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  1. #1
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    Default 2016 Federal Budget discussion thread

    $29.4B deficit
    $100B over 4 years

    http://www.cbc.ca/news/business/budg...ture-1.3502940

    Ottawa forecasts $29.4B deficit with lots more red ink to come

    The Liberal government unveiled its first federal budget on Tuesday, an outline of the new government's spending projections that's awash in big plans and big deficits.

    Ottawa plans to spend almost $30 billion more than it takes in this coming fiscal year, a big jump from the $5.6-billion deficit for the current year straddling the previous Tory and current Liberal governments.

    The red ink flows from there, to $29 billion the following year, then $22.8 billion and $17.7 billion in 2019-2020, the next scheduled federal election year.

    All told, it's almost $100 billion in deficit spending, a figure that Finance Minister Bill Morneau said is more than warranted given the current economic climate.

    "The government is making the investments needed," he said, "to boost the economy over the long term."

    Infrastructure spending

    That's because a good chunk of that deficit spending is targeted at infrastructure projects things like highways, bridges and airports that help make it easier for the economy to thrive, and make government tax revenues increase by enough to offset the cost of dipping into the kitty up front.

    There's a surge of almost $12 billion in the next five years for so-called "shovel ready" projects the government wants to get off the ground. That's things like the Lions Gate Wastewater treatment plant in Vancouver and the Outlet Channels Project that will help flood protection near Lake Manitoba and Lake St. Martin.

    There's money to spend on projects like those and countless others, and it breaks down as follows:

    $3.4 billion for public transit.
    $1.4 billion for affordable housing.
    $2.2 billion for water and waste management systems in First Nations communities.
    $400 million for early learning and child care.
    $518 million for climate change mitigation technologies.
    Almost $4 billion in other miscellaneous spending under the grab-bag of "infrastructure."
    There's even more after that "more than $120 billion in the next decade" according to a government press release but the 269-page budget itself was bereft on details of that spending.

    The idea is that projects like bridges and airport improvements pay off for governments down the line by making it easier for companies to grow, which boosts Ottawa's bottom line by increasing the tax base.

    But that comes later. For now, Ottawa's betting on its own future by spending money it doesn't have today.

    And making some pretty bleak assumptions about the economy in the process.

    Lowered expectations

    For planning purposes, Ottawa consults with a collective of more than a dozen private sector economists to see how they expect the economy will perform. Those economists expect Canada's GDP to grow by a relatively solid 2.4 per cent this year.

    But the government's own assumptions are far less rosy. Ottawa is projecting the economy will grow by $40 billion a year less than its own advisers are saying in each of the next five years.

    That level of economic growth would mean about $6 billion less revenue every year for Ottawa, a major factor in the deficit.


    But that's not even the only management of expectations going on. In its deficit projections, the government is front-loading the spending costs, but not factoring in any of the benefits of the rising economic tide that might ensue.

    As Morneau himself said, "for every dollar a government spends on infrastructure, substantially more than $1 of economic activity is generated." Yet the government's own deficit projections seem to assume all that spending won't have enough impact to bring down the deficit over time.

    That leaves a lot of wiggle room for the numbers to look a lot better than what we're now being led to expect .

    As Sahir Khan, a senior visiting fellow at the University of Ottawa and formerly of the Parliamentary Budget Office, said: "If the economy does a little better, we're going to pull out."

    Bank of Montreal economist Doug Porter agrees, saying the government has intentionally "set the bar low."

    "It leaves them room to spend more if need be," he said, "and they can still boast that they beat their targets."

    Other changes

    Other items that had been rumoured -- including changes to the way stock options are treated for tax purposes, and an overhaul of capital gains rules aren't mentioned anywhere in the document.

    But as Ian Sherman of accounting firm Ernst & Young LLP said, "I would assume those are coming later."

    There was also a major change to child care costs, with the creation of the Canada Child Care Benefit. It replaces a network of previous programs with one centralized one, which the government says will put more money into the pockets of 90 per cent of families with children, and will be tax free.

    And there was a tiny amount -- $500,000 earmarked for Statistics Canada, to give the data agency more tools to be able to track the amount of foreign buying happening in Canada's housing market.
    Last edited by Strider; 03-22-2016 at 02:47 PM.
    Originally posted by max_boost
    Hey baller, any problem money can solve is no problem at all. Don't sweat it.

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    Are they going to raise taxes to pay for it or just hope the economy and income taxes turn around? I say if you're going to spend, put a plan in place to pay for it now.
    Originally posted by 89coupe
    I do get great service there, especially when I mention my name, haha.

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    If you don't spend now, you will spend more later. That's what I use to justify my spending as well.

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    We need to find a way to elect Trump to stop this nonsense

    Trump for Overlord of North America!
    sig deleted by moderator, click here for info

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    Wasn't the budget supposed to balance itself?
    See Crank. See Crank Walk. Walk Crank Walk.

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    ...
    Last edited by Sugarphreak; 08-15-2019 at 04:39 PM.

