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Saturday September 21, 2024

September 21, 2024 by Graeme MacKay

Despite Doug Ford's boasts of prudent fiscal management, critics warn that rising debt, hidden subsidies, and inflated job creation claims undermine the Ontario premier's economic narrative.

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday September 21, 2024 – (Published later in The Toronto Star)

Link to the animated version.

Ford’s Fiscal Claims Face Scrutiny Amid Rising Debt and Misleading Job Numbers

Concerns over Doug Ford's alcohol market liberalization focus on fears of reduced public revenue, private gains, and disadvantages for taxpayers and consumers amid LCBO strikes.

July 19, 2024

Despite Doug Ford’s Ontario government basking in its own glowing self-assessment, a growing consensus among critics is that the province’s fiscal strategy is far less successful than the premier claims. The government’s financial reports may look impressive at first glance, with near-balanced budgets, no tax hikes, and spending increases in key areas, but a deeper look reveals that many of the promises and claims are inflated, misleading, or based on a selective reading of the numbers. From job creation to debt management, Ford’s fiscal reputation, while politically advantageous, should be taken with a grain of salt.

News: Ontario ends 2023-24 with nearly balanced budget

In the face of Ontario Premier Doug Ford's optimistic portrayal of the province's economy, a reality check reveals underlying weaknesses including sluggish growth, rising business bankruptcies, and challenges stemming from rapid population growth and macroeconomic headwinds.

March 27, 2024

In the Toronto Star, Martin Regg Cohn highlights one of the more glaring examples of Ford’s economic exaggeration: job creation. Ford frequently touts his government’s success in creating jobs, especially in construction, claiming numbers that don’t match the official statistics. The premier’s boast of “100,000 estimated jobs in construction” falls flat when compared to Statistics Canada’s more modest figure of 26,500 new jobs in the sector since Ford took office. More troubling is the unemployment rate under Ford, which now stands at 7.1%, higher than when Kathleen Wynne left office in 2018 with a rate of 5.6%. This trend is exacerbated in major cities like Toronto and Windsor, where joblessness is even worse.

Opinion: Believe the numbers, not the premier: Doug Ford’s unemployment numbers are worse than when he took over from Kathleen Wynne

The narrative Ford tries to sell—that Ontario is thriving under his leadership—collapses under scrutiny. While it’s true that Ford has inherited some challenges and can’t control all economic factors, such as global recessions or federal interest rate policies, his tendency to take credit in good times and shift blame in bad times rings hollow. Ford’s economic stewardship, as Cohn argues, relies heavily on overstatements, selective data, and a consistent deflection of responsibility.

The Fraser Institute takes a similarly critical stance on Ford’s fiscal management, but through a conservative lens. It highlights that despite modest deficits, the province’s net debt continues to rise, reaching $408 billion in 2023-24—an increase of $8.2 billion in just one year. This accumulation of debt, combined with delayed budget balancing, suggests that Ford’s claim to fiscal prudence is unfounded.

The Fraser Institute: Ford government continues irresponsible fiscal management in Ontario

November 22, 2019

Even more alarming is Ford’s reliance on hydro subsidies, a hidden cost to the province that has now ballooned to $7.3 billion annually. As Regg Cohn points out, this subsidy is not only unsustainable but also counterproductive, distorting the true cost of electricity and placing an enormous burden on future budgets. Instead of addressing this issue, Ford has chosen to disguise the real cost of electricity from voters and investors, further undermining his claim of responsible fiscal management.

The Toronto Sun’s Brian Lilley, though defending Ford’s spending increases as proof that he’s not cutting services, also acknowledges that Ontario’s spending has risen by 34% since Ford took office, outpacing inflation. While this might be seen as a positive—investment in health care and education has surged—it raises questions about efficiency and missed opportunities. The Fraser Institute criticizes Ford for failing to balance the budget when he could have, especially as higher-than-expected revenues and lower debt interest costs provided room to do so. Instead, Ford increased program spending by $4.6 billion beyond what was planned, losing the chance to either run a surplus or reduce the growing debt burden.

