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Torontonian 4ever
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Discussion Starter · #1 ·
I'm interested in getting the input from other members of the forum, especially those specializing in public budgets...

So, recently I've been having numerous discussions with my colleagues about what I call a uniquely Canadian paradox, our federal budget.

Inarguably, Canada is one of the wealthiest countries on the planet, both in economic output and raw resources. In fact, Canada's resource wealth is only rivaled by Russia... This leads me to my main point.

WHERE is this wealth going?! I'm going through the 2007 budget scratching my head at over $118 billion in 'transfer payments' to provinces and territories, yet what do we have to show for it? Our healthcare is sub par, our education standards are slipping rapidly and our infrastructure is, at best, from the developing world. The opposition seems to make a massive issue from spending a sad billion on defense improvements (which are imperative given the shifting power balance in the world) and the federal government releases only $18 billion in federal stimulus money... A paltry amount which pales to nearly every other developed nation.

In 2010, Canada's revenue was $231.4 billion, while its expenditures were higher at ~$280 billion. The biggest share of this are so called 'Federal Programs', which do not include the big ticket items such as healthcare and social services, this amount has more than doubled in the last 5 years.. So what exactly is this, and being a significant amount ($120 billion), what are we showing for it? Considering our cities are chronically underfunded and infrastructure spending seems to be a taboo, there is absolutely no way all of this is getting siphoned off somewhere. Some mention agricultural subsidies and other rural initiatives, yet this amount would pay for all rural roads to be paved in gold. Otherwise, wouldn't it make economic sense to fund our cities accordingly? They are what drives the Canadian economy and makes it one of the most competitive in the world, not farmers in Saskatchewan.. Some might mention Quebec, yet as much of a black hole for money that province is, it is a very tall order to blow that much money and continuously fail at getting your fiscal house in order.. Anyway..

Canada is one of the wealthiest countries in the world, yet we have very little to show for it is basically my point.

Begin discussion....
 

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Canada is one of the wealthiest countries in the world, yet we have very little to show for it is basically my point.

Begin discussion....
Canada has one of the world's highest life expectancies due to comprehensive health care coverage. One of the highest literacy rates due to a decent public education system. Canada consistently ranks in the top 5 countries of the world for quality of life. We have a lot to show for our wealth.
 

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Torontonian 4ever
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Discussion Starter · #3 ·
Our rankings have been falling steadily for the past few decades.. Our education system is filled with problems (recent rankings have criticized Canadian schooling) and our healthcare system is unsustainable.

European countries have a better ranked healthcare system, comparable, if not better education and ditto for life expectancy, however our infrastructure is laughable compared to theirs... There is a myriad of problems with Canada, and resting on our laurels is beginning to take its toll.

For our wealth, we really have nothing to brag about anymore...
 

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Well, considering Canada is probably about the size of all of Europe put together, with a population of only 33 million, one could assume that there are going to be higher costs associated with infrastructure, health care, etc... I'm no economist, but it does not seem to be a mystery at all to me. I think we have long known that it costs more to run a country this size with our population than one that has the same population and is the size of one of our Great Lakes. Is there any comparison maintaining an infrastructure system spanning 3500 miles to one spanning a hundred miles? Milder countries also don't have to spend so much money repairing roads damaged by winter. In the same way it is cheaper to maintain a little bungalow than upkeep for Casa Loma. I am surprised that we are surprised.


I disagree about our education being ranked lower and think perhaps we suffer a bit from "Grass is Always Greener on the European Side", however. We have life pretty soft here, and tend to take that for granted. Food is so cheap and plentiful that it is ridiculous, and car gasoline is half the price of Europe. And what about our national debt compared to other countries?
 

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Torontonian 4ever
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Discussion Starter · #5 ·
Wouldn't the fact that we provide for fewer citizens, yet have comparable wealth mean that our services should be vastly superior? This is mostly pertaining to the social/education/health aspect and not infrastructure.

I'd just like to know what the $120 billion per annum for Federal Initiatives means.... Methinks it's code for Quebec appeasement and subsidizing hicks... God knows that's a massive amount of money and I doubt maintaining our roads costs more than a 5 billion a year.
 

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If this thread is just set up to start regional fighting, then it will be closed right away. I know we are approaching Christmas Cranky season, but lets try not to deliberately argue.

Again, I am no economist, but it seems to me that supporting a huge infrastructure for a tiny fraction of the population is going to be inherently costlier. Sure it is for fewer users, but the tax base is less, too.
What about our personal debt/savings, home ownership/size of living accomodations, etc.... Are we really paupers?
 

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our education standards are slipping rapidly
Sorry to nitpick, but not really. Canada has one of the best public education systems in the world. According to a recent article published by The Globe and Mail:

Canada, Finland, Japan, Korea, Hong Kong-China and Shanghai-China were all noted in the PISA report as places where “students tend to perform well regardless of their own background or the school they attend.”
http://www.theglobeandmail.com/news...dless-of-socioeconomic-status/article1827651/
 

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Torontonian 4ever
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Discussion Starter · #8 ·
If this thread is just set up to start regional fighting, then it will be closed right away. I know we are approaching Christmas Cranky season, but lets try not to deliberately argue.

