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2021 federal budget and the CAF

Thankfully municipalities cannot go into debt. So the taxpayers are spared bailouts on at least one level.

As for the provinces, pray it just be the small ones. Canada can "afford" to bail out NL MB and NB, but if its Ontario or Quebec or BC who need saving we are in for a world of hurt.

BC is fine, Quebec doesn't look too bad, and with equalization can probably make it back to balance, but Ontario was trending in the wrong direction before the pandemic and could be sitting at well over 50 percent in the next few years.

Except Vancouver, of course, because: special snowflake....


City of Vancouver addicted to debt​


“When a person is addicted to a substance…they are not able to control the use of that substance. They continue taking it, even though it may cause harm.” That’s a key sign of addiction, according to a popular medical website.

In the City of Vancouver’s case, the substance is government debt and the city has been addicted for more than a decade. Despite clear signs of an addiction problem, city hall recently proposed an ambitious infrastructure plan that would further increase debt over the next four years.
It’s ultimately up to voters to approve the new infrastructure plan in November’s election but they should consider the city’s finances before making up their minds.

Some background: The City of Vancouver is the only municipality in B.C. that can directly take on debt without permission from the provincial and regional governments. Perhaps not surprisingly, it is also the only municipality in the Metro region with liabilities (debt, employee pension obligations, etc) consistently greater than financial assets (cash, investments, etc).

But accumulating debt has consequences. The money eventually has to be paid back and regular Vancouverites will foot the bill through increased taxes and municipal fees. According to estimates by the city’s finance staff, the cost of servicing new debt for the proposed infrastructure plan is the equivalent of a 2.2 per cent property tax hike over four years.

It’s important to remember that the city, like the rest of us, has to pay interest on debt in addition to repaying the principal. With more money going to service past debt (interest plus principal), less is available for important municipal services such as garbage collection and policing. That means Vancouverites also “pay” for debt indirectly through reduced services.

Importantly, debt servicing costs are set to grow even if the new infrastructure plan fails to move forward. In 2010, debt servicing costs equaled 7.2 per cent of the city’s budget. By 2013, they grew to 7.8 per cent and are expected to reach approximately 9 per cent by 2019. In five years, nearly one of every 10 dollars spent by the city on operations will go to servicing debt and not municipal services.

They say the first step on the road to recovery is admitting you have a problem. Unfortunately, with the newly proposed infrastructure plan, the City of Vancouver is signaling it’s not ready to kick its debt addiction.

 
Why not? We do it for the apprenticeship program here in Alberta, and the Coop program can give you credits for doing BMQ. So why not credit for working the fields?
Part of the problem here in Ontario is the low age of students graduating from high school coupled with the lack of a healthy work ethic. Paper routes have gone the way of the dinosaur, pumping gas is no longer an option, and fast food establishments only provide short shifts so as to avoid any benefit costs. Every kid with a laptop is graduating with high expectations of inventing a new game and retiring at 21. A number of European countries still maintain compulsory national service such as military or social work for a year after graduation. Perhaps introducing a similar programme, paid, with basic labour tasks or basic training as options as a mandatory grade 13 or sooner if they chose to leave school might solve a number of problems. Just a thought
 
Except Vancouver, of course, because: special snowflake....


City of Vancouver addicted to debt​


“When a person is addicted to a substance…they are not able to control the use of that substance. They continue taking it, even though it may cause harm.” That’s a key sign of addiction, according to a popular medical website.

In the City of Vancouver’s case, the substance is government debt and the city has been addicted for more than a decade. Despite clear signs of an addiction problem, city hall recently proposed an ambitious infrastructure plan that would further increase debt over the next four years.
It’s ultimately up to voters to approve the new infrastructure plan in November’s election but they should consider the city’s finances before making up their minds.

Some background: The City of Vancouver is the only municipality in B.C. that can directly take on debt without permission from the provincial and regional governments. Perhaps not surprisingly, it is also the only municipality in the Metro region with liabilities (debt, employee pension obligations, etc) consistently greater than financial assets (cash, investments, etc).

But accumulating debt has consequences. The money eventually has to be paid back and regular Vancouverites will foot the bill through increased taxes and municipal fees. According to estimates by the city’s finance staff, the cost of servicing new debt for the proposed infrastructure plan is the equivalent of a 2.2 per cent property tax hike over four years.

It’s important to remember that the city, like the rest of us, has to pay interest on debt in addition to repaying the principal. With more money going to service past debt (interest plus principal), less is available for important municipal services such as garbage collection and policing. That means Vancouverites also “pay” for debt indirectly through reduced services.