Premier Doug Ford's exclusive deal with American giant Staples for Service Ontario accommodations, devoid of competitive bidding and sprinkled with linguistic quirks, unfolds as a quirky comedy, leaving Ontarians questioning the spelling choices and transparency of their government. *Misspellings intended.

February 2, 2023

Ford’s fiscal approach increasingly looks like a populist smokescreen, more concerned with short-term political gain than long-term fiscal health. Reader comments on the Toronto Star article amplify this skepticism, pointing out wasteful spending on projects like highway expansions, unnecessary construction, and the cancellation of license plate fees—moves that sound good on paper but come at a steep cost. One commenter laments the lost revenue from the elimination of license plate fees, amounting to $1.1 billion annually, while another highlights Ford’s fixation on populist policies like the expansion of alcohol sales in convenience stores—costing the province up to $1 billion—instead of addressing critical issues like long wait times for cancer treatment.

Ford’s reliance on PR-driven policies, rather than substantive fiscal reform, reflects a broader trend in his government. From the high-profile legal battles over nurse pay raises to the cancellation of renewable energy projects, Ford’s record is riddled with choices that seem more about scoring political points than making sound financial decisions. Critics argue that these decisions are not just costly but counterproductive, diverting funds from more pressing needs like housing and education.

While Doug Ford enjoys high popularity, likely buoyed by his ability to avoid tax hikes and portray himself as a champion of the people, his record on fiscal responsibility is increasingly coming under fire. Ford may be close to balancing the budget, but critics warn that his methods—ballooning debt, hidden subsidies, populist giveaways, and job creation claims that don’t hold up—paint a much less rosy picture of Ontario’s fiscal health.

Series: Young Doug Ford

The consensus among economists, fiscal watchdogs, and even some conservative commentators is clear: take Ford’s fiscal claims with a grain of salt. Ford’s penchant for over-promising and under-delivering when it comes to job creation, debt reduction, and balanced budgets should raise concerns for anyone paying close attention. Ontario’s economy may not be in immediate crisis, but the long-term risks of Ford’s populist approach—ballooning debt, unsustainable subsidies, and mismanagement—could leave the province in a precarious position.

In the end, whether you’re a fiscal conservative, a liberal critic, or a neutral observer, the message is the same: believe the numbers, not the premier’s spin. (AI)

Posted in: Ontario Tagged: 2024-17, animated, debt, Doug Ford, Fiscal report, jobs, Ontario, report card, sleeping, spending, YDF, Young Doug Ford

Saturday December 16, 2023

December 16, 2023 by Graeme MacKay

The 10 days before Christmas shopping

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday December 16, 2023

Navigating the Stress and Materialism for a Meaningful Celebration

December 23, 2022

Ah, Christmas – the time of festive lights, joyful gatherings, and the spirit of giving. It’s that magical season where we look forward to time off work, exchange gifts, and relish in the warmth of togetherness. Yet, amid the joyous facade, many find themselves entangled in a web of stress, a phenomenon that, studies suggest, could even lead to heart issues.

Winter’s shorter days and gloomy weather already cast a shadow on our moods. Imagine an environment flooded with dark corners periodically disrupted by bright, garish Christmas lights and decorations. Research hints that such extremes can be taxing on our mental well-being. The seemingly cheerful Christmas visuals might unwittingly contribute to the season’s stress.

It’s not just the visuals; the relentless repetition of Christmas songs can wear on even the most festive soul. While familiar tunes are generally well-received, the saturation of a few songs played incessantly can turn cheer into irritation. The limited playlist of Christmas songs, played on an endless loop, might just push us beyond the threshold of festive enjoyment.

Reporst: Canadians are planning to spend less this holiday season 

December 10, 2021

While we cherish the pleasant aspects of Christmas, the reality is far from the idyllic scenes portrayed in mainstream media. The pressure to create a perfect Christmas often falls on a designated family member, typically mom or the family matriarch, leading to heightened stress levels. The workload doesn’t diminish during the holiday; if anything, it intensifies with the closures of work and school, accompanied by more frequent visitors.

Expectations play a significant role in holiday stress. The idealized image of a flawless, cozy Christmas clashes with the unpredictability and messiness of real life. The human tendency to anticipate the best, coupled with the planning fallacy (our knack for underestimating the time and effort tasks require), sets the stage for disappointment.

