Canada’s Fiscal Strength Means Commodities Won’t Sink Soundest G-7 Economy

[Kassz007]

http://www.bloomberg.com/news/2011-...modities-won-t-sink-soundest-g-7-economy.html

"Canada’s economy is seen by economists as able to withstand any weakness in commodity prices as it taps strengths that include political stability and the best fiscal outlook of any Group of Seven country."

“Canada as an attractive place to invest transcends the commodity story and a lot of that has to do with political stability and fiscal integrity,"

"Canada is the only G-7 economy that is a major exporter of commodities. Canada is the biggest foreign supplier of oil to the U.S., and as recently as January was supplying the country with twice what Saudi Arabia does."

"The victory by Harper, 52, came three weeks after the International Monetary Fund predicted the world’s 10th largest economy will expand 2.8 percent this year, while inflation will end the year near the Bank of Canada’s 2 percent target. An average unemployment rate of 7.6 percent will be bettered only by Japan and Germany in 2011. Canada’s net debt, a measure of indebtedness that takes into account the value of assets such as government pension funds, is the lowest in the G-7 and half the level in the U.S."

"The Conservative platform, which commits to reintroduce measures from the 2011 fiscal plan that wasn’t passed before the election was called, projects a C$2.8 billion surplus in the fiscal year that begins April 2014. "

 

[toc]

Commodities might correct but not sink, not for 5-8 more years.

 

[Gabfly1]

Quote from Kassz007:

"The Conservative platform, which commits to reintroduce measures from the 2011 fiscal plan that wasn’t passed before the election was called, projects a C$2.8 billion surplus in the fiscal year that begins April 2014. "

With the Conservatives' revenue policy? Be sure to bookmark your post for posterity. It would be great to see, but I wouldn't bet my lunch money on it.

 

[Kassz007]

Quote from Gabfly1:

With the Conservatives' revenue policy? Be sure to bookmark your post for posterity. It would be great to see, but I wouldn't bet my lunch money on it.

Revenue policy? The Conservatives have been lowering taxes since they took office in 2006...

With oil prices this high, it will make Harper's plan for a balanced budget even easier, and will come to fruition even sooner. And with his majority, there will be no opposition lefties to demand he not lower taxes and raise spending.

No more excuses for Harper. Time to put up or shut up. I, for one, have faith in his ability to put up.

 

[arbprofit2]

You can sign these petitions (one federal and one provincial) and even donate if you like.

http://www.debtclock.ca/

 

[Kassz007]

Quote from arbprofit2:

You can sign these petitions (one federal and one provincial) and even donate if you like.

http://www.debtclock.ca/

Boy am I ever glad Harper won a majority so he can finally start reducing that number.

When Hudak owns McGuinty in the Ontario provincial election in October, we will finally start to see balanced budgets in Ontario as well. The fiscal conservative movement has taken hold in Canada, and will not stop until budgets are balanced.

 

[Gabfly1]

Quote from Kassz007:

Revenue policy? The Conservatives have been lowering taxes since they took office in 2006...

Precisely. And tax cuts do not pay for themselves.

Quote from Kassz007:

...With oil prices this high, it will make Harper's plan for a balanced budget even easier, and will come to fruition even sooner. And with his majority, there will be no opposition lefties to demand he not lower taxes and raise spending...

There is no question that high commodity prices are helping Canada's economy in a big way. But I'd be careful about engaging in too much straight-line extrapolation. Counting on it is the kind of thing that got Bush into trouble south of the border. Someone gave the guy some rosy projections, and Bush used them as the basis for prematurely cutting taxes. The projections did not quite come to fruition as advertised, making the Bush tax cuts that much more fiscally stupid.

Meanwhile, consider Canada's corporate income tax rates:

¡21% before January 1, 2008
¡19.5% effective January 1, 2008
¡19% effective January 1, 2009
¡18% effective January 1, 2010
¡16.5% effective January 1, 2011
¡15% effective January 1, 2012

If it were not for commodity prices, over which Harper has no control, Canada's financial position and budget would look decidedly different. Perhaps Harper shouldn't rely too heavily on variables outside of his control in designing his fiscal policy. Why doesn't he balance the budget first, establish a grown-up plan for dealing with the national debt, and then cut taxes to those who don't actually need them, especially since tax cuts don't pay for themselves?

 

[Kassz007]

Quote from Gabfly1:

Precisely. And tax cuts do not pay for themselves.

Regardless of your ideology and regardless of whether tax cuts actually do pay for themselves or not, if you actually took the time to look at the Conservatives' platform, you would see that the numbers suggest a balanced budget in 2014 even WITH the lower revenue from the tax cuts.

If it were not for commodity prices, over which Harper has no control, Canada's financial position and budget would look decidedly different. Perhaps Harper shouldn't rely too heavily on variables outside of his control in designing his fiscal policy.

The Bush comparison is irrelevant because there are way too many other variables for the two situations to be comparable, so I leave that out of your quote.

But your last paragraph is certainly worth addressing, as it is flat out wrong. The Conservative's economic plan projects a balanced budget by 2014 with oil prices LOWER than they are today. They are NOT relying on high oil prices to balance the budget, it is merely a windfall that will help balance the budget even quicker.

Harper is relying on variables inside his control. The only true variable a government CAN control. Something fiscally-leftists do not understand...spending cuts. It is widely believed that Harper will use the first year of his four-year mandate to dramatically cut government spending. It is the platform he ran his election on, and it is what Canadians expect him to do.

 

[Gabfly1]

Quote from Gabfly1:

...Be sure to bookmark your post for posterity...

 

[Hello]

Quote from Kassz007:

Boy am I ever glad Harper won a majority so he can finally start reducing that number.

Yep Canada is now in glorious shape, Harper was already kicking Obamas ass, but now we are going to see the 2 really seperate, as Obama care, and the inevitable tax increases he is preaching take place in the states, we are going to see just what a disaster left wing policy is, as Canada thrives and the U.S. falls apart.

Pretty soon Harper might have to put a fence up along the U.S. border, to keep the poor people from the states who are dependent on left wing welfare programs from entering Canada illegally.