Budget 2011 Canada

Budget to Nowhere

If the political pundits are correct then the Harper Government has thrown out the first few planks of their election platform with yesterday’s Budget 2011 (part 1) announcement (here is a link to the Budget 2011 Speech if you want to read Mr. Flaherty’s words too). I dub it part 1, since there will be another one, if there is an election. Budgets can be fun and exciting times, and no doubt our friend Larry MacDonald has been locked up with a bunch of other folks in the budget enclave, Larry always has interesting stories from those lock ups.

So what does this Jim Flaherty’s budget do for you and me? Remember, don’t get too excited, because if there is an election and the Harper Government doesn’t get a majority or is removed from power, then we will be enduring another budget cycle again this year (if not many more). What happens with yet another minority government? Let’s not speak of such, it means more of the same kind of Government again, and I for one would love to see any Majority in power for a while (within reason).


Given all opposition parties have said they will not support this budget, don’t get very excited about any of this however, some of the highlights from the Jim Flaherty Harper Government budget include:

  • A balanced budget pledge by 2015-16, this is good, stop spending money you don’t have Harper Government.
  • Lots of fun little tidbits of money going around like:
    • $5 Million to the Calgary Stampeded for their 100th anniversary
    • $5 Million to the Grey Cup for their centennial as well
    • $25 Million over 5 years for Toronto’s harbor front
  • Up to a $300 Tax Credit for those caring for a “disabled” loved one (how disability is interpreted is still unclear, whether it is disabled in CRA’s eyes, or another interpretation)
  • Children are now counted as active if they are taking Tuba Lessons (i.e. the Active Child credit will include the Arts as well). Hope that is Marching Tuba Lessons.
  • Elimination of mandatory retirement at age 65, for federally regulated jobs. Guess that means I can now work ’til I die? Maybe that wasn’t the exact idea behind it, but it may be how things end up.
  • Helping lower-income Seniors out a bit more, with a top up to their old age security payments. Can’t argue with that one, no Politician is going to say that is a bad idea, but they might say it isn’t enough.
  • More money for full and part-time students in Grants and Loans? Not clear on how that might help middle class folks, but it might. If you are a Doctor or a Nurse and go work in a remote area, your loans would be forgiven too (what is remote? Scarborough? Barrie?).

A well described Hodge Podge (or Dog’s Breakfast) of bits and pieces, but a little bit for everyone, and not much for anyone, fine and dandy.

Now let the fireworks commence, will the Tories survive the week? When will a Spring Election be? Is Jack Layton ready for a campaign with his dodgy hip? Will Mr. Duceppe wear a funny hair net? Will Michael Ignatief find another way to snatch defeat from the jaws of victory? Why do I keep asking questions I can’t answer?

Hold onto your hats, this Budget may be forgotten, but some of it might come back in the fall, depending on who gets into power.


Useful Graphic For Debt Reduction Fans (like me)

Deficit Fighting

Deficit Fighting Plan


Now that is overspending

That is a Credit Card Debt!

Here in Canada we are flagelating our government because they are going to be running a budget deficit (they are going to spend more than they make this year) of over $50B, and rightfully so, given we have been runnnig surpluses for several years (i.e. making more than we spend), however we are humble overspenders compared to our brothers to the south (the USA). The estimate now is that this year the US Federal Government will run a deficit (remember that is overspending this year’s budget) of over $1 Trillion, wow.

That is effectively the same as giving every single human being on the earth (assuming the Trillion they are talking about is 10 to the power of 12) $140.00, this year.  Canada’s deficit would only give every human a paultry $7 , as you can see we Canadians are small time in this overspending world.

How will this be remedied in either country. Some are arguing in both cases there are 1 time bail outs that do not reflect actual spending habits (Bank Bail outs, Car Company Bail outs, etc.,), and that may well be the case, but what is going to be the fall out trying to pay back this deficit? Canada had been paying back the National Debt (i.e. the money we owe, from accumulated deficits over the years) however this latest set back is not a good thing.

As with personal finance every time a deficit is run for a year, it will eventually need to be paid back, Live Now but you will Pay A Lot More Later.

Local Ponzi News

If you think Bernie Madoff is a uniquely American issue, think again, evidently a new collapsed Ponzi scheme has been uncovered in Montreal. Earl Jones, the advisor in question is missing, as is all of his “clients” money as well.

This begs the question, do you trust your financial advisor? Are you sure you know where all your money is, and why it’s there?


Where are your Air Miles Going?

You Gonna Use those Air Miles?

The LCBO evidently has fired 10 employees for allegedly de-frauding the Air Miles system (according to the CBC). This one while upsetting, is not surprising.

More than once I have thought (while standing in line behind someone at a store that takes Air Miles or some other rewards program where your number is put in at the end end of sale) about asking whether their sale could go onto my account. The problem with this idea is it is fraudulent in the eyes of the rewards program, since I didn’t purchase the goods, and evidently this is sort of what these employees were doing (taking points on sales where the consumer didn’t have their card, or didn’t care).

This is another example of the problem of “insider trading” (i.e. employees or insiders taking advantage of the system, which we have seen in the lottery sales area, and now with this reward system).  The LCBO policy quoted is:

“Staff are … prohibited from using the purchase by any customer to issue reward miles to their own personal account or the account of other staff, family, friends, other customers or any other person,”

How can this be remedied? Not sure, but it is something to be prudent about, to make sure you don’t lose any rewards you should get.  In this instance no one lost their points, it was a situation where fraudulent points were created where none should have been given out, not to rationalize or worse condone this bad behavior, but the victims were the folks at the Air Miles reward program.