Again, I am no economist, but it seems to me that supporting a huge infrastructure for a tiny fraction of the population is going to be inherently costlier. Sure it is for fewer users, but the tax base is less, too.
What about our personal debt/savings, home ownership/size of living accomodations, etc.... Are we really paupers?
With Canada's wealth we can't seem to be able to fund improved trackage between Montreal and Toronto.. Now THAT is embarrassing.

It's these little things that bother me about this great country.. So much wealth, yet the simplest of solutions are too costly. A country goes into debt to provide for future generations.. To a certain extent of course (Spain, I'm looking at you) but a reasonable amount of debt is good. The government is trying too hard to pay it off and it's stifling the amount that can be spent to improve not just our infrastructure but our standard of living.
 

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Torontonian 4ever
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Discussion Starter · #9 ·
Sorry to nitpick, but not really. Canada has one of the best public education systems in the world. According to a recent article published by The Globe and Mail:



http://www.theglobeandmail.com/news...dless-of-socioeconomic-status/article1827651/
I was going by this:

http://www.nationalpost.com/news/ca...ath+science+reading+skills/3937286/story.html

Canadian students continue to slip in international rankings of math, science and reading skills, but the country can boast of an education system that lessens differences of social class and gaps between immigrant and native-born students
Of course, relatively we're still near the top, but our rankings are slipping, which was my main point.
 

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Interesting how two papers can take the same information and run in different directions with it.
 

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All Urban
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I would surmise that a great deal of Canada's national wealth is untapped because the governments at different levels simply have differing opinions about how to plan and fund infrastructure and development programs.

Case(s) in point:

1. Toronto Island Airport provides fast, effective air links between Toronto and many major cities - encouraging economic activity - and is supported by the Federal Government

However, Mayor David Miller campaigned against a bridge that would expand the economic capability of the Island Airport and promised to eventually do away with it.

2. Why has a "business" oriented airline been so successful building service from Toronto Island Airport? One reason is because Toronto Pearson, despite being such a short distance from downtown Toronto (as compared to other airports) has no frequent, fast, reliable (rail) connection to downtown as well as links between the other cities.

Now, these links have been proposed, but often as parochial, "pet projects" (can you say "David Collennette") or have been proposed and cut back (Eglinton line).

When the projects are proposed again at the municipal level, they are cut back again (Eglinton Line) because of different levels of political infighting.

Should I go on? Or should I just post that image once posted by Jaye101 explaining how the 3 levels of government worked (the keyword is "blameshifter")

Cheers, m
 

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Torontonian 4ever
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Discussion Starter · #13 ·
Yea.. lots of inter-provincial bickering and political incontinence.

We need an event to bring Canadians together... American invasion perhaps? Yoohoo Palin?!?!
 

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Wouldn't the fact that we provide for fewer citizens, yet have comparable wealth mean that our services should be vastly superior? This is mostly pertaining to the social/education/health aspect and not infrastructure.
That would seem to be a valid point, but one thing people tend to overlook is that a person is also a resource and form of revenue. Scientists, Architects, Designers, and Doctors to name a few are a commodity themselves. If you have a smaller population you also have less revenue created in some of these fields. Brain power is worth much more then even the oil sands.


It is true though, where is all the money going? I see no reason why we can't have our own space agency of maglev train with all of our riches and brain power.
 

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All Urban
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I think the other problems arise from the fact that Canada has developed a "what's in it for me?" and "winner-loser" mentality that develops from the way cities relate to the provincial governments (and to a lesser extent, the Federal Government), and the Federal Government relates to the Provincial governments (and to a lesser extent, the cities).

Basically, all cities provide money to the Provincial government and the provincial governments push that money on upwards to the Federal Government. I can imagine that a lot of money gets "stuck" when it is transferred.

Now, the Federal Government pools and redistributes the national wealth, back to the Provincial Government, which then distributes the money to the cities again. Once again, you have potential for money to become "stuck".

The provinces have the right to treat all cities as fundamentally equal, whether that city is Toronto or Wawa (to use examples from Ontario). This system is equal but definitely not equitable considering the huge benefits and costs that Toronto has to deal with.

But there is no real option under the constitution for more equitable funding - leaving Toronto's biggest cities with a huge funding shortfall. And when you have a funding shortfall, new infrastructure and economic development programmes are the first to be cut back.

So the big city mayors join together and push for "new deal for cities", whereby they can collect more revenue sources from the Provincial Governments and more funding of infrastructure from the Federal Government.

