Federal Surplus hits $6.8-Billion from April to August

Friday, October 14, 2005 Posted at 3:09 PM EDT

Canadian Press

Ottawa — The federal government recorded a surplus of $6.8-billion in the first five months of the fiscal year.

That's up $2.2-billion from the same period (April to August) last year.

Revenues were up $7.5-billion, reflecting higher personal and corporate income tax receipts, the Finance Department reported Friday.

Overall spending rose by $5.8-billion, largely due to higher transfer payments to the provinces for health care and equalization, the department said.

Public debt charges were down $500-million.

It's unclear how big the surplus will be at year's end, but experts say it should be big.

Currently, the government uses the surplus to pay down the public debt. New legislation proposes that all future surpluses over $3-billion go equally toward tax relief, new spending and debt repayment.

For August, the government reported a $300-million deficit, compared with a surplus of $300-million in 2004. Total revenues were actually up $400-million over August 2004, but spending was $1.1-billion higher.

[EDIT] Huh?

[EDIT] Huh?

Confused?

Yeah tax breaks... so let's see them. NOW!

Lets see the spending NOW.
This government has a habit of great announcments for this , that, and the next thing but always do it on the never-never plan.

Ottawa must run generous surpluses in order to pay the herculean debt Canada has. These are excellent news!

I want to see the Conservative Party response considering they had nearly a 50% share of this years budget (how can they complain about too much surplus when they created it?) and were against the "risky" spending added on by the NDP.

I like the proposed treatment of suplus dollars because it keeps pretty much every group happy and won't backfire if the economy does tank and the suplus is no longer there -- permenant increased spending or tax cuts are hard to reverse once implemented.

give the provinces a couple of taxation points so they can do whatever they want with it.

Ottawa must run generous surpluses in order to pay the herculean debt Canada has. These are excellent news!

I agree. Let's first deal with the debt.

^^I also agree... it's the interest that kills you in the end... much of our debt rapayment is going toward the interest on the debt... once you get rid of the debt, there will be so much more money to work with. Screw the tax breaks, we've been surviving at what it is now... just pay down the debt and give tax breaks later.

Ottawa must run generous surpluses in order to pay the herculean debt Canada has. These are excellent news!

*Gasp* You mean if we pay down the debt we no longer have to deal with massive servicing?!? Why, that's something those crazy, backwards Albertans might have done! :eek:

Debt Servicing eats up what, 18% of the Federal Budget right now? Goes to show how Alberta leads the nation in fiscal policy.

^^If it wasn't for the oil Alberta would stlll be in debt though.

^^If it wasn't for the oil Alberta would stlll be in debt though.

Rising oil prices have helped speed up debt recovery, but we have had our budgets balanced and surpluses running along since way back in the mid-90's, when the price per barrel of oil was much, much lower. Ralph promised and he delivered, unlike so many other politicians.

Yes, we would be in debt still, but we would still be well on our way out of it. Oil is just a major contributor, not a be-all and end-all (which is unfortunately the view of the rest of the country).

^^yawn.

Rising oil prices have helped speed up debt recovery, but we have had our budgets balanced and surpluses running along since way back in the mid-90's, when the price per barrel of oil was much, much lower. Ralph promised and he delivered, unlike so many other politicians.

Yes, we would be in debt still, but we would still be well on our way out of it. Oil is just a major contributor, not a be-all and end-all (which is unfortunately the view of the rest of the country).

I didn't say that you guys weren't on your way out of debt, I was just saying that the oil has sped up and is ultimately why you are out of debt NOW. ;)

Now if only Potash prices skyrocketed Saskatchewan would be rich (we have over 66% of the worlds supply of potash) :tongue2:... although we have some oil too :)

I didn't say that you guys weren't on your way out of debt, I was just saying that the oil has sped up and is ultimately why you are out of debt NOW. ;)



Lots of people believe this and they are all wrong. It's not the oil, its the natural gas where Alberta has made huge revenues!

What Boris said is basically correct.

*Gasp* You mean if we pay down the debt we no longer have to deal with massive servicing?!? Why, that's something those crazy, backwards Albertans might have done! :eek:

Debt Servicing eats up what, 18% of the Federal Budget right now? Goes to show how Alberta leads the nation in fiscal policy.

