# Federal Budget Revealed



## carverman (Nov 8, 2010)

The 2016 Liberal Budget is being tabled in the H of C.

No surprises that this budget is targeted for the middle class and infrastructure spending to create jobs, but
what is a bit alarming is the fact that balanced budgets as we know it is now a thing of the past.

The new budget deficit will grow to 29.4 billion by 2020-2021. 
http://www.thestar.com/news/canada/2016/03/22/what-to-know-about-trudeaus-2016-federal-budget.html

i'm sure that Ms. Wynne will also review the provincial budget to determine if their promises to balance the budget over
the next 4 years is really necessary.
What may be known for sure is that the tax payers will be shelling out more and more in creative taxes imposed by
two levels of gov't in Ontario.


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## MyCatMittens (Oct 20, 2015)

carverman said:


> i'm sure that Ms. Wynne will also review the provincial budget to determine if their promises to balance the budget over
> the next 4 years is really necessary.
> What may be known for sure is that the tax payers will be shelling out more and more in creative taxes imposed by
> two levels of gov't in Ontario.


Why balance budgets? That doesn't get you elected - fiscal responsibility doesn't register as important for the vast majority of voters.. spend spend spend... which is reflective of their own personal finance habits.

I'm not sure how spending on infrastructure creates long term jobs. I guess they don't need to be long term.. only need to last until the next election.


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## slacker (Mar 8, 2010)

Those of you using "switching funds" to defer/avoid taxes, pay attention: http://www.budget.gc.ca/2016/docs/plan/budget2016-en.pdf

"Prevent the deferral of capital gains tax by investors in mutual fund corporations structured as switch funds"


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## olivaw (Nov 21, 2010)

The deficit will be 29.4 Billion in the first year. There are smaller projected deficits in future years but the Liberals have no plan to submit a balanced budget in their current mandate.


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## OptsyEagle (Nov 29, 2009)

$29 Billion dollar deficit. 

Every single one of us will be $1,000 poorer by this time next year. Since not every single one of us pays taxes or ever will, you can assume that every one reading this post and paying taxes will owe another $2,000 or more by this time next year, and this is expected to go on year after year, for the foreseeable future.

Could you imagine the response to this budget if we all received a tax bill in the mail next week for $1,000. It would be the honest thing for them to do instead of saying, hey maybe you won't have to pay for it and someone else's unsuspecting kid will pick up the tab a few decades from now. Some kid that, today, can't even vote. How nice is that?


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## none (Jan 15, 2013)

Deficits are extremely useful tools to stimulate the economy. This is one of those times. OR we could cut interest rates AGAIN and just piss all the money into housing at risk.


Anyway, the budget is absolute terms will increase, however, as a proportion of the Canadian economy it will actually go down. That's a good thing.

There are a lot of people who want to follow Europe and austerity into oblivion. That's stupid.

I hate that kid sports credit. What a pain in the butt that was.


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## Eder (Feb 16, 2011)

Apple fell close to the tree.


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## sags (May 15, 2010)

A very good budget, considering the times we are in.


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## webber22 (Mar 6, 2011)

What about page 225 in the above link
INTRODUCING A BANK RECAPITALIZATION “BAIL-IN” REGIME
...This would allow authorities to convert eligible long-term debt of a
failing systemically important bank into common shares to recapitalize the
bank and allow it to remain open and operating


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## AltaRed (Jun 8, 2009)

That is already the case as brought in by the PCs for preferred shares (NVCC compliant issues). Is that now being proposed for bond debt too?


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## AltaRed (Jun 8, 2009)

sags said:


> A very good budget, considering the times we are in.


We are not in recession. Why the need for deficit financing other than to provide some life support to AB, SK and NF at the current time? Can you imagine WTF would happen to deficits if we were in recession?


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## carverman (Nov 8, 2010)

OptsyEagle said:


> $29 Billion dollar deficit.
> 
> Every single one of us will be $1,000 poorer by this time next year. Since not every single one of us pays taxes or ever will, you can assume that every one reading this post and paying taxes will owe another $2,000 or more by this time next year, and this is expected to go on year after year, for the foreseeable future.


Well as they say, the poor don' t pay taxes (at least not income taxes)and the rich don't pay taxes..
and thanks to my DTC and substantial medical/dental expenses as well as supporting my (remarried) ex ($300 a month), 
I don't pay taxes either..well actually I do, but I get my tax dollars back with the refund.


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## OptsyEagle (Nov 29, 2009)

Eventually someone pays. That is my point. Hopefully it is some generation after mine, but that is one big deficit to bury for that long.

I agree with Altared. The economy is far from a level that would justify that type of spending. The problem with government spending is that it appears an economy eventually gets dependant on it and it is like crack. It needs more and more to get the required jolt. Our ability to afford such a habit was spent a long time ago.

All my opinion, of course.


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## tygrus (Mar 13, 2012)

sags, this is not a good budget. Theres mostly spending on pet projects not on anything thats going to stimulate our economy in the long run. I see nothing that will make canada better off on the world stage. Social housing, native schools, public transit, green energy and bailing out bombardier wont do a thing for us globally. 

We needed ideas to get our major exports to market or to create value added industries around them. Thats where we will grow. This budget is DOA.

The PM should have been dangling some major carrots and sticks too. Like we will give bombardier a billion, but only if energy east gets approved. And to Alberta, we will give you a nice cash infusion if its spent on diversifying your economy. And ontario, your cash infusion is dependent on getting your 3rd world debt under control.


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## andrewf (Mar 1, 2010)

Not sure there is anything too newsworthy in the budget. It seems to have all been telegraphed early.

It seems like a lot of the budget deficit has come from significant decreases in projected real GDP growth this year and next, and lower oil prices.


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## olivaw (Nov 21, 2010)

I have mixed feelings. The economy is soft enough that most of us can accept a modest deficit. It's more difficult to accept the government's failure to outline a plan to restore balanced budgets during their mandate.


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## andrewf (Mar 1, 2010)

I am satisfied with a plan to keep debt:GDP low and stable. I would like them to plan to trend down to 25% debt:GDP (rather than the ~30% the fed government is at now), and then plan to maintain that level.


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## tygrus (Mar 13, 2012)

These were canadas top exports


Oil: US$77.8 billion (19% of total exports)
Vehicles: $60 billion (14.7%)
Machines, engines, pumps: $31.1 billion (7.6%)
Gems, precious metals: $19 billion (4.7%)
Electronic equipment: $13.2 billion (3.2%)
Plastics: $12.5 billion (3.1%)
Aircraft, spacecraft: $12.3 billion (3%)
Wood: $11.8 billion (2.9%)
Aluminum: $8.2 billion (2%)
Paper: $7.7 billion (1.9%)

How does anything in the liberal budget enhance that part of the economy because we as citizens cant spend locally until we have made an income globally.

I still maintain it would have been better money spent to give it to 100 different companies and make them set up shop here with their headquarters and jobs.


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## olivaw (Nov 21, 2010)

There is something to be said for public/private partnerships but governments in this country have a poor track record of choosing the right companies for partnership. Investment in hard infrastructure, education and research represent a better long term use of public funds, IMO. 

I'm not convinced that a stable federal debt to GDP ratio should be considered the new balanced budget. Total public debt in Canada is closer to 90% of GDP than it is to 25%


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## none (Jan 15, 2013)

I liked the budget. It doesn't really help me really but I see it as more of a house cleaning budget. I liked all of the education stuff (don't have to pay loans if making <25K per year etc). Work on our crumbling infrastructure, and clean up the child credits mess that Harper made.

Yeaps - I take it back. Apparently I'm getting $337 tax free per month because I had a massive RRSP claim this year (reduced my net income) and I have a 6 year old. SWEET! Thanks taxpayers!

http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html

Hmm... that's a lot. Also b/c I can claim my kid as a dependant I get another ~2500. Plus RESP 20% is another $500.

That seems a bit excessive to be honest. Breeders get a lot of breaks.

I feel bad for the middle aged single people. They always getting totally screwed.