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    As Morneau himself said, "for every dollar a government spends on infrastructure, substantially more than $1 of economic activity is generated."
    More like "for every dollar a government spends, 30 cents is completely wasted/thrown away forever".

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    Originally posted by Manhattan


    More like "for every dollar a government spends, 30 cents is completely wasted/thrown away forever".
    $8.2B for Indigenous Communities.

    CBC left out that they are getting $675 million...

    Last edited by phreezee; 03-22-2016 at 03:28 PM.

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    Lol so is anyone going to notice all of the great things we are getting with this money?

    Doubtful. Especially on Alberta.

    Anyone who voted liberal and expected anything else is a plain fool and deserve to have their money taken away from them like this.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
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    guessing who I might be, psychologizing me with your non existent degree.

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    A budget that doesn't benefit me in any way....awesome.

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    Originally posted by SmAcKpOo
    A budget that bankrupts my future and doesn't benefit me in any way....awesome.
    Ftfy
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
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    fact.
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    guessing who I might be, psychologizing me with your non existent degree.

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    Anyone who voted Liberal knew that there was deficit spending coming, and isn't surprised.
    Last edited by 95EagleAWD; 03-22-2016 at 03:54 PM.

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    Originally posted by 95EagleAWD
    Anyone who voted Liberal knew that there was deficit spending coming, and isn't not surprised.
    I doubt they believed they would break two huge election promises to this degree. Any Liberal supporter I heard truly believed what Trudeau was selling.
    See Crank. See Crank Walk. Walk Crank Walk.

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    Originally posted by FraserB


    I doubt they believed they would break two huge election promises to this degree. Any Liberal supporter I heard truly believed what Trudeau was selling.
    Sometimes, you just need to spend money. Do I agree on everything? Of course not. But infrastructure spending is good. It's crumbling, it's past design life, and eventually it'll be unsafe, and people will die. There's no reason for things like a dam to fail in Canada. That shit should be taken care of.

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    Originally posted by FraserB


    I doubt they believed they would break two huge election promises to this degree. Any Liberal supporter I heard truly believed what Trudeau was selling.
    So do most people who sign up for direct energy door to door sales
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
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    guessing who I might be, psychologizing me with your non existent degree.

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    Originally posted by 95EagleAWD


    Sometimes, you just need to spend money. Do I agree on everything? Of course not. But infrastructure spending is good. It's crumbling, it's past design life, and eventually it'll be unsafe, and people will die. There's no reason for things like a dam to fail in Canada. That shit should be taken care of.
    Since you mentioned a specific example, which dams are in danger of failure in Canada?

    The only major infrastructure issue I've heard lately was that bridge in Ontario, but that had nothing to do with lack of spending.
    See Crank. See Crank Walk. Walk Crank Walk.

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    Current debt is $616bil.

    An extra $25bil per year over 4 years.

    So they want to increase the federal debt by ~17%.

    I guess my question is, "does it matter"? Arguably, I say yes it does. It is a big deal. Some newspaper articles I have been reading suggest that $100bil is chump change in light of a $2trillion economy, which I would agree, but the federal government does not own that $2tril economy.

    The federal gov takes tax from that $2tril economy. Apparently that revenue in 2014-2015 was ~$282bil.

    So I don't know how outraged to be. It is irritating, especially since a lot is earmarked to buy votes essentially. Luckily for treaudope, the conservatives left the economy in alright shape and private industry steered itself down a decent path to keep generating money. So I am not happy about it, but I don't know if I am frothing mad. I would always prefer for a government to live within its means.

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    Originally posted by FraserB


    Since you mentioned a specific example, which dams are in danger of failure in Canada?

    The only major infrastructure issue I've heard lately was that bridge in Ontario, but that had nothing to do with lack of spending.
    No idea. Was just pulling it out of a hat. Still, it applies to everything. Highway's shouldn't crumble. Rail lines, etc. You know what I'm getting at. Spending money on these things to ensure that they're as safe as they can be is a good idea, just an unsexy way to spend money.

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    Originally posted by killramos
    Lol so is anyone going to notice all of the great things we are getting with this money?
    Higher income tax rate √
    No income splitting √
    No more UCCB √
    Less TFSA contribution room √
    Taking on massive debt and burdening our future for infrastructure projects and special interests √ - let's see how much of this is even spent in Alberta

    Yup, this budget is coming up roses. But hey, at least it'll absolve the guilt of not knowing what happened to all those missing/murdered aboriginal women - throwing money at it will make us all feel better, right?
    Originally posted by 95EagleAWD
    Anyone who voted Liberal knew that there was deficit spending coming, and isn't surprised.
    "We will run modest short-term deficits of less than $10 billion in each of the next two fiscal years to fund historic investments in infrastructure and our middle class."
    Surprise! $29B
    Last edited by Strider; 03-22-2016 at 04:50 PM.
    Originally posted by max_boost
    Hey baller, any problem money can solve is no problem at all. Don't sweat it.

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