Deficit

Tuesday March 22, 2016

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator Ð Tuesday March 22, 2016 OttawaÕs deficit-spending budget WhoÕd have thought that a governmentÕs deficit-spending budget would garner such universal support? But most business groups, usually the shrillest of critics, are behind the Liberal governmentÕs plans. This backing includes support from the Canadian Chamber of Commerce, Canadian Manufacturers and Exporters, economists at the big banks and several think tanks. And this, even though the budget may see a $30 billion deficit when unveiled in Ottawa Tuesday. It says a lot about how the world has changed. In the past decade, many economic assumptions have been turned upside down. Many attitudes have also changed. Who would have once thought that our central bank would be trying to stoke inflation, rather than crush it? Or that instead of worrying about rising interest rates killing the economy, weÕd be worried that falling rates killing the economy? Or that it would okay for central banks to create trillions of dollars out of thin air? This new consensus is really a capitulation. It says that, after eight years of manipulating interest rates, that policy hasnÕt worked. No amount of pushing on that string has created growth. So itÕs time to pull lever number two, fiscal policy. You spend money you donÕt have (but promise to pay back). You hope to stimulate demand so that businesses will follow along and economic activity will increase. Central banker Stephen Poloz delayed cutting CanadaÕs key rate again in January from its lofty one half of one per cent for this reason. He wanted to see what Ottawa planned to do. The frantic effort to get something going is as much about the future as the present. The concern is that when the next recession arrives Ñ which inevitably it will Ñ there will be nothing central banks can do. ThereÕll be no ammunition left in the rate-cut gun. Most economic expansions last between five and seven years. The current one i

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday March 22, 2016

Ottawa’s deficit-spending budget

Who’d have thought that a government’s deficit-spending budget would garner such universal support?

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator - Friday February 12, 2016 Trudeau shies away from Liberals' balanced-budget vow, cites fading economy Prime Minister Justin Trudeau is backing away from a campaign vow to balance the public books before the end of his government's four-year mandate Ñ a promise that was central to the Liberal election platform. As a result of a weakening economy, the government's upcoming 2016-17 budget plan will show a deficit larger than the Liberals' promised $10-billion shortfall cap, Trudeau told Montreal's La Presse newspaper. Just how big that deficit will be remains unclear. If the economy continues to deteriorate, it will be difficult for the Liberals to live up to their pledge to balance the books in 2019-20, Trudeau said in an interview published Thursday. Less than two months ago, Trudeau insisted that the Liberal plan to make good on that key balanced-budget promise was "very" cast in stone. The doubts raised by Trudeau offer a glimpse of the fiscal pressure faced by the Finance Department as it crafts the government's first federal budget, expected late next month. "If we look at the growth projections for the next three or four years, it will be difficult (to return to balance)," Trudeau was quoted by La Presse as saying. "But everything we're doing is aimed at creating economic growth. When predicting the level of growth four years in advance, governments often miss the target." During the fall election campaign, Trudeau promised to keep deficits below the $10-billion mark in 2016-17 and 2017-18 unless the economic situation got radically worse. "Yes, we will go over $10 billion," Trudeau told La Presse. "By how much? We are in the process of examining that." In recent months, the Canadian economy has sputtered in large part due to the steep drop in commodity prices. On Wednesday, a National Bank of Canada report said the country's fading economic prospects could put the Liberal government on tra

Friday February 12, 2016

But most business groups, usually the shrillest of critics, are behind the Liberal government’s plans. This backing includes support from the Canadian Chamber of Commerce, Canadian Manufacturers and Exporters, economists at the big banks and several think tanks. And this, even though the budget may see a $30 billion deficit when unveiled in Ottawa Tuesday.

It says a lot about how the world has changed. In the past decade, many economic assumptions have been turned upside down. Many attitudes have also changed.

Who would have once thought that our central bank would be trying to stoke inflation, rather than crush it? Or that instead of worrying about rising interest rates killing the economy, we’d be worried that falling rates killing the economy? Or that it would okay for central banks to create trillions of dollars out of thin air?