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## NorthernRaven (Aug 4, 2010)

AltaRed said:


> We are not in recession. Why the need for deficit financing other than to provide some life support to AB, SK and NF at the current time? Can you imagine WTF would happen to deficits if we were in recession?





andrewf said:


> I am satisfied with a plan to keep debt:GDP low and stable. I would like them to plan to trend down to 25% debt:GDP (rather than the ~30% the fed government is at now), and then plan to maintain that level.


For debt:GDP ratios, that denominator grows. So if GDP is hypothetically $1.7 trillion and growing at 3% annually in nominal terms, there could be a deficit of $51 billion and the debt:GDP ratio would remain constant. Of course debt service costs as a proportion of expenditures would increase, be subject to financing costs, etc, so the actual equilibrium point would be much lower. And of course over a cycle you'd want to be balanced, or reduce debt ratios, and blah, blah, blah. The point is that a growing economy dilutes ratios to some degree, and that should be taken into account when juggling all this stuff in one's mind. 

For the recession point, population is also growing, say at over 1% annually. The economy would then need to grow at that pace in real terms just to keep real per-capita GDP constant. StatsCan seems to show real GDP growth of 1.2% in 2015, and a quick look around seems to have forecasts for 2016 at the same level this year before possibly rising in 2017; presumably budget stimulus is baked into that.


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## dogcom (May 23, 2009)

Well since his deficit is not on from his election promise he can then substantially decrease his refugee promise. In light of what is happening in Europe and their complete failure on being nice and opening the doors, we can slow it down substantially and save some money there.


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## andrewf (Mar 1, 2010)

Raven, not quite. Debt can't increase at a % of GDP each year, it can grow at the same rate as GDP but applied to the debt. Say Canada's GDP is around 2 trillion, and the debt is around $600 billion. If there is nominal GDP growth of 4%, the government can borrow 4%*$600 billion = $24 billion and keep the debt:GDP ratio constant.


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## NorthKC (Apr 1, 2013)

I'm of mixed feelings too on the budget. It's not overly bad but it's not great either. I'm just more concerned about the high deficit.

Things I'm in favour of:
- higher grants for students including the middle-income for once (could have used that when I was in uni)
- I definitely like the income threshold before you start paying the loan back. Too many times I have seen my peers working crappy jobs just to make their loan payments while trying to find employment in their field. This will help students move to a city where necessary for their work and get set-up without this looming payment over their head. $25K is reasonable.
- Shorter work hours required for EI for those in regions where unemployment is higher than average. This helps more than you realize as job search often takes 3-6 months longer than in other regions. Shorter waiting period is definitely a plus as now it won't take a month before the money finally comes in
- Expandable affordable housing especially in smaller communities. Finally!
- Improving rail service - a much better commute than cars and lower carbon footprint too!
- Eliminating ECE and using a CCA class instead. No more 15-20 years of amount still on the books. 


Things I'm not in favour of:
- Maybe I'm missing something but this combined taxable child tax benefit (from what I understand) will end up being lower by the time taxes are paid on this. On the plus side, it's nice to see one benefit rather than multiple benefits across the board
- Extended EI benefits for those affected in Oil-producing regions are great but I hope those who qualify realize that the EI income is fully taxable. They may get quite the shock on their tax return
- Still nothing for disability benefits for wounded veterans
- A couple of business loopholes closed like the related active business income in passive companies. It's just shifting income around. They still pay those taxes in the end.


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## NorthernRaven (Aug 4, 2010)

andrewf said:


> Raven, not quite. Debt can't increase at a % of GDP each year, it can grow at the same rate as GDP but applied to the debt. Say Canada's GDP is around 2 trillion, and the debt is around $600 billion. If there is nominal GDP growth of 4%, the government can borrow 4%*$600 billion = $24 billion and keep the debt:GDP ratio constant.


Whoops, mentally multiplied by the wrong side in my head; shouldn't do this stuff under insomnia. The point was that the ratio broadly remains stable at some negative budget figure, given GDP growth.


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## OptsyEagle (Nov 29, 2009)

none said:


> That seems a bit excessive to be honest. Breeders get a lot of breaks.


Except when you consider that it is those same kids that get most of the burden of paying all this back some day.

So, yes, for the love of your country, let's start breeding some more taxpayers ... and fast.


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## tygrus (Mar 13, 2012)

none said:


> http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
> 
> That seems a bit excessive to be honest. Breeders get a lot of breaks.


Well none, we can always bring in the next generation of tax payers from syria or other worse places if you want. 

I would much rather our own population having kids


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## AltaRed (Jun 8, 2009)

Maintaining 'debt to GDP' ratios is dangerous especially if GDP growth does not occur as assumed. It is especially dangerous to do that in non-recession times as annual deficits could become structural deficits.

In non-recession times, it would seem an opportune time to pay down debt while: a) one has GDP growth to do so, and 2) we are not burdened with high interest payments. The whole concept of taking on more debt when we could take advantage of reducing it in these 'good times' is bizarre at best.

Bill Morneau himself said 'why not spend when interest rates are low'? Sounds like an irresponsible consumer to me.


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## OptsyEagle (Nov 29, 2009)

AltaRed said:


> Bill Morneau himself said 'why not spend when interest rates are low'? Sounds like an irresponsible consumer to me.


I hope when the historian's look back at what caused the "Developed Countries Debt Collapse" and the ensuing reduction in living standards that resulted, the quote above is forever stamped into the history books so that the generation that gets to deal with all the pain, will forever remember what caused it.

Do they really think they can just keep borrowing more and more, without any intention of ever paying it back, and that it will not create a rechoning for someone in the future. My god why can't the population in the world see this huge meteor coming straight at us. What does it take? A bigger Greece?

To test my concerns, just go down to your neighborhood bank and tell them that you want to borrow $3,000 every year. You want to borrow an additional amount to pay the interest on it and you have virtually no intention of ever paying it back. Let us know how it turns out.


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## coptzr (Jan 18, 2013)

How many people do you know plan that in the next 4 years they will make more so they should spend more and go further in to debt now?

Is it a good lesson to teach graduating students to not worry about the important responsibility of paying those you owe first? I will easily bet this new budget will promote getting a job and spending your new found income on all those items you wanted like a better place to live, reliable transportation, new clothes, etc...The government gets what they want, a new generation of spend what you got. We've all done it. First year out going from spending $500 a week to making $500 a week, its like winning the lottery. About 5 years later we begin to complain about the cost of living. I worked days, nights, and weekends while studying and had to borrow a car to go to interviews. Got job in 2 weeks, had to travel 1hr each way for a month borrowing vehicles and carpooling until I could buy a cheap car. I have buddies who signed tech deals a week out and bought new car after first pay stub. 10 years later they were jobless and staring at a lingering student loan.

I don't agree with picking 100 companies for example and giving them money. I only makes the people in control rich.

How about offering reimbursements after proof of certification or graduation. More specifically for those while working trying to further their skills or education.


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## RBull (Jan 20, 2013)

This is a very bad budget and all Canadians should be very concerned about the financial direction and cavalier attitude towards spending/debt this government is taking. 

Increasing debt for all Canadians at a time when we are not in recession is irresponsible. Even worse is projecting a growing debt throughout your mandate with no forecast of when budgets will even balance. I cannot begin to imagine what will happen to the countries finances when/if we do go into recession during the mandate of the current government. 

It is not difficult to operate a government that spends money it does not have and explain it not as spending but as an investment that Canadians told them they wanted. Governments should have the courage and the sense to chart a course that is financially sound and in the long term best interests of Canadians. Unfortunately there is no evidence this government is even remotely capable or interested in this. 

AltaRed and OptsyEagle have it pegged.


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## tygrus (Mar 13, 2012)

As I said a few posts ago, our real GDP cannot increase unless the value of our goods increases. That means either more sales, lower interest rates or a devalued currency. Two of those are already in place, so how does the T2 budget increase sales of our goods. How does social housing do that. How does native schools do that. How does more child benefits do that. How does green energy which cant be exported do that. How does public transit do that.

