Enjoy the Decline

Putting unserious, inept and craven never-beens in charge of a resource-rich economy has a priace.

Behold:

The 2024 federal budget failed to spark a much-needed rebound in the polls for Prime Minister Justin Trudeau’s trailing Liberal party, according to new Ipsos polling released Tuesday.

Canadian reaction to the Liberal government’s latest spending plans shows an historic challenge ahead of the governing party as it tries to keep the reins of government out of the Conservative party’s hands in the next election, according to one pollster. ...

 

Quelle surprise.

More:

After stripping out those who said they “don’t know” how they feel about the federal budget (28 per cent), only 17 per cent of Canadians surveyed about the spending plan in the two days after its release said they’d give it “two thumbs up.” Some 40 per cent, meanwhile, said they’d give it “two thumbs down” and the remainder (43 per cent) gave a symbolic “shrug” to Budget 2024.

 

The latter are the ones who don't do math and don't realise how badly the economy is doing.

There is no money for ANYTHING the Liberals have promised and won't (and certainly can't) deliver. 

It takes a lot for Canadians to be cynical (because they are slow on the uptake). 

We've reached that point.

Also:

David Dodge, former deputy finance minister and governor of the Bank of Canada, said before the 2024 federal budget was presented that it would “likely be one of the worst in decades.” He wasn’t wrong. The budget Finance Minister Chrystia Freeland delivered Tuesday fails to address the biggest problem currently facing Canada — our declining standard of living.

It is very irritating to hear the Trudeau government congratulate itself for Canada’s economic growth over the past few years without pointing out that all of it has come from immigration. Factor out population growth and Canada’s real GDP “growth” per capita has been negative 2.5 per cent — a number mentioned nowhere in the budget. Even Carolyn Rogers, deputy governor of the Bank of Canada, recently called our weak economic performance an economic emergency — and bank officials are always extremely careful about their choice of words.

Stumbling in her new shoes, Minister Freeland has taken three steps backward in this budget. She is running up federal spending by 10 per cent over the next two years. From fiscal years 2022-23 through 2025-26, the government’s financing requirements will have grown by 61 per cent while the interest it is paying on its debt will be up 57 per cent. She is also taking the wrong path by raising taxes on the private sector rather than cutting federal spending.

In what it bills as an “affordability” budget, the federal government is spending oodles of money on housing, dental care, school lunches, pharmacare, Indigenous support, green subsidies and, of course, consultants’ fees and a padded public service. To finance all the new spending, it will issue still more bonds, which will push up interest rates even as the Bank of Canada tries to bring them down. Higher corporate and capital gains taxes will discourage the supply of goods and services to the market whether in housing starts or in food. Instead of improving affordability, the fiscal plan will impair it.

Even though the government finally got the message that it has made a mess out of immigration, its new spending programs and regulatory changes to encourage housing supply won’t keep up to demand. Even with temporary residents held to five per cent of the population over three years, population growth will be almost one million a year, down from 1.5 million, but still outstripping GDP growth and new housing starts.

If we want to reverse our slide in economic performance, we need to revitalize private-sector investment.

Co-operating is not what Justin does:

Canada's premiers are warning the federal government not to overreach into their jurisdictions when it comes to delivering the programs laid out in Ottawa's latest budget.

In a letter responding to the Liberals' budget, the premiers say they worry new federal programs are eventually going to be downloaded onto provinces and territories.

They also say the housing crisis cannot be solved by the federal government working with municipalities alone.

Prime Minister Justin Trudeau said he would go directly to mayors to provide housing funding after Ontario Premier Doug Ford refused to accept the money with conditions.

The premiers say they need to have a key role in developing federal housing programs and are calling for more flexibility.

The government's new housing plan includes billions in spending aimed at building nearly 3.9 million homes by 2031.

In the letter, Council of the Federation president and Nova Scotia Premier Tim Houston touches on everything from defence spending and disaster assistance to housing. He says the premiers were expecting updated Disaster Financial Assistance Arrangements this year to provide adequate support for emergencies.

The premiers want to see even more spending on Arctic security and investments to equip and staff the Canadian Armed Forces.

Houston and his fellow premiers also say they expected the federal budget to include flexible and predictable infrastructure funding, "but this did not happen."

