Tag: federal budget process

Federal budget process overview: Introduction

A recent The Forum Poll™ indicates that for about 61% of the Canadians polled, a balanced budget is more important than spending on government services. The federal budget process overview is that Prime Minister Trudeau and Finance Minister Morneau have signed off on a budget that will have the federal government spend more than it receives in revenue. So, Canada’s debt will continue to grow.

The poll results showed that:

1. 40% don’t like the budget;
2. 17% were in favour;
3. 31% were neutral; and
4. 12% did not know.

Federal budget process overview: Budget spending highlights

On February 27, 2018, Finance Minister Bill Morneau tabled the Liberal Government’s budget titled “Equality + Growth: A Strong Middle Class”. The federal budget process 2018 calls for $338.5 billion in overall planned spending. The budget projects an $18.1 billion deficit in 2018-19.

The highlights of the government’s proposed major spending included in the budget are:

• Nearly $5 billion invested in Indigenous communities over 5 years;
• Canadian science and research spending of almost $3.2 billion over five years;
• $2.6 billion over 5 years to promote gender equality in science and business;
• $1.2 billion over 5 years for a new parental sharing benefit; and
• $2 billion over 5 years for international aid

Federal budget process overview: Deficits and debt

I normally don’t think of Prime Minister Trudeau or Finance Minister Morneau as being like an average Canadian, but the 2018 federal budget canada news shows me that the government is budgeting now like an average Canadian.

What do I mean? Well, I have written many times about the average family household debt rising over the last few years. Some of the blogs I wrote are:

• CANADIAN HOUSEHOLD DEBT RATIO HITS HIGH TORONTO STAR REPORTS: WHAT’S THE NUMBER 1 FINANCIAL PRIORITY FOR CANADIANS IN 2018?
• CANADIAN HOUSEHOLD DEBT CRISIS: CANADIANS ARE DEAF TO NOT HEED WARNINGS AS CANADIAN HOUSEHOLD DEBT LEVELS NOW LEADS THE WORLD
• #VIDEO-CANADIAN HOUSEHOLD DEBT NEWS: ARE CANADIANS ADDICTED TO BORROWING#
• #VIDEO – HOUSEHOLD DEBT IN CANADA CRISIS#
• HOW BINGE BORROWING RAISES CANADA’S HOUSEHOLD DEBT BURDEN
• CREDIT CARD DEBT: 9 REASONS HOUSEHOLDS ARE BEING CRUSHED BY CREDIT CARD DEBT
• CANADIAN HOUSEHOLD DEBT: WE SEEM TO LOVE IT!

I have also written on the need for Canadians to reign in their spending and have a proper household budget. Some of my blogs on that topic are:

• FINANCIAL SECURITY PLANNING PROCESS: PREPARING AND FOLLOWING A PROPER HOUSEHOLD BUDGET FORM WILL FORCE YOU TO ACHIEVE FINANCIAL SECURITY
• FREE PERSONAL FINANCE APPS: HOW TO USE THEM TO ROCK, SET YOUR BUDGET & SAVE YOU MONEY
• HAVING TROUBLE BUDGETING? OUR TOP 6 LIST OF APPS TO HELP YOU
• DO YOU NEED A HOUSEHOLD BUDGET? MOST CANADIANS DO!
• A BALANCED BUDGET IS TO FINANCIAL HEALTH WHAT A BALANCED DIET IS TO PHYSICAL HEALTH – Part 1
• BANKRUPTCY TRUSTEE SAYS A BALANCED BUDGET IS TO FINANCIAL HEALTH WHAT A BALANCED DIET IS TO PHYSICAL HEALTH

Federal budget process overview: Our government is like the average Canadian

All of these blogs have a common message that the average Canadian is:

1. amassing too much debt;
2. using debt to supplement income to meet their spending habits;
3. although they can afford minimum payments on the debt in this low-interest rate environment, trouble will begin when rates creep up; and
4. in need of a proper household budget so that borrowing can stop, existing income can be used for expenses and debt repayment.

That is why I say that the government created the 2018 federal budget deficit and the debt just like the average Canadian does. The government has one trick up their sleeve to raise more money than us normal Canadians have; they can just increase the taxes we pay to try to cover off the extra deficit spending.

Federal budget process overview: The practical problem

The practical problem for the government is that although Canadians say that they prefer a balance budget, they also like spending that they believe will help them. When polled on the individual spending plans, the results were favourable. Although it does not seem that the poll asked the question “Would you favour higher taxes to pay for the spending so that there will not be a deficit”, I suspect the answer to that question would be a loud NO!

So the government has to make promises if it wants to get re-elected. The government also knows that Canadians will like spending for things they believe will help them or their quality of life. So what the federal government is hoping is that this will translate in the voting booth for more votes for the Liberal government than votes from people who don’t like deficits.

Federal budget process overview: Difference between budget deficit and federal debt

The 2018 federal budget Canada shows that Ottawa has no plan to stop deficit spending or reduce federal debt in the short or medium term. The annual deficit represents the amount the government spends in any year above what it earns in revenue in that same time period. The federal debt is the amount of money the government has to borrow to pay for cumulative amount of deficits.

Previous Liberal and Conservative governments devoted efforts to balancing the budget and paying down debt. This government isn’t.

Federal budget process overview: If you are serious we can help you reach your financial freedom before our government does

What about you? Do you enjoy the stress you feel every month when you do not have enough money to go around? Have you been avoiding the tough discussions with your family about what spending has to be cut out to balance your books? Before your life gets totally out of control, now is the time for you to take positive steps to gain back your financial freedom and your life.

If you are serious we can help you reach your financial freedom before our government does. We are very interested in helping honest but unfortunate people whose spending was perhaps out of control in the past because of an unexpected life event. Even if your spending remains a problem, we can help you get back on course.

Contact the Ira Smith Trustee & Receiver Inc. Team today. We’re not politicians. We are experts in helping good people regain control of their financial and personal lives. If you give us a call today we will work with you to find one of the bankruptcy alternatives so that you can cut your stress and regain control over your finances, Starting Over, Starting Now.