In today’s digital age, social media amplifies the pressure to conform. The perfect Christmas isn’t just a personal goal; it’s a public spectacle. People not only navigate the extra workload to make Christmas happen but also strive to showcase their holiday achievements online. The societal and communal pressures can turn a joyful season into a stressful performance.

December 23, 2011

Now, let’s talk about the elephant in the room – the materialistic frenzy that ensues during the holiday season. The decked-out malls, the frenzy of consumerism, and the jingling all the way to the cash registers have become synonymous with Christmas. As the season approaches, the world succumbs to a costly ritual, leaving millions nearly penniless.

But why has Christmas shifted toward materialism? Originally a celebration of the birth of Jesus Christ, Christmas evolved over centuries, intertwining with pagan traditions and seasonal festivities. The 19th-century poem “A Visit from Saint Nicholas” played a pivotal role in transforming the holiday into a gift-giving spectacle, altering the once simple and magical celebration.

The solution to this materialistic frenzy lies in our hands. Let’s redefine Christmas as a time for family, generosity, and peace. Don’t succumb to the calculated moves of corporations seeking your money. Resist the societal pressure to overspend. Christmas, at its core, is about spending quality time with loved ones, not draining every dime in your wallet.

As we navigate the holiday season, let’s prioritize generosity over greed. Teach our children the true spirit of Christmas, fostering a sense of togetherness rather than consumerism. This year, let’s focus on creating meaningful memories, not accumulating more stress and debt. Christmas can be a time of genuine joy if we choose to embrace its essence – a celebration of love, compassion, and shared moments. (AI) 

 

Posted in: Lifestyle Tagged: 2023-22, christmas, consumerism, debt, Economy, Materialism, spending, stress, tradition

Thursday November 23, 2023

November 23, 2023 by Graeme MacKay

The Trudeau government, led by Justin Trudeau and Finance Minister Chrystia Freeland, faces mounting challenges as Canada grapples with a substantial national debt, increased debt servicing costs, economic slowdown, and rising unemployment, prompting concerns about the government's ability to address critical issues across various sectors.

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday November 23, 2023

Growing Debt, Shrinking Priorities: The Trudeau Government’s Balancing Act

November 3, 2022

The Finance Minister, Chrystia Freeland, has tabled a fall economic statement revealing a stark reality: servicing the considerable federal debt will consume a larger share of Ottawa’s revenue than in recent years. This ominous financial forecast comes as Canada grapples with the aftermath of the COVID-19 pandemic, with economic growth expected to stall, unemployment set to rise, and tens of thousands of jobs at risk.

Freeland proposes additional spending of $20.8 billion over the next six years, emphasizing it as a modest increase compared to previous years and a display of fiscal prudence. However, the lion’s share of this new spending is allocated to housing initiatives and climate-friendly projects, diverting attention and resources away from crucial areas such as defense, social programs, infrastructure, innovation, and healthcare.

News: Canada fiscal update sees higher deficits and debt, adds housing measures  

October 1, 2019

The Trudeau government has consistently run deficits since its election, exacerbated by the pandemic’s economic fallout. The interest rates, now at a 20-year high, have inflated the cost of borrowing from $20.3 billion in 2020-21 to a staggering $46.5 billion in the current fiscal year. Debt servicing charges are projected to soar to $60.7 billion in 2028-29, making it one of the most burdensome items in the federal budget.

To contextualize the impact, debt service charges for this year alone surpass spending on the Canadian Armed Forces by $18 billion and exceed the allocated funds for the Canada Child Benefit by $20 billion. This rise in debt interest charges limits the government’s fiscal flexibility to address critical issues such as the housing supply crunch.

November 2, 2016

Kevin Page, former parliamentary budget officer, warns that the substantial increase in debt during the pandemic will now have repercussions. The federal debt has doubled since 2015-16, reaching $1.2 trillion last year and projected to climb to $1.4 trillion by 2028-29. As debt interest charges consume more fiscal space, the government’s ability to tackle pressing issues diminishes.

