Justin Trudeau again says Canada has “one of the best balance sheets in the G7” If your assets don’t produce cash flow, it’s not an asset – March 27, 2020,
The inflation of assets doesn’t mean those assets will sell for the asking price, furthermore, if your assets aren’t producing you any cashflow, your asset is actually a liability. Even Canada’s State-Run media pointed this out on video titled: “FACT CHECK: Is Canada’s balance sheet really the best in the G7? you’ll gain a better understanding of how a balance sheet works.
In Toronto Ontario, while Ontario was experiencing a real estate boom the SkyDome was SOLD for $25 Million by Rogers Communications. The Skydome opened in 1989 with a price tag of $600 million, mostly funded by taxpayers!
If you ever watched Blue Jays or Argos games, you’d know that the Skydome was usually empty! That’s because whenever government buys or subsidizes anything, typically the entire process top to bottom is done inefficiently, which is why costs to maintain government-owned assets are usually very expensive and the processes or business systems created by Government people to keep government projects solvent are often more costly than the cashflow those government-run institutions will produce.
I say this because after reading the National post article titled: COVID-19: Trudeau announces increased wage subsidy for businesses Justin Trudeau states the following:
The parliamentary budget officer projected Friday that the spending measures could add up to a deficit of $112 billion next year. Trudeau said that this crisis called for major investments.
“We recognize these are unprecedented investments in the economy, but they are necessary.”
He said the government had given Canada the fiscal room to manage this crisis.
“We also know that Canada’s fundamentals are strong. We have one of the best balance sheets in the G7.” The end of the dollar as we know it | NationalPost.com
I’m writing this as a warning to those of you who currently don’t understand the financial jargon being used by politicians. Please keep in mind how government balance sheets are calculated!
Interesting times ahead!