Importantly, debt servicing costs are set to grow even if the new infrastructure plan fails to move forward. In 2010, debt servicing costs equaled 7.2 per cent of the city’s budget. By 2013, they grew to 7.8 per cent and are expected to reach approximately 9 per cent by 2019. In five years, nearly one of every 10 dollars spent by the city on operations will go to servicing debt and not municipal services.

They say the first step on the road to recovery is admitting you have a problem. Unfortunately, with the newly proposed infrastructure plan, the City of Vancouver is signaling it’s not ready to kick its debt addiction.

Thats just depressing.
 
Thats just depressing.

Not as depressing as this, of course. From last year, but the situation hasn't improved all that much.

You're welcome :)

COVID-19: City of Vancouver at risk of bankruptcy, says mayor​


The City of Vancouver is at risk of going bankrupt, says the mayor, citing a recent poll showing more than half of property owners are not expecting to pay full property taxes this year as COVID-19 financial woes take hold.

In a press release issued on Sunday afternoon, Mayor Kennedy Stewart said his earlier claim that the city would lose up to $189 million in revenue and fee shortfalls in 2020 could be $325 million short of the mark. The city has already laid off 1,500 workers.

“If 25 per cent of homeowners do end up defaulting on their property taxes, we could shed up to an additional $325 million in revenues,” Stewart said. “Losing more than half-a-billion dollars in operating funds in 2020 would devastate the city’s financial position, forcing us to liquify assets and exhaust every reserve fund we have — just to avoid insolvency.”

Property taxes make up the bulk of the city’s revenues at $874 million in 2019.

Stewart said that Research Co. polling commissioned by his office found that a quarter of all property owners would not be able to pay more than half their property tax owed in 2020 and that six per cent were not expecting to pay anything at all.

The poll also found that 68 per cent of Vancouver home owners did not pay their full mortgage on April 1, and that 55 per cent were not expecting to make their full mortgage payment on May 1.

According to the Canadian Bankers Association, over 500,000 Canadians have asked for mortgage deferrals in the wake of the COVID-19 crisis. This comes are banks are increasing interest rates.

The Research Co. survey also found Vancouver renters were being hit hard, with 30 per cent not able to make their full April rents and 63 per cent not expecting to make full rent in May.

Over one million Canadians have so far applied for the federal government’s $2,000 a month COVID-19 emergency benefit.

The survey found that 46 percent of those living in the city had either lost their jobs or experienced a reduction in hours. This has led to half of all households reporting an overall decrease in income, with 24 percent experiencing a significant decrease.

“The research is clear — the city’s finances are going to be negatively affected by COVID-19 due to lost revenues and hard-hit homeowners defaulting on their property taxes,” Kennedy said.

“It’s illegal for Vancouver and other local governments to run deficits, so the only way we can stay afloat is with the help of the federal and provincial governments. Otherwise, local governments will be forced to take drastic measures that will hurt residents and businesses, and significantly slow any post-pandemic economic recovery.”

According to the city’s financial records , the city’s overall financial position improved by $300.8 million in 2019 with accumulated surplus totalling $7.9 billion. The city is carrying $1 billion in debt and last year received an extra $40 million in property tax, as payments from developers plunged. City expenses climbed over $300 million a year between 2015 and 2019.

The city has $1.28 billion in reserves, including $146 million set aside for catastrophic events.

Last week, Mayor Stewart called on the provincial government to give the city $200 million.

The online survey was conducted by Research Co. between April 9 and April 10, 2020. The results for employed residents are based on a sample of 421 Vancouver residents, the results for homeowners were based on a sample of 278 Vancouver residents and the results for renters were based on a sample of 301 Vancouver residents.

 
"Print money" has an end. If it did not, a sovereign government could simply issue cheques for massive universal basic income amounts - say, $100,000 annually. (Or why not more?) People would not need to work, although some might choose to do so. Everyone is at liberty to make up his own ending for that scheme. For those who assume it can't be done, it means that between here and there exists an inflection point from good to bad - we could already be past it, since we are unlikely to recognize it immediately - on some imaginary curve representing social and political well-being and stability, and maybe one sharper than we can handle (events exceeding the capabilities of our decision cycles). We should want to avoid getting too close, let alone passing it, since a little temporary instability could push us past it.

Municipalities seek bailouts and subsidies from provinces, and provinces seek the same from the federal government. All of them ordinarily take their funding from people. Evidence accumulates that people are having difficulty meeting current fiscal obligations. Confiscating assets from those who hold them is not a solution, because not all wealth is held as cash. After confiscating ready money and equities and whatnot from people who have them, who is left with ready money to buy the equities and whatnot? Obviously, demand falls and the prices of equities and whatnot crater anyways.