Despite lower new spending in the economic statement compared to previous budgets, the fiscal outlook remains grim. The deficit for this year stands at $40 billion, and with a forecasted economic growth of only 0.4%, the unemployment rate is expected to rise to 6.5%. Projected deficits for the coming years have been revised upwards, indicating a challenging fiscal path ahead.

Freeland’s focus on housing measures, while important, raises concerns about the government’s ability to address a broad spectrum of issues. The proposed new spending measures, though aimed at addressing the housing crisis, may not be sufficient to meet the urgency of Canadians’ needs, as emphasized by opposition leaders.

Opinion: ‘Trudeau’s political problem is bigger than his debt problem’  

November 13, 2014

As the government deviates from its traditional fiscal anchor, allowing the net debt-to-GDP ratio to rise, questions arise about the sustainability of Canada’s finances. Freeland introduces a new fiscal anchor, aiming to keep deficits below 1% of GDP in future years, asserting that this strategy will ensure continued investments in Canadians.

In the face of rising debt and constrained fiscal options, the Trudeau government must carefully navigate its spending priorities to address the multifaceted challenges facing the nation. Balancing economic recovery with essential program funding is a delicate task, one that demands strategic decision-making to safeguard Canada’s financial stability and the well-being of its citizens. (AI)

From sketch to finish, see the current way Graeme completes an editorial cartoon using an iPencil, the Procreate app, and a couple of cheats on an iPad Pro. If you’re creative, give illustration a try:

https://mackaycartoons.net/wp-content/uploads/2023/11/2023-1123-NAT.mp4
 

 

Posted in: Canada Tagged: 2023-20, Canada, Chrystia Freeland, debt, Defence, Economic statement, Economy, healthcare, innovation, Justin Trudeau, money, procreate, spending, treasury

Thursday November 2, 2023

November 2, 2023 by Graeme MacKay

A surge in mortgage renewals in Canadian banks over the next three years may lead to substantial payment increases for borrowers due to rising interest rates, potentially affecting credit losses and bank profits.

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday November 2, 2023

Haunted by High-Interest: The Looming Spector of Canadian Mortgage Renewals

In the eerie aftermath of Halloween, a haunting spector looms over Canadian mortgage holders, threatening a grim future of financial distress. The dread doesn’t come from ghouls or ghosts but from the imminent renewal of mortgages, unleashing a chilling cascade of increased interest rates set to torment thousands.

August 29, 2023

Recent analyses by RBC reveal a daunting reality: more than $900 billion in mortgages within Canadian banks are slated for renewal over the next three years. This impending wave of renewals, as pointed out by RBC researchers led by analyst Darko Mihelic, spells potential financial peril for many homeowners. An alarming 60 per cent of mortgages in Canadian chartered banks are anticipated to undergo renewal by 2026. As fixed-rate mortgage terms established prior to the Bank of Canada’s interest rate hike in October undergo renewal, borrowers are slated to face staggering increases in their monthly payments, a significant burden detailed in the report titled “Canadian Banks: A Review of Mortgage Payment Shock.”

The report forewarns that unless interest rates experience substantial declines, credit losses are bound to surge, potentially peaking in 2025 and beyond. These credit losses are estimated as outstanding payments owed to companies, including mortgage defaults. Alarming as it is, this prediction aligns with the Office of the Superintendent of Financial Institutions’ directive to major banks to bolster reserves for potential debt defaults, nearly tripling the amount set aside for bad loans compared to the previous year.

News: About 60% of outstanding mortgages facing payment shock in next 3 years: RBC  

July 18, 2023

While some industry experts like Carl De Souza, senior vice-president at DBRS Morningstar, express confidence in the resilience of major Canadian banks against mortgage defaults, the forthcoming surge in renewals poses a significant threat to banks’ profitability and homeowners’ financial stability. However, the report suggests that the impact of mortgage losses might be mitigated to some extent due to Canada’s relatively low unemployment rate, which remains below pre-pandemic levels.

Nevertheless, the impending renewals paint a stark picture for homeowners. Banks are exploring options to alleviate the impending financial shocks, including renegotiating mortgage terms from variable to fixed rates. Currently, more than half of Canadians opt for a three-year fixed-term mortgage, but the stark difference in interest rates from previous years is ominous. Rates for a three-year fixed-term mortgage have climbed substantially, with estimates indicating a potential surge from the comparatively lower rates of 2019 to an alarming 6 to 8 percent at renewal, spelling financial distress for borrowers.

