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Overview. Context: citizens’ priorities, recession, long term trends, government capacity Recommendations Revenues Savings Spending. Context: Priorities. What do Canadians care about? Education, health, environment, fairness, economy (when it’s down, not to exclusion of others)

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overview
Overview
  • Context: citizens’ priorities, recession, long term trends, government capacity
  • Recommendations
    • Revenues
    • Savings
    • Spending
context priorities
Context: Priorities

What do Canadians care about?

Education, health, environment, fairness, economy (when it’s down, not to exclusion of others)

Northern concerns similar, plus cost of living, others per 16th Assembly Priorities

There is a public demand for strong, effective public programs

context recession
Context: Recession
  • Worst since Great Depression?
  • Green shoots of recovery, or second dip?
  • Will only know these things in hindsight
  • What we do know:
    • Workers and families feel the impact
    • Job losses continue after recession ends
    • Public spending is propping up economies
context recession policy
Context: Recession & Policy
  • The non-ideological view
    • economists, bankers, international organizations, finance ministers
  • Recession is part of the business cycle
  • When down, stimulate. When up, cool it.
  • Countercyclical monetary and fiscal policy.
    • Monetary: Bank of Canada.
    • Only Territorial option is fiscal (spend/save).
context long term
Context: Long Term
  • Details are not clear
  • Some big picture elements are clear:
    • Recession will end
    • Fossil fuels scarcer and costlier
  • Macquarie Bank (Globe Sept 16): peak oil
context fiscal capacity
Context: Fiscal Capacity

Three elements:

  • Among strongest balance sheets in Canada
  • Well under borrowing cap
    • smart debt vs. dumb debt
  • New revenues capacity
slide8

2008

1999

revenues
Revenues
  • Federal rules allow new taxes and tax rate increases with no clawback
  • Integrated package of reforms
    • Some up, some down (smart tax reform)
      • Social, economic, environmental improvements
      • Raised tobacco, liquor revenues – good start
    • Implement 2010-2011, phase in over 4 years
    • By year four, raise additional $54 million
savings
Savings
  • Two goals: year-to-year, and long term
  • Year-to-year: countercyclical spending
    • When economy hot, take money out (save it)
    • When economy cold, spend it
    • Economic Stabilization Fund (savings acc’t)
  • Long term:
    • When resource revenues decline
    • Territorial Trust Fund (RRSP)
spending short term
Spending – Short Term
  • Economists: no cuts: don’t even discuss
  • No P3s:
    • Expensive: profits, advertising, cost to borrow
    • Accountability: “offshoring” debt, commercial confidentiality
  • No Privatization
    • E.g. ATCO shopping for new assets in North
    • NWTPC: high annual net revenues: plum
spending short term1
Spending – Short Term
  • Recession stimulus test – 3 criteria:
    • Implement immediately
    • Value: number of jobs per dollar spent
    • Prepare us for the long-term future of expensive energy
  • Illustrate use of these criteria
    • Traditional: roads and bridges
    • New: energy efficiency upgrades for buildings
spending short term3
Spending – Short Term
  • Energy efficiency upgrades in buildings
  • Insulation, weatherstripping, doors, windows, furnaces, etc. – can start immediately
  • Public buildings and public housing
  • Private residences: subsidy
    • NWT: $7-35 million – 80-385 person-years employment
  • owner cost savings, energy conservation, reduced emissions, green jobs, boost small business
spending long term
Spending – Long Term
  • Revenue capacity  citizens’ priorities
  • Helping the most vulnerable
    • Progressive tax and income support system
    • A.k.a. “automatic stabilizers”
  • Cultural and language preservation programs
  • Early childhood education:
    • extend public system: $18m
  • Quality public health care
  • Sustainable transportation - transit where practical
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