I am a Canadian citizen. In 1995, I, my wife and three daughters, came to Canada. It has been more than 25 years. We are very adaptable to life in Canada, but in these two decades, I am most concerned about Canada’s livelihood and economy.
I live in Ontario and am most concerned about the debt situation in Ontario. Although it was also mentioned in my previous articles that Ontario’s total debt was 348 billion Canadian dollars in March 2020 and the annual interest rate expenditure is 12.5 billion Canadian dollars. How big is this number? It means adding 10 zeros after 1 ( or 8 zeros after 125 ), At present, the provincial debt having been raised up to 470 billion. What a rapid increase it is! That is because of the attack of Covid-19. Our provincial government did expense an unexpected great amount of money in medical treatment and welfare supplement.
Ontario’s current national Gross Domestic Product ( GDP ) is 850 billion Canadian dollars, equivalent to Ontario’s debt accounts for 41% of its GDP. Calculated at an interest rate of 3.6 %, an average monthly interest of 140 million Canadian dollars will be paid, which is already a very low interest rate level.
The Canadian Federal government’s debt is even more onerous. In March 2020, Canada’s total debt was as high as 2,434 billion, while GDP was only 2,311 billion. The debt reached 105.3 % of GDP, which is indicating to more money owed than Canadians’ average income. Affected by the new Crown Epidemic in 2021, debt is expected to increase by another 713 billion, bringing the total national debt to more than 3,000 billion Canadian dollars. In addition, the federal debt interest rate is also much higher than that of Ontario. The interest expense calculated on the average total debt in 2021 will reach 378 billion Canadian dollars, which is equivalent to an interest rate of nearly 10.3 %. Why is there such a high interest rate? Other than long term compound interest effect and because 4% of Canadian government bonds are being held by foreign creditors, originally some are calculated in U.S. dollar, some are calculated in Euros, some are calculated in U.K. pounds sterling, and some are calculated in other major currencies in the world. Thus by putting together the average interest rate converted to Canadian dollar will raise the debt interest rate high up to 10.3 %.
Although the new Crown Epidemic virus attack has caused a substantial enormous increased in government debts, yet before 2019, Canada’s Federal debt was already very high, and the Ontario debt was also very high too. Therefore, in the politics of the Canadian government, it must be very clear to take care of the people’s livelihood. We need a responsible government to control spending, strengthen economy, encourage investment, support trades, increasing jobs, creating prosperity, lowering tax, balance budget, cut deficit, access west-to-east pipeline and technological fixes replacing carbon tax; all of which are the major issues in the right track tackling the present needs of Canadians.
First of all, we must gradually reduce the Federal debt, or we need to initiate a referendum to find some way to reduce the Federal debt. If we can gradually reduce the Federal debt bid by bid every year, such as by balancing the budget, even if the budget is not balanced, we must find ways to reduce the Federal debt and continue to reduce un-necessary / over budget expenditure.
It can be considered that every tax payer will add 1 – 10 % of one’s annual assessed tax amount based on higher income persons pay more and less income persons pay less. All such additional tax revenue should be used as a special fund to reduce both Provincial and Federal debts. And also encourage those enormous income people and large business enterprises and industrialists to take the lead of huge amount donations. The government provides preferential policies in return and defines them as significant contribution to our country and allows the Federal and / or Provincial governments to issue certificates of appreciation and medals awarding to generous individuals and corporations. Commending their remarkable acts to make them feel that helping the government and our country clearing off and balancing the debts is a great contribution. By this way, Canada is able to reduce the debts year after year. The government has to legislate that the money received by residents over taxation and contribution must be designated to be used for debt repayment and cannot be used for any other payments nor expenses. Money raised from Province must be used to repay the Provincial debt; money raised from the Federal level must be used to repay the Federal debt. So that very soon we can make our economy turn good and better. In this way, all debts can be cleared within in 5 ~ 6 years. Needless to say, Canada economy will be bound to improve!
There are many problems facing Canada. In particular, Canada is close to the United States, and mainstream society’s ideas and policies tend to follow the United States. But today, Canada should have its own orientation in economics and politics. We do not need to follow the American line 100 %. Our policy is most important for the development of our country and the solution of people’s livelihood issues. The dispute between parties is not a big issue, as long as the whole Canadian people reach a consensus in a key target of whatever Canada is in need is the priority.
In addition, the government should also consider increasing the development of natural resources, especially Alberta. Since the development of crude oil requires a huge amount of funds, if the government does not obtain permission, transporting the developed crude oil to the whole country through railways or pipelines, or opening up the export to the province, will not achieve economic benefits, and no one is willing to invest heavily in the development of oil resources in Canada.
The Federal government is currently governed by the Liberal Party and has adopted an unfair policy against Alberta. Because over 90 % of Alberta citizens are standing on the side of the Conservative Party and three level of Alberta governments has been opposed to the Liberal Party for so many years.
The Liberal Party does not want the Conservative Party to benefit from it. Therefore, it uses the pretext of environmental protection to join with the Canadian Green Party and the New Democratic Party ( NDP ) to place a “ Prejudicial Attack “ on Alberta. According to Bill C-69 which as a fragrant violation of the exclusive constitution jurisdiction of provinces to control the development of Alberta’s natural resources as that will make the prospects of any major pipeline development bleak. And Bill C-48 which bans tanker traffic from a stretch of B.C.’s north coast that only targets one product ( bitumen ) that produced in only one province, Alberta.
