The Globe and Mail newspaper’s lead story today refers to the not-so-surprising fact that the federal government is well on its way to post another surplus for the current fiscal year. In April and May 2005 alone, Ottawa posted a surplus of $3.1-billion. A strong economy and high energy prices are likely filling up Ottawa’s coffers faster than the minority government cuts deals with opposition members to stay in power.
An earlier post suggested that the federal government should return some of its surpluses to working Canadians. Finance minister Ralph Goodale talks a great deal about “improving Canada’s productivity”. His government should now follow-through and invest more in education, help companies invest in R&D and make serious efforts to combat our brain drain.
Note: I will be posting sporadically this week as I attend to some personal matters.
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6 responses so far ↓
1 Jose Anes // Aug 9, 2005 at 9:38 am
lucky you that have a country with a surplus.
Money and Investing
2 Yeroc // Aug 9, 2005 at 2:21 pm
I would prefer that the government pay down the debt before throwing more money at people. There’s still a rather significant portion of each tax dollar collected allocated to servicing our national debt. If we were debt free taxes could be cut considerably.
3 Anonymous // Aug 9, 2005 at 4:40 pm
curious…what is our current debt?
4 Arbee // Aug 9, 2005 at 10:25 pm
Anes: True, a surplus is far better than a deficit situation. But, you don’t want any government to have too much money. They will find a way to spend it.
Yeroc: Good point though I disagree. Interest rates are so low that debt paydown need not be the top priority now. Even with a string of break-even budgets, debt-to-GDP would go down due to the growth in the economy.
My concern is they will find a way to spend it all (gun registry, HRDC, sponsorship etc.).
Anon: Canada’s current debt-to-GDP ratio is 41%. Our economy is about $1 trillion.
5 Jose Anes // Aug 10, 2005 at 8:02 am
I benefit from learning how our friends across the border are doing the finances, and I guess they may also like to know how things are here:
USA GDP: 11,750,000,000,000
USA Public Debt: 4,580,884,219,639.65
39% of GDP
However, the government owes to itself 3,301,693,023,871.45 USD. A big portion of it is Social Security money that has been collected, spent, and there is no plan to repay it when the Social Security starts providing a surplus.
Bureau of the Public Debt
CIA Fact Book
I wonder what is a safe debt level for a country?
40% 30% 25% 20% ??
Any opinions, ideas?
– Jose
Money and Investing
BTW:
I also believe governments with too much money tend to waste it. Like people, money have to find its way into savings (or pay debt) BEFORE deciding where to spend it (social, defense, etc).
6 Anonymous // Aug 10, 2005 at 10:54 pm
the federal government should return some of its surpluses to working Canadians.
They are. By paying down the debt today, working Canadians benefit tomorrow.
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