Tuesday, May 16, 2023

It's Just Money

Let's introduce a few facts:

As of this writing, Canada's national debt is $1, 220, 309, 980, 000 (it fluctuates rapidly). 

That is $35, 184.00 per person.

The debt growth is $144, 931, 507.85 per day.

The sector with the highest employment rate is the public one, skewing the data to suggest that Canada's overall unemployment rate is low, thanks to the government's skillful intervention, when nothing could be further from the truth: 

The data show that workers have been more than willing to join the fast-expanding public service. From April 2014 to April 2023, federal, provincial and municipal employment grew 22.3 per cent, private-sector employment only 11.4 per cent. Today, public-sector employment accounts for almost 20.9 per cent of all jobs in Canada, compared to 19.4 per cent in 2014. The private sector pays the bills, so that can only mean a higher tax burden on private-sector workers and businesses.

Public-sector jobs are clearly more secure. In the pandemic’s first two months, fully 22.5 per cent of private-sector employees lost their jobs — compared to only six per cent in the public sector. The same pattern held when the financial crisis hit in the fall of 2008: as private-sector employment fell by four per cent public-sector employment actually rose by 1.2 per cent (through July 2009). Layoffs are devastating for all families, but the risk of experiencing them is much greater for private-sector employees.

Public-sector workers are highly unionized. So it is not surprising they have succeeded in pushing up salaries and benefits faster than in the private sector. The average hourly wage and benefits for unionized workers (both private and public) is $35.44, which is nine per cent more than for non-unionized workers. But despite the potential for wage gains through bargaining, private-sector unionization fell from 21 per cent in 1997 to just 15 per cent in 2021, even as unionization grew from 74 to 77 per cent in the public sector.

If unions do achieve higher benefits, why has collective bargaining declined so much in the private sector? In part, it’s due to the shift from goods to services production. Unionization rates in the service sector (excluding health, education, social assistance and public administration) are just 15 per cent, a quarter the rate in the goods sector.

More importantly, private companies have much less ability to raise consumer prices to recover higher negotiated wage costs. If they do, both domestic and foreign competitors will take market share from them. Workers understand this. And paying dues and being subject to seniority rules may not be so appealing, especially to the young. In the public sector, where there is no competition to worry about, it may not matter so much.

When private unionized companies push up wages too much, private-sector employers may move production to other countries or, failing that, go bankrupt. The auto industry is a perfect example of the fallout from bargaining over the years between an oligopoly and union. To save auto production, governments have had to subsidize the industry, with the recent outrageous payment to Volkswagen of more than $4 million per direct job being only the latest example.

Even the tax system penalizes private employment. People whose income fluctuates year to year, as it often does in the private sector, pay more tax over a lifetime than people whose income is more stable, as it usually is in the public sector. How come? Under our progressive tax system, we pay more tax in the higher-income year than we save in tax in the lower-income year. We used to let people average their incomes over several years to avoid this tax penalty. But averaging was abandoned in 1988 on the ground that top marginal rates were being reduced so as to maintain tax competitiveness with the United States after the Reagan tax reform. But now that our top rates are back up to levels not seen since then, maybe it’s time to bring back averaging.

 

We can no longer borrow money legitimately as our credit rating has been downgraded:

On June 24, the rating agency Fitch downgraded Canada’s long-term debt rating from AAA to AA+, citing a deterioration in government finances due to fiscal policy in response to the coronavirus pandemic.

The downgrade was not entirely unexpected, since Canada has been on “negative outlook” for Fitch since April 2020. Canada has been AAA-rated by all four rating agencies since 2004 (Fitch, plus Moody’s, Standard & Poor’s, and DBRS), and the other three have maintained their AAA-ratings with stable outlook.

 

Keep these matters in mind when you review all of the other stupid decisions that are ruining this country:

 

A real per capita recession is when real GDP per capita contracts for two consecutive quarters. If that sounded like gibberish, let’s break it down. Real GDP is a country’s economic output adjusted to remove the impact of inflation. Adjusting it per capita averages it per person, removing the impact of population change. 

