Ontario to hit record $14.1B deficit in 2009(!)

Ξ March 27th, 2009 | → 0 Comments | ∇ business, Canada, government/politics, Maple Lake Ontario, Ontario, Travel/Vacation, United States |

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1 Canadian dollar = 0.813008 U.S. dollars

Ontario will rack up a record $14.1-billion deficit in 2009

Ontario will rack up a record $14.1-billion deficit in 2009 as it commits billions to infrastructure projects and job retraining aimed at pulling the province out of a recession, provincial Finance Minister Dwight Duncan revealed on Thursday in the tabling of his $108.9-billion budget.

The fiscal plan also proposes corporate tax cuts to ease costs for struggling businesses and stimulate investment in Ontario’s sagging economy, which has shed hundreds of thousands of jobs in recent years.

The budget forecasts a deficit of $3.9 billion in the 2008-2009 fiscal year, followed by a deficit of $14.1 billion in 2009-2010. It anticipates Ontario will run deficits for the next seven years, with a proposed return to balanced books no later than the 2015-2016 fiscal year.

The province and the federal government have also agreed to harmonize the provincial sales tax and GST into a single 13 per cent sales tax by July 1, 2010, which Duncan called the “next essential step” in growing the province’s economy and improving competitiveness.

It also allocates a $3.4-billion contingency fund, from which an unspecified amount can be directed toward a bailout package for the province’s beleaguered auto industry once negotiations with automakers are completed.

You know what alarms me about Ontario’s fiscal situation? Just last summer the Canadian dollar was worth more than the American. For the first time ever we spent more to vacation in Ontario at the cottage that in my entire life! And I was completely happy to do so. Happy for Canada, happy for Ontario. But in less than nine months time the Canadian dollar has plummeted to be worth roughly 80 cents on the American buck! Call me fiscally naive but that seems really out of whack. What the heck happened?! And so quickly.

Here in the States we are up a creek with no paddle but this has been building for many years. I have to think that the Canadian economy was in a fix 9 months ago but something was over-inflated and it appeared you all were fine. Best of luck. We’ve got a long slog too so at least you are not alone. Hate to consider this but I’ve been told that as the US goes so goes Canada about 6 months later and darned if  it’s not happening.

Second point. What is with the word “harmonize” when describing the fusing of  the provincial sales tax and GST into a single 13 per cent sales tax? Harmonize? Really? The politicians really know how to spin.

And 13%? Oi! Even with socialized medicine as a benefit and that silly baby supplement that families get– a 13% tax? We have the highest sales tax in the United States and it’s 10.25%. Honestly, when I really start comparing the two countries I have to believe that Canada is not better off than the States. What’s next? Your infant mortality rates going up and life expectancy going down? Do you really want to follow the muddy path that the States has followed– or is it too late? I hope not. On both counts.

 

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