Federal Language Test Leaked?

On Thursday I took two Federal Government language tests (for French), and they were quite challenging (I was close to being able to work in a French environment in my younger days, my French now is very rusty). I found out Friday morning that evidently these tests may have been leaked , which is intriguing, and may prove very costly to the Federal Government (which will have to retest a large group of folks who have been tested (hopefully not me)).

The tests leaked were the two which I took, and they were done on line, on a private network, so how the questions were “copied” seems to suggest another “insider job”, but we shall see.

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Now that is a Debt

$30 Billion is Quite a Debt

Stephen Harper told the CBC that the coming fiscal year the Canadian Government could run up to a $30 Billion debt thanks to the Financial Apocalypse? Wow, that is quite the turn around from running surpluses for years, and if it is a one time thing that does stimulate the economy and gets people (like me) back to work, I guess it isn’t too bad, however my concern is that this isn’t going to be a one time thing. When deficit financing started in the 70’s it was not planned to be the “Standard Business Practice”, but it did end up being that way and we are still paying for it now.

The statement by Harper is also a contradiction of his own finance ministers statements of a week or two ago where it was claimed Canada would only run a $5 Billion deficit, makes me wonder what is the real number (and we won’t know that until December 31 2009 or later) and how much “stimulation” the Tories plan on putting into the economy (and what happens to this whole mess if the Three Headed Coalition Monster rears it’s head as well). Should be a very interesting fiscal year coming ahead, that is for sure.

The specter of Deflation or Hyper-Inflation is what has me concerned as well, because we are now in uncharted waters that is a certainty.

Advent Financial Calendar Box Day 20

Advent is slowly coming to a close and the Christmas Festival begins on Sunday and our Financial Calendar has very few boxes left for us to open.  In today’s box we find House Plan, complete with blue prints, cost estimates, the works. This plan has a few ways you can look at it as part of your financial journey:

  1. If you succeed in your financial journey, you may one day be able to afford building your Dream House where you and your family can live and prosper.
  2. For me this signifies the importance of a complete Plan for your Financial Journey. If you do not have a Financial Plan which is honest, and complete you cannot succeed and worse still, you cannot tell if you have succeeded as well (which is more important). 

Every week I write at least one article on the importance of Financial Planning, but many times I don’t mention why it is so very important.

There is a line from a Tom Clancy novel that rings in my ears, “… if you don’t write it down, how do you know it happened…”, but better still if you don’t write down what your goals and plans are, how do you know if you are succeeding? That is the positive view you should take of any financial plan, it gives you the positive feedback that you are succeeding, or the Shepherdly tap on the shoulder to get back on track, if you are not.

Make that Financial Plan for next year today, before Advent is over.


After visiting Toronto (to pick up my daughter from school), I had to chuckle at Environment Canada’s interpretation of the coming snowstorms for Southern Ontario.  The weather forecasts on Wednesday night quoted Environment Canada saying the storms would be Snowmagaedon (my spelling), which is a little over the top, given I don’t think the Rapture will be occurring during this event (if it is, my apologies), but it is even funnier to think that Environment Canada feels it is important to get people’s attention so they use these kind of sensationalized colloquialisms.

The storm does look quite serious, and I would suggest not traveling during it, but I am hoping that the Rapture does not come during it (because then we’d miss Christmas). Hunker down my fellow Ontarians, here comes another snowstorm!


Deficit Budget? Lump of Coal for Finance Minister

Deficit? Booo!

Yes, Jim Flaherty announced the likelihood of a budget deficit in 2009 for the first time (a planned one at least) in a while.

“There tend to be delays in infrastructure projects and, given the seriousness of the economic situation, it’s important that shovels get in the ground, that repairs on buildings start as quickly as possible,” Flaherty told CBC News.

He also warned of much higher unemployment as well. The year 2009 is shaping up to be a very “interesting” year economically.

The Day the TSX Died

Unbelievable but, the TSX did not open yesterday due to a network glitch? Amazing. An allegedly world class stock exchange is crippled by a network problem, in the middle of the Financial Apocalypse?

“Because the data feeds provide information to investors to guide their trading decisions, trading was halted to ensure market integrity,” the TSX said in a statement.

Integrity may have been saved, reputation on the other hand, who knows?

Are Banks a Bargain?

For those who remember, I still hold banks in my portfolio, mostly because I view them as a good Dividend providing investment.


Bank of Montreal had a new stock offering and thus added more shares and lowered their stock value thanks to this, which doesn’t make me very happy, but on the converse side of things, thanks to this my DRiP(Dividend ReInvestment Plan) will be buying more this quarter for this stock.


Toronto Dominion continues to get hammered as part of the Bank Backlash with all the shenanigans that have gone on in the U.S. (and around the world).

Again, this means my dividend reinvestment program will be buying more shares, so that is good.

I am holding these stocks as a long term investment vehicle, which creates dividend income as well, and they continue to be good for that.

Advent Financial Calendar Box Day 19

Opening this box, you find a card, a Library Card. The Library is our friend, because we can do our Personal Finance research without having to buy books to do it. In Ottawa you can get books on CD, DVDs and a lot of on line information as well. Research is a cornerstone of your Personal Finance Journey, the more you read, the more you learn and the more you can apply to your financial planning.

If you are planning for next year (as you should in Advent), visit your Library and use your Library card.


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