The biggest problem with aggregate GDP is it’s easily skewed by population change. Countries with poor economic performance may obfuscate the issues with aggressive population growth. Things are getting worse, but there’s more tax units, er… human capital stock, I mean… people generating output.

Still not clear? Think of it like a portfolio filled with poorly performing stocks. Let’s say a friend started a portfolio with $100k, and the value of stocks fell by 50%, leaving them with a $50k portfolio. They deposit another $100k, bringing the value to $150k. Talking about aggregate GDP growth is like them saying their portfolio grew 50% since they first started. Is it true? Sure, and it sounds like they’re doing great. But the reality is you didn’t learn about their performance, just the total. 


 

A quarter too few:

Data confirm hundreds of thousands of families will not use subsidized daycare. A quarter of young children are raised in the home, figures show: “It provides a snapshot of early child care use across the country.”



By "government grants", one means taxpayer money for something what little private industry we have wants no part of:

There is little “greening” of the nation’s commercial truck fleet despite offers of $250,000 federal grants, says in-house research by the Department of Natural Resources. Cabinet has targeted transportation as a key polluter that accounts for 22 percent of all greenhouse gas emissions: “The most common barrier identified by companies is cost.”

 

Also - yes, blame someone else for your bad decisions:

Ottawa is “very confident” it can settle a dispute with automaker Stellantis if the Ontario government pays its “fair share,” Industry Minister Francois-Philippe Champagne says.

 

Speaking of bad decisions:



Remember - even semi-privatised healthcare is an abomination:

Excessive wait times for medically necessary surgery and treatment cost close to $3.6 billion in lost wages and productivity in 2022, according to a new research report by the Fraser Institute, a non-partisan think tank.
The Private Cost of Public Queues for Medically Necessary Care, 2023, released May 9, values only the hours lost during the average work week. It said an estimated nearly 1.23 million Canadians were on waiting lists for medical treatment in 2022.
With an average wait time averaging 14.8 weeks between seeing a specialist and receiving treatment, the cost per patient waiting worked out to $2,925.
“This is a conservative estimate that places no intrinsic value on the time individuals spend waiting in a reduced capacity outside of the work week. Valuing all hours of the week, including evenings and weekends but excluding eight hours of sleep per night, would increase the estimated cost of waiting to $10.9 billion, or about $8,897 per person,” said a summary of the findings by the study’s co-authors, policy analyst Mackenzie Moir and director of health policy studies Bacchus Barua, both with the Fraser Institute.
“Waiting for medically necessary treatment remains a hallmark of the Canadian health-care system, and in addition to increased pain and suffering—and potentially worse medical outcomes—these long waits also cost Canadians time at work and with family and friends,” said Barua in a news release.



Vaguely related:

Statistics Canada says the number of new cancer cases dropped by 12.3 per cent in 2020, compared with the average annual rate over the previous five-year period, possibly due to pandemic-related disruptions in screening services.

StatCan data show there were 450 new cases per 100,000 people and that overall, cancer diagnoses among males fell by 13.2 per cent.

That was more of a decrease than for females, who saw an 11.4 per cent drop in new cases during the first year of the pandemic.

StatCan says difficulties accessing primary care and fewer in-person appointments due to COVID-19 lockdowns as well as travel restrictions may have impacted the registration of new cancer cases.

 

Is that so?: 

 


This industry was created purely for mollifying effect and nothing more:

Cabinet spent billions more on Indigenous affairs without proportional improvement in actual services, Parliamentary Budget Officer Yves Giroux said yesterday. Public Accounts show spending more than doubled after Prime Minister Justin Trudeau created two Indigenous departments out of one: “Increased spending did not result in a commensurate improvement.”

 

Also - because of course it will:

A search for the remains of two First Nations women at a Winnipeg-area landfill could take up to three years and cost $184 million, says a study examining whether a successful search is possible.


No comments: