This presentation is gives insight on how decisions by the government drive revenue and expenses.

1. PAUL YOUNG, CPA, CGA
SEPTEMBER 10, 2017
Canada – CPC and liberals –
Surplus Debate

2.  This presentation discusses clean technology in Canada. The presentation will look at
the market for clean technology and issues facing Canada transforming to low carbon
economy.
Description

3. Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

4.  Surplus – Paul Martin, Justin Trudeau and Stephen Harper
 Beware of Austerity Models – Paul Martin
 Rebuttals – Surplus and Deficits
Agenda

5. Source – Government of Canada
Surplus – Paul Martin and CPC - Harper
• CPC reduced both GST and Income Tax
Rates “Another gift to the government
in the report was that the PBO found
that in relative terms — lower income
Canadians earning between $12,200
and $23,300 benefited the most,
increasing their after-tax income by
four per cent.
• Harper honoured the HST and CST
Transfers
• Harper created two new funds – Gas
Tax and Build Canada fund
• Liberals neglected the infrastructure in
1990s as well as cut transfers payments
to the province
• Harper supported social programs.
• Liberals never discussed how Harper
left a surplus which the Liberals have
turned into a $28B deficit
• Harper’s growth rates are similar to
Trudeau
• Liberals also demanded a stimulus as
part of supporting the minority
government in 2008-2009 -
• http://business.financialpost.com/opini
on/the-trudeau-liberals-make-history-
for-the-highest-per-person-spending-
outside-a-war-or-recession

6. Paul Martin and Austerity
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.
By 2007, spending was just 39.1% of
GDP, or more than 7 percentage points
down from the peak debt year. By
contrast, spending in the OECD area as
a whole fell by only 0.7 percentage
points of GDP from 1998 to 2007, and
fell by 2.6 percentage points in the Euro
area. Canada relied more on spending
cuts than most of the smaller countries
mentioned above.
• All governments
review liabilities
including EI. Martin
took surpluses from
EI and plug his budget
hole
• Liberals slashed
transfers to the
provinces in the
1990s
• Paul Martin restore
transfers in 2006
which also part of the
surpluses being
eliminated.

7.  There is a lot of talk about $13B surplus that Harper inherited when he took office in February 6, 2006.
The LPC statement is true there was a surplus, but what is not being stated is the following:
 Provincial Transfers went from $41.9B in 2006 to 60.1B in 2013. Transfers are averaging about 3.4%
over the past 8 years. There will be argument that the last budget/annual report by LPC the transfers
were 3.6% of GDP. Per my discussion with Mr. Goodale was that he restored the transfers as such there
likely was a spike up to cover years of neglect. I reviewed the 2004 annual report and the transfers
were about 30B.
 The government also made tax cuts to help the GDP by allowing more people to spend money. It is
consumer spending that drives the economy as such the tax cuts help circulate money into the
economy. http://globalnews.ca/news/1356467/tax-cuts-since-2005-net-canadians-30b-pbo/ or
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil130a-eng.htm.
 I could also go into the dedicated moneys of $70B for infrastructure as that is also part of the surplus
management: The Federal government has committed $70B to the provinces and territories over 10
years for infrastructure spending. http://www.infrastructure.gc.ca/pub/infra/gtf-fte/gtf-fte-2013-
eng.html or http://www.infrastructure.gc.ca/alt-format/pdf/RPP-2014-2015-eng.pdf.
Comments and Links

8.  Accumulated Deficit growth has slowed due to growing economy and measures by the government to managed the deficits over the
past several years. Canada was running accumulated deficit of GDP at 41% in 2006 to 33.1 in 2013. Yes, the GDP is higher, but it does
show that harper managed to slow the deficit growth over the past few years.
 Revenue of GDP was 20.1% under Martin, but now is 14% under Harper. Harper and his government has made changes to tax
policies to put more money into people’s pocket as such the overall corporate/personal tax revenue went from 132B in 2006 to 166B
in 2013. The growth of revenue show that the economy has performed well despite the major recession in 2008-2009.
 Corporate Tax Revenue http://www.fin.gc.ca/afr-rfa/2014/afr-rfa-eng.pdf. Corporate Tax revenue is $36B and the feds are schedule
to balance the budget in 2015.
 Debt to GDP is the lowest in the G-8 at 40%. Debt to GDP is about where it was back when Martin was in power in early 2000s.
 Harper has kept taxes down, but put money back into program spending. (see links to below presentation)
 Harper is not responsible for provinces introducing the health premium, carbon taxes, etc. Harper has up the transfers to provinces
and yet nothing is said on that work, why?
 So, the argument could be that part of the surplus was return by upping the transfers to the province as well as putting more money
into taxpayers pocket to spurn consumer spending. The LPC likes to say the surplus was blown, but the reality the surplus was re-
allocated to support economic measures.
Comments and Links

9.  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/.
Rebuttal / Liberal Supporter

10.  Liberal Supporter - What is a surplus? http://www.investopedia.com/terms/b/budget-surplus.asp. So, Martin left $13B surplus, right?
 GST was at 7%, Canada taxes were high for the middle class, right?
 Harper took a balance approach with the surplus which is never discussed by either NDP or LPC
 Trudeau’s comment - https://www.youtube.com/watch?v=y-fo7zhvezk or https://www.youtube.com/watch?v=qbw1Bb32gQ0 Source:
https://www.slideshare.net/paulyoungcga/22b-annual-budget-deficit-predicted-for-canada
 Harper cut taxes: http://www.cbc.ca/news/business/canadians-pocket-30-billion-from-tax-cuts-in-past-decade-pbo-1.2655522
 Martin cut spending - https://www.policyalternatives.ca/publications/monitor/beware-canadian-austerity-model. Harper restored spending and/or honored LPC
commitments when he took office – see below comments:
 Martin/Goodale did restored transfers in 2005, but that was too little too late. Healthcare/education were starved 1.9% of GDP for funding? So, did those cuts
impact healthcare?
 Martin cut direct program spending to many areas like military, vets, etc. and there is no comment, why?
 Harper honored the CST/HST transfer including adding dedicated money for infrastructure - http://www.slideshare.net/paulyoungcga/canada-deficit or
http://www.slideshare.net/paulyoungcga/federal-government-programs-canada or http://www.slideshare.net/paulyoungcga/provincial-transfers-and-program-
spending.
 2014-2015 Annual report - https://www.youtube.com/watch?v=Nc2ffkTA8kM
 Mulcair’s platform full of holes - https://www.youtube.com/watch?v=BzxHVMD7c-E
 Canada debt to GDP - http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/prov_fiscal.pdf
 http://www.cbc.ca/news/canada/liberals-ndp-bloc-sign-deal-on-proposed-coalition-1.700119
 I am all for a good debate, but not when people do not deal with facts. It seems constantly the left always complains about the surplus, but never says really what is
a surplus?
Rebuttal / Liberal Supporter