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator Ð Thursday February 18, 2016 Canada to lose 2,830 jobs as Bombardier slashes workforce Bombardier Inc. says it will cut 7,000 positions over the next two years including 2,000 contractors in both aerospace and train divisions Ð almost 10 per cent of its global work force. Most of the job losses will be in Canada and Europe, but will be partly offset by hiring in certain growth areas as production ramps up for the new CSeries aircraft. ÒWe are taking this difficult decision to make Bombardier strong,Ó said Bombardier CEO Alain Bellemare on a conference call with analysts on Wednesday after reporting weak fourth quarter earnings. The Montreal-based aerospace and rail equipment company says the cuts will begin in the coming weeks and be completed by 2017. It was not immediately clear where the job cuts will be, though 2,830 will be in Canada. Of those, 430 will be in Ontario and 2,400 in Quebec. In Canada, 400 jobs will be eliminated in the transportation division and 2,430 in the aerospace division. Transport Minister Marc Garneau says he has mixed feelings about the job cuts and the Air Canada deal. The minister sang the praises of BombardierÕs new aircraft, but he did not immediately commit to helping the troubled company out of its financial difficulties. The Quebec government is putting up $1 billion (U.S.) for a 49.5 per cent stake in the CSeries program, while the Caisse de depots et placement du Quebec, the pension plan, spent $1.5 billion (U.S.) for a 30 per cent stake in the companyÕs train division. Bombardier has asked the federal government to join in with financial assistance for the CSeries, but like Garneau, Navdeep Bains, minister of innovation, science and economic development, said Ottawa is still studying the idea. ÒAny action the government takes with respect to Bombardier will be first and foremost in the interest of Canadians,Ó Bains said in a statement. ÒWe have been clear th

Thursday February 18, 2016

This new consensus is really a capitulation. It says that, after eight years of manipulating interest rates, that policy hasn’t worked. No amount of pushing on that string has created growth.

So it’s time to pull lever number two, fiscal policy. You spend money you don’t have (but promise to pay back). You hope to stimulate demand so that businesses will follow along and economic activity will increase.

Central banker Stephen Poloz delayed cutting Canada’s key rate again in January from its lofty one half of one per cent for this reason. He wanted to see what Ottawa planned to do.

Saturday August 29, 2015The frantic effort to get something going is as much about the future as the present. The concern is that when the next recession arrives — which inevitably it will — there will be nothing central banks can do. There’ll be no ammunition left in the rate-cut gun.

Most economic expansions last between five and seven years. The current one is weak, but is still in its seventh year. For the U.S., it’s the fourth-longest period of growth recorded.

There’s nothing to suggest any downturn is imminent, though early in the new year many wondered. Things are looking a lot better than they did then. A low dollar has perked up manufacturing. Retail sales surprised in the latest reading. American unemployment is low. (Continued: Toronto Star)

 

Friday February 26, 2016

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator - Friday February 26, 2016 OntarioÕs budget deficit for 2016 shrinks Ontario Finance Minister Charles Sousa announced Thursday that the provinceÕs budget deficit has shrunk more than expected and that the Liberals are on pace to return to a balanced budget by 2017-18, even as net debt is set to increase in that timeframe. Sousa said that the deficit is now down from the $7.5 billion projected at the end of last year to $5.7 billion, as stronger economic growth in Ontario boosted government revenues. The budget forecasts that OntarioÕs economy grew 2.5 per cent in 2015, a much stronger level than the 1.2 per cent forecast for the national economy. But net debt will go up as the government continues to borrow to fund projects, including a massive $160 billion infrastructure project over the next 12 years. Net debt is set to increase to $326.8 billion in 2018-19, from $296.1 billion in 2015-16, even as the Liberals are set to have a balanced budget by then. The projection that OntarioÕs debt will continue to rise and that debt-to-GDP will continue to hover near 40 per cent in the medium-term will not thrill debt rating agencies. Standard & PoorÕs downgraded the provinceÕs debt last year, while others such as MoodyÕs Investors Service have placed a negative outlook on provincial bonds. OntarioÕs deficit will also be helped by $1.1 billion gained from the sale of Hydro One, as well as growing cash injections from the federal government, which will hit $24.6-billion this year and rise to $26.6-billion by 2018. Sousa dismissed the idea of further debt downgrades, however, saying a declining debt-to-GDP ratio would be welcomed. ÒI believe credit agencies are going to look at this budget and realize that weÕre achieving what we said weÕre going to do,Ó he said during a news conference. The government has said it has a target of reducing net debt-to-GDP to its pre-recession level of 27 per cent, though it ge

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday February 26, 2016

Ontario’s budget deficit for 2016 shrinks

Ontario Finance Minister Charles Sousa announced Thursday that the province’s budget deficit has shrunk more than expected and that the Liberals are on pace to return to a balanced budget by 2017-18, even as net debt is set to increase in that timeframe.

