If you spent and borrowed like Ottawa you’d be in big trouble

If the median household chose to spend like the Trudeau government, it would spend $109,982 and incur a deficit of $8,161, which it would put on a credit card. And this year—again, if the family was in the same fiscal situation as the federal government—it would pay $11,066 in interest on an overall debt burden of $427,759.

According to polling released earlier this year, two-thirds of Canadians are concerned about the size of the federal deficit. And considering its size, Canadians are right to be concerned, but it can be hard to wrap our heads around the scale of the numbers involved. A new study puts the federal deficit in more familiar terms, and shows what the median Canadian household’s finances would be like if it budgeted like the federal government.

This year, the Trudeau government plans to spend $537.7 billion while expecting to collect $497.8 billion in revenues—a $39.8 billion difference or deficit, which represents the amount of money Ottawa must borrow in 2024/25 to cover its spending commitments. The Trudeau government has run deficits every year for the last decade, and plans to continue running deficits for at least the next five consecutive years.

Consequently, the government has racked up massive amounts of debt. In 2024/25, federal gross debt is expected to reach $2.1 trillion, which is nearly double the $1.1 trillion held in 2015/16.

So what would the median household budget look like in 2024 if it managed its finances like the federal government?

In 2024, the median household will earn $101,821 after taxes (median means half of Canadian families earn more than this amount and the other half earn less). If the median household chose to spend like the Trudeau government, it would spend $109,982 and incur a deficit of $8,161, which it would put on a credit card. And this year—again, if the family was in the same fiscal situation as the federal government—it would pay $11,066 in interest on an overall debt burden of $427,759.

While it’s clear that a family spending 11 cents of every dollar it earns on debt interest, and ending the year with $8,161 in new credit card debt, is not in a good financial situation, there’s an important nuance that makes this situation even worse.

For this comparison (the federal government and a Canadian household) to work, we shouldn’t view the $427,759 in debt as a mortgage. Why? Because when a family takes out a mortgage, the amount of debt is balanced by the value of the house. In other words, the family could sell the house and use that money to pay off most or all of the outstanding mortgage.

The same cannot be said about government debt. In many cases, government debt is not backed by many assets. In the unlikely scenario the federal government used all of its financial assets to pay off its debt, it would still be left with $1.4 trillion in debt this fiscal year. If the government went a step further and sold all its non-financial assets (which includes all buildings and land owned by the federal government), it would still have $1.3 trillion in debt. In other words, more than half of the federal government’s debt cannot be paid off simply by selling its assets.

The Trudeau government continues to spend beyond its means and rack up mountains of debt every year, which has eroded federal finances. If a family budgeted like the federal government, it would be in big financial trouble.

Authors:

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

Related Topics:#FederalDebt #FederalDeficit #FraserInstitute #GradyMunro #JakeFuss #JustinTrudeau FederalSpending LiberalGovernment

Up Next

Jordan Peterson condemns ‘trans-butchery of minor children’ as ‘a crime against humanity’

Don't Miss

Lockdowns Codified a World of Violence

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

21 states threaten top medical group with legal action for claiming puberty blockers are ‘reversible’

Business / 2 hours ago

Time to finally privatize Canada Post

National / 4 hours ago

Canadians are not buying the ‘climate change’ narrative: government poll

Artificial Intelligence

Will AI Displace Climate Change As The Next Globalist Bogeyman?

Published on September 26, 2024

Todayville

From the Daily Caller News Foundation

By David Blackmon

On Monday, before most people even knew its annual General Assembly was again invading New York City, the United Nations issued a press release proclaiming the unanimous adoption of what it calls its “Pact for the Future.” Designed to be a successor plan to its “Agenda 2030” — which the international globalist organization admits is failing — the press release boasts that this “Pact” is designed to create a glorious “new global order.”

Where have we heard those dangerous words before?

The U.N.’s alarmist general secretary, life-long socialist Antonio Guterres, had laid the narrative groundwork for Monday’s press release during a preview delivered last week. In that statement, Guterres – who famously proclaimed the world had entered into “the era of global boiling” last July – advocated for a complete restructuring of the world’s “institutions and frameworks” to address major issues like “runaway climate change,” something that no real data indicates is even happening.

In addition to his usual climate alarmism, Guterres also raised questionable alarm about what he termed the “runaway development of new technologies like artificial intelligence.”

“Our institutions simply can’t keep up,” Guterres said. “Crises are interacting and feeding off each other – for example, as digital technologies spread climate disinformation that deepens distrust and fuels polarization. Global institutions and frameworks are today totally inadequate to deal with these complex and even existential challenges.”

In other words, Agenda 2030, the U.N. plan adopted to leverage those institutions to solve all the world’s problems, has failed. The solution? Why, adopt a new “Pact for the Future” to solve all the world’s problems while also rejiggering all those institutions and frameworks. Sure, that will work.

You would think such an all-encompassing Pact approved by a unanimous vote of the world community would make headline news, but that did not really happen. Perhaps that lack of breaking news coverage can be attributed to the fact that a reading of the document itself reveals it doesn’t really offer many plans for specific action items.

