The Economy One Voted For

Does anyone remember when it was pointed that Justin's cavalier approach to the economy was called crazy but then laughed off?

I do:

Pandemic lockdowns doubled small business loan defaults under a federal program, new data show. The scope of losses on taxpayer-backed loans was expected to worsen due to “a certain time lag.”

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Interest rates are high enough, Bank of Canada Governor Tiff Macklem said yesterday. Macklem questioned “how long we need to hold” the current benchmark rate of five percent on interbank loans unchanged since last July 12: “Rates are high enough.” 

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Peter Routledge, Canada’s chief bank inspector, yesterday issued a directive ordering bankers to begin assessing mortgage holders at risk of default “effective immediately.” Canada has not had a bank failure in 39 years: “Begin testing to estimate potential losses.”

 

More:

Homeowners in Canada are edging closer to mortgage default as many near the “trigger point” on their loans, according to a federal memo to the superintendent of financial institutions.

A trigger point is when the amount of interest is equal to the fixed monthly mortgage payment, meaning that zero is going to pay off the principal of the loan. At this point, nothing is being paid down on the mortgage itself. If interest rates keep going up, those with variable rate, fixed payment mortgages will need to pay more just to cover the interest payments.

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Why didn't anyone bring this up before?:

A majority of Canadians want to see Prime Minister Justin Trudeau reduce government spending, which many see as one of the primary drivers of inflation in recent years, a new survey finds.

Overall, about 63 per cent of Canadians would prefer to see lower spending in Trudeau’s budget, according to the poll by Nanos Research Group conducted for Bloomberg. Some 38 per cent of respondents want the money that would be saved to go toward repaying government debt, while 25 per cent want tax cuts.

That may make April’s federal budget an unpopular one, as Trudeau’s Liberals appear likely to increase spending on items such as housing, defence and industrial subsidies.

“Canadians by a large margin prefer spending reductions over increased spending,” said Nik Nanos, the polling firm’s chief data scientist. “As Canadians exercise their own economic restraint as they struggle to pay for housing and groceries, they likely expect the federal government to also exercise fiscal restraint.”

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Behold! The trough!:

Canada’s viceregal is set to pocket a hefty pay raise in 2024.

The salary of Canada’s Governor General will increase by $11,200 in 2024, bringing the role’s annual salary to $362,800, according to information provided to the Canadian Taxpayers Federation by the Privy Council Office.

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This will be the third raise for current Governor General Mary Simon’s since her appointment in 2021, meaning she now earns around $34,000 more per year than when she first entered Rideau Hall.

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Simon received a $9,500 raise in 2023.

The numbers were confirmed by the Privy Council Office.

Remuneration for the viceregal is outlined in the Governor General’s Act, which established a base salary of $270,602 a little over a decade ago, subject to annual raises. 

Those raises are calculated via a complicated formula involving multiplying the previous year’s salary by “the lesser of 107 per cent and the percentage that the industrial aggregate for the first adjustment year is of the industrial aggregate for the second adjustment year.”

Canada’s industrial aggregate is a measure of average earnings by the nation’s labour force.

Franco Terrazzano, federal director of the Canadian Taxpayers Federation, called on the government to justify why Canada’s Governor General is entitled to automatic and hefty pay raises while Canadians struggle to pay rent and buy groceries.

“Canadians are struggling to afford a jug of milk or a package of ground beef, so the government shouldn’t be rubber-stamping another raise for the Governor General,” he said.

“A serious government would mandate the Governor General’s office be subject to access-to-information requests, cut all international travel except for meetings with the monarchy, end the expense account for former governors general, reform the pension and scrap the clothing allowance.”

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 The public sector is growing:

The job gains more than doubled expectations of economists surveyed by Bloomberg. Employment growth, however, continued to lag population growth, with the employment rate falling by 0.1 percentage points to 61.5 per cent.

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If there were term limits (limiting the career politicians and their grubby pensions) and strict rules that, if broken, would be punishable with jail time, this wouldn't pop up so much:

Canada’s federal, provincial and municipal governments spent $52 billion on corporate welfare in 2022 — the latest data available —according to a new study by the Fraser Institute released Tuesday.

“These subsidies for businesses — also known as corporate welfare — come with huge costs to government budgets and taxpayers, while doing little if anything to stimulate economic growth,” said Tegan Hill, co-author of “The Cost of Business Subsidies in Canada: Updated Edition,” by the fiscally conservative think tank.

 

It's time to give SNC-Lavalin, Irving and the ArriveCan parties a complete and total miss.

 

Also:

The Commons public accounts committee yesterday by a 6 to 5 vote asked that Parliament ban insider contracting by federal employees. Liberal MPs opposed the motion prompted by disclosures a defence contractor made millions while on the Department of National Defence payroll: “We seem unable to call a spade a spade.”

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Treasury Board President Anita Anand has been summoned for questioning over suspicious ArriveCan contracting. Anand as Minister of Public Works was in charge of contracting when program costs soared to $59.5 million on alleged bribery, fraud and bid-rigging: ‘They make it sound like she is a passenger, not steering the ship.’

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Oh, is it, you pants-wetting creature?:

Repeated reference to ArriveCan as “Arrive-scam” promotes public cynicism, Liberal MP Iqra Khalid (Mississauga-Erin Mills, Ont.) yesterday told the Commons public accounts committee. “It is impacting public trust,” she said.

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Mexico overtakes Canada as the US' major trading partner:

Last year, Mexico became the United States’ biggest trading partner, surpassing Canada and China for the first time. This humiliating fact is simply the latest statistic that illustrates Canada’s economic decline since Prime Minister Justin Trudeau took power in 2015.

The value of U.S. trade with Mexico in 2023 was US$798 billion (C$1.1 trillion), surging past America’s other two major trading partners. The increase will continue as offshore factories in China and elsewhere relocate to Mexico in order to cash in on the tariff-free North American free trade arrangement. “This is not cyclical, this is new,” Andrew Hupert, a trade expert who moved from China to Mexico, told Al-Jazeera.

Mexico is booming because of geopolitical trends and its trade-friendly government. In the first six months of 2023, Mexico has secured US$13 billion in investments, mostly in the auto industry, according to government figures. “The pandemic left us a very important lesson that took us from the globalization of production to the regionalization of production,” said Claudia Esteves, director general of the Mexican Association of Private Industrial Parks. “It’s practically killing globalization.”