Sousa said that the deficit is now down from the $7.5 billion projected at the end of last year to $5.7 billion, as stronger economic growth in Ontario boosted government revenues. The budget forecasts that Ontario’s economy grew 2.5 per cent in 2015, a much stronger level than the 1.2 per cent forecast for the national economy.

But net debt will go up as the government continues to borrow to fund projects, including a massive $160 billion infrastructure project over the next 12 years. Net debt is set to increase to $326.8 billion in 2018-19, from $296.1 billion in 2015-16, even as the Liberals are set to have a balanced budget by then.

The projection that Ontario’s debt will continue to rise and that debt-to-GDP will continue to hover near 40 per cent in the medium-term will not thrill debt rating agencies. Standard & Poor’s downgraded the province’s debt last year, while others such as Moody’s Investors Service have placed a negative outlook on provincial bonds.

Ontario’s deficit will also be helped by $1.1 billion gained from the sale of Hydro One, as well as growing cash injections from the federal government, which will hit $24.6-billion this year and rise to $26.6-billion by 2018.

Sousa dismissed the idea of further debt downgrades, however, saying a declining debt-to-GDP ratio would be welcomed.

“I believe credit agencies are going to look at this budget and realize that we’re achieving what we said we’re going to do,” he said during a news conference.

The government has said it has a target of reducing net debt-to-GDP to its pre-recession level of 27 per cent, though it gets no where close to that level in its projected forecast, with net debt-to-GDP hitting 38.5 in 2018-2019. The ratio is expected to peak at 39.6 per cent in 2015-16, remain level in 2016-17 and only begin to decline in 2017-18.

The government is projecting that total revenue in 2015-16 will be $2.2 billion higher than the 2015 budget had factored in, due to “higher asset optimization” and more tax revenue as a result of a stronger Ontario economy. (Source: Financial Post)

 

Friday February 12, 2016

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator - Friday February 12, 2016 Trudeau shies away from Liberals' balanced-budget vow, cites fading economy Prime Minister Justin Trudeau is backing away from a campaign vow to balance the public books before the end of his government's four-year mandate Ñ a promise that was central to the Liberal election platform. As a result of a weakening economy, the government's upcoming 2016-17 budget plan will show a deficit larger than the Liberals' promised $10-billion shortfall cap, Trudeau told Montreal's La Presse newspaper. Just how big that deficit will be remains unclear. If the economy continues to deteriorate, it will be difficult for the Liberals to live up to their pledge to balance the books in 2019-20, Trudeau said in an interview published Thursday. Less than two months ago, Trudeau insisted that the Liberal plan to make good on that key balanced-budget promise was "very" cast in stone. The doubts raised by Trudeau offer a glimpse of the fiscal pressure faced by the Finance Department as it crafts the government's first federal budget, expected late next month. "If we look at the growth projections for the next three or four years, it will be difficult (to return to balance)," Trudeau was quoted by La Presse as saying. "But everything we're doing is aimed at creating economic growth. When predicting the level of growth four years in advance, governments often miss the target." During the fall election campaign, Trudeau promised to keep deficits below the $10-billion mark in 2016-17 and 2017-18 unless the economic situation got radically worse. "Yes, we will go over $10 billion," Trudeau told La Presse. "By how much? We are in the process of examining that." In recent months, the Canadian economy has sputtered in large part due to the steep drop in commodity prices. On Wednesday, a National Bank of Canada report said the country's fading economic prospects could put the Liberal government on tra

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday February 12, 2016

Trudeau shies away from Liberals’ balanced-budget vow, cites fading economy

Prime Minister Justin Trudeau is backing away from a campaign vow to balance the public books before the end of his government’s four-year mandate — a promise that was central to the Liberal election platform.

Liberals then, 2003

As a result of a weakening economy, the government’s upcoming 2016-17 budget plan will show a deficit larger than the Liberals’ promised $10-billion shortfall cap, Trudeau told Montreal’s La Presse newspaper.

Just how big that deficit will be remains unclear.

If the economy continues to deteriorate, it will be difficult for the Liberals to live up to their pledge to balance the books in 2019-20, Trudeau said in an interview published Thursday.

Less than two months ago, Trudeau insisted that the Liberal plan to make good on that key balanced-budget promise was “very” cast in stone.

The doubts raised by Trudeau offer a glimpse of the fiscal pressure faced by the Finance Department as it crafts the government’s first federal budget, expected late next month.

