Austerity vs Deficit vs Common Sense

A recent article on the Toronto Sun website by former NDP Staffer Tom Parkin, is titled “Austerity isn’t a fix for Canada’s Debt Problems”(15 January). In it he cites Canada’s slagging GDP is a result of a decrease in the available workforce. I am not sure where he lives, but lack of available workforce is not the problem here. Lack of good paying jobs is. Even not so good paying jobs are at a premium. It is definitely an employers market out there.

Austerity vs Deficits

In an article on Austerity, in the Toronto Sun website by former NDP Staffer Tom Parkin, is titled “Austerity isn’t a fix for Canada’s Debt Problems”(15 January). In it he cites Canada’s slagging GDP is a result of a decrease in the available workforce. I am not sure where he lives, but lack of available workforce is not the problem here. Lack of good paying jobs is. Even not so good paying jobs are at a premium. It is definitely an employers market out there.

It is no secret that Local, Provincial and Federal Governments are feeling the pinch of our slagging economy. Our GDP growth is so low that it might as well not be moving. Arguing why this happened is a mute point. All levels, all parties are responsible for this. Now moving on with our lives and getting fixed before we look like a bigger version of Greece.

There are two major camps and one smaller one when it comes to thinking our way out of this. We can slash and cut the Government budgets from top to bottom, we can simply keep running up the deficit and throwing money at useless legacy and infrastructure problems in a vain and useless attempt to put a bandaid on. Or, and this one is my favorite. We can use our common sense.

The common sense approach is simple, we do what the bankruptcy trustees and lawyers do when individuals and business go broke. We take a bit form column A and a bit from column B. We reduce our spending, find efficiencies and lower our monthly/yearly expenses. There may also be projects that will generate a long term positive economic return that should be actioned on. In other words, instead of having a $30 Billion deficit for the fiscal year, we cut spending, find efficiencies and get it down to $15 Billion this year. We then look at the projects that Provinces and Municipalities are putting forward for funding and determine which one will have a long term POSITIVE ECONOMIC impact on our GDP. Building of roads and bridges will not provide a long term positive economic impact. In some cases these may need to be funded for safety reasons, otherwise, local road, local problems.

The building of community centres, theatres, arena’s, improving access to transit, creating environments where warehouses, fabrication plants and other business will be created are what stimulate the economy. Decreasing your populations disposable income by increasing existing and creating new taxes creates a negative return. The more disposable income our citizens have the more they will spend and invest. The more they spend and invest the more products that are required, the more products that are required the businesses that will provide them which causes an increase in employment, which raises our GDP.

Increasing the cost to do business means less money for employees, which means less people employed. This also means that the cost of living rises faster than the rate of salaries. Which means less and less disposable income for us to spend and invest. This drives our GDP down, creates unemployment and a whole host of other problems.

Simply throwing money at projects that will cause a negative economic impact only increases the problems. Here in Sudbury we have a $3 Billion infrastructure deficit. We need to spend at a minimum over $200 Million a year just to get caught up and fix everything, for the next 10 years. We currently spend about $130 Million MAX, and even this is depleating our meagor reserves rather quickly. Our unemployment rate is one of the highest in the Province. What does the City do? They plan to drop over $200 million over the next 5 to 10 years on building a new road that will create a new East to West bypass just north of the City. Meanwhile, our current roads are crumbling and the data does not support this venture. Also, for the next fiscal year they have decided to give $5 Million for the creation of an Arts Centre in our Downtown. No one is arguing we couldn’t use a proper one, but we don’t have the money for this. City Council has also decided to fully endorse the application for the 2021 Canada Summer Games. This city only has 1500 hotel beds and maybe another 2-300 in College/University Residences. Where are they going to put over 4000 atheletes, coaches and volunteers. Speaking of Volunteers, how are we going to come up with around 2000 volunteers when the City of Winnepeg could not do it, and they have a larger population base. While there is SOME funding from both the Provincial and Federal Governments, it will not be anywhere near enough to cover the full cost of the games. Leaving the city on the hook for whatever is left that cannot be covered by donations, ticket sales and concession sales. We are talking tens of millions of dollars that the City DOES NOT have.

At the Provincial level the Premier has increased the cost of living and doing business so much that businesses are closing and families have to choose between lights and food. Or even between the hydro bill or their Rent/Mortgage. Having to pay over $100 thousand for $13 thousand in actual hydro use should be criminal. No family or person should have a hydro bill that is greater than their mortgage or rent. To top this all off the cost of fuel has risen to well over a dollar because of the Provincial Cap and Trade Tax. This means it now costs more for our food stuffs. Especially for those of us here in Northern Ontario. What used to be $800 per month for groceries is now $900 for my family of 4. The increased cost of fuel is now costing me an extra $50 per month. That is a $150 a month increase in my cost of living. Next up for 2017 is a 11.4% increase in what I have to pay in Property Tax and Water & Sewer (3.6% and 7.8% respectively). The Federal Government is also considering it’s own “Carbon Tax”, and the Premier wants everyone to switch back to electric heat after decades of switching to Natural Gas. Every six months almost our Gas and Hydro rates increase this is ridiculous, especially since we have a huge surplus in Hydro.

Federally our Government cannot seem to wait to spend billions on Foreign Aid and negative economic impact projects, while seemingly unable to take care of it’s own house. The military is once again begging for equipment that should have been purchased a decade or two ago. They cannot even pay their own employees because the system does not work. The Government is running a $30Billion tab and they cannot even get things going.

If you look at the 2016 Federal Budget, we see a lot of increased funding in the areas of Social Services and the Environment with some money tossed in for Infrastructures. We also see billions being spent on foreign aid and development. Hundreds of millions more are being spent on increasing our refugee and immigration numbers. What we do not see, is the Government saving money. We went from a surplus or even a minor deficit to one that even my great, great grand-kids will be paying for. All this money spent, and our economy is still a disaster. This government should be hoarding our money and spending it wisely instead of giving money away like we are a broken ATM spitting out cash.

Do we have an obligation to the international world to do our part in helping developing countries? Yes, we do, however our government is forgetting that the first priority is to it’s own citizens. How can we be justifying giving away millions when people are living on the street and starving. How can we give money to third world countries to improve housing when we have similar situations in our far North? It is time that Canada starts to take care of Canada. Yes, we can still help others, just not as much. We desperately need to fix ourselves to set the proper example for the international community. Before we can even THINK about obtaining a Security Council seat. It does us no good to give all our money away and force a close to 100% green economy, if in the process we destroy ourselves. Ontario and Alberta are both in shambles because of this exact reason. IT is time our elected officials of all levels stop trying to create legacies and start governing. Before it is too late.

SudburyMatt

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