Alberta provincial oil is sent to the whole country. Therefore, the province’s economy is becoming more and more difficult. Under such continuous persecution, Alberta may seek independence and cause political turmoil. Quebec may also seek independence, and Canada will not become a nation. Even if it does not seek independence, Alberta may, like Quebec, ask for privileges from the Federal government. This is understandable, because Alberta has been persecuted. I do believe that if the Canadian crude oil transportation is opened up, the quantity of crude oil imported by Canada can be reduced and the oil price can be lowered. Our own external economy will also be booster up, and on the whole, the economic growth of Alberta will lead to an increase in tax revenue, so that the country’s economy will grow, and the people of Canada will not worry for the high cost of petrol oil.
In addition to crude oil, Alberta has the Rocky Mountains contain various other precious metal resources, including ore. Like British Columbia, it has agricultural and forestry resources, especially timber. If these resources can rely on exports to earn income is a big profit. Because the United States not only hinder our crude oil pipeline cross the border to America and has not relaxed its tariff policy on Canada, thus we need to pay high tariffs on steel and timber exports to the United States. Therefore, we cannot
In terms of business, at present, only China can invest in large amounts and purchase Canadian natural resources, and only China can carry out large-scale trade in natural resources with Canada. Because China is booming, China also hopes to have a good relationship with Canada. However, due to various circumstances, especially from the beginning of the Meng Wanzhou incident to the present, the relationship between Canada and China has deteriorated drastically in the past three years, and Canada is even in cooperation with U.S.A. considering deporting Meng Wanzhou to the United States. Is it actually necessary for Canada to do this? This situation has affected the Liberal Party’s governance, because most Chinese origin Canadians in Canada do expecting for a long term good relationship in between Canada and China.
Looking at the entire country of Canada, the Liberal Party’s total membership is about 12 ~ 13 % more than that of the Conservative Party. The Conservative Party’s total membership is about 10 ~ 12 % more than that of the New Democratic Party. So, just based on the number of each parties’ total membership predicted for voters turnout, the Conservative Party cannot surpass the Liberal Party. If the Conservative Party can the referendum in the Federal Election, it always because the Liberal Party had made big mistakes in international or domestic affairs. For example, the reason why Harper was able to represent the Conservative Party in power for nearly twelve years was mainly because the Liberal Party’s misjudgment of the poll tax at that time being afraid of the consequence that it would involve a lot of financial compensation and cause the loss of seats. And also scandals like corruption in the Liberal Party having been continued several years, so most of the non-party citizens especially the Chinese Canadians did come out to vote, eventually, the Conservative Party won the Federal Election.
Trudeau became the Prime Minister of Canada because of his present appearance and the influence of his father. However, because he is not mature enough and lacks consideration for many problems, he believed he needs to show his identity, so he spent a lot of money to decorate the official residence over tens of millions expenses, yet Harper hadn’t been renovated in 12 years. Visiting the Queen, Trudeau spend high consumption in hiring a nanny and family expenses, although the absolute figures are not high, but let the people disappointed in him, thinking that he is not a leader dedicated to Canada and the welfare of the people.
However, due to Trudeau’s better luck, the Conservative Party during the following years, has no better competitor to win the Federal Election. In the epidemic virus attack, that began in November 2019, he made the right decision to spend most of the fiscal budget and increase the borrowing of Canadian debt to provide living allowances and subsidies to ordinary civilians, including middle-class and low-income people. He was right to do so, because during the epidemic, the people are not living good, and many people cannot work and have no income. How to pay for housing rent and mortgage and even un-affordable to maintain a normal life nor the business owners able to maintain profit sufficient to pay for rent and salary! Therefore, this epidemic has changed Trudeau’s image, which is also a good thing for Canada. No matter when he proposes a general election this year, he can win. It‘s just a matter of winning more and less. Unless the Conservative Party really bring out new issues such as the solution for reducing Federal debt and the Alberta pipeline problem, then the trend will go towards the Conservative.
But this does not solve the livelihood of the people in Canada at present and in the future. Sooner or later, we will have to repay such a large debt loan, otherwise we will be like many European countries such as Greece, Portugal, Spain and other small European countries. They all have a lot of foreign debts that cannot be re-paid, and their welfare is not reduced, which leading to their needs fade. Borrowing money and relying on the support of other countries ended up stagnating the entire country’s economy.
Fortunately, China can lend them money, otherwise they will not be able to borrow money in international banks, or the credit of borrowing money will be greatly reduced. I don’t want Canada to be the same.
If we are no longer reducing the Federal & Provincial debts and save debt interest, then it will be very dangerous. Now, every province has debts, Ontario has the second largest debt, and the largest debt is Nova Scotia. Reducing debt savings can also reduce the interest paid each year, and the remaining money can be used to do a lot of public affairs to alleviate problems such as medical care, construction, and education. Even if the government has surplus money, it needs to save money. It cannot spend it arbitrarily or use it to do some insubstantial infrastructure. It also needs to save resources and requires the cooperation of citizens. At present, there is no better way to reduce debt. I hereby appeal to the people, hoping that we, as citizens of Canada, can take part of our responsibilities, because we have enjoyed a lot of benefits over the past years, and the level of welfare has never declined. The people should also give back to the country so that the country can be able to be better year after year.
Reducing debt is URGENT! The government should start to call for a referendum to set up a special account raising money merely to reduce the Federal and Provincial debts. And to legislate, whatever additional / excess money received from the public donation and on top of the revenue in taxation must be designated to be used to repay debts and cannot be used for other payments. The accounts must be clear. The money raised in debt reduction, whether donated by individuals or enterprises, must be used to reduce debts, from provincial taxes to the return of Provincial debt, and from Federal taxes to the return of Federal debt, so that as applied, our economy surely will be improved.(By Kenny TSUI)
