Canada's debt to jump to $630B in 5 years: TD Bank

[1cooldude]

Canada's total debt will jump more than 30 per cent by 2013-14 under current economic conditions, the Toronto-Dominion Bank said Tuesday in a new forecast.

The bank said Ottawa's auto bailout package, as well as a lagging economy, will add $167 billion in new public borrowing over the next five years.

That means government debt, estimated at $462.9 billion at the end of fiscal 2008-09, will rise by 36 per cent during the period to almost $630 billion, according to Don Drummond, TD's chief economist, and Derek Burleton, the bank's director of economic analysis.
On the current path

Worse still, from a fiscal perspective, the TD analysis assumed that Ottawa did not allow much growth in the spending on existing programs, such as health and defence.

Many experts have argued that national governments, whether in Ottawa or Washington, have a difficult time ignoring voter entreaties to spend more, especially during times of economic stress.
Ottawa's fiscal balance---------($)
2009-10------------------------51.0B
2010-11------------------------45.3B
2011-12------------------------28.3B
2012-13------------------------23.1B
2013-14------------------------19.4B

Source: TD Economics

The federal deficit will peak at $51 billion in 2009-10 and then drop marginally to $45 billion in the next fiscal year. By 2013-14, the final year of TD's outlook, Ottawa's shortfall will be at $19.4 billion.
Cash-in and cash-out

According to the TD's analysis, government spending will increase by more than $40 billion, or 20.3 per cent, comparing the 2007-08 level of $199.5 billion to the bank's projection of $240.1 billion in 2009-'10.

A large chunk of Canada's expenditure rise is due to the government's plan to forward cash to the country's ailing auto sector.

In addition, TD expects the government's revenue to drop almost 10 per cent, hitting $218.6 billion in 2009-10 versus $242.4 billion in 2007-08.

Thus, the bank forecasts that Ottawa's revenue will pass the $242 billion threshold in another two years, hitting $245.3 billion in 2011-12.

Falling company profits in the current recession have sliced the amount of income taxes paid by corporations.

Also, lower consumer spending has cramped GST receipts, while declining take-home pay has cut the federal government's income from personal income taxes.

All told, while revenue as a percentage of the country's GDP reached 16.3 per cent in 2006-07, Canada's intake will only hit 15.1 of GDP by 2013-14.

In the final year of TD's forecast, Ottawa is assumed to have revenue of $275.7 billion.


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[mountain_rage]

That is what happens when idiots with no understanding of the politicians platforms elect ideological fiscal conservatives. The GST was at its levels to help build a cushion to safeguard against more dept and help pay it down. All politicians are morrons, but the conservatives are paticularly so, and all they have accomplish in their weak government is to devide the country, and weaken our resillience. We need a government willing to analyze expenditures and cut inneficiencies, not taxes and programs. Why is that so hard to find these days?

[1cooldude]

That is what happens when idiots with no understanding of the politicians platforms elect ideological fiscal conservatives. The GST was at its levels to help build a cushion to safeguard against more dept and help pay it down. All politicians are morons, but the conservatives are particularly so, and all they have accomplish in their weak government is to divide the country, and weaken our resilience. We need a government willing to analyze expenditures and cut inefficiencies, not taxes and programs. Why is that so hard to find these days?

That would actually require some forethought and planning ahead.I don't think these guys are there to save the country. With the demise of GM and everything that GM stood for one realizes how flawed their business model truly was..the scary thing is that the same people that buried this company are going to run the new re-born GM again...hmmm?
I think we are ready to change the political system and the way the government is run. An old British Parliamentarian system should see the change of the 21 century.Very little gets accomplished and government rots in its own stench.

[mountain_rage]

That would actually require some forethought and planning ahead.I don't think these guys are there to save the country. With the demise of GM and everything that GM stood for one realizes how flawed their business model truly was..the scary thing is that the same people that buried this company are going to run the new re-born GM again...hmmm?
I think we are ready to change the political system and the way the government is run. An old British Parliamentarian system should see the change of the 21 century.Very little gets accomplished and government rots in its own stench.

Could not agree more, the current political system, as well as capitalism has failed numerous times since its inception. How many times must we continue to bail ourselves before we try something new. We need a new system that encourages the advancement of society, with enough incentives for people to want to advance, but not so much that they can corrupt to get to, or remain in a position of power. What that system could be, I have no idea, but if we are to advance as a society, we need to reform our politics and our economics.