Federal Government & Politics II

[lio45]

Originally Posted by 1overcosc

That's a feel-good measure, ultimately. You can't actually generate much meaningful increase in revenue with "tax the rich and the corporations". A few billion a year at best. We're talking about multiple tens of billions a year for programs like OAS or pharmacare.

It's well known that there's a point at which further "tax the rich" measures result in LESS taxation revenue, not more. And we're probably close to that point already.

[whatnext]

Originally Posted by harls

It also made him look like a total prick, which sane people already knew.

LOL, again, you just prove yourself to be Exhibit A in out of touch Liberal supporters. Only they were outraged that Poilievre dared to show his contempt for a reporter (asking a stupid question). I'd rather take honest open contempt than Trudeau's "That Guy":

Justin Trudeau brings That Guy with him to the public inquiry on foreign interference
SHANNON PROUDFOOT
INCLUDES CORRECTION
OTTAWA
PUBLISHED APRIL 11, 2024

Prime Minister Justin Trudeau was on the first sentence of his first answer at the public inquiry into foreign interference when it became clear that uh oh, he’d summoned That Guy.

You know the guy: Ask him a factual question and the response is a purring, generic values statement so distantly related to the original question they could legally get married.

That Guy. He’s around a lot.

When it was Mr. Trudeau’s turn on Wednesday – he was last up for the first phase of the inquiry – a commission lawyer opened by asking him to paint a picture of the foreign-interference landscape since he became Prime Minister in 2015. It was an interesting question that could have drawn out a fascinating answer: What did the incursion look like from his chair?

Mr. Trudeau and his party have contended all along – reasonably enough, to a point – that foreign-interference attempts are happening constantly in Western countries at the hands of a range of rogue states. So a real answer to that question wasn’t necessarily self-indicting of clueless inaction on Canada’s part;....

...But it was That Guy who gallantly swooped in to answer, offering a brisk infomercial about all the astute and effective steps the Trudeau government had taken to deal with what sounded vaguely like a problem for the U.S. and France, but not particularly Canada.

It’s not always That Guy who shows up – usually, but not always. And what makes That Guy so vexing is that he doesn’t have to exist, or at least he doesn’t have to visit so often....

....You can always tell when Mr. Trudeau is in a defensive crouch when he uses the phrase “continue to” as a fly swatter, shooing away the notion that any problem exists about which inadequate action has been taken. At one point in his testimony on Wednesday before commissioner Marie-Josée Hogue, he said “We’ve continued to continue to do more” of the measures against foreign interference that, it seems manifestly obvious, have at least some weaknesses, or why was everyone gathered in that building on Wellington Street for the inquiry?...

https://www.theglobeandmail.com/poli...iry-testimony/

[1overcosc]

Originally Posted by Truenorth00

Well there's no way out. All the things you mention don't actually reduce the deficit enough. And OAS liabilities are growing faster than everything else. So if they don't do anything, they won't be able to keep the deficit in check or offer the tax cuts they will inevitably want to offer.

They can say what they want now. I think the numbers basically tell us what they do after the election will be another matter. Exactly like the Chretien Liberals running on one platform and then having to go in a substantially different direction after having a crisis of confidence on Canadian bonds. Perhaps the only difference here is that the CPC will be less surprised at the situation than the Chretien Liberals were by the bond market's reaction.

We have a rare opportunity at the federal level in Canadian politics right now, which is that our political class has a lot of leeway to implement tough/unpopular, but necessary changes. We have an incumbent government that is extremely unpopular and is probably headed to defeat no matter what they do, so they can implement all kinds of tough medicine. On the other side of the house, the CPC is about to take government, likely with a supermajority, and will have a period of about a year or two when they take office where they can similarly implement lots of tough decisions and get away with it.

Moments like this don't happen often. If either JT or PP has balls, they have unprecedented opportunity to fix things.

[Truenorth00]

Originally Posted by lio45

That columnist insists on raising the age of OAS eligibility, but as discussed here already, there's also the separate option of raising the wealth threshold for OAS eligibility. (Or a mix of both.)

The goal is to contain the cost and cost growth of OAS. Rolling the age back to 67 is obviously difficult (politically) and will undoubtedly lead to the LPC campaigning on reversing that policy in 2029, just as they did in 2015.

If you're going to blow up something, blow it up in way that is irreversible. That's what Harper basically did with the GST cut. He created a situation that is very difficult and painful to reverse. I would argue they should take the hit and simply replace OAS with a more targeted program that is also cheaper. Boomers are going to be mad either way. Might as well get the most fiscal room for the wrath they'll face anyway.