You know what, Albertans always complain that the rest of Canada insults them and thinks there backward. Yet you take the first opportunity to say a dumb sarcastic comment trying to promote your province at the expense of the rest of the country. This thread has nothing to do with how Alberta got rid of it's debt, but that CANADA has a surplus.

And if oil prices tank by chance and Alberta starts to incur deficits all over again, how would you feel if the rest of Canada starts laughing about oil dependancy.

So, please stick to the topic at hand.

^^ what he said.

How much a country owes is irrelevant, its how they owe as a % of GDP. Canada's has fallen from 72% in the mid 90s to 36% today and will be down to 25% by 2011 or sooner.
Canada has paid off about $50billion of its debt but that doesn't make that big a difference. The real reason Canada's debt to GDP ratio has fallen is due to a strong economy.
Every year Canada's debt to GDP ratio declines by about 4%. This due to economic growth, inflation of 1.5% and pop growth of 0.9%. Not even paying off a single cent of the debt still results in a lower debt to GDP ratio. For example the current debt {give or take} is $500billion and the economy is about $1.4 billion. That results in a debt to GDP ration of about 36%. When the economy hits $2billion due to economic growth, inflation, and population growth will will still owe that $500 billion but it would now represent only $25% of GDP. I think paying off the debt is OK with the current $3billion budget contigency fund but anything after that should go to infastructure. Infastructure also leads to further economic growth.

exactly, paying down the debt isn't the most productive way of using surpluses.

Very well said ssiguy2. Paying down debt of course is always important, but the most important factor is using your surpluses in the best way possible to expand the economy.
Try to think of it as an investment. If you spend money on a social program, will that additional expenditure expand the economy (and therefore drop the debt:GDP ratio. Alternativly, what would the effects of a tax cut (especially corporate) do to expanding the economy.

Nevertheless, money should always be placed against the debt. Martin's $3 Billion buffer was a great idea to almost guarantee that at least this amount will be used to pay down the debt.

You know what, Albertans always complain that the rest of Canada insults them and thinks there backward. Yet you take the first opportunity to say a dumb sarcastic comment trying to promote your province at the expense of the rest of the country. This thread has nothing to do with how Alberta got rid of it's debt, but that CANADA has a surplus.

And if oil prices tank by chance and Alberta starts to incur deficits all over again, how would you feel if the rest of Canada starts laughing about oil dependancy.

So, please stick to the topic at hand.

Sorry, Partybits. I was just taking a potshot at .affed (who has been saying stupid bigoted comments about Alberta for the last few weeks). Nothing against the rest of you.

And no, paying down the debt isn't always the most productive way to use a surplus. However if you don't take care of it and let it grow, it is going to keep taking up x% of your GDP.

No offence taken, must be another thread your talking about with .affed then. Keep in mind it usually is one vocal guy who makes the rest look like they are all bad.
I think that's exactly the case with Alberta/ROC relationship. A few people who like to stir up shit when the rest just don't give a rats ass.
Anyways, cheers. :cheers1:

And if oil prices tank by chance and Alberta starts to incur deficits all over again, how would you feel if the rest of Canada starts laughing about oil dependancy. .

This reminds me of the NEP that tanked the Alberta economy, and the only feeling coming from the rest of the country was one of indifference. Honestly, the rest of Canada does not care about Alberta, and likely never will.

And I never did say that was right for Canada's attitude to be that way. But two wrongs don't make a right. Besides, this was 20yrs ago now. You can't hold a countries opinion hostage when we have a whole new generation of people who barely know about NEP, or could care less about what happened during the last oil crisis.

^^ The recent calls for nationalization of oil resources could trigger another round of economic problems for Alberta. Interestingly enough, like the NEP, the biggest round of support comes from Quebec. Even though I'm not Albertan, I understand how mistreated they feel to be within the Canadian federation. Alberta is practically tied with Ontario for mistreatment from the federal government.

If politicians had been smart they could have fixed this problem long time ago. We should have an insurance system in place where if oil drops very low, it would be Canada's obligation to funnel funds to Alberta to stabilize there economy. When oil prices go through the roof, it would be Alberta's obligation to subsidized oil sold to Canada. It works like insurance so not one part of the country is overly destablized due to unforseen oil price swings.
Unfortunatly proposing this now would be stupid as Alberta would view this as a 'nice' way of saying we want NEP. But if this was proposed in the mid 80's-90's instead of just scrapping the NEP, it might have just worked because this was the one time Alberta really could've used Canada's help.
Once again politics and raw human emotion trumped logic.

