Economy
If Canadian families spent and borrowed like the federal government, they would be $427,759 in debt
From the Fraser Institute
By Grady Munro and Jake Fuss
If the median Canadian family spent and borrowed like the federal government, they would already be $427,759 in debt and continuing to borrow, finds a new study published today by the Fraser Institute.
“If the median family in Canada spent and borrowed like the federal government, they would be in serious financial trouble,” said Grady Munro, a Fraser Institute policy analyst and co-author of Understanding the Scale of Canada’s Federal Deficit.
The $39.8 billion deficit expected by Ottawa in 2024/25 represents the 17th consecutive annual federal deficit, with continued deficits expected into the foreseeable future, eventually resulting in higher taxes for Canadians.
Continuous annual borrowing by Ottawa to finance increased spending has driven federal total debt from 53.0 per cent of the economy ($1.1 trillion) in 2014/15 up to an expected 69.8 per cent ($2.1 trillion) in 2024/25.
To put this into perspective, the study’s analysis offers an example of what a median family’s household finances would look like if they were to spend and borrow like the federal government in 2024.
The study found that the median Canadian family in 2024 would spend $109,982 while only earning $101,821, meaning that it would borrow $8,161 just to pay for its normal spending. This $8,000-plus in additional debt is on top of the $427,759 in existing debt the family would already hold based on previous borrowing.
Illustrative of the burden of debt, $11,066 of the family’s income, representing almost 11 per cent, would be spent on just the interest costs of existing debt.
“Unlike most households, where debt is often offset by assets such as a home or investments, the federal government has little in the way of assets to offset its enormous debt,” said Jake Fuss, director of fiscal policy at the Fraser Institute and coauthor. “And it’s important to note that this government debt burden on Canadian families does not include the burden of provincial and municipal government debt, which depending on one’s location, can be significant.”
- For many years the federal government’s approach to government finances has relied on spending-driven deficits and a growing debt burden, causing a deterioration in the state of federal finances.
- While deficits can sometimes be justified in certain circumstances, perpetual spending-driven deficits have become the norm rather than a temporary exception for the federal government. The $39.8 billion deficit expected in 2024/25 is the 17th consecutive annual deficit, and deficits are expected to continue into the foreseeable future.
- Deficits have helped drive federal gross debt from 53.0% of the economy ($1.1 trillion) in 2014/15 up to an expected 69.8% ($2.1 trillion) in 2024/25.
- This increase in the level of federal debt comes with costs and will result in higher taxes on Canadians.
- It may be hard to comprehend the scale of the deficits and debt, so to contextualize the current state of federal finances this bulletin provides an example of what a median family’s household budget would look like in 2024 if it managed its finances the way the federal government does.
- The median family earning $101,821 in 2024 would be spending $109,982 if it spent the way the federal government does. To cover the difference, it would put $8,161 on a credit card, despite already being $427,759 in debt.
- Of the total amount spent, $11,066 would go towards interest on the debt his year. Simply put, a Canadian family that chose to spend like the federal government would be in financial trouble.
Authors:
Economy
The Green Army Will Keep Pushing Unrealistic Energy Transition in 2025 Despite “Reality”
From EnergyNow.ca
By Irina Slav
The facts behind energy transition are so staggeringly counter to common sense that the only way to achieve them is by force, and the only path ahead is failure.
I was going to wrap this eventful year with a nice little post of gratitude but, as usual, the news flow has forced me to revise my plans. So much has happened in the last week days failing to report on it would be a real shame. You may want to put down the hot beverage or, then again, not put it down, you’re the master of you.
A few years ago, during some election campaign or other — we’ve had so many it’s hard to keep track — one of the most popular parties in Bulgaria chose as its slogan “Work, work, work!” Naturally, the slogan became the butt of many jokes almost immediately.
More recently, we were graced with the “Fight! Fight! Fight!” adage from the Trump campaign that was nowhere near as amusing. It also worked. Meanwhile, the transition army is moving fast towards a “Force! Force! Force!” stage in its efforts to keep the green ball rolling.
Consider the latest gem from the International Energy Agency, out this week. The press release for the report was headlined Global coal demand is set to plateau through 2027, with the subheader summary stating that “New IEA report finds that strong deployment of renewables is set to curb growth in coal use even as electricity demand surges, with China – the world’s biggest coal consumer – remaining pivotal.”
What the report actually admitted, however, was that coal supply and demand hit an all-time high this year, they are both likely to scale new highs next year and keep going in that direction until at least 2027. The way things are going with the transition, coal will probably continue growing beyond 2027 as well because much as Fatih and the Transitionettes want it to die, they can’t tell China and India what to do — or anyone else, really, when push comes to shove.