What this budget is a stop gap hoping the real economy picks up in the next business cycle and then they can tax back the deficits when we dont notice. But its nothing even close to an investment.


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## tygrus (Mar 13, 2012)

I dont know what these politicians are thinking. Instead of doing whats right for the country, they are always looking for votes.

For instance, T2 should have been in quebec for the last month negotiating energy east. He should have laid it on the line in montreal and told them he will bail out bombardier, but only if EE gets approved. 

And the natives too, you want 10 billion for your schools, then you back down off all those bogus protests and let a few of these big projects get going. 

And Obama too. You want us to be all kumbya beside the campfire, then you need to let a pipeline or two go ahead.

Maybe Trump should negotiate for us.


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## stantistic (Sep 19, 2015)

To me, a westerner, the statistics for top exports seem suspicious with the absence of "agricultural products". Canada is the world's second largest producer of canola and the sixth largest producer of wheat. (Source: Wikipedia)


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## coptzr (Jan 18, 2013)

Unfortunately this reality will only happen when the government tells us they can no longer support us or our employers. They cut services before and technology has saved us. When manufacturing is gone our systems will be too deteriorated to bring in new business.
The nicest buildings I have been to lately were family services and hydro/power generation. Bank teller areas have all been under construction to bring new life, but there is no customer line up except for government cheque day, be prepared to wait at least 1/2hr. New road construction is happening but older rural roads revitalization and 20-30 yr old city streets are very rough. Our city water/sewer system is aging quickly with road collapse more often.
Trying to find a plumber or electrician for repairs/renovation is pitiful. These are the people we need to support. Not the union's and large new construction firms. Help the small company running the roads 12-16hr/day.


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## tygrus (Mar 13, 2012)

stantistic said:


> To me, a westerner, the statistics for top exports seem suspicious with the absence of "agricultural products". Canada is the world's second largest producer of canola and the sixth largest producer of wheat.


But as a portion of our economy, its only 5 or 6 billion.


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## coptzr (Jan 18, 2013)

Nobody thinks about agriculture. Even while they eat their cereal, order milk added to their coffee, or BBQ their favorite steaks. Food has become so readily available. Don't be fooled by a fancy tractor in the field or swayed by new protein shakes that farmers don't need help or not needed. They should promote and support downtown development.


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## sags (May 15, 2010)

The Liberals purposefully underestimated GDP growth and set aside $6 Billion a year as a contingency fund.

It is quite likely the actual deficit will be far lower than the $30 Billion projection.

Much of the additional spending will flow back to the government from increased taxation revenues, so the net increase in debt will be even less.


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## NorthernRaven (Aug 4, 2010)

One has to be careful using "household" metaphors for a country's economy. People die, countries don't, and any number of other considerations. Banks would be happy to loan someone $3000 every year if they were getting $5000 raises every year and able to pay back the money. Also, 1.2% real GDP growth isn't technically recession, but given population growth it isn't "good times" either, probably more like "standstill" or a bit worse. This doesn't necessarily mean that "all borrowing is automatically good", but overly simplistic household budget analogies are probably going to fail.

Building or replacing needed infrastructure either maintains or increases productivity, among other things. If the government can borrow long-term at 1-2%, and there is slack in the relevant industries, it may be something of a no-brainer to finance some of that now. There may be softer "investments" that are harder to quantify, but may still produce improved "returns" - larger numbers of better educated workers, for instance. Or things like reasonable GIS increases, while an expenditure, may be largely spent as immediate consumption, and have an offsetting effect on demand. 

Different people may have different estimates of the multipliers, or future growth, or whatever, but shouting "we're going to be Greece in 5 years" or whatever is just noise without at least some sort of order of magnitude story of why this will be so.


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## RBull (Jan 20, 2013)

sags said:


> The Liberals purposefully underestimated GDP growth and set aside $6 Billion a year as a contingency fund.
> 
> It is quite likely the actual deficit will be far lower than the $30 Billion projection.
> 
> Much of the additional spending will flow back to the government from increased taxation revenues, so the net increase in debt will be even less.


They also likely underestimated the price of oil at $25. There is a danger that if the deficit appears less than planned due to these distorted assumptions the government will continue to spend this money we don't have regardless. 

It is also arguable how much of the actual spending of money we don't have will actually benefit the economy and come back to government as revenue. It is doubtful "much" of this will. If one believes this one could argue no amount of spending would be too much since there would always be some return, since the cost to future taxpayers is almost never considered. What we do know is the cost of running large deficits and ballooning debt will lead to more money being spent on debt servicing and less for actual programs. It forever burdens taxpayers since governments never plan to pay off debt. If they did in an orderly fashion and it was legislated without exception during better times I could accept some amount of true "investment" in infrastructure.


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## OptsyEagle (Nov 29, 2009)

Even if it did come back as revenue, which I highly doubt it will, it is of no value if they just go and spend it, like they always do, and it never gets put towards the debt they used to help create it. This is the problem.

As for Northernraven's comment about the bank being OK as long as the raises were there. How do you prove the raises will be there. Since it cannot be done, neither would a loan of this type ever be given. Why. Because it would be what any educated human being would call "bad banking". When a sovereign nation does it. An entity that cannot file bankruptcy or ever be bailed out, it goes way beyond a bad idea. It is economic suicide. Maybe, and I say maybe lightly. Maybe not for you or me, but I find it highly unlikely anyone's children, who were born in the new millennium, will be able to escape this political disaster.

May god have mercy on their soles.


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## NorthernRaven (Aug 4, 2010)

RBull said:


> They also likely underestimated the price of oil at $25. There is a danger that if the deficit appears less than planned due to these distorted assumptions the government will continue to spend this money we don't have regardless.





Budget2016 said:


> Given these risks, for fiscal planning purposes, the Government has judged it appropriate to adjust downwards the private sector forecast for nominal GDP by
> $40 billion per year for 2016 through 2020.
> 
> The size of the $40 billion forecast adjustment takes into account the following factors:
> ...


From a quick scan, it appears they are adjusting the private sector nominal GDP forecasts downwards by $40 billion annually, which is roughly equivalent to using a $25/barrel oil price rather than $40. If the price is actually closer to the higher level, government finances would actually be *better* off, since the positives of the higher prices should offset the negatives. I think this conservative assumption is the source of the $6 billion "contingency" mentioned in the news; WTI futures seem to be around $40 currently, although how they'll bounce over the year, who knows.


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## RBull (Jan 20, 2013)

NorthernRaven said:


> From a quick scan, it appears they are adjusting the private sector nominal GDP forecasts downwards by $40 billion annually, which is roughly equivalent to using a $25/barrel oil price rather than $40. If the price is actually closer to the higher level, government finances would actually be *better* off, since the positives of the higher prices should offset the negatives. I think this conservative assumption is the source of the $6 billion "contingency" mentioned in the news; WTI futures seem to be around $40 currently, although how they'll bounce over the year, who knows.


Yes, they've likely low balled things to try and look better than their forecasts. As I stated before even if these assumptions are conservative there is a danger this deficit hungry government will spend all or much of the upside elsewhere anyhow.


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## CPA Candidate (Dec 15, 2013)

Trudeau is paving the way to financial ruin, just like his father, leading to a painful comeuppance a decade down the road. He's "stimulating" an economy that isn't in a recession and will recover with time on it's own.

Let's be serious about what this is all about - the lefty dream of big government playing a leading role in the economy and our lives, with a big invoice to our future selves.

What a disaster.


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## Mukhang pera (Feb 26, 2016)

OptsyEagle said:


> May god have mercy on their soles.


I suppose that mercy will be needed because they'll not be able to afford shoes. Maybe their souls could also use some mercy.

Sorry, I could not resist.


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## sags (May 15, 2010)

A lot of economists say the Liberals should have spent more, so there seems to be a differing of opinions among economists.

Business leaders seemed to be in support of more government spending as well.

Canada isn't currently in a technical recession, but it was last year and is still bouncing right along the line between economic low growth and no growth.

If the Liberals wait until Canada is in an official recession, they would already be many months too late. 