They'll probably have to do this for every LPC initiative too, from CCB, to dental care to childcare. Whatever isn't getting eliminated will have to be scoped.

And if they want to offer tax cuts on top of everything, the social spending cuts will have to be 90s level severe. Or more.

[Truenorth00]

Originally Posted by 1overcosc

We have a rare opportunity at the federal level in Canadian politics right now, which is that our political class has a lot of leeway to implement tough/unpopular, but necessary changes. We have an incumbent government that is extremely unpopular and is probably headed to defeat no matter what they do, so they can implement all kinds of tough medicine. On the other side of the house, the CPC is about to take government, likely with a supermajority, and will have a period of about a year or two when they take office where they can similarly implement lots of tough decisions and get away with it.

Moments like this don't happen often. If either JT or PP has balls, they have unprecedented opportunity to fix things.

Well put. And 100%. This is going to Poilievre's 1993 moment. He can go down in history as Chretien did for putting the country on a sound fiscal track. Or he can go down in history as vindictive and austere (as Mike Harris is remembered). It's his choice. I think he'll be more Mike than Jean. But I hope to be surprised. Either way, we're probably in for a difficult decade ahead, as soon as the Liberals are out.

[Acajack]

Originally Posted by 1overcosc

We have a rare opportunity at the federal level in Canadian politics right now, which is that our political class has a lot of leeway to implement tough/unpopular, but necessary changes. We have an incumbent government that is extremely unpopular and is probably headed to defeat no matter what they do, so they can implement all kinds of tough medicine. On the other side of the house, the CPC is about to take government, likely with a supermajority, and will have a period of about a year or two when they take office where they can similarly implement lots of tough decisions and get away with it.

Moments like this don't happen often. If either JT or PP has balls, they have unprecedented opportunity to fix things.

Excellent prescient post.

[harls]

Originally Posted by whatnext

LOL, again, you just prove yourself to be Exhibit A in out of touch Liberal supporters.

I'm not a Trudeau supporter, but you do you.

[1overcosc]

Originally Posted by Truenorth00

The goal is to contain the cost and cost growth of OAS. Rolling the age back to 67 is obviously difficult (politically) and will undoubtedly lead to the LPC campaigning on reversing that policy in 2029, just as they did in 2015.

If you're going to blow up something, blow it up in way that is irreversible. That's what Harper basically did with the GST cut. He created a situation that is very difficult and painful to reverse. I would argue they should take the hit and simply replace OAS with a more targeted program that is also cheaper. Boomers are going to be mad either way. Might as well get the most fiscal room for the wrath they'll face anyway.

They'll probably have to do this for every LPC initiative too, from CCB, to dental care to childcare. Whatever isn't getting eliminated will have to be scoped.

And if they want to offer tax cuts on top of everything, the social spending cuts will have to be 90s level severe. Or more.

With childcare, I can already see a reasonable set of reforms:

1) means-testing the fee a bit, from $10 a day to something like $20-$25 a day (still cheap enough to make it worth it for parents to stay in the workforce), combined with a means test that keeps $10 a day for the poorest.
2) Enhanced tax credits for those who provide childcare for their children outside the universal subsidized program (ie. those who use private/unsubsidized daycares or who hire nannies, etc.) - if done correctly, this will actually save the government money as the cost savings from reduced demand for the public system offset the lost revenue from the credits.

The savings from these two reforms combined can be split; a portion of the savings can be reinvested into creating more spots in daycare centres, which when combined with the decrease in demand from reform #2, should help fix the atrocious waitlist problem (the program is practically useless in much of the country because of the long waitlist for subsidized spots), while the rest of the savings can go towards balancing the budget.

As for dental care, the program doesn't exist yet and a lot of it is still being decided. But I think the income thresholds are poorly set because they use household income entirely. IIRC it phases out at $90k a year. For a married couple, $90k household income is very low - you're barely making ends meet if that's your combined income as a multi-person household. But for single people, you're quite comfortable at $90k. In effect, the program is way too generous for single folks and way too stingy for married ones. They could lower the income thresholds for singles and redirect part of the savings to increasing the threshold for couples (while, again, using the rest of the savings to reduce the cost of the program overall).

[Truenorth00]

I am going to be crass here and suggest what the CPC isn't going to care about progressivity in every program. They could jack it up to $30/day and it's still still cheaper than what most parents had before and still better than staying at home. Availability might get better too at that price.