“If we look at the growth projections for the next three or four years, it will be difficult (to return to balance),” Trudeau was quoted by La Presse as saying.

“But everything we’re doing is aimed at creating economic growth. When predicting the level of growth four years in advance, governments often miss the target.”

Saturday August 29, 2015During the fall election campaign, Trudeau promised to keep deficits below the $10-billion mark in 2016-17 and 2017-18 unless the economic situation got radically worse.

“Yes, we will go over $10 billion,” Trudeau told La Presse. “By how much? We are in the process of examining that.”

In recent months, the Canadian economy has sputtered in large part due to the steep drop in commodity prices.

On Wednesday, a National Bank of Canada report said the country’s fading economic prospects could put the Liberal government on track for $90 billion in deficits over its four-year mandate. (Source: CBC News)

In related news, Zoolander 2 will be released in theatres on Friday.

 

Saturday August 29, 2015

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator - Saturday August 29, 2015 Justin Trudeau alters election equation with deficit-spending gamble Justin Trudeau has just broken this election campaign wide open. His Liberals have chucked the balanced-budget pledge, at least in the short term, to promise economic growth instead. And now Mr. Trudeau gets to offer a different economic policy. It makes the Liberals the interventionist party, the only party willing to tell voters theyÕd spend substantially more in the short term in a bid to get a slow economy rolling. ItÕs in part an effort to outflank NDP Leader Thomas Mulcair, who wonÕt make those kinds of promises. Many Canadians want a more interventionist approach: A Nanos Research poll released Wednesday found 54 per cent say they support a new round of deficit spending to boost the economy. But it is a big gamble with a charged political symbol, the deficit. Mr. Trudeau is walking right into Conservative Leader Stephen HarperÕs accusation that heÕd increase the national debt. Still, the economy is the issue, and the Liberal Leader has altered the election equation. Until now, all parties had accepted they were constrained by more or less the same shackles: balanced budgets, and roughly the same tax rates, give or take a small shift of the burden toward one group or another. That meant big money wasnÕt available. Parties could shift a few billion dollars around, and then claim their child benefits or child care or tax breaks were the best plan. But one major option Ð using the federal treasury in a bid to boost economic growth Ð was more or less off the table. It takes billions and billions to have any real hope of nudging growth in an economy the size of CanadaÕs. Now, Mr. Trudeau has thrown off the restraints and said heÕll run deficits of up to $10-billion a year for three years in order to allow for a multibillion-dollar increase in spending on infrastructure, raising it from $5.1-billion t

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator – Saturday August 29, 2015

Justin Trudeau alters election equation with deficit-spending gamble

Justin Trudeau has just broken this election campaign wide open. His Liberals have chucked the balanced-budget pledge, at least in the short term, to promise economic growth instead. And now Mr. Trudeau gets to offer a different economic policy.

2009

It makes the Liberals the interventionist party, the only party willing to tell voters they’d spend substantially more in the short term in a bid to get a slow economy rolling.

2008

It’s in part an effort to outflank NDP Leader Thomas Mulcair, who won’t make those kinds of promises. Many Canadians want a more interventionist approach: A Nanos Research poll released Wednesday found 54 per cent say they support a new round of deficit spending to boost the economy.

But it is a big gamble with a charged political symbol, the deficit. Mr. Trudeau is walking right into Conservative Leader Stephen Harper’s accusation that he’d increase the national debt. Still, the economy is the issue, and the Liberal Leader has altered the election equation.

June 5, 1997 Canada, Deficit, debt, whale, fish, fishing, Liberal, Jean Chretien, Paul Martin, economy

1997

Until now, all parties had accepted they were constrained by more or less the same shackles: balanced budgets, and roughly the same tax rates, give or take a small shift of the burden toward one group or another.

That meant big money wasn’t available. Parties could shift a few billion dollars around, and then claim their child benefits or child care or tax breaks were the best plan. But one major option – using the federal treasury in a bid to boost economic growth – was more or less off the table. It takes billions and billions to have any real hope of nudging growth in an economy the size of Canada’s.