The impact of low oil prices is still reverberating through the economy and the worst may be yet to come.

As it is, it will take months or years to get some projects started and for the economy to feel the impact of more spending.


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## AltaRed (Jun 8, 2009)

Wonder where those Keynesian economists will hide when total debt sinks the ship? Keynesian economics can have an impact to jump start frozen liquidity or if invested in high return (even public) projects. Sadly, too often there is no accountability in spending OPM and when there is political partisanshp involved. Keynesian economics worked wonders in the Great Depression to put money into the system, but it was spent on getting people jobs on 'real' public projects, from hydro-dams to national park development, etc.


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## gibor365 (Apr 1, 2011)

CPA Candidate said:


> Trudeau is paving the way to financial ruin, just like his father, leading to a painful comeuppance a decade down the road. He's "stimulating" an economy that isn't in a recession and will recover with time on it's own.
> 
> Let's be serious about what this is all about - the lefty dream of big government playing a leading role in the economy and our lives, with a big invoice to our future selves.
> 
> What a disaster.


Poor Canada :upset: what a ridiculous government .... on the other hand , Canadians deserve this disastrous "government" .... stupidity should be punished!


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## RBull (Jan 20, 2013)

CPA Candidate said:


> Trudeau is paving the way to financial ruin, just like his father, leading to a painful comeuppance a decade down the road. He's "stimulating" an economy that isn't in a recession and will recover with time on it's own.
> 
> Let's be serious about what this is all about - the lefty dream of big government playing a leading role in the economy and our lives, with a big invoice to our future selves.
> 
> What a disaster.


Correct. This is starting out as a disaster. 

I lived through the PET nightmare and voted against it. I had strong visions of a repeat pattern and it's clear this will be the case, regardless of rhetoric to the contrary.


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## carverman (Nov 8, 2010)

RBull said:


> Correct. This is starting out as a disaster.
> 
> I lived through the PET nightmare and voted against it. I had *strong visions of a repeat pattern and it's clear this will be the case, regardless of rhetoric to the contrary*.


-------------------------------------------------------------------



> The Child is father of the Man


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## carverman (Nov 8, 2010)

gibor said:


> Poor Canada :upset: what a ridiculous government .... on the other hand , Canadians deserve this disastrous "government" .... stupidity should be punished!


Still better than what the Russkies have now.


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## The_Tosser (Oct 20, 2015)

CPA Candidate said:


> Trudeau is paving the way to financial ruin, just like his father, leading to a painful comeuppance a decade down the road. He's "stimulating" an economy that isn't in a recession and will recover with time on it's own.
> 
> Let's be serious about what this is all about - the lefty dream of big government playing a leading role in the economy and our lives, with a big invoice to our future selves.
> 
> What a disaster.


The only disaster here is a CPA candidate plus evidently a pile of supposedly educated canadians on the whole that don't know a goddamn thing about Sovereign currency issuers and their role.

Too damn funny. Great education system we have here huh? rofl.

Oh we're going broke, our children will have to pay for it,..rofl holy **** 50 years ago i heard this...lmfao. Wasn't true then, ain't true now. The only difference is back then i/we had an excuse since most of us was youngin's. What's 'our' excuse now? lol

Ignorance is no excuse people. Get a grip on yourselves.


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## NorthernRaven (Aug 4, 2010)

AltaRed said:


> Wonder where those Keynesian economists will hide when total debt sinks the ship? Keynesian economics can have an impact to jump start frozen liquidity or if invested in high return (even public) projects. Sadly, too often there is no accountability in spending OPM and when there is political partisanshp involved. Keynesian economics worked wonders in the Great Depression to put money into the system, but it was spent on getting people jobs on 'real' public projects, from hydro-dams to national park development, etc.


Actually, there are some famous thought examples on stimulus spending in demand-challenged economic times:


Keynes_GeneralTheory said:


> If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.


Or the "helicopter money" examples. For the Great Depression, the US actually went into recession again around 1937-38, often attributed to premature monetary tightening. The massive "stimulus" of WWII (and buildup) that gave a final lift to the economy. A "Keynesian" fiscal policy doesn't mean "deficit spending always good"; it is more "deficit spending compensates for and/or stimulates depressed demand".

For the 1970s, a major problem was a stagnant economy with high inflation ("stagflation"), not just pure deficit spendingl Inflation had to be tamed, and Canada wasn't alone with similar problems.


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## gibor365 (Apr 1, 2011)

carverman said:


> Still better than what the Russkies have now.


Just give to Liberals some time :biggrin:

P.S. Still Russkies live better than Ukrainskies now and much better than during Eltzyn


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## none (Jan 15, 2013)

gibor said:


> Just give to Liberals some time :biggrin:
> 
> P.S. Still Russkies live better than Ukrainskies now and much better than during Eltzyn


Really shooting for the stars. :/


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## andrewf (Mar 1, 2010)

The_Tosser said:


> The only disaster here is a CPA candidate plus evidently a pile of supposedly educated canadians on the whole that don't know a goddamn thing about Sovereign currency issuers and their role.
> 
> Too damn funny. Great education system we have here huh? rofl.
> 
> ...


Yeah, I think people don't really get it. Fed debt in 1962 was $15 billion, and higher as a % (33%) of GDP than today. We are hardly crushed under the weight of that $15 billion debt left to us from Canada of 1962. That $15 billion is now a mere 0.75% of GDP. Woe betide the Canadians of 2062, for whom that $15 billion from 1962 will represent 0.13% of GDP.


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## humble_pie (Jun 7, 2009)

basically we got the budget the liberal party campaigned for. No surprises.


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## MyCatMittens (Oct 20, 2015)

andrewf said:


> Yeah, I think people don't really get it. Fed debt in 1962 was $15 billion, and higher as a % (33%) of GDP than today. We are hardly crushed under the weight of that $15 billion debt left to us from Canada of 1962. That $15 billion is now a mere 0.75% of GDP. Woe betide the Canadians of 2062, for whom that $15 billion from 1962 will represent 0.13% of GDP.


Perhaps I am wrong, but didnt we have significant average GDP growth between 1960 and 2000, and very little (in comparison) since? What GDP growth do we need to minimize the impact? Or do these things just balance themselves over time?

Our debt servicing costs are astronomical - is this not a concern? What happens when rates rise? Do we just print a ton of money and screw the savers?


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## mordko (Jan 23, 2016)

humble_pie said:


> basically we got the budget the liberal party campaigned for. No surprises.


Nope, because:

- Infrastructure spending is half of what they promised.
- There was an election promise to contain deficit at $10bn. The budget is asking for 3 times as much (!)
- Don't recall them campaigning on the basis of eliminating textbook tax credit for students. 
- There is a whole lot of crazy expenditure, like giving $millions to a First Nation lobby group.


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## andrewf (Mar 1, 2010)

MyCatMittens said:


> Perhaps I am wrong, but didnt we have significant average GDP growth between 1960 and 2000, and very little (in comparison) since? What GDP growth do we need to minimize the impact? Or do these things just balance themselves over time?
> 
> Our debt servicing costs are astronomical - is this not a concern? What happens when rates rise? Do we just print a ton of money and screw the savers?



How much of federal government revenues are used to pay interest on the debt:


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## mordko (Jan 23, 2016)

andrewf said:


> How much of federal government revenues are used to pay interest on the debt:


Watch the trend reverse.


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## Moneytoo (Mar 26, 2014)

gibor said:


> Poor Canada :upset: what a ridiculous government .... on the other hand , Canadians deserve this disastrous "government" .... stupidity should be punished!


«Blessed are the meek:
for they shall inherit the earth.»