Push appears to have come to shove in Canada already, with the federal government suddenly deciding to walk back its plan for a net-zero grid by 2035. Now, it will be aiming for a net-zero grid by 2050, which is what is going to be happening elsewhere as well —except perhaps in the UK, where everyone’s gone truly insane but more on that later.
So, Canada last week released something called Clean Electricity Regulations that originally, I gather, were supposed to outline plans to remove hydrocarbons from its already pretty green grid by 2035. The provinces, however, objected. And they must have objected strongly enough for an ounce of sanity to crawl into the regulations. Resource minister Jonathan Wilkinson of “We are not interested in investing in LNG facilities” fame called it “flexibility”. Whatever works to make one feel good, I guess.
Here’s a fun fact: the new Clean Electricity Regulations with the revised target come out literally days after the Trudeau government pumped up its emission cut plan, aiming for cuts of 45-50% from 2005 by 2035. All it took was six days and the start of what might end up being complete government meltdown to reconsider that deadline and delay it by 15 years. But stranger things have happened and some are happening right now, one of them at the U.S. Department of Energy.
The regulator of the department, Inspector General Teri Donaldson said in an interim report that the loan office of the DoE should stop giving out loans to green project developers on suspicion of conflicts of interest, or, as Reuters put it, “contractors who vet them may be serving both the agency and potential borrowers.”
From Donaldson’s report: “The projects funded with this authority, which involve innovations in clean energy, advanced transportation, and tribal energy are inherently risky in part because these projects may have struggled to secure funding from traditional sources such as commercial banks and private equity investors.”
Yet these same projects got DoE funding, which naturally raises the question of whether this funding success was at least in part related to the department’s failure to ensure everyone involved in the process was impartial and driven exclusively by professional motives, and I cannot believe I managed to put this stinky situation so delicately.
Anyway, the DoE has struck back immediately, saying the report was full of errors, and accusing Donaldson of “fundamentally misunderstanding” the “implementation of contracting in the Loan Programs Office.” Yeah, that must be it. That’s why she was appointed Inspector General of the department — but by the Trump administration so it doesn’t count.
All of this, however, is pretty weak beer compared to what’s been happening in Europe. VW is not yet bankrupt and the lights are still on in Germany, for the time being, but in the UK, the government has apparently found a way to grow money on trees because the grid operators of the three constituent parts of the UK’s bigger island are planning to spend 77.4 billion pounds on grid upgrades with a view to accommodating more wind and solar into said grid.
The upgrade is a must if Labour’s 2030 decarbonization plan is to have a fighting chance even though the outcome of that fight is already clear and it rhymes with beet, feet, and meat. The money is to be spent between 2026 and 2031, which means that the money trees take two years to start bearing fruit.
Yet here is my concern: with every other form of plant life susceptible to the devastatingly catastrophic effects of climate change, who is to guarantee that the money trees will be spared the devastating catastrophe? No one, that’s who. The UK may fail to accomplish its task of decarbonizing the country’s grid because of the very climate change it wants to neutralize with that decarbonization, and how cruel of an irony is that? Very, is the answer.
Usually, the UK government is difficult to rival in insanity and anti-intelligence but this week we have a serious contender and it’s not Germany’s government. It’s Big Oil and the heavy industry. That’s right. Europe’s energy and heavy industries have been driven to insanity by the climate crusade army although I’d stop short of painting them as innocent victims.
They could have said something. They should’ve said something. And they should’ve said it loud and clear. But they didn’t, so now Big Oil and Big Heavy Industry are asking the EU to force — that’s right, force — consumers to buy their transition cost-loaded products. Because there is no other way of selling those products.
““We will need to focus on demand creation to achieve new investment prospects,” executives from the two sectors said in a letter to Wopke Hoekstra, EU climate commissioner, warning of an “industrial exodus” without intervention,” the FT reported this week.
It also reported that “companies trying to invest in production methods that may result in lower carbon emissions are “pricing themselves out of the market” due to high costs, and authorities need to step in to create demand for their products.” I think this is beautiful, in the same way that an orca catching its pray is beautiful, that is, in a rather terminal way.
I don’t normally like to brag about being right about things, not least because it’s invariably bad things I’m right about, so it is with a sigh of frustration and some boredom that I have to note I have been saying this for two years now — and of course I haven’t been the only one, far from it. The only way for the energy transition to work is through force, and a lot of it. The only way for the transition to work is to eliminate all alternatives to the Chosen Tech, and for some reason Big Oil and the heavy industry seem to believe this is a constructive approach to life, the universe and everything.