I think the CPC will try to kill childcare. They put in child benefits under Harper to specifically combat the Liberal offer of universal daycare. Unless the provinces really go to bat for this, I don't know if it survives. And if it does, it most certainly won't be $10/day.

Dental care is probably gone too. Or maybe just restricted for seniors and the poorest kids.

We have to accept there will be severe cuts and programs eliminated. If tax cuts are on the table, that's the only way to pay for them. It's $40B today. Any tax cuts make that deficit bigger. Cutting 50 000 public servants only saves $5B per year. So there's literally no way to do this but painful cuts. I even expect there will be defence cuts (for example cutting the number of F-35s).

[shreddog]

Originally Posted by 1overcosc

We have a rare opportunity at the federal level in Canadian politics right now .... We have an incumbent government that is extremely unpopular and is probably headed to defeat no matter what they do ...

I wonder if anyone in a serious role in the party (MPs or execs) actually believes this, or thinks that they can still turn this ship around?

[casper]

Originally Posted by Truenorth00

I am going to be crass here and suggest what the CPC isn't going to care about progressivity in every program. They could jack it up to $30/day and it's still still cheaper than what most parents had before and still better than staying at home. Availability might get better too at that price.

I think the CPC will try to kill childcare. They put in child benefits under Harper to specifically combat the Liberal offer of universal daycare. Unless the provinces really go to bat for this, I don't know if it survives. And if it does, it most certainly won't be $10/day.

Dental care is probably gone too. Or maybe just restricted for seniors and the poorest kids.

We have to accept there will be severe cuts and programs eliminated. If tax cuts are on the table, that's the only way to pay for them. It's $40B today. Any tax cuts make that deficit bigger. Cutting 50 000 public servants only saves $5B per year. So there's literally no way to do this but painful cuts. I even expect there will be defence cuts (for example cutting the number of F-35s).

I am certain it will service in more progressive provinces like BC and Quebec. It will likely be killed the first chance it can in places like Alberta and Saskatchewan.

In BC when it was first introduced there were some operators that objected and wanted to be able to charge a premium over the $10, I know one that argued it was buying food from wholefoods, all organic and therefore it wanted to charge an extra $5 a day. They were told they could not be part of the program but free to operate outside the program.

I think what we want is a dramatic increase in the GIS combined with a dramatic reduction in OAS. That provides the safety net for those that need it without a dramatic change.

As for changing away from 65. Zero chance this Liberal government does it. It would be political suicide.

[shreddog]

Speaking of OAS ... a very sobering read from the Federal OFSI on the current and future state of OAS. Note this was from 2020 - since then inflation has been higher then they project and immigration (not the right kind) has also been higher, such that we've reached their pop targets at least 2 years earlier.

While not "totally end of the world", I'd say it does not portray the picture getting better in 10-15 years. Sorry Millenials/Zoomers

A couple quotes:

Demographic changes, notably the aging of the Canadian population, will have a major impact on the ratio of the number of people aged 20 to 64 to those aged 65 and over. This ratio is projected to fall from about 3.3 in 2020 to 2.0 in 2060.

THIS IS REALLY SCARY as our productivity is not forecasted to pick up the slack

Total annual OAS program expenditures are projected to increase from $60.8 billion in 2020 to $123.4 billion in 2035 and $243.4 billion by 2060.[/B]

Yes inflation and GDP growth - but still, HOLY F##K!


There's a ton of good information in this report - and I don't want to be accused of cherry picking - so I suggest reading it and then deciding which federal party has the balls to do the heavy lifting ... if any

[goodgrowth]

The fact that seniors could be sitting in a $1M+ house getting senior welfare bucks is everything wrong with our stance on housing. What exactly was the societal benefit and goal of protecting and blowing up this asset if there was never any formal expectation of liquidation for retirement income supplementation?

Thanks for the GDP loss and externalities I guess?

[Truenorth00]

Federal finances are screwed. So personally I wouldn't trust anything they campaign on over the next 1.5 years. Whatever they campaign on isn't worth the paper it's printed on when they all know they have to solve a $40B (and growing) deficit in 2026. Their values and general tendencies will determine what they do. I think the LPC if re-elected will absolutely raise the HST by 2%. It's the only way to pay for what they want. And I think the Reform Party heritage CPC is going to absolutely take an axe everywhere they can get away with. That's the only way to pay for the tax cuts they want.

[Truenorth00]

Originally Posted by shreddog

Speaking of OAS ... a very sobering read from the Federal OFSI on the current and futire state of OAS. Note this was from 2020 - since then inflation has been higher then they project and immigration (not the right kind) has also been higher, such that we've reached their pop targets at least 2 years earlier.