But because there is no realistic funding plan in place, every city has to go to their Provincial Government and the Federal Government and fight for that money - suggesting that the resources are limited and not really available unless you "really want it"

And every other cities complains when one city gets money because it means that they have "lost" money - even though there is actually a huge pool of untapped wealth in the country that is being parcelled out by the Federal and Provincial governments - often for reasons that upset other Canadians (can we say "Quebec")

Cheers, m
 

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All Urban
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That would seem to be a valid point, but one thing people tend to overlook is that a person is also a resource and form of revenue. Scientists, Architects, Designers, and Doctors to name a few are a commodity themselves. If you have a smaller population you also have less revenue created in some of these fields. Brain power is worth much more then even the oil sands.

It is true though, where is all the money going? I see no reason why we can't have our own space agency of maglev train with all of our riches and brain power.
Canada is investing in Canadians. The Canadian government is investing in infrastructure and funding and economic development.

But they are not doing it in a quiet way that inspires people to take up the projects on their own initiative.

Instead, they are investing in a relatively sneaky and manipulative, politically self-serving way, making the public "dependent" on going back to the government again and again.

Instead of long-term funding for long-term development programs you get short term funding for "one-time only" projects - capital spending, sprucing up for G8/G20, stimulus packages.

You cannot build a country on short-funding!


Cities can get funds but have to fight for them or show loyalty to receive them (Can someone say Muskoka - G8)

So everything becomes political and/or about fighting - whoever has the most connections and/or shouts the loudest.

You cannot build a country on politics and infighting!


And much of that investment goes into projects that may not have the biggest overall benefit (e.g. Maglev train which gave us ICTS) or are political (UTDC, Ontario Bus Industries).

And in that kind of an unhealthy investment climate, companies do not want to invest beyond a token amount of money, so again, so much of that wealth is untapped.

You cannot build a country if businesses and industry are not willing to invest and take risks!


And without investment, without vision and innovation there is no leadership and no job creation. There is no opportunity for new industries, only limited space in older ones.

Hence, there is no reason to invest in education & knowledge except to make you more competitive and allow you to survive in a stagnant market

You cannot build a country if people are too busy focusing on competing and surviving!


I think the only thing that will bring Canada out of this stupor is to go back into our past and "re-vision Canada as a federation of mutually supportive regional economies that contribute towards a common vision of a better quality of life for each other."

Or to use English instead of government-speak, we need to see "Canada as a community of people who want to see everyone succeed and are ready to lead by example."

Cheers, m
 

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~ Mysterious Entity ~
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Canada may have a large amount of natural resources compared to its population but in a free market society those resources are not largely exploited/developed by Canada for the benefit of Canadians, they're exploited or developed by companies for the companies' profit. And the companies are often not even based in Canada, and therefore the proceeds of the resources ultimately end up enriching someone else.

Ultimately the wealthiest economies (over the long term, not counting short term booms) are the ones based on adding value to resources rather than simply selling primary resources to other places for them to develop. Generally the countries that can add the most value to primary resources are the wealthiest, even if the primary resources come from somewhere else.
 

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One of the biggest problem Canada faces at the moment relies in its poor productivity compared to other countries within the OECD. In 2009, Canada ranked 17th out of 23 OEDC nations in terms of productivity, while the United States placed 7th despite its deep economic crisis. Canadian companies have historically been reluctant to heavily invest in state of the art machinery and processes and usually tend to react rather then lead when it comes to new technology adoption. Therefore, it costs more to produce a good or to offer a service in Canada, both in the public and the private sector, then it does in many western countries. Hence, for example, building hospitals is more expensive (because the older machinery consumes more fuel, is slower, has lower loading capacity, etc) and operating them is costlier as well (less MRI scanners, older operating softwares, etc)... The same conclusion applies to any infrastructure construction in the country. I only found a 2007 graph but you can see the gap with European country. At least, it seems that this trend is changing. I don't have the numbers right now but if I remember correctly, canadian investment in machinery recently jumped by 5,6%... We'll see.


http://stats.oecd.org/Index.aspx
 

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Canada may have a large amount of natural resources compared to its population but in a free market society those resources are not largely exploited/developed by Canada for the benefit of Canadians, they're exploited or developed by companies for the companies' profit. And the companies are often not even based in Canada, and therefore the proceeds of the resources ultimately end up enriching someone else.
DING! DING! DING!

Canada may have a large amount of resources, but we practically own none of them.

Every resource we have within our borders has been sold off to some foreign oil or mining company.

A Brazilian company called "Vale" owns Canada's largest nickle mine in Sudbury.

The oil sands? HAHA! We'll never be allowed to touch any of that. The Americans own it and soon the Chinese will too.

BHP Biliton owns our diamonds up north in the territories.

It goes on.


Ultimately the wealthiest economies (over the long term, not counting short term booms) are the ones based on adding value to resources rather than simply selling primary resources to other places for them to develop. Generally the countries that can add the most value to primary resources are the wealthiest, even if the primary resources come from somewhere else.
We sell our diamonds to Beligum. Then they cut them and sell them back to us in the form of jewelry.

I wish Canada had a larger export based economy such as those of Japan, China, Germany, etc., but sadly we are catergorized with Russia and Australia for having a resource based economy.

We export resources and they export them back to us in the form of completed goods.
 
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