The report predicts a staggering increase in payments at each milestone year. In 2024, more than $186 billion in mortgages will renew, signifying a 32 percent payment shock. By 2025 and 2026, the looming numbers continue to surge, with estimated renewals of $315 billion and $400 billion, respectively. Payments are expected to soar by 33 percent and a staggering 48 percent, respectively, on a weighted average basis.

News: As inflationary pressures grow, Canadians increasingly struggle to make monthly mortgage & credit card payments 

May 13, 2010

Even if there’s a hopeful return of the Bank of Canada’s key interest rate to 0.25 percent by 2026, the projected increase in payments still stands at a significant 20 percent. RBC’s estimations suggest a potential return to a lower interest rate in the future, yet the haunting reality of surging payments remains a foreboding certainty.

The post-Halloween season brings no respite as the grim spector of mortgage renewals hangs ominously over Canadian homeowners. The alarming forecasts and stark statistics paint a chilling picture of financial turmoil, urging caution and preparedness to weather the impending storm of high-interest renewals. (AI)

 

Posted in: Canada Tagged: 2023-19, affordability, Canada, cost of living crisis, debt, Grim reaper, Halloween, inflation, Interest rates, mortgage, renewal

Thursday December 15, 2022

December 15, 2022 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday December 15, 2022

Household debt levels could cripple economy, economist warns

November 3, 2022

Canadian household debt levels have increased enough to spark a recession when combined with interest rate hikes, says one economist, after Statistics Canada released its latest report Monday.

Jim Stanford, the director of the Centre for Future Work, said the debt levels are high enough that, as interest rates rise, disposable income ordinarily spent on consumer goods is being used to pay debt.

“Chances are you’re going to see an increased interest bite from household budgets equal to about two or three per cent of GDP,” he said. “That alone is enough to put the economy into a recession, let alone the other impacts on business investment, for example.”

The standard definition of a recession is when the country’s gross domestic product (GDP) contracts for at least two quarters.

Household consumption accounts for more than 50 per cent of Canada’s GDP, Stanford said, making it the biggest single contributor to economic growth.

Stanford said $16 billion in additional interest payments made over three months is worth more than half of a percentage point of Canada’s GDP.

Statistics Canada’s new figures show for every dollar of disposable income in the third quarter of 2022 there was $1.83 in credit market debt. The figure is a slight increase from the previous quarter and up from $1.77 last year.

Thursday September 8, 2022

The figures come as the Bank of Canada has continued to raise its key policy rate. Last week it hiked the key policy rate another 50 basis points to 4.25 per cent in an effort to fight inflation.

Mortgage payments also hit Canadians hard with interest payments expanding by more than 16 per cent, which is the largest increase on record, according to the StatsCan report.

“It’s certainly hard evidence that the rising interest rates are wreaking havoc with household finances,” Stanford said. “We’ve never seen an interest shock like that to Canadian households before.”

He said he expects the situation to worsen in the coming months.

On Monday, Bank of Canada governor Tiff Macklem defended the interest rate hikes in Vancouver in front of the Business Council of British Columbia. He said they are working and the country needs to stay the course.

“If we under-tighten, inflation is going to stay too high. Canadians are going to have to continue to endure the hardship of higher inflation,” Macklem said.

He said the bank was surprised at how international events, like the Russian invasion of Ukraine and supply chain issues powered inflation.

He said such trends will make it more difficult to bring inflation down than it has been in the past. (The Toronto Star) From sketch to finish, see the current way Graeme completes an editorial cartoon using an iPencil, the Procreate app, and a couple of cheats on an iPad Pro … These sped up clips are posted to encourage others to be creative, to take advantage of the technology many of us already have and to use it to produce satire. Comfort the afflicted. Afflict the comforted.

https://mackaycartoons.net/wp-content/uploads/2022/12/2022-1215-NATshort.mp4

 

Posted in: Canada Tagged: 2022-42, Bank of Canada, Canada, christmas, debt, Economy, inflation, procreate, recession, Santa Claus, spending, Tiff Macklem
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