Skip to main content

“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

Dan Albas: Examples that point towards increased household debt ... in order to access the benefits of the programs ... that themselves are being offered by a $19.8 billion deficit budget


The challenge with many of the programs on offer in this budget is the fine print!

In last week’s report I provided some highlights on the recent 2019 budget and asked citizens if they liked what they saw in the budget so far.  I also made a commitment to share my own thoughts on this budget as an opposition Member of Parliament.

Most critics have labelled this budget as an ‘election year goodies’ budget that targets certain voting demographics that the Liberals hope will translate to votes in the October election.

While I do not disagree with that sentiment, I would submit that most every sitting government in an election year tables a budget that it believes will be politically popular.

My concern with this budget is somewhat different.

As you may have heard, household debt levels here in Canada are at an all-time high.  Household debt as a percentage of gross income in 2016 was 166%.  In January of this year (2019) it has now increased to 176%.

Why do I mention that in the context of this budget?

The new “Canada Training Benefit” on the surface sounds like a good program encouraging job skills retraining. However when you read the fine print only $250 is available per year up to a career maximum of $5,000.

The challenge that I am already hearing is the majority of training programs cost well in excess of that amount.  Many skills training programs are literally thousands of dollars or more. For many workers to benefit from this $250 training credit it will mean borrowing thousands and increasing household debt.

Similarly, for most to access the credit of $5,000 towards the purchase of a new electric car, would mean borrowing up to the maximum for the program amount of $45,000.  This again results in more household debt for anyone borrowing for a new vehicle purchase.

A similar situation is created with the new home buyers program.

Rather than eliminate the GST on affordable new housing (as has been done with the PST provincially), this budget only offers more options that encourage borrowing. Borrowing $10,000 more from your RRSP, up to maximum of $35,000, is  an option that few new home buyers can access.

The new first time home buyers incentive on the surface sounds helpful. The program can help provide between 5-10% of the down payment towards a maximum CMHC insurable mortgage up to $480,000, not counting the total down payment.

The challenge with this program is also in the fine print.

The maximum $480,000 mortgage value is also based on the programs maximum allowable household income level of $120,000 annually.

In a community where the average household income is $70,000, the maximum value under this program is set at FOUR TIMES the income, meaning a CMHC (Canadian Mortgage and Housing Corporation) insurable mortgage limit of just $280,000.

A significant difference.

These are just a few examples that all point towards increased household debt ... in order to access the benefits of these programs ... that ironically are themselves being offered by a $19.8 billion deficit budget.

My question this week:
At this current rate of spending, by 2040, an additional $271 billion in new debt will have accumulated, not factoring in household debt levels.

Are you concerned about this?

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.

Comments

Popular posts from this blog

GORDON F. D. WILSON: When The Trick Masquerades as The Treat

Thirty-seven years ago, Halloween 1987, I became the leader of the BC Liberal Party.   British Columbia was badly polarized. Social Credit held one side and the NDP the other. It had been twelve years, 1975, since Liberal MLAs Garde Gardom, Pat McGeer, and Alan Williams had walked away from their party to join Social Credit, one year after the lone Progressive Conservative MLA Hugh Curtis had abandoned his party to sit with Bill Bennett, the son and heir apparent to long-serving BC Premier, WAC Bennett.   An unwritten agreement by the biggest Canadian political shareholders, the federal Liberals and Conservatives, decided that if British Columbia was to remain a lucrative franchise from a revenue perspective, they couldn’t risk splitting the electoral vote and electing the real enemy, the NDP, so no resources would be used to finance either a Liberal or Conservative party provincially.   “There are two sides to every street,” I was told by a very prominent Canadian businessman who cont

FORSETH: You Have To Be A Bit Crazy

  Ward and his wife Carleen celebrating his win on election night.   In March of this year, I took on the role of Campaign Manager for BC Conservative candidate Ward Stamer.  It’s the third time I’ve had the opportunity as I took on the role for Peter Sharp in 2013, and for Dennis Giesbrecht in 2020. Now let me tell you, in the past, a BC Conservative campaign team generally consisted of myself, the candidate and one or two helpers – and very little in the way of a campaign budget. Thankfully, a benefit of having spent 30+ years in the broadcast media afforded me the ability to do ad copy and write candidate speeches, and prep both Dennis and Peter to deal with the media – it’s also something I have always enjoyed. That was part of my duties this time around as well, however having a team of a dozen and a half volunteers meant that for the first time we had people available to ID our supporters, put together and install campaign signs, distribute campaign literature, and help out at ou

Rustad will support policy for 'everyday' people, otherwise work to bring down NDP

  Conservative Party of B.C. John Rustad Tuesday (Oct. 29) said his party would support government policies that support "average, everyday working" persons in B.C., but also repeated earlier promises to bring down the B.C. NDP government under Premier David Eby. "If there are things that are moved forward that will improve lives for those people, we would be looking at support it," Rustad said. "But if he's going to carry forward with the destructive policies that he has, then yes, we are going to look at every opportunity possible to bring him down as soon as possible."  CLICK HERE for the full story

Labels

Show more