Instead, it reads like something written by the talking points compilers for Vice President Kamala Harris’ campaign — a lot of lofty language that doesn’t actually say anything.

Nowhere is this reality starker than in the section on “affordable, reliable, sustainable and modern energy.” After laying out the rationale for pushing the sputtering, subsidized energy transition – as always, painting oil, natural gas and coal as the convenient bogeymen justifying a forced move away from democratic national institutions to change forced by socialist central planning – the document offers only nebulous talking points instead of action items:

“Countries can accelerate the transition to an affordable, reliable, and sustainable energy system by investing in renewable energy resources, prioritizing energy efficient practices, and adopting clean energy technologies and infrastructure.”
“Businesses can maintain and protect eco-systems and commit to sourcing 100% of operational electricity needs from renewable sources.”
“Employers can reduce the internal demand for transport by prioritizing telecommunications and incentivize less energy intensive modes such as train travel over auto and air travel.”
“Investors can invest more in sustainable energy services, bringing new technologies to the market quickly from a diverse supplier base.”
“You can save electricity by plugging appliances into a power strip and turning them off completely when not in use, including your computer. You can also bike, walk or take public transport to reduce carbon emissions.”

It all amounts to bits of advice, much of which constitutes laudable goals. But there is nothing new here, nor is there anything that is going to lead to meeting the UN-invented “net zero by 2050” target. The simple reality is that demand growth for energy – real, 24/7 energy – will continue to outstrip the ability of global or national governments to force reductions in carbon emissions, because modern life is not sustainable without the use of carbon-based energy. Period.

By citing the evolution of energy-hungry AI technology as a development to be feared and attacked, Guterres admits this reality. He also appears to be admitting that the attempt to displace democratic institutions with socialism using climate alarmism as the justification is also failing, thus necessitating the need for a different bogeyman.

It is all so incredibly tiresome and unproductive.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Economy

Federal government’s environmental policies will do more harm than good

Published on September 25, 2024

Todayville

From the Fraser Institute

By Matthew Lau

The study covered grocery bags, food packaging, soft drink containers, furniture, t-shirts and other plastic products. In most cases, replacing plastics with alternatives causes greenhouse gas emissions to rise by 35 to 700 per cent.

Through a variety of regulatory and spending initiatives, the Trudeau government is expanding its control over our lives, often in the name of climate change or other environmental objectives. For example, the government plans to force consumers to buy electric vehicles instead of conventional cars and has proposed or implemented plastics restrictions on consumers and businesses—everything from plastic drinking straws and plastic utensils to clothing material and food packages.

However, while evidence of the high costs to consumers continues to mount, evidence of the environmental benefits is notably absent. Indeed, many recent studies provide evidence that Ottawa’s restrictions on consumers may well cause net environmental harm. One reason is that the plastic products the federal government is so intent on restricting are more environmentally efficient than alternatives.

A study published earlier this year in the journal Environmental Science & Technology concludes, “15 of the 16 applications a plastic product incurs fewer greenhouse gas emissions than their alternatives.” The study covered grocery bags, food packaging, soft drink containers, furniture, t-shirts and other plastic products. In most cases, replacing plastics with alternatives causes greenhouse gas emissions to rise by 35 to 700 per cent.

Why? Because plastic generally takes less energy to manufacture and transport than the alternatives. In fact, many plastic products that are more environmentally friendly than non-plastic alternatives (according to the study) are products the Trudeau government wants to ban or curtail through regulation.

Other evidence shows plastic bans of the type imposed in Canada cause environmental ruin, contrary to the predictions of politicians. For example, research in New Jersey found after single-use plastic bags were banned in 2022, shoppers switched to the heavier reusable bags. “Owing to the larger carbon footprint of the heavier, non-woven polypropylene bags,” reported the Wall Street Journal, “greenhouse gas emissions rose 500%.”

Similarly, the New York Times reported that while California banned single-use plastic bags almost a decade ago, in 2023 “Californians threw away more plastic bags, by weight, than when the law first passed, according to figures from CalRecycle, California’s recycling agency.”

Also from the Wall Street Journal, analyses suggest electric vehicles often emit more particulate pollution (dust, dirt and soot) than conventional vehicles. That’s because most particulate pollution these days is not from the tailpipe but from tire wear. EVs are much heavier than conventional vehicles so their tires wear out faster, increasing particulate pollution. The firm Emissions Analytics compared a plug-in electric to a hybrid vehicle and found the plug-in electric, which weighed more, emitted about one-quarter more particulate matter than the hybrid as a result of tire wear.

Last year, the chair of the U.S. National Transportation Safety Board noted that EVs manufactured by Ford, Volvo and Toyota were all about 33 per cent heavier than conventionally powered versions of those same vehicles. That’s a problem not only for the environment but also for driver safety—and yet more evidence that the Trudeau government’s EV mandates will harm Canadians.

When it comes to vehicles, plastic products and many other things, the Trudeau government should begin reducing its control over consumers. The harm to consumers is evident; the compensating benefits to the environment—if any—are not.