Economic Update: Take that Fat Cats!

Jim Flaherty came through with an interesting and, I would say, very optimistic Economic Update (mini-budget, whatever) yesterday that aimed for something that all voters love to see under financial siege, Government Agencies and MP’s.

No Debt Financing?

With some very creative and optimistic accounting, the Finance Minister is promising to try to have either balanced budgets or very small surpluses up to 2013, which is very contrary to what most economists are saying is possible in the current economic instability (i.e. Financial Apocalypse).

Flaherty did couch his optimism with the following cold statement:

“Any additional actions to support the economy will have an impact on the bottom-line numbers in our next budget. These actions, or a further deterioration in global economic conditions, could result in a deficit.”

So he isn’t saying there will be deficits, just that there will be measures taken to avoid debt if possible.

Take that Ottawa Fat Cats

Ottawa Fat Cat
That is a fat cat

No, that is not a real Ottawa fat cat, it’s my cat from when I lived in Kitchener, but he is a good metaphor for the “Fat Cats” in Ottawa.

Some of the measures against the “Ottawa Fat Cats” taken will be:

  • Elimination of the $1.75 per vote allowance to support political parties that receive more than 2 per cent of the vote, staring April 2009. I really like this one, because all of the politicians are howling about it, so it must be a good thing.
  • Wage controls holding increases to public servants, including MPs and senators, to 2.3 per cent for last year and 1.5 per cent for each of the next three years. I really like this one, because the MP’s are mad about this as well, and the public service doesn’t like it either.
  • Slash cost overruns on government travel, hospitality, conferences, exchanges and political services, this sounds like something they should have been doing already? What exactly were they doing before this, wait, I don’t want to know the answer to that one, so please don’t answer.
  • Provincial equalization payments are gauged to the average GDP growth over a three-year period. Can’t wait to hear Dalton McGuinty tirade about this one.
  • No mention of any extra taxes, but since this is not a budget, then I guess nothing has to be mentioned about that (yet).

Other Steps

Some pro-active steps being taken are:

  • Giving $350 million in equity into the Export Development Canada and another $350 million in equity into the Business Development Bank of Canada. Interesting, guess I should send my resume in there since they might be hiring soon.
  • A scary one for soon to be pensioners is allowing federally regulated pension plans to spend 10 years instead of five to make solvency payments if necessary. This is a slippery slope I think and it could end up like some of the private pensions that are woefully underfunded these days.
  • Only allowing seniors to withdraw $7,500 instead of $10,000 from their Registered Retirement Income Funds (RRIFs), which is supposed to slow the cashing in of stocks and mutual funds I guess.


File Taxes Electronically Get a Break!

Back in October 2007 this was important. Filing your taxes electronically was still a new-ish thing. Back then you had to pay to E-file? The late Mr. Layton made a good point about the ecological impact. More importantly it also meant quicker response to filings as well. Preparing your taxes should be free (i.e. no cost to prepare it), for most of us. Intuit and Quicktax are fighting this hammer and tong.

Says the NDP?!??!? Wow, I had to go back and read over this, but yes, Jack Layton is saying that anybody who E-filed this year should get a $10 rebate and next year, they should get FREE tax software to help modernize the whole tax system.

By encouraging Canadians to file their taxes electronically we can shrink the ecological footprint of the annual tax package by reducing printing, transportation and physical storage requirements,” Layton said. “Helping Canadians move away from paper tax forms is where government leadership is needed.”

Jack Layton – NDP Leader 2007

OK, I get the gist of the argument, that cutting down the great paper storm that Tax season creates would be a good thing, but the NDP said this? Interesting indeed. I’ll give them a point on my scorecard for that one. Wonder when the Liberals will hop on board of this one?


Election Wrap: It’s Like Buckley’s

I think this hour has 22 Minutes had the best “send up” of the Tories, which showed people acting like they had just taken Buckley’s Mixture, but they were in fact in a voting booth, choosing a Tory Candidate. That is just classic!

What does this mean? Means another minority government, mostly emasculated will pass a few little tidbits from their platform, and get turfed in 2 years or so (unless Paul Martin pulls a Pierre Trudeau, and cuts the legs out from under Harper in a Machiavellian fashion). The government will continue to function by sheer momentum, agencies will put together their yearly plans, and life will go on.

Am I upset, happy or indifferent about this turn of events? Apathetic really, don’t care right now, I’ll wait to see what this really means in the next few months.


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