While not "totally end of the world", I'd say it does not portray the picture getting better in 10-15 years. Sorry Millenials/Zoomers

That's why there's no honest way to do this without the Boomers at least carrying part of the pain. The reason all of this got so bad, was exactly because the LPC prioritized their gerontocratic interests the whole time they were in office.

Deficit financing OAS payments while cutting the programs needed to sustain our fertility rate (the very thing preventing this problem from getting worse) is just accelerating the problem. That analysis also shows some student immigration is needed. We need those young people to prevent our demographics from getting devastatingly bad in 35 years.

[shreddog]

Interesting perspective in the G&M

The carbon tax is almost dead, and NDP leaders are helping to kill it

The carbon price is a dead tax walking. NDP leaders Jagmeet Singh and Wab Kinew are both helping to kill it.
...
Mr. Singh, the federal NDP leader, signalled his party’s shift in a speech on Thursday, in which he declared that fighting global warming “can’t be done by letting working people … bear the cost of climate change while big polluters make bigger and bigger profits.”

The NDP leader told reporters his party was developing a new climate-change policy focused on penalizing corporate polluters: “It should not be that a working class person has to make that choice that, ‘am I on the climate-fighting side, or am I on the affordability side?’”
...

This is too bad in the end as this tax is the most effective/efficent means to drive carbon out of the system. In the end, making it revenue neutral may have been the mistake that the LPC made, had it been made foundational to gov't revenues, the CPC couldn't remove it so easily.

As it stands now, but 2026 it seems likely that Canada will not have a national level carbon tax.

[shreddog]

Originally Posted by goodgrowth

The fact that seniors could be sitting in a $1M+ house getting senior welfare bucks is everything wrong with our stance on housing. What exactly was the societal benefit and goal of protecting and blowing up this asset if there was never any formal expectation of liquidation for retirement income supplementation?

Thanks for the GDP loss and externalities I guess?

The worst part - nd the thing that pisses me off the most - is when the sanctimonious boomers say that they scrimped and sacrificed to pay off their mortgage - which they did - and now deserve their ungodly windfall - which they really don't.

Time to implement a Million dollar tax free (lifetime) capitial gains exclusion for a primary residence. I can't imagine that anyone sacrificing to pay off a mortgage added $4M value to their SFH!

[shreddog]

Originally Posted by Truenorth00

The reason all of this got so bad, was exactly because the LPC prioritized their gerontocratic interests the whole time they were in office.

Which is ironically painful. THe "youth vote" was key to JT and the Gang winning in 2015. We were all sold a bill of good that a PM who was also Minister of Youth, would actually do something beneficial for the future generations of Canadians, rather than play to those that still had hardons for his dad.

Originally Posted by Truenorth00

That analysis also shows some student immigration is needed. We need those young people to prevent our demographics from getting devastatingly bad in 35 years.

The challenge is that it is not just a pulse solution - to make sure we don't fall into that future trap, we either have to bring in the students now with the skills already in place OR ensure we have an environment to take the unskilled students to the correct/needed skills. And by that, I don't mean more uber bike couriers.

[Truenorth00]

I'm actually curious if the CPC goes for letting in private healthcare in office. If there ever was a time for it....

The accusations of "hidden agendas" are going to by flying furiously next election.

[Truenorth00]

Originally Posted by shreddog

Which is ironically painful. THe "youth vote" was key to JT and the Gang winning in 2015. We were all sold a bill of good that a PM who was also Minister of Youth, would actually do something beneficial for the future generations of Canadians, rather than play to those that still had hardons for his dad.

Gen Squeeze has been calling for a generational fairness lens to be applied to the federal budget for years, and a generational fairness task force. Interesting how the Libs had no issues putting in GBA+ immediately into entering office but wouldn't touch Generational Fairness until they started absolutely tanking in the polls with young people. They seemed to think token policy like cannabis and signalling on cultural issues could keep going people on side. And the real LPC nightmare is that the kids go conservative instead of Dipper. That simply emboldens the CPC to take on the olds.

Originally Posted by shreddog

The challenge is that it is not just a pulse solution - to make sure we don't fall into that future trap, we either have to bring in the students now with the skills already in place OR ensure we have an environment to take the unskilled students to the correct/needed skills. And by that, I don't mean more uber bike couriers.

Agreed. I don't know how this is done. But there needs to be a way to force provinces to stop treating foreign students as just cash cows and start prioritizing the skills needed.