Just did our taxes. We paid $105K in 2015. It never bugged me before I joined this forum that the decisions are made by the majority who don't even earn this much - despite having a great headstart of being born here and inheriting houses and cottages and businesses and what not. Hope I won't be alive when our (great-)grandchildren go to the Liberal Arts program, as they'll be too stupid and/or lazy to get a real profession and earn a good living - besides, by then every Canadian will be getting 100K per year from birth (it might only be worth 10 grand in current dollars, but who cares? Lenin would be proud - there won't be any more rich, everyone will be equally poor, doing whatever they want - and the weed will be legal and cheap , like vodka in Russia )

The amount of homeless on the streets seems to be increasing every day. Soon some parts of downtown Toronto might become like zombie-land near San-Francisco's city hall... But, hey, at least the climate will get better - I mean, warmer - oh, wait, but it won't... :hopelessness:


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## lonewolf (Jun 12, 2012)

The destroyer of the money world government does not understand the economy has x amount of energy period. The government creates jobs in the public sector it will take jobs away from the efficient private sector. The laws of nature the government can not change. Energy can not be created or destroyed.


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## lonewolf (Jun 12, 2012)

Emotion energy in motion of the masses has structure which is fractal in nature. Can be seen in chart of price pattern of stock markets which is a representation of the mood of the masses. Emotions energy in motions causes one to act & is the driving force of the economy. Every emotion as a kinetic element an impetus to act in relationship to the particular emotion involved. The structure of the energy results in structure of actions. Energy is needed to act, precise energy will result in precise action. Action comes after energy & can not come before energy for energy is needed to act. The government thinks it can act to cause energy LOL ( some of my philosophy on economy & energy true or false?)


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## Moneytoo (Mar 26, 2014)

*Newburg*



lonewolf said:


> ( some of my philosophy on economy & energy true or false?)












How far up the hiearchy this degeneration goes is uncertain, but it may well be that a large portion(one third?) of the galaxy may be affected.


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## MyCatMittens (Oct 20, 2015)

andrewf said:


> How much of federal government revenues are used to pay interest on the debt:
> http://www.budget.gc.ca/2016/docs/images/intro27
> 
> Should I infer:
> ...


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## andrewf (Mar 1, 2010)

The point is that servicing our debt was far worse in the past than today.


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## RBull (Jan 20, 2013)

andrewf said:


> How much of federal government revenues are used to pay interest on the debt:


Thanks for posting this. One must consider some of this trend is due to hyper low interest rates that we lucked into helping reduce debt servicing. However, it is concerning that the new government intends to slightly reverse this positive trend. 

IMO, 26 billion thrown away to service debt is still a waste that could go to programs benefiting Canadians, or simply reduce taxes. I doubt most people on this site would consider spending 10% of their income to service their own debt, and that percentage only factors in federal debt. 

To me it's also critical for Canadians to look at combined provincial, municipal and federal debt levels which in Canada are now $1.3 trillion or about $36,000 per citizen and growing. The cost of this is $60 billion per year even in this extreme low interest rate environment. 

We may read all this stuff about lowest debt:GDP in G7 etc but that's like comparing ourselves to an obese person when looking at healthy weight levels. These numbers should be much lower.


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## mordko (Jan 23, 2016)

@RBull - spot on.


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## lonewolf (Jun 12, 2012)

Tax payers need to default the central banks. Why pay central banks to borrow money? Need the good old days when we borrowed from tax payers interest free  Anyone on welfare needs to do community service for food, shelter & clothing.


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## tygrus (Mar 13, 2012)

moneytoo, you need a corporation


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## Moneytoo (Mar 26, 2014)

tygrus, not really an option since my husband and i like our current jobs (and our companies wouldn't re-hire us as contractors) - but even if it were, isn't there a plan to go after private corporations? To make sure that the rich will be paying higher taxes to subsidize not so poor who can choose to donate the money to the real poor?


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## gibor365 (Apr 1, 2011)

> Lenin would be proud - there won't be any more rich, everyone will be equally poor,


 Looks like this is Liberals objective :stupid: . However, like in CCCP, everyone will be equal, but some willbe more equal than others (party and unions high-ranked officials) 

P.S. After I maxed up RRSP contribution, I still own money to CRA, even though I claimed a lot of medical expenses, children day care and don't have any equities cash account . And every year it will be worse and worse


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## Moneytoo (Mar 26, 2014)

gibor said:


> P.S. After I maxed up RRSP contribution, I still own money to CRA, even though I claimed a lot of medical expenses, children day care and don't have any equities cash account . And every year it will be worse and worse


"Luckily" we both still have lots of unused RRSP contribution rooms (oh all those years of blindly paying taxes and naively thinking that the government knows better what to do with the money.. ) Otherwise (and if we didn't have to take care of our daughter and parents) we'd probably be gone somewhere warm already - but looks like it'll remain just a daydream for at least 5 more years: http://www.expatfocus.com/expatriate-belize-retiring-pensions


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## andrewf (Mar 1, 2010)

I think you guys are indulging in the narcissism of small differences. Trudeau is no Lenin, Harper was no Mussolini.


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## Moneytoo (Mar 26, 2014)

You're right, and Putin is no Hitler - although I hear Trump might be... lol










via The confused


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## CPA Candidate (Dec 15, 2013)

While Trudeau is not a communist, I don't think he values business/private enterprise very much as a force of economic growth and prosperity. He is very much your big government liberal elite. He surveys the landscape charts a path to use government to enact his version of how society should operate. He's all aspiration and positivity, pretty short on realistic ideas or sustainable solutions. 

But the Canadian voting public is very much addicted to government spending promises so he's in a very comfortable place and could probably win a second term without achieving anything in his first and breaking a host of promises. Even taxpayers don't seem to care that he is spending their money they don't have. Irresponsible debt binges have become totally acceptable to nearly everyone in Western society. 

Somehow we all deserve a life we can't afford and just kick the can down the road insisting that people are more important than balanced budgets. Well, where does all that wealth come from? People. Somehow is it acceptable to rob future Canadians to buy votes in the present.


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## AltaRed (Jun 8, 2009)

I dunno know. Putin uses goons (like the stormtroopers/brownshirts) to intimidate and even make people disappear. Russia's institutions are not strong enough to counteract Putin. 

Trump may try the same thing, except I believe the other 2 pillars of US governance, namely the legislative and judicial branches, will be enough to keep a bully reasonably in check. Vetoes will be overridden and the Supremes will crimp the most severe White House excesses.


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## mordko (Jan 23, 2016)

Trudeau is a prince with no education or experience in anything except for teaching drama.


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## tygrus (Mar 13, 2012)

Let me give an example. Natives are wanting more opportunity and investment in their communities, education infrastrucutre etc. So I am PM and I hear this and I agree to meet with them, hear their demands. Great, now the compromise. To grow your communities, we need our economy to grow in parallel, not just give you cash from some other group. So you want 8 billion in funding, then you let a oil project or pipeline go through to pay for that.

Another, so Alberta you are always getting caught in the boom and bust and you are too scared to build a refinery. Fine the govt will come in and part backstop it in exchange for equity shares and when its making money we can distribute our share to some other part of canada.

Or for quebec and manitoba, our leaders in green energy (hydro). We want to ramp that up and start dumping it across canada and into the states. We will backstop a hydro project in each of your provinces and keep the natives from blocking it. 

Or BC, your greatest asset is our cultural link to indo-china an up and coming big trade area. We want to leverage your business experience and connections in those communities to increase our trade 5%. 

I could go on and on.


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## Moneytoo (Mar 26, 2014)

mordko said:


> Trudeau is a prince with no education or experience in anything except for teaching drama.


No offence, but I read somewhere recently (probably Garth' blog as I don't read around a lot) that Canadians are the biggest whiners in the world, so... http://first-world-problems.com


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## Koogie (Dec 15, 2014)

CPA Candidate said:


> But the Canadian voting public is very much addicted to government spending promises so he's in a very comfortable place and could probably win a second term without achieving anything in his first and breaking a host of promises. Even taxpayers don't seem to care that he is spending their money they don't have. Irresponsible debt binges have become totally acceptable to nearly everyone in Western society.


Remember we get the elected government that reflects the majority (sort of). Most Canadians are awash in personal debt, mortgage debt and god knows what other kinds of debt (moral ?... lol) and live for the moment and spare no thought for their own future or future generations.

Therefore they elect a government which reflects their "values" and spends money like they do. A government elected by such people does not (nor should it probably) have any different attitude than the people that support it. 

