By Mel Wilde
Two things happened on Monday, June 6 2011. The first, and the event that captured almost every headline, was that the Vancouver Canucks got trounced 8 to 1 by the Boston Bruins. The second event that lost out to the hockey story, was that our government tabled its new budget.
I liked most of the items included in our federal budget, but I was sure disappointed by some issues that didn’t get in the budget.
I really liked the new family caregiver tax credit which helps folks who have a
dependent relative, including spouses. They can get a tax credit of $2,000.
Removing the limit on the amount of medical expenses claimed for a financially dependent relative was a much-needed improvement. Along with that, many of my Senior neighbors will get a top-up benefit of $600 for individuals and $840 for couples for those eligible for income supplement.
Across the board this was a budget that helps many average Canadians and for that, I’m thankful. It was a stay the course budget that helps those in need. From seniors to students, it provides green help for home improvement and recognizes that kids need to grow in a healthy world.
There is no doubt that Canadians are getting a huge boost from tax savings that we have been given over the last five years. But, there are serious storm clouds on the horizon and we need to be prepared because we are vulnerable, whether we want to admit it or not.
Last week a small but important tidbit of news flashed around the world. China has divested itself of billions of dollars in United States treasure bonds. From a peak of
$210.4 billion, they are now down to $5.69 Billion in United States short term securities.
For a time they did move funds from the short term American securities to longer term funds, but now they are divesting themselves of those assets. With the United States debt growing by trillions one has to wonder if the government of China is leaving a sinking ship?
Another very troubling storm cloud is in Europe. Many of the banks in countries like Portugal, Greece or Ireland no longer can get cash from commercial banks. They simply have poor credit. Because they are desperate for cash they are using junk bonds as collateral to get funds from the European Central Bank (ECB).
The implications of this issue are huge, with the current amount of questionable securities at over 700 billion and with another 360 million in unsecured loans. If any more countries in Europe fall into a crisis, who will bail them out?
We as a nation are vulnerable to these threats and we need to take steps to cover ourselves should these storms break out. Yes, we are doing a good job managing our own economy, but that won’t help if the big guys fall.
The potential to cut the cost of governing Canada is huge. Literally, billions of dollars could be saved with very little effort, but perhaps it would require the courage to place the “needs” of average Canadians before the “wants” of special interest groups.
Subsidizing political parties doesn’t provide food for the kids or a job for most Canadians. We should not wait years to end the cash cow payouts. Do it all by 2012.
We do not need to fund organizations that assist questionable foreign activity. Canadians should not provide a nickel to activities of the militants in the West Bank and Gaza.
Trying to emulate a swan dancing, may be nice and look pretty, but it is something for another time and another day. When our nation is financially threatened it’s time to get realistic. When times improve, then by all means fund weird and creative adventures, if Canadians want that, but not now.
We have four national television networks. Why should one of them get a subsidy valued at over a billion dollars? Whatever has happened to the principle of competing for advertising dollars? The CBC gets over a billion of our tax dollars every year and it’s time that came to an end.
We have no influence with regard to what is happening in the United States or Europe.
How we arrange our affairs and what steps we can take before the next looming financial crisis hits the world is something we can and should tackle right now.
The billions you and I spend to meet special interest desires is appalling. If you have to go out and work to afford the things you want, why shouldn’t everyone?
Mel is a retired Director of Operations for a large Canadian corporation. He is a noted world traveller and has studied geopolitical issues for many years. His most noticeable interest is in the effects of different types of governance and organizational behaviour.