"Budget 2024 may lead to positive impacts for Canadians if actioned properly and collaboratively with provincial and territorial partners," Houston wrote.

Indeed, why?:

The problem is that the proposed capital gains tax hike won’t only soak a handful of rich Canadians as advertised. In its current design, it broadly punishes individuals and families of small business owners, tech entrepreneurs, dentists and countless others who have often spent decades trying to build their businesses for a potential once-in-a-lifetime capital gains event. Together, our analysis suggests that those people represent closer to 20 per cent of Canadians.

This tax proposal simply amounts to a systemic tapping on the brakes on the investment in a productive and prosperous future, being made by innovative, hardworking Canadians. And it does so at the very time Canada needs them to accelerate their investing.

But among the innovators and business leaders I talk to in the Canadian tech sector, this week’s budget was a chilling shock. There is a sincere and widespread belief that if something does not change, the budget will do widespread and irreparable damage to Canada’s tech sector.

That’s why more than 1,000 CEOs have signed a public letter to Prime Minister Trudeau and Deputy Prime Minister Freeland at ProsperityForEveryGeneration.ca, calling on the government to stop this tax hike. Innovators understand what’s at stake.

Firstly, we are at a moment when capital is harder to access than at any time in the past generation. Higher interest rates and economic uncertainty mean that many high-growth companies with innovative products struggle to secure growth capital on favourable terms.

South of the border, we’re seeing strong growth, driven by significant government investment through strong industrial policy, alongside significant growth in bleeding-edge artificial intelligence applications. The U.S. is an exciting place to invest right now.

And capital is highly mobile. If Canada is seen as an unfriendly place to invest, due to high taxes, investors will simply take their money elsewhere, and propel the growth of promising tech companies in other countries.

What’s more, highly skilled talent is more mobile than ever before, and among innovative high-growth companies, stock options — subject to capital gains tax — are a key form of compensation.

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We’re not talking purely about CEOs and tech founders here either. The dedicated early players of a promising tech startup earn their stock options with sweat equity. Their dedication, taking a risk in the prime of their career, is often the key ingredient for the success of future innovation champions.

Innovators are intimately aware of these concerns, because this isn’t the first time the Liberal government has tried to tax stock options. Nearly a decade ago, they promised to hike taxes on stock options in their 2015 campaign platform, and it took years of public advocacy from tech leaders to help the government understand the potential unintended damage that a reckless tax hike could do on the ability to attract and retain talent.

All along the way, we were assured by the government that they knew what they were doing, and there was nothing to worry about. In truth, after many frank conversations, they changed course.

In the days and weeks ahead, I’m expecting to hear the same kind of thing again. Already we’ve heard from government officials pointing to the “Canadian Entrepreneurs’ Incentive” carve-out, which will soften the blow of higher capital gains tax rates overall. The details of this carve-out are not yet fully clear, and it’s possible that the government will tinker with the thresholds to help mitigate the damage of a tax hike on capital gains.

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But the reality is that without a significant change in messaging, the danger to Canada’s economy is real.

 

And the Liberals know it.

There are many things that could be said about the failed healthcare system in Canada and the medical professions that serve in it.

What one cannot dispute is that a medical professional has indispensable skills and that one must train and keep such people instead of relying on an unvetted influx to somehow have the skills we need and is willing to work at bargain basement prices.  

The Liberals are trying to run professionals of all sorts out of Canada and it looks like they will succeed:

The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing they will affect doctors' retirement savings.

Kathleen Ross, the association's president, says many doctors incorporate their medical practices and invest for retirement inside their corporations.

The proposed changes would increase taxes on those investments, something the association says will add "financial strain" for doctors who do not have a pension to rely on.

Ross argues the change could also affect recruitment and retention of physicians in Canada.

Doctors are the latest group to come out against the tax change, which is expected to largely affect wealthier Canadians and businesses.

The federal budget presented last week proposes making two-thirds rather than one-half of capital gains — or profit made on the sale of assets — taxable.

The increase in the so-called inclusion rate would apply to capital gains above $250,000 for individuals, and all capital gains realized by corporations.

"We have seen this portrayed by the government as tax fairness for every generation. But realistically, there are certain members of the population that are going to be more impacted," Ross said in an interview.

