will now be 36% drop, so there is a catch.

This is in reaction to the number of Canadians who do NOT have a pension (other than the CPP), so a step in the right direction, but is it enough?

Oh, and the deficit for this year’s budget is goinig to be MUCH bigger, in case you were curious too (Yikes).