This is something we will likely never see but there is a chance that there will be more and more input from lenders, banks, creditors and people we owe money too. Canada has a huge debt and it is growing considerably at a extremely fast rate. We have spent more money then we bring in since 2009 and have multiplied our debt levels multiple times over. Canada’s debt stands at 1 trillion three hundred seventy eight and give or take a couple million. Living in Canada we feel that we will not have to worry about banks trying to control our business and that government will continue to do what the people want. We are starting to see a change in this thinking because of what is happening in Europe and Ontario.
Recently, the government of Ontario took a harder stand on there debt and getting it under control as a couple credit agencies told them that there rating would be dropped. This seemed to come as a shock to McGunity and his party and they took this to heart with the Drummond report and the recent budget. Even after the release of the budget and the extra 490 million towards the deficit, a couple credit agencies have already dropped its rating and caused another problem for the province. A good credit rating will allow a person or a province to borrow money at a cheaper level, each time the level goes down the amount that may be borrowed goes down and they increase the amount of interest they want. Currently, the interest Ontario pays is the third largest expense and getting bigger. With the downgrade this means that banks will be less willing to borrow money to Ontario and they will want a higher return upfront. Without showing the banks and lenders that Ontario is committed to cutting the debt and deficit earlier the credit agencies will continue to be shaky and hesitant with Ontario. If we continue down this path we could see a Greece like control of Ontario’s finances. While the province has a plan to cut the deficit by 2017-2018 the debt levels will have increased substantially and could overtake education in expenses. This is something that is happening as well with Quebec and slowly with Canada as a nation.
Canada’s debt is close to 82% of our Gross Domestic Product or GDP. “Gross domestic product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period.” This means that our debt is coming towards being on par with the level of the Canadian economy. The debt also stands at a level of $40,000 per person or the average income of a Canadian worker annually. A higher debt level requires a higher amount of money put towards it and requires more to be put aside which could be used for more productive levels. Lenders, banks and credit agencies will watch you with more of a hawkish attitude when the money they lend you becomes in danger of failure to repay. This is being shown to the world in Greece where the government was almost unable to pay its debts and without the help of foreign money would have failed. Banks and other governments have twisted the government’s of Greece’s arm to force cuts, austerity down the throats for repayment. While its unlikely to happen here in Canada just yet, if we continue down the road we are now it is a possibility. Banks could play a bigger role in modern government if they feel they will not be repaid and force the government’s hand. While its likely not on the mind of Canadians just yet, the amount of personal debt along with the amount of government debt could lead to a reduction in the quality of life we all have come to enjoy. We as a country need to accept that this level of debt isn’t acceptable anymore and need to work on bringing it down to a level which is more manageable. With a reduction in debt we will be able to work on the projects we desperately need like feeding the poor and helping the homeless. While the plan might be harsh at first it will likely be necessary to get the job done.
The plan should include: – 2% increase in the GST which that increase is put directly to the debt.
– 2 cent increase in gas tax which is put to repairing roads and other infrastructure
– Continued labor cuts to government employees even after the budget returns to black. Using this money to pay down the debt
– Reducing the transfer to Quebec from 10 billion to 3 billion. Using that money to pay for infrastructure upgrades across the country
– Increasing VIA and defense spending with a minimum 50% Canadian content for any contract signed by these 2
– Reducing the senate from 105 – 20 (1 French and 1 English from each province/territory), reducing the pension and pay given to senators and making the process an elected one.
– Get rid of subsidies for the oil sands, big business and wealthy Canadians.
– Change the tax brackets around to include more in the lower levels and return the business tax level up to a higher level.
– Make cabinet smaller by merging departments and move more then online to make it cheaper for government.
Cutting from top to bottom will be necessary for the Canadian economy and the debt levels. It might be hard to get through this but the financial freedom that Canadians will have once the debt is lower will allow them to breathe easier and know that another country or private industry will never have to arm bar us to do what we should have done in the first place.
Open minded Millenial perspective - OMMP 