Leadership and restraint ? Don't be naive ...


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## gibor365 (Apr 1, 2011)

Moneytoo said:


> : http://www.expatfocus.com/expatriate-belize-retiring-pensions


"You must send a copy of the birth certificate of each person who would be moving to the country," - do you have your birth certificate?! Curious what income they require if you're not retired yet?


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## gibor365 (Apr 1, 2011)

Koogie said:


> Remember we get the elected government that reflects the majority (sort of). Most Canadians are awash in personal debt, mortgage debt and god knows what other kinds of debt (moral ?... lol) and live for the moment and spare no thought for their own future or future generations.
> 
> Therefore they elect a government which reflects their "values" and spends money like they do. A government elected by such people does not (nor should it probably) have any different attitude than the people that support it.
> 
> Leadership and restraint ? Don't be naive ...


Just wanted to write exactly same post , but you did it already  Completely agree!


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## AltaRed (Jun 8, 2009)

tygrus said:


> Another, so Alberta you are always getting caught in the boom and bust and you are too scared to build a refinery. Fine the govt will come in and part backstop it in exchange for equity shares and when its making money we can distribute our share to some other part of canada.


Off-topic, but can't let this one go. There are no economics in major refining in AB. It has been examined to death since at least 1970. Why build infrastructure if there is negligible to negative return on investment? We want our gov't to invest in infrastructure that provides at least a 'full cycle' cost benefit (to Canada) return.


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## sags (May 15, 2010)

What about pipelines AltaRed ?

The news overnight was that the world was awash in oil. Record levels of storage and capacity nearing the maximum. 

So..........is there a market for pipelines..........east, west or south ?

Personally, I have nothing against pipelines that are built safely in a path of least environmental danger, with a substantial fund allocated for clean ups.

But there isn't much point anguishing about pipelines to nowhere.


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## tygrus (Mar 13, 2012)

If the product was refined to a lighter stage, it would be come more valuable and allow more of it to be moved on the pipelines we already have. It would also be easier to clean up in a spill. Solves about 10 problems in one stroke.


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## AltaRed (Jun 8, 2009)

Well, AB and SK do need to have another outlet for their crude in order to avoid the severe discounts they now experience - and it is to tidewater. Either Energy East or TransMountain. Sometimes people will argue that rather than billions spent on crude oil pipelines, why not spend it on refineries? It is not so simple. Refineries are extraordinary expensive AND the end products would still have to be pipelined out through currently non-existing product pipelines, i.e. gasoline, jet fuel, diesel at al pipelines... or heaven forbid flammable tank rail cars. 

People who think they have brilliant ideas about what to do simply do not have an understanding of what is required or what it would cost. Course it would help if industry or gov't would provide some Econ101 information on why refining in AB does not make sense.


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## AltaRed (Jun 8, 2009)

tygrus said:


> If the product was refined to a lighter stage, it would be come more valuable and allow more of it to be moved on the pipelines we already have. Solves about 10 problems in one stroke.


Cannot ship highly volatile, high(er) vapour/flash point and thus high(er) pressure product in existing pipelines. It is way more complex than one understands. Look at all the problems reversal of Line 9 is having. Imagine trying to ship gasoline/diesel/jet fuel.


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## tygrus (Mar 13, 2012)

AltaRed said:


> Cannot ship highly volatile, high(er) vapour/flash point and thus high(er) pressure product in existing pipelines. It is way more complex than one understands. Look at all the problems reversal of Line 9 is having. Imagine trying to ship gasoline/diesel/jet fuel.


Enbridge has an entirely line dedicated to NGLs and another to lighter products like kerosene. Its already being done. Alliance pipeline ships multiphase natural gas products. 

If alberta wants out of the boom bust, they are going to have to bite the bullet.


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## AltaRed (Jun 8, 2009)

With yet another pipeline. There is no room in existing lines, albeit Alliance could be converted from gas at some $1-2B perhaps if there was a will and a way.


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## olivaw (Nov 21, 2010)

AltaRed said:


> Well, AB and SK do need to have another outlet for their crude in order to avoid the severe discounts they now experience - and it is to tidewater. Either Energy East or TransMountain. Sometimes people will argue that rather than billions spent on crude oil pipelines, why not spend it on refineries? It is not so simple. Refineries are extraordinary expensive AND the end products would still have to be pipelined out through currently non-existing product pipelines, i.e. gasoline, jet fuel, diesel at al pipelines... or heaven forbid flammable tank rail cars.
> 
> People who think they have brilliant ideas about what to do simply do not have an understanding of what is required or what it would cost. Course it would help if industry or gov't would provide some Econ101 information on why refining in AB does not make sense.


Many Albertans do feel that we need to make an investment in refining capacity here at home. It is not the most economically viable solution. Indeed the risk is high, profitability remains uncertain and it may turn into a boondoggle. Unfortunately, it may be the only solution that affords us the opportunity take charge of our own destiny. As a land locked province we rely on cooperation from other provinces or the United States to get our product to market. Recent experience suggests that we're going to get no cooperation at all. Quebec opposes Energy East (which is not even a new pipeline). BC is not going to approve the Northern Gateway pipelines. Keystone XL through the US is effectively dead.

What other reasonable choice do we have? We can continue to ship our product via rail and wait for the inevitable backlash after the next spill. We can hope, against hope, that the Liberals will manage to accomplish what the Conservatives could not and allow a pipeline projects to proceed. Or we can refine the product closer to the source and ship lighter and safer crude at a higher price. It may not be the best economic choice but it may be the only choice available to the Alberta oil industry.


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## andrewf (Mar 1, 2010)

I think Keystone has a chance if Hillary is elected. She's pretty business-like, and Trudeau is harder to cast as an environmental villain in the pockets of big oil as Harper was. I think Keystone is probably the best solution.


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## AltaRed (Jun 8, 2009)

olivaw said:


> What other reasonable choice do we have? We can continue to ship our product via rail and wait for the inevitable backlash after the next spill. We can hope, against hope, that the Liberals will manage to accomplish what the Conservatives could not and allow a pipeline projects to proceed. Or we can refine the product closer to the source and ship lighter and safer crude at a higher price. It may not be the best economic choice but it may be the only choice available to the Alberta oil industry.


Fair enough. I don't disagree... I did spend most of my career in the oil patch myself. Strategic need may trump project economics, but the residents of AB are going to need to understand the taxpayer is going to have to foot a good portion of the bill to pave the way.


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## tygrus (Mar 13, 2012)

AltaRed said:


> Fair enough. I don't disagree... I did spend most of my career in the oil patch myself. Strategic need may trump project economics, but the residents of AB are going to need to understand the taxpayer is going to have to foot a good portion of the bill to pave the way.


I think that alberta has another option that should be considered. IMO the oil industry in its current form has another 20 years of life left in it. Renewables and climate change are going to alter it. Canada is going to be a middle oil exporter in such a scenario, couple million bbls per day. The sands will die first, so instead of investing there, start drilling the hell out of the light basins like South Sask and start divesting away from heavy crude. There are billions of barrels of untapped sweet crude in the Bakken. Instead of a refinery then its old time wildcatting exploration.


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## Justme39 (Mar 25, 2016)

*Budget Bail-Ins*

Just wondering if anyone is concerned about the bail-in section of the budget, and seizing bank assets in case of failure. Anyone have more information on this? I'm not able to post a link. 

It (budget) is not clear about regular deposits, or if it is only anything above CDIC protection. I’m also pretty sure that GICs would be subject to seizure. A lot of retired people keep their savings in GICs so this would put those savings at risk IMO. We need some clarity and soon but I’m not sure many have picked up on this issue yet. I'm interested in your comments, thanks


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## NorthernRaven (Aug 4, 2010)

Justme39 said:


> Just wondering if anyone is concerned about the bail-in section of the budget, and seizing bank assets in case of failure. Anyone have more information on this? I'm not able to post a link.
> 
> It (budget) is not clear about regular deposits, or if it is only anything above CDIC protection. I’m also pretty sure that GICs would be subject to seizure. A lot of retired people keep their savings in GICs so this would put those savings at risk IMO. We need some clarity and soon but I’m not sure many have picked up on this issue yet. I'm interested in your comments, thanks


It really depends on which faction of the Trilateral Commission secretly controls the legislation. If it is only the Freemasons it probably won't be too serious, but if the Illuminati prevail it could be very bad indeed. And just the thought of the Chiliast Tendency reviving keeps me awake at night.