Justin Trump | Available at the MacKaycartoons Boutique Cartoon by Graeme MacKay. A one-time print license has been extended to Redbubble.com. Unauthorized use is prohibited. All kinds of stickers, greeting cards, postcards, framed prints and t-shirts displaying the illustrations of Graeme MacKay are available for purchase through Redbubble via http://www.redbubble.com/people/mackaycartoons Justin Trudeau, Donald Trump, Election, Canada, Canadian, politics, hair A one-time print license has been extended to Redbubble.com. Unauthorized use is prohibited. All kinds of stickers, greeting cards, postcards, framed prints and t-shirts displaying the illustrations of Graeme MacKay are available for purchase through Redbubble via http://www.redbubble.com/people/mackaycartoons

Now, Mr. Trudeau has thrown off the restraints and said he’ll run deficits of up to $10-billion a year for three years in order to allow for a multibillion-dollar increase in spending on infrastructure, raising it from $5.1-billion to $10.2-billion next year. He’s gone where no other leader will go. (Source: Globe & Mail)

 

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Friday, July 24, 2015

Editorial cartoon by Graeme MacKay, The Hamilton Spectator - Friday, July 24, 2015 Feds canÕt avoid $1-billion deficit, budget officer says The federal Conservatives will fail to accomplish their key promise of balancing OttawaÕs books this year, instead running a $1-billion budget deficit in 2015, the parliamentary budget officer says. Budget watchdog Jean-Denis FrŽchette said Wednesday that the economic picture had changed since the ConservativesÕ budget in April, which predicted surpluses in 2015-16 and over the next several years. ÒEconomic data has since indicated declines in real GDP (gross domestic product) that were not reflected in the governmentÕs assumptions,Ó FrŽchette said. He noted that the Bank of Canada, in its quarterly forecast last week, had chopped its prediction for economic growth this year from 2 per cent to about 1 per cent. The worse than expected economic conditions will reduce federal tax revenues, trimming $3.9 billion from OttawaÕs fiscal accounts in 2015, the budget watchdog said. But taking into account the $1 billion set aside as a rainy-day fund by Finance Minister Joe Oliver and factoring in other impacts, FrŽchette said the Conservatives will run a $1-billion deficit this year. With an eye on the Oct. 19 election, opposition parties seized on the report to slam the ConservativesÕ handling of the economy. Prime Minister Stephen Harper has promised for years that 2015 would be the year his government puts an end to a seven-year string of budget deficits. ÒThat was supposed to be the ConservativesÕ hallmark branding, wasnÕt it, balanced budget?Ó NDP leader Thomas Mulcair asked during a campaign-style swing through southern Ontario. ÒWe now know thatÕs not going to be the case.Ó Mulcair said Harper put the economy at risk by relying too much on the oil and gas industry as an engine of growth. ÒThe Conservatives put all of our economic eggs in the resource extraction basket, and now that that sector is having considerable diffi

Editorial cartoon by Graeme MacKay, The Hamilton Spectator – Friday, July 24, 2015

Feds can’t avoid $1-billion deficit, budget officer says

The federal Conservatives will fail to accomplish their key promise of balancing Ottawa’s books this year, instead running a $1-billion budget deficit in 2015, the parliamentary budget officer says.

Tuesday July 14, 2015Budget watchdog Jean-Denis Fréchette said Wednesday that the economic picture had changed since the Conservatives’ budget in April, which predicted surpluses in 2015-16 and over the next several years.

“Economic data has since indicated declines in real GDP (gross domestic product) that were not reflected in the government’s assumptions,” Fréchette said.

Thursday November 13, 2014He noted that the Bank of Canada, in its quarterly forecast last week, had chopped its prediction for economic growth this year from 2 per cent to about 1 per cent.

The worse than expected economic conditions will reduce federal tax revenues, trimming $3.9 billion from Ottawa’s fiscal accounts in 2015, the budget watchdog said. But taking into account the $1 billion set aside as a rainy-day fund by Finance Minister Joe Oliver and factoring in other impacts, Fréchette said the Conservatives will run a $1-billion deficit this year.

With an eye on the Oct. 19 election, opposition parties seized on the report to slam the Conservatives’ handling of the economy. Prime Minister Stephen Harper has promised for years that 2015 would be the year his government puts an end to a seven-year string of budget deficits.

Wednesday January 21, 2015“That was supposed to be the Conservatives’ hallmark branding, wasn’t it, balanced budget?” NDP leader Thomas Mulcair asked during a campaign-style swing through southern Ontario. “We now know that’s not going to be the case.”

Mulcair said Harper put the economy at risk by relying too much on the oil and gas industry as an engine of growth. “The Conservatives put all of our economic eggs in the resource extraction basket, and now that that sector is having considerable difficulty, it’s affecting everything else in the Canadian economy.” (Source: Toronto Star)

SOCIAL MEDIA

Posted by Project Democracy on Friday, July 24, 2015