This presentation looks at government debt and deficit for Canada

1. DEBT TO GDP AND
GOVERNMENT
DEFICITS – CANADA -
TRUTH
BY: PAUL YOUNG CPA, CGA
DATE: FEBRUARY 10, 2018

2. SUMMARY
• Key measurement for a country is Debt-to-GDP. Canada has one of the lowest Debt-to-
GDP in the G-7

3. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

4. AGENDA
• Paul Martin
• Stimulus
• Ralph Goodale / Twitter Post
• Canada and IS Debt-to-income Ratios
• Spending / Deficits by Party
• Middle Class / Truth
• Job Market

5. STIMULUS
Liberal Supporter
• How about what the PBO office said on tax cuts: http://globalnews.ca/news/1356467/tax-cuts-since-2005-net-
canadians-30b-pbo/.
• There also is difference of opinion on EI: http://www.cbc.ca/news/politics/pricey-ei-rate-cut-will-yield-only-800-
jobs-pbo-report-1.2793591.
• Yet CFIB likes the tax cuts: http://www.cfib-fcei.ca/english/article/6564-small-biz-job-credit-release.html. So,
who is right?
• Do you want me to go into the debt/deficits? http://www.slideshare.net/paulyoungcga/canada-deficit. It seems
to be the LPC pushed for more of stimulus: http://business.financialpost.com/2010/09/22/this-cant-go-on/.
• Opposition Coalition Government - http://www.cbc.ca/news/canada/liberals-ndp-bloc-sign-deal-on-proposed-
coalition-1.700119

6. PAUL MARTIN AUSTERITY MEASURES
• Canada was approaching 50% of their federal debt to GDP
• Canada undertook various measures the deficit/debt
• Reduced program spending
• Reduced the transfers to provinces
• Changed the rules for EI
• Other austerity options
Did Paul Martin’s Plan work
What makes the Canadian experience really stand out is
the very heavy reliance on spending cuts to eliminate the
deficit and then run budget surpluses. In 1996, when
Canadian debt peaked, spending was 46.6% of GDP,
down a bit from a peak of over 50% of GDP in the
recession of the early 1990s. Source – Policy Alternative
Canada also stands out in that it did not rely at all on tax
increases to lower the deficit and debt. Indeed, once
surpluses emerged after 2002, corporate and personal
income taxes were cut.
Putting the burden of debt reduction on social spending
cuts rather than on taxation meant that the burden of
Canadian deficit reduction fell on the lower end of the
income distribution, and this was a significant factor
behind the pronounced increase in Canadian income
inequality over the 1990s – Source – Policy Alternatives
Spending Cuts
Taxation and income inequality

8. SURPLUS/(DEFICIT) AND GDP GROWTH
• Source – Government of Canada

9. DEBT TO GDP RATIOS
Source - http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/prov_fiscal.pdf or
https://economics.td.com/federal-fiscal-update or https://www.fin.gc.ca/afr-rfa/2017/index-eng.asp

10. GOVERNMENT TAXATION AND SPENDING
Source - http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/prov_fiscal.pdf or
https://economics.td.com/federal-fiscal-update or https://www.fin.gc.ca/afr-rfa/2017/index-eng.asp
I am not surprised with this comment as the Liberals expenses are growing
about 2x times faster than the growth of GDP. Here is my surplus/deficit
calculation - https://www.slideshare.net/paulyoungcga/canada-cpc-and-
liberals-surplus-debate. Yet if Harper did the same thing in terms of
spending and deficits then the left would have crucified him. So, why does
PM Selfie get a free pass?
Secondly, the economy is projected to grow at slower rate in 2018 and
beyond, why? Federal government is pushing national carbon tax starting
in 2018. The carbon tax will take money out of the economy -
http://business.financialpost.com/commodities/energy/ottawas-carbon-tax-
plan-to-shrink-economy-by-3-billion-hurt-loonie-in-2018-study. The
adjustment is small, but it was shave a point or two off GDP. Canada is
also seeing correction in areas like manufacturing, construction, energy and
utility sector.
Thirdly, GDP is project to drop back down to 1.9% to 2.2 range
https://www.slideshare.net/paulyoungcga/gdp-outlook-canada-and-the-
world-september-8-2017 - see slide 3 which shows you that Trudeau growth
is same Harper was achieving post 2008-2009 recession.
Government gets too much credit for an economy. Government has a role
which is create policies that support economic expansion. The Liberals are
moving Canada to high tax and high regulation as compare the USA which
is going low tax and low regulation.

11. MIDDLE CLASS TRUTH / BRISON
https://twitter.com/scottbrison/status/940990340802195457
1. Where is the infrastructure money? It took you over a year
to progress the money, why?
http://www.msnewsnow.com/story/37051063/municipaliti
es-to-receive-funding-for-72-infrastructure-initiatives-
across-canada
2. Canada Middle Class -
https://www.slideshare.net/paulyoungcga/middle-class-
analysis-and-commentary-canada-october-2017
3. Canada had the best middle class in 2014 -
https://www.youtube.com/watch?v=yOl37VcG89c&t=3s
4. 80% of the middle class are paying more in taxes -
https://globalnews.ca/news/3769136/taxes-middle-class-
liberals/
It would be nice if your party would not mislead Canadians.

12. JOB MARKET
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