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## Justme39 (Mar 25, 2016)

NorthernRaven said:


> It really depends on which faction of the Trilateral Commission secretly controls the legislation. If it is only the Freemasons it probably won't be too serious, but if the Illuminati prevail it could be very bad indeed. And just the thought of the Chiliast Tendency reviving keeps me awake at night.


Huh.. I'm talking about the page 223 of the budget zero hedge fund seems to think that bank depositors are at risk, not just shareholder. 

INTRODUCING A BANK RECAPITALIZATION “BAIL-IN” REGIME
To protect Canadian taxpayers in the unlikely event of a large bank failure, the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers. This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Such a measure is in line with international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”. The Government is proposing to introduce framework legislation for the regime along with accompanying enhancements to Canada’s bank resolution toolkit. Regulations and guidelines setting out further features of the regime will follow. This will provide stakeholders with an additional opportunity to comment on elements of the proposed regime


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## AltaRed (Jun 8, 2009)

There is nothing there about seizing deposits. That is 'crying wolf'.


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## NorthernRaven (Aug 4, 2010)

...and there were in those days signs and portents, and the lion lay down with the lamb, and spake as with a forked tongue, and the sky rose red with the blood and devastation to come, and... what, oh, it says "_eligible_, _long term debt_"? Um, well, never mind; so, bingo on Friday, then?


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## Moneytoo (Mar 26, 2014)

NorthernRaven said:


> Um, well, never mind; so, bingo on Friday, then?


I have a Lotto Max ticket for tonight's draw, researching Cayman Islands banks to move my winnings offshore to be safe lol Although after last Friday's "one winning ticket for the $60-million jackpot was purchased somewhere in Toronto" - I think I can keep sleeping well at night lol


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## Justme39 (Mar 25, 2016)

AltaRed said:


> There is nothing there about seizing deposits. That is 'crying wolf'.


Okay, thanks for a reply, Idea how the other posts relate... I was beginning to think I was in the wrong thread or something.

I took it that _"This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating"_ to mean that if we have money in the bank, that money could be seized for a bail out.


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## AltaRed (Jun 8, 2009)

Deposits are not shareholders (common or preferred) nor debt holders (secured debt (typically bonds and loans) or unsecured debt (typically debentures, etc.) of the corporation. Preferred share issues for the past few years have already needed to be NVCC compliant, meaning they can be converted into commons in a crisis. Banks have been busy redeeming their old non-NVCC compliant preferred share issues with new NVCC compliant issues. I will never buy these new prefs. Better to hold common equity instead.

Added: Besides, CDIC insures deposits to $100k anyway, and it is easy for a couple to arrange their GICs and cash to have well over half a million dollard protected by CDIC


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## Eder (Feb 16, 2011)

We should all thank Alta Red for taking the time to post as he seems the only one with a clue about many things here...(btw us tax payers are on the hook building an unneeded refinery in Alberta already)


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## AltaRed (Jun 8, 2009)

Deleted


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## Moneytoo (Mar 26, 2014)

Justme39 said:


> Okay, thanks for a reply, Idea how the other posts relate... I was beginning to think I was in the wrong thread or something.


Try reading other blogs, not just zerohedge, and you might start understanding the (uncalled for) sarcasm and making fun of your post: http://www.greaterfool.ca/2016/03/25/merchants-of-fear


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## Justme39 (Mar 25, 2016)

AltaRed said:


> Deposits are not shareholders (common or preferred) nor debt holders (secured debt (typically bonds and loans) or unsecured debt (typically debentures, etc.) of the corporation. Preferred share issues for the past few years have already needed to be NVCC compliant, meaning they can be converted into commons in a crisis. Banks have been busy redeeming their old non-NVCC compliant preferred share issues with new NVCC compliant issues. I will never buy these new prefs. Better to hold common equity instead.
> 
> Added: Besides, CDIC insures deposits to $100k anyway, and it is easy for a couple to arrange their GICs and cash to have well over half a million dollard protected by CDIC


Thank you for the explanation, will read the other blog. I also noticed that another poster mentioned the same thing in the other budget thread, post #24


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## andrewf (Mar 1, 2010)

AltaRed said:


> Fair enough. I don't disagree... I did spend most of my career in the oil patch myself. Strategic need may trump project economics, but the residents of AB are going to need to understand the taxpayer is going to have to foot a good portion of the bill to pave the way.


And frankly, I think Alberta should pay for it. I don't see why the federal government should have to pay for pipelines, refineries or cleaning up old oil wells when the industry and the province enjoy windfall profits that are promptly blown on tax cuts and current consumption when times are good.


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## humble_pie (Jun 7, 2009)

perhaps this is not the right thread to continue discussing refinery proposals for alberta tar sands oil?

nevertheless it's a vital issue, all canadians are stakeholders.

here's all i know. Early in the transcanada pipe thread, a knowledgeable US gas executive who called himself *val* joined the thread. The issue of why canada doesn't refine her own alberta tar crude was raised. Folks supporting a home refinery said it would offer employment & technology upgrade, plus a value-added product to sell into world markets.

*val* replied that the costs of building a refinery capable of handling heavy bitumen are so astronomic as to be unbearable for canada. He said that such refineries have already been recently build in china, which is why our alberta heavy oil has to be shipped to china.

currently a trio of embryonic canadian companies are proposing to build canada-based refineries for alberta heavy oil. There has been plenty of media coverage. All 3 companies have recruited critical support from first nation stakeholders.

in addition to the reasons mentioned above (employment, technology, know-how, value-added product) a canadian refinery would mean that alberta heavy oil would be shipped out of BC ports as LNG, ie in a lighter & less toxic form, if a leak or spill should occur.

one of the proposals - from the vancouver Aquilini group - suggests that the refinery could be located east of the Rockies, in eastern BC or in alberta. The other 2 proposals call for refineries at kitimat or prince rupert.

here is a summary of all the refinery project submissions for kitimat alone. There are other projects that focus on prince rupert as refinery site & LNG terminal.

the kitimat list deceives the eye because it lists oldest projects first. Don't be fooled, some of those have been abandoned or modified. Current kitimat projects are at the bottom of the list.

http://www.cosbc.ca/index.php/regulatory-updates/itemlist/category/23-kitimat


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## andrewf (Mar 1, 2010)

How could oil be refined into LNG (liquified natural gas)? Oil is usually refined into a mixture of diesel, gasoline, kerosene, etc. Not much in the way of methane (NG).


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## humble_pie (Jun 7, 2009)

you know, i was asking myself that same question!

but looking through the vast & confusing wealth of documentation on the 3 major proposals to refine alberta bitumen for export from west coast BC ports, i found that 2 of them included talk about building LNG terminals (there are fights over whether kitimat is too far inland et patati et patata.)

i left out about Nexen which apparently intends to build its own BC refinery for export to its owner, CNOOC of china. I left it out because i couldn't figure out if nexen would be a 4th proposal or a business arrangement with one of the 3. I mean, there's said to be korean, chinese, singaporean, malaysian, reportedly spanish money already in there backing each of the 3 principal refinery projects.


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## AltaRed (Jun 8, 2009)

LNG projects are completely different than oil refinery projects (different feedstock). Part of the confusion may be that some refer to Natural Gas liquefaction plants (LNG) as refineries which, while large, with a lot of columns, are nowhere near as complicated and as expensive as oil refineries. LNG plants are energy intensive due to the refrigeration and pressure necessary to liquefy methane.