Realistically Alberta will be the only province to clear its debt. Maybe NFLD if the oil really starts flowing but even that will be decades away.
I love Quebecers. Can you imagine Quebec given its electricity away?

The NEP will NEVER happen again. Ottawa makes too much money off Alberta oil but most of all they know that Albertans would not allow it again.
Alberta would separate clear and simple and would not "threaten" it evertime they don't get their way. She would just say fuck you and leave and BC would go with her. Sask/Man I don't know.

Realistically Alberta will be the only province to clear its debt. Maybe NFLD if the oil really starts flowing but even that will be decades away.
I love Quebecers. Can you imagine Quebec given its electricity away?

The NEP will NEVER happen again. Ottawa makes too much money off Alberta oil but most of all they know that Albertans would not allow it again.
Alberta would separate clear and simple and would not "threaten" it evertime they don't get their way. She would just say fuck you and leave and BC would go with her. Sask/Man I don't know.

has anyone else noticed how all econ/politcal quarrels also seem to boil down to talk of seperation of one province or another

A lot of Canadians tend to forget that the average individual has been basically been paying for this gargantuan debt through higher tuition fees, lower quality in health care etc. The fact that 22 cents out of every dollar of our budget goes into Debt payment is INSANE!!. Okay now i agree we need to assure our economy continues to grow, however to close the income disparity between us and the USA we have to get that Dollar to get even higher and productivity to rise!!

Why do our exporters whine about the hike in the dollar's value?? cause our exporters and their factories are retardedly low in productivity!. They just need to learn how to become more competitive and cut their costs. Exporters can't expect Canada to subsidize their lame ass through lower purchasing power of our dollar!

What I would like to see is a chart of the debt-to-gdp ratio of various countries. To see how Canada is doing relative to other developed nations. My guess would be we are in the middle area but the top half. Some Scandanavian countries I believe have lower ratios than we do, as well as Japan, but USA & Western Europe would probably have higher.

^^^
Have I got a resource for you! www.odci.com/cia

Its the CIA world book. It is a wealth of information that is very easy to use. It has everything you need to know about each country clearly stated and also has over 30 world ranking orders statistically.

In the G& Canada has the lowest debt to GDP {but Canada here was nott mentioned due to not having 2004 figures out}. Anyway, I know Canada is now down to about 35%. Next is the UK.....40%, USA,Ger,Fra all about 65%. Italy is at 105% and Japan is nearly the most indebted percapita in the world, a whopping 160%!

The only other major countries below Canada are Russia..29%, Ireland.....31%, NZ...21% and finally Australia 17%.
Canada is doing extremly well and our debt to GDP ratio is falling fast.

That said, hats off the the Kiwis and Aussies.

^^^
BTW, for some unknown reason it can take very long to get it up if you use its web address becuase you get all this other crap.
Just go to any search sit and put cia worldfact book. No problem.
Its a great, easy to use fact book.

Your hyperlink rerouted me to http://www.seeq.com/lander.jsp?referrer=http%3A%2F%2Fwww.skyscrapercity.com%2Fshowthread.php%3Fp%3D5855660%23post5855660&domain=odci.com&cm_mmc=

However, easy to find on google. Thanks for the link. I found the list of all countries debt:GDP, but ironically enough excluded Canada. However, based on what you mentioned (35%), we are in 76th out of 108th place. 108th being the lowest GDP ratio. However, many of these countries are 3rd world.
http://www.odci.gov/cia/publications/factbook/rankorder/2186rank.html

Canadian debt ranking as compared to other G7 countries is pretty detailed in chapter 7 and appendix 2 in the budget.

http://www.fin.gc.ca/budtoce/2005/budliste.htm

A few graphs...

http://www.fin.gc.ca/budget05/images/bpc7_1e.gif

http://www.fin.gc.ca/budget05/images/bpc7_2e.gif

http://www.fin.gc.ca/budget05/images/bpc7_9e.gif

Debt with provinces included:

http://www.fin.gc.ca/budget05/images/bpa1_1e.gif

What are we spending?

http://www.fin.gc.ca/budget05/images/bpa2_3e.gif

http://www.fin.gc.ca/budget05/images/bpa2_4e.gif

Everyones favorite. Foreign debt.

http://www.fin.gc.ca/budget05/images/bpc2_2e.gif

Thanks heaps for the graphs/stats, those are great!!!