Municipal & Provincial Taxes, Regulations, and PRICE CONTROLS: Inflation in Canada is likely to remain a bigger threat than in the United States. Are Austerity Measures Inevitable? #LateStageSocialism – January 17, 2024
Prior to the federal disaster known as Justin Trudeau, Canadian voters have historically been voting in municipal and provincial elections like SOCIALISTS. Well, because of these socialistic voting patterns, Canadians were GAMBLING on good governance, which should have equated to SOLVENT fiscal policies.
Unfortunately for these socialist Canadians, they decided to vote for the federal Liberals and the Federal NDP political Parties, and these two socialist political parties merged together and went on a reckless spending spree, which also included declaring a regulatory war on FOSSIL FUELS.
Truth be told, the only thing holding the Canadian economy together is the strength of the Canadian dollar in the FOREX markets as well as Canada bordering with the United States, having the U.S. as its largest trading partner.
Although for most Americans, Joe Biden has been an ECONOMIC disaster, America does NOT have an Equalization scheme that benefits badly run U.S. States.
Equalization is the Government of Canada’s transfer program for addressing fiscal disparities among provinces. Equalization is financed by the Government of Canada from general revenues, which are largely raised through federal taxes
In Canada, the Federal government is LEGALLY able to reward provinces and VOTERS who vote for bad fiscal policies, which many in Canada who understand politics comprehend that equalization lends itself to socialistic ideals.
Because if let’s say I vote to grow the size of the PROVINCIAL government and regardless of how large my PROVICIAL government gets, I’m rewarded by the Federal government with free money, to help finance the SHORTFALLS of the public sector in my province.
Equalization payments from the federal government go to the PUBLIC SECTORS of insolvent provinces, and this is what most Canadians don’t understand. In America, if a State, which is their equivalent to a Province, runs out of money, the Federal government will NOT reward that State’s government with free money.
This is one of the reasons why Americans tend to be more mobile than Canadians. In California and New York, for example, since the Socialists took over, there has been a mass exodus of PRODUCTIVE working-class people leaving the State for Conservative/Republican States because the COST OF LIVING has come down.
This is actually the main reason why Joe Biden’s economy is better than Justin Trudeau’s economy, there are for example, Republican States with surpluses, primarily because in the U.S. protectionism per capita differs greatly from Canada.
In Canada, in the province of Quebec, for example, their government went as far as to create a Maple Syrup cartel; now for some, they’d imagine this as a great thing for jobs and income to the government, but in actuality, this is a revenue killer for the PUBLIC sector of Quebec because businesses/jobs that otherwise be created in Quebec can’t be created, because their Provincial government basically MADE IT illegal to do so.
And making matters worse, when Quebec has a shortfall of revenue, it’s rewarded year after year by the Federal Government with FREE MONEY. Now, imagine this type of FREE FEDERAL GOVERNMENT welfare becomes part of the culture, and equalization payments, become an entitlement, the people of Quebec will have ZERO incentive to change their behavior.
How this translates to Canada’s central bank is that as the Federal Government declares war on Fossil Fuels via regulations and taxes, and DOMESTIC consumer price INFLATION continues to soar, PRICE controls, which also include WAGES that keep pace with inflation, continue to go up, contributing to higher OPERATING costs, which then become an ever-rising permanent FIXATURE on the Canadian Federal Governments balance sheet.
What this does in practice is that it makes the Canadian DOMESTIC economy UNCOMPETITIVE on the global stage, which actually equates to Canada being more reliant on EXPORTS because, in practice, what higher operating costs do is that it makes it more economical for MOST businesses to, manufacture things OUTSIDE of Canada.
Canadian Equalization Payment Numbers in 2023
- Quebec: $14 billion
- Manitoba: $3.5 billion
- Nova Scotia: $2.8 billion
- New Brunswick: $2.6 billion
- Prince Edward Island: $561 million
- Ontario: $421 million
No, big deal, some might argue; we’re lowering our carbon footprint, they’ll argue, but in practice, this actually equates to more pressure on the CANADIAN dollar because once those manufacturing jobs are gone, and operating costs in Canada are high it means that Canada’s dependence on IMPORTS become more important to the Canadian economy.
This is where the strength of the Canadian dollar comes into play because if the value of the Loonie in the Foreign Exchange markets drops, inflation in Canada will run hotter than it is now, and if inflation runs hot in Canada, and a lot of PUBLIC SERVANTS have their WAGES tied to the inflation rate, you better start to comprehend the disaster I’m referring to.
With that said, sure, the central bank of Canada can lower interest rates, but it better be careful because Canada and the United States are NOT in the same positions.
The way I see things is that Austerity is inevitable at this point, the question is how long will it take and who will pull the trigger, Late Stage Socialism #LateStageSocialism, for me equates to the inevitability of Austerity measures.
Late Stage Socialism is derived from Late Capitalism, or Late Stage Capitalism which assumes that Capitalism is the problem, I contend that in the real world, clearly SOCIALISM is the problem and will be phased out or the FIAT money will hyperinflate as it always does, when the government gets to large.
Interesting times ahead!