What I find most interesting in this situation is the fact that it is extremely easy to find evidence the forceful approach tends to result in outcomes that are the exact opposite of the intended ones. History is full of such evidence. Yet it appears the most essential industries for modern civilization have taken the green “It will work this time” pill and are eagerly digesting it. Which means two things we already knew: one, the transition is doomed as it has been from the start; and two, Europe’s going down unless it uses a fast-closing window to come to its senses. We all know it won’t — unless it’s forced to. Work, work, work, force, force, force, fight, fight, fight.
Economy
When Potatoes Become a Luxury: Canada’s Grocery Gouging Can’t Continue
By Jeremy Nuttall
I don’t want to live in a country where pensioners have to put back potatoes, a food that supported millions of lives in desperate times
It was a routine wait in the grocery line last year when I personally witnessed the true cost of the grocery price spike. An elderly lady in front of me in the lineup did a double take when the clerk told her the total for her bill.
“What’s $10?” she asked, looking at the cashier’s screen. The clerk told her it was the handful of potatoes she’d grabbed. The woman, easily old enough to be retired, put the potatoes back.
Being middle-aged with a decent full-time job, until that moment, I was fortunate enough that experiencing the rising cost of groceries was not much more than a bit of a drag. But seeing a pensioner putting potatoes back highlighted the problem. The humble tuber has sustained whole civilizations in dire circumstances due to its being inexpensive and nourishing. Now it’s a luxury item?
After two years of complaints about the cost of groceries, the government pretending to fix the issue with the grocery code of conduct (and a lot of big talk), and more Canadians hitting food banks than at any time in recent memory, earlier this month we found out food prices will rise again next year.
The Food Price Report, produced by a joint effort between several Canadian universities, predicted a five per cent increase for meat and vegetables in 2025. That’s more than double the predicted rate of inflation from BMO for the coming 12 months.
Yet again, Canadian government actions have proven worthless.
The message is clear, and “we can’t really help you” is pretty much that message.
Another idea the government had to solve this was to head down to the U.S. to beg some of their chains to open up in Canada. This, rather than breaking up the big Canadian-owned grocery chains dominated by a couple of corporate giants already caught in a major price-fixing scandal, was their best idea.
Anything to get out of doing the work and angering the people with whom they hit the cocktail circuit.
I stopped buying my produce, and most of my meat, at large outlets a couple of years ago. I knew I was saving money, but just how much surprised me recently. I was at a Safeway and wanted to buy a russet potato there to save myself making another stop. I saw the price was $2.69 a pound. The spud I chose was more than a pound—potentially a $3 potato. Disgusted, I left the store without a thing to mash, bake, or julienne.
A few days later, I headed to my usual produce market, the Triple A market on Hastings in Burnaby, a trusty institution with a lot of character. I purchased a big russet potato, a big red onion, two Roma tomatoes, and two Ambrosia apples. (These are random items; please don’t try to make a pie out of this.)
My total was $5.15. This seemed reasonable to me. Right after, I went back to the same Safeway. I purchased the same items, while trying my best to get the weight as close as possible to the first batch I bought.
The result? Even with the Triple A red onion and potato having a couple hundred grams more weight, the Safeway total for the same basket was $8.83. That’s forty per cent more, probably closer to 50 per cent if you factor in the size difference for the onion and potato from Triple A.
A quick look around my nearest Jim Pattison-owned Buy-Low (or Buy Low Sell High, as we call it around my house) revealed prices similar to Safeway, yet the neighbourhood Sungiven, a Vancouver Asian market chain, had prices closer to those of the produce stand.
Now, the argument is often that big grocers have more overhead, advertising budgets, and larger staff. But I think it’s fair to say there’s something suspicious going on here. One thing is clear, though: big grocers are increasingly strictly for suckers.
Out here in B.C., this predicted five per cent increase in grocery prices will have companions by way of increases to property taxes recently passed in Metro Vancouver and a 17 per cent increase to natural gas rates in the province.
We may have a tariff war on the horizon, making all that even worse.
This crushing of Canadians can’t go on. Sadly, it will, due in part to the complete lack of real action from the authorities meant to protect the public interest.
To be clear, I’m not an expert on grocery stores or farming. I’m sure there are flaws in my complaints.
But one thing I know for certain is I don’t want to live in a country where pensioners have to put back potatoes—a food that has saved millions of lives during destitute times—at the checkout after seeing how much they cost.
And any government agency or elected official who thinks it can half-ass the response to something like that while collecting a paycheque is gouging Canadians in their own way.
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