The LNG proposals have mostly died on the vine. Christy Clark and her bumbling cabinet, after being naively starry eyed, have gone relatively silent. I think I am on record somewhere as having said Canada would be lucky to get even one LNG project. I know I have been saying it for many years. It is easy to forget that LNG prices are tied to oil prices in Asian markets, and it is easy to forget that LNG can be developed and shipped from places like Brunei and Papua New Guinea, and even Australia more cheaply than North Amerian. Even Qatar gas (LNG) is making it to the Far East and that is because the supply cost is next to zero. 

Canada is a high priced jurisdiction and is hampered by lack of easy and cheap access to tidewater. Never mind the tree huggers who don't understand that if it does not come from Canada, it comes from somewhere else. Constraining production from Canada does nothint to constrain the supply of fossil fuels. It is really that simple.


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## humble_pie (Jun 7, 2009)

altaRed all may be simple to you but it's truly alphabet soup & smog to most of us.

there are some big names in the BC LNG terminal applications, just as there are in the quebec LNG port proposals. You are saying, then, that they are all dead in the water because places like papua & qatar can get gas to chinese factories faster & cheaper?

back to the oil refineries, i take it you are not saying that the 3 oil refinery projects for alberta crude are also dead in the water? these three appear to be:

1) the Pacific Future Energy group (Ovide Mercredi & Shawn Attleo, plus SNC lavalin preparing the project submissions) will ship neatbit by railcar to kitimat;

2) the Eagle Spirit Energy group (vancouver's Aquilini group plus all BC first nations along the proposed pipeline route) will ship dilbit by pipeline to prince rupert or else will refine it first in eastern BC or alberta;

3) the Clean Kitimat group, a project of newspaper magnate David Parker, will ship neatbit by railcar to kitimat.

the neatbit avantage sounds convincing to us ignorant folks, until we read that it has to be heated to inject it into the railcars & it also has to be heated at the other end to get it out of the railcars.


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## AltaRed (Jun 8, 2009)

Not sure what you refer to as neatbit... but I call it dilbit (diluted bitumen). Depending on the blend (to decrease viscosity), heat may be required for it to flow 'readily'. 

Every major has looked at LNG throughout North America for some time. Back in the '70s, it was to import LNG because of NG shortages. The last 10 years or so, it has been the other way around. Several proposals, not just in Canada, but the USA. Every time it looked like there was enough spread between NG supply cost and LNG sales price, all the big boys set about doing project feasibility studies, even to the point of gas export licenses and FEED (Front End Engineering Design) before price spread collapses stalled everything yet again. The Alaska Gas Pipeline was looked at in depth 3 times (the last time was in 2000-2001 and over $125 million was spent before it collapsed) and the Mackenzie Gas Pipeline was looked at, at least twice. Lots of engineering and project feasiibility money has been spent on a wide variety of gas projects to no avail. I have been involved in at least a few of them over the decades. It is a tough business.

I am a skeptic about the refinery proposals as well. It will take a significant input from the taxpayer to make them go. Either in the way of accelerated tax credits, a direct infusion of crown royalty oil to guarantee some feedstock, non-recourse financing with government loan guarantees, etc. I am not optimistic. We will be in it for $1B or more as seed money. Maybe better than C series jet aircraft?


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## Justme39 (Mar 25, 2016)

AltaRed said:


> Deposits are not shareholders (common or preferred) nor debt holders (secured debt (typically bonds and loans) or unsecured debt (typically debentures, etc.) of the corporation. Preferred share issues for the past few years have already needed to be NVCC compliant, meaning they can be converted into commons in a crisis. Banks have been busy redeeming their old non-NVCC compliant preferred share issues with new NVCC compliant issues. I will never buy these new prefs. Better to hold common equity instead.
> 
> Added: Besides, CDIC insures deposits to $100k anyway, and it is easy for a couple to arrange their GICs and cash to have well over half a million dollard protected by CDIC


Okay.. . The trouble with the budget document is that it provides no details. Turner in his blog is inferring that it's the same as the Conservative proposal because it uses the same language. That may be, but we don't know until we see details. At the very least it's odd that the Liberals would use the language of a bail in if that isn't what they intend.


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## humble_pie (Jun 7, 2009)

AltaRed said:


> Not sure what you refer to as neatbit... but I call it dilbit (diluted bitumen). Depending on the blend (to decrease viscosity), heat may be required for it to flow 'readily'



i get the neatbit/dilbit comparison because i like to cook & they're calling neatbit thick as peanut butter with low flash point. It doesn't flow unless it's heated. Therefore it won't roll out of railcars nor will it likely explode out of railcars in the event of a railway accident, say neatbit supporters.

i believe i glimpsed in the welter of refinery pages that it was Future Energy that coined the term neatbit. Both Future Energy & Kitimat Clean will transport alberta oil by rail as neatbit.

dilbit, as i understand it, is bitumen diluted enough that it will flow through pipelines. Eagle Spirit has chosen pipeline shipment of dilbit.


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## andrewf (Mar 1, 2010)

neatbit is dilbit with the diluent removed. It does not flow unless heated. The proposals of transporting neatbit involve heating railcars to get the material to flow. I guess it is much safer in the event of spills, as it solidifies at near room temperature.


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## humble_pie (Jun 7, 2009)

andrewf said:


> neatbit is dilbit with the diluent removed. It does not flow unless heated


surely this fact has already been stated enough times




> The proposals of transporting neatbit involve heating railcars to get the material to flow.


not really. Heating an empty railcar will not cause cold neatbit to flow from the exterior *into* an oil tanker, regardless of whether that car has been heated or not.

even during the extraction procedure, i doubt the entire railcar would be heated. The concept of a simple pot being heated on a kitchen stove would not apply here. There are various engineered procedures that could warm neatbit sufficiently that they could extract it from railcars, but we do not know which procedure(s) is or are being considered.

SNC Lavalin is the firm developing the Future Energy refinery proposal, including the neatbit technology.


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## Justme39 (Mar 25, 2016)

I found this in which Mark Carney says a bail -in may include customer deposits. I've read others too, so we have to hope that Trudeau clarifies this in legislation.

http://www.canadiantimes.ca/ct2/ind...adian-bail-in-may-include-customer-s-deposits


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## NorthernRaven (Aug 4, 2010)

If you are disposed to basing your view of reality on conspiracy sites, I'm not sure how a government clarification would provide much comfort. However, the Finance department issued "Taxpayer Protection and Bank Recapitalization Regime: Consultation Paper" back in the fall of 2014. While unfortunately short on alien autopsy results, it lays out the basics of the contingent capital conversion of "_long-term senior debt_", not deposits. This is declared explicitly: "_The Government is committed to ensuring that Canada’s deposit insurance framework adequately protects the savings of Canadian consumers. In this regard, deposits will be excluded from the Taxpayer Protection and Bank Recapitalization regime._"

Note that if a big D-SIB bank (or any bank) were to go insolvent right now, deposits outside of CDIC coverage would currently be at risk as unsecured creditors anyway; the additions to the resolution regime would if anything help in preventing this. And they would only apply to the D-SIBs; anyone fearful of them can choose to move to a smaller bank which would not be affected by them. 

This is just an echo of the original scare-mongering back from the original 2013-2014 period, and is as ridiculous now as it was then, whatever differences of opinion sensible people might have over the most effective and appropriate resolution mechanisms.


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## Justme39 (Mar 25, 2016)

NorthernRaven said:


> If you are disposed to basing your view of reality on conspiracy sites, I'm not sure how a government clarification would provide much comfort. However, the Finance department issued "Taxpayer Protection and Bank Recapitalization Regime: Consultation Paper" back in the fall of 2014. While unfortunately short on alien autopsy results, it lays out the basics of the contingent capital conversion of "_long-term senior debt_", not deposits.
> ......


Thank you. I wasn't aware that Canadian Times is a conspiracy site.


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## andrewf (Mar 1, 2010)

The key thing to keep in mind is that the government is not stupid. If they used deposits, particularly insured deposits as part of a bank bail-in, they would trigger a run on the whole financial system.


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## Moneytoo (Mar 26, 2014)

Hi Katyana from Rumania, what you'll be selling us today? Black magic or tantric healing?


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