Getting to a lower debt:GDP ratio is possible by increasing GDP more than debt; it is also possible by inflation. For the first, assuming current policies will lead to atypically high future GDP growth is an "underpants gnome" strategy. For the second, inflation fucks over everyone neither working nor on a strictly inflation-adjusting pension (market wages will mostly inflate to follow) which increases the number of people living in poverty.

So what we have right now is a not particularly controlled experiment in how high debt:GDP ratios can be pushed, a number which I suppose is situationally different for various nations and societies (assuming it is not so and that what works for, say, Japan will work for anyone is unreasonable). We may not know where the edge is, but if we get close to it, the next big crisis is by definition unaffordable (because the "solution" leads to an even bigger crisis).
 
Part of the problem here in Ontario is the low age of students graduating from high school coupled with the lack of a healthy work ethic. Paper routes have gone the way of the dinosaur, pumping gas is no longer an option, and fast food establishments only provide short shifts so as to avoid any benefit costs. Every kid with a laptop is graduating with high expectations of inventing a new game and retiring at 21. A number of European countries still maintain compulsory national service such as military or social work for a year after graduation. Perhaps introducing a similar programme, paid, with basic labour tasks or basic training as options as a mandatory grade 13 or sooner if they chose to leave school might solve a number of problems. Just a thought
Do they still have co-op programs in high school? That was a great way to test the waters of specific trades and make some money.

Also the basic shop, home ec and similar classes were probably the most useful for day to day things. It's nice to know how to do basic plumbing/electrical/home repairs, as well as basic cooking/baking knowledge, or how to balance a checkbook etc, file taxes, etc.
 
Do they still have co-op programs in high school? That was a great way to test the waters of specific trades and make some money.
Strangely enough, they actually use to run PRes BMQ/SQ co-op programs in some areas. Not sure if it's still a thing. Basically a semester off school, paid, that could lead into DP1 and subsequent reserve employment for those who wanted it.

If you dug into the data, you'd find graduates of such co-ops have gone on to become Pilots, CANSOF members, and a whole host of other things. Not to mention a ton have completed tours in AFG & elsewhere. All thanks to a high school co-op program.
 
"Print money" has an end. If it did not, a sovereign government could simply issue cheques for massive universal basic income amounts - say, $100,000 annually. (Or why not more?) People would not need to work, although some might choose to do so. Everyone is at liberty to make up his own ending for that scheme. For those who assume it can't be done, it means that between here and there exists an inflection point from good to bad - we could already be past it, since we are unlikely to recognize it immediately - on some imaginary curve representing social and political well-being and stability, and maybe one sharper than we can handle (events exceeding the capabilities of our decision cycles). We should want to avoid getting too close, let alone passing it, since a little temporary instability could push us past it.

Municipalities seek bailouts and subsidies from provinces, and provinces seek the same from the federal government. All of them ordinarily take their funding from people. Evidence accumulates that people are having difficulty meeting current fiscal obligations. Confiscating assets from those who hold them is not a solution, because not all wealth is held as cash. After confiscating ready money and equities and whatnot from people who have them, who is left with ready money to buy the equities and whatnot? Obviously, demand falls and the prices of equities and whatnot crater anyways.

Getting to a lower debt:GDP ratio is possible by increasing GDP more than debt; it is also possible by inflation. For the first, assuming current policies will lead to atypically high future GDP growth is an "underpants gnome" strategy. For the second, inflation fucks over everyone neither working nor on a strictly inflation-adjusting pension (market wages will mostly inflate to follow) which increases the number of people living in poverty.

So what we have right now is a not particularly controlled experiment in how high debt:GDP ratios can be pushed, a number which I suppose is situationally different for various nations and societies (assuming it is not so and that what works for, say, Japan will work for anyone is unreasonable). We may not know where the edge is, but if we get close to it, the next big crisis is by definition unaffordable (because the "solution" leads to an even bigger crisis).
You have to figure that UBI is a bad idea if, after paying for a study on it, the BC NDP quietly shelve the whole idea...
 
Last time they ran the numbers, the coop cohorts had slightly lower CAF retention than other Army Reserve entry modes.
 
liability issues killed the tech programmes in our area with a significant push from the teacher's union who ganged up on the boards for hiring cabinet makers to teach woodworking and mechanics to teach auto instead of a "qualified professional" i.e. a dues paying university grad. It was a great idea while it lasted. They had girls in auto mechanics and guys taking cooking classes after a while.
 
Not as depressing as this, of course. From last year, but the situation hasn't improved all that much.

You're welcome :)

COVID-19: City of Vancouver at risk of bankruptcy, says mayor​


The City of Vancouver is at risk of going bankrupt, says the mayor, citing a recent poll showing more than half of property owners are not expecting to pay full property taxes this year as COVID-19 financial woes take hold.