Ross pointed out that doctors would not be eligible for the $250,000 exemption to the higher inclusion rate, since the investments they make are largely inside corporations.

 

And:

Cabinet’s decision to defer a steep increase in capital gains taxes for two months was “surprising to say the least,” says Budget Officer Yves Giroux. MPs called the deferral a ploy for pre-election boosts in tax revenues: “If that’s not the reason that certainly will be the effect.”

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Currently, people only pay tax on 50 percent of the total capital gains they earn from selling their assets. Under the new measure, effective June 25, they would still pay tax on just half of their first $250,000 in capital gains, but for any capital gains beyond that threshold, two-thirds would be taxed.

If Canadians find ways to avoid paying, it could leave a revenue gap in a budget already reliant on borrowing, he said. The budget estimates that this capital gains measure would increase federal revenues by $19.4 billion over five years starting in the current fiscal year.

“We are asking the wealthiest Canadians to contribute a bit more, so that we can make investments to ensure a fair chance for every generation,” it says.

“[The budget] does not address what I think is the number one problem facing Canada, which is our very poor productivity,” Mr. Mintz said.

 

Somewhat related:

Private insurance company Sunlife is the administrator of the program, which is currently only available to seniors. Children under 18 will become eligible to apply in June, while those aged 18 to 64 will need to wait until 2025 to apply for the program.

Health Minister Mark Holland announced this week that the government would be looking into tweaking the plan to make it more attractive to dentists and get more of them to sign up but noted at least 5,000 dentists have signed on so far.

The Canadian Dental Hygienists Association has also voiced criticism of the plan, particularly the reimbursement guide which would pay significantly less to a private hygiene clinic as opposed to a dentist’s office.

 

 

No, cell phone bills have not decreased:

Winseck cited another metric that tells a different story — the average revenue per user reported by cellphone companies.

According to the CRTC, telecoms averaged $67.26 in mobile phone revenues per user during the second quarter of 2023, up from $64.33 in the same quarter of 2016.

“(it) really is, at the end of the day, the key measure here,” he said.

 

 

Read Dead Aid, a treatise on why perpetual foreign aid funding hurts but not helps countries in need.

We have no money for anything in this country and all of the foreign aid goes to groups like Hamas.

Enough already:

Foreign aid groups are hailing the federal Liberal government’s return to a policy of increasing humanitarian and development spending each year, while asking for a plan to push allies to reverse a global decline in aid.

“It was a good moment for Canada to step up and show global leadership by making this commitment of additional, new humanitarian money,” said Kate Higgins, the head of Cooperation Canada, which represents more than 100 non-profits.

The Liberals pledged in their Tuesday budget to increase humanitarian aid by $150 million in the current fiscal year and $200 million the following year.

International Development Minister Ahmed Hussen would not confirm the total amount of Canada’s foreign aid, though Higgins pegs that total at just over $7 billion this year, and $7.2 billion next year.

“We can talk about the details at another time, in terms of the number-crunching. What I can tell you because the budget was just introduced, is we’re very happy with the fact that our government is doubling down on international assistance,” Hussen said in a Wednesday interview.

 

 

It's always been a scam:

Unsubstantiated claims about the impact of human-induced climate change on weather are prompting governments — including Canada’s — to impose excessive regulations and costly new programs on businesses and taxpayers, according to a new report by the Fraser Institute.

“Based on such assertions, governments are enacting ever more restrictive regulations on Canadian consumers of energy products, and especially Canada’s energy sector,” the paper by the fiscally conservative think tank says.

“These regulations impose significant costs on the Canadian economy, and can exert downward pressure on Canadians’ standard of living.”

Study author Kenneth Green argues, “the evidence is clear — many of the claims that extreme weather events are increasing are simply not empirically true. Before governments impose new regulations or enact new programs, they need to study the actual data and base their actions on facts, not unsubstantiated claims.

 

Whatever may happen, one's political betters will always be alright:

Meanwhile, Canadians pay for the lavish lifestyle of Prime Minister Justin Trudeau, Governor General Mary Simon, Finance Minister Freeland and the high-living cabinet. They don’t stand in line for gas. Or pay out of their own pockets. The people in the lineups pay for their privileged existence.

 

Canadians are being robbed and they let it happen.