In a press release issued on Sunday afternoon, Mayor Kennedy Stewart said his earlier claim that the city would lose up to $189 million in revenue and fee shortfalls in 2020 could be $325 million short of the mark. The city has already laid off 1,500 workers.

“If 25 per cent of homeowners do end up defaulting on their property taxes, we could shed up to an additional $325 million in revenues,” Stewart said. “Losing more than half-a-billion dollars in operating funds in 2020 would devastate the city’s financial position, forcing us to liquify assets and exhaust every reserve fund we have — just to avoid insolvency.”

Property taxes make up the bulk of the city’s revenues at $874 million in 2019.

Stewart said that Research Co. polling commissioned by his office found that a quarter of all property owners would not be able to pay more than half their property tax owed in 2020 and that six per cent were not expecting to pay anything at all.

The poll also found that 68 per cent of Vancouver home owners did not pay their full mortgage on April 1, and that 55 per cent were not expecting to make their full mortgage payment on May 1.

According to the Canadian Bankers Association, over 500,000 Canadians have asked for mortgage deferrals in the wake of the COVID-19 crisis. This comes are banks are increasing interest rates.

The Research Co. survey also found Vancouver renters were being hit hard, with 30 per cent not able to make their full April rents and 63 per cent not expecting to make full rent in May.

Over one million Canadians have so far applied for the federal government’s $2,000 a month COVID-19 emergency benefit.

The survey found that 46 percent of those living in the city had either lost their jobs or experienced a reduction in hours. This has led to half of all households reporting an overall decrease in income, with 24 percent experiencing a significant decrease.

“The research is clear — the city’s finances are going to be negatively affected by COVID-19 due to lost revenues and hard-hit homeowners defaulting on their property taxes,” Kennedy said.

“It’s illegal for Vancouver and other local governments to run deficits, so the only way we can stay afloat is with the help of the federal and provincial governments. Otherwise, local governments will be forced to take drastic measures that will hurt residents and businesses, and significantly slow any post-pandemic economic recovery.”

According to the city’s financial records , the city’s overall financial position improved by $300.8 million in 2019 with accumulated surplus totalling $7.9 billion. The city is carrying $1 billion in debt and last year received an extra $40 million in property tax, as payments from developers plunged. City expenses climbed over $300 million a year between 2015 and 2019.

The city has $1.28 billion in reserves, including $146 million set aside for catastrophic events.

Last week, Mayor Stewart called on the provincial government to give the city $200 million.

The online survey was conducted by Research Co. between April 9 and April 10, 2020. The results for employed residents are based on a sample of 421 Vancouver residents, the results for homeowners were based on a sample of 278 Vancouver residents and the results for renters were based on a sample of 301 Vancouver residents.

Thankfully BC doesn't have a lot of debt, they can afford to bail out Vancouver.
 
Last time they ran the numbers, the coop cohorts had slightly lower CAF retention than other Army Reserve entry modes.
My point was more that co-op programs can lead people down paths (in terms of both career & life experience) that they otherwise would have never considered or even known about.

So while I'm certain you're correct from an institutional (CAF) point of view, it doesn't negate the impact that such programs have had on individuals.
 
The actual road work isn't bad there, go on the side streets of East Vancouver and you see humps and dips about a 1' deep
 
I'm sad none of you saw through my sarcasm. I don't believe a single word I said in my last two posts.

Eaglelord17 expressed these opinion (that it's our choice to remain in a tough situation) and I argued against it, but no one agreed with me or came to my defence.
I wouldn't take what I am saying personally, I am simply saying that things are cyclical and that there are things that a person can do to mitigate it. In many ways the CAF does put more pressure on people than what your average job does as you can't quit it instantly. For many people though they choose to scrape by in these big cities for nothing, when they could be working significantly less and having a much higher standard of living in some of these more rural areas/smaller cities they are always looking down upon. I don't understand the logic of trying to buy in at the top of a market that is generally agreed to be a bubble. The government should be stepping in by making it so if it isn't your primary residence you should have to have a 40-50% downpayment like what New Zealand just did, and that would take all these speculative 'investor' buyers out of the market and really cool the prices.
Like the Feds wouldn't bail out homeowners.

The amount of retirements and investments tied into housing equity would make the 2008 crisis look like a cake walk.
They wouldn't or at least shouldn't. It isn't the governments responsibility in the first place, not to mention people are knowingly taking risky investments because they think they can quickly flip them for more profit. At some point someone will be left holding the bag and it isn't my responsibility as a tax payer to pay for others mistakes. Its called personal responsibility, and we need more of it not less.
 
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