Enjoy your last term in office campbell.

So we will see a bureaucratic induced recession prior to July 1st?

So if you own a business and were planning on making a purchase of some new 'capital asset', like a new pick-up truck, say, then it's better to defer that purchase til after July 1, 2010 when the 7%Provincial tax component of the 12% HST will be an Input Tax Credit? Effectively giving you that pick-up for 7% less than the total price you'd pay for it right now.

That should REALLY go a long ways to help those auto-dealers, and every other purveyor of any other kind of "capital" equipment, right NOW ~ when they need it the most.

How do you think they're going to recoup what they lose from the fall off in business in the interim? That's been, as Eagleone says, "bureaucratically reduced"?

This tax increase is going to cause a lot of pain for a lot of people.

"Canadians are facing a national pension meltdown. Decades in the making, it has worsened dramatically during the recession. Businesses are shredding pension promises, retirement savings are shrinking, employees are working longer and the elderly are selling homes and returning to the workforce. As the retirement dream fades, policymakers seem unwilling to tell Canadians they have not saved enough to retire"

"A slow retreat by companies from their pension obligations turned into a gallop this year after a severe global recession laid bare the frailties of the promises made to employees. The withdrawal is major factor behind a startling statistic: Eleven million Canadian workers, about 60 per cent of the work force, do not have a pension plan.

Those corporate pension plans left standing also face unprecedented stresses. Market turmoil has punched an estimated $50-billion deficit hole into Canada’s corporate pension funds, according to experts who have crunched what little current data is available.

The cost of replenishing the deficit is squeezing businesses when they can least afford it. Pension costs are spiralling as retirees live longer and the baby boom generation heads for the exits: More than 40 per cent of workers will reach retirement age over the next two decades.

A crisis this large isn’t just financial. It’s also tearing the fabric of Canadian society. Retirement anxiety is changing our notion of personal wealth. Where once a house and two cars were symbols of success, today the measure is more likely to be the size of your nest egg. And as with any wealth metric, there is a class system. At the top of the system is a shrinking royalty. The majority of them are public servants: About 84 per cent of public-sector workers are pension plan members, most of whom have gold-plated pensions designed to guarantee retirees fixed incomes.

At the bottom are the pension paupers, the millions of workers who never had an employee retirement plan – and whose taxes contribute to public-sector pensions that they can only dream about."

84% of public service workers have pensions.
78% of these plans are gold plated defined benefit pensions
25% of private sector workers have a pension plan
16% of these plans are gold plated defined benefit pensions
11 million workers, or 60 per cent, of Canada’s workers have no pension at all
8 million or 45 per cent, have no pensions or registered retirement savings plans (RRSPs)

http://www.theglobeandmail.com/report-on-business/retirement/retirement-dreams-under-siege/article1327536/

I have a feeling a lot of people (in the private sector) are going to be eating dog food when they retire.

Good post Charles.

Yes good post Charles, just goes to show the greed of private sector employers living off the backs of their employees.

Very good post Charles! I'm afraid many Corporate Heads and Executive types will be living off shore in luxury on our pension losses.
Your point at the end regarding Dog Food may be a good tip in the end. It should taste better however than the S___our Actuaries have been handing us for so many years.

great post charles!
And I don't believe for one second the Campbell government doesn't already know all this!
They just don't care in their greed driven quest for more money to waste!

just wonder whats going to take place in this country when the light at the end of the tunnel is snuffed out....somethins gonna hit the fan.

"84% of public service workers have pensions.
78% of these plans are gold plated defined benefit pensions"

I wonder why that is if is a fact. I have been retired for a number of year and recieve a gold plated public service pension The fact is that during my working years I contributed 7% of my income towords my pension (1% was set aside for indexing).

And when I retired I had the option of taking my contribution and investing it elswhere or just collecting my gold plated pension which I did. There was no point in me withdrawing my money as the NDP Government set up an investment corporation to manage the pension fund which today has some where in the neigbourhood of 18 billion dollars in the fund. It is completely seperate from the government of the day.

Therein lies the problem that the private sectore belive that their employers know how to manage their retirement fund. So get the fund out of the employers hands to use as a slush fund for rainy days and get it working for those who deserve it for years of service. Use the public sector example and stop using them as a whipping horse.

And dont start to malign the public service as lazy pencil pushers. I worked throughout Britich Columbia and provided a meaningfull service to the public at large. I had contact through my work in all the major industries in our province and there are lazy workers and free loaders in every part of our society.
Cheers

"I have a feeling a lot of people (in the private sector) are going to be eating dog food when they retire"

Either that or they'll live off of the investments that they should have been making during their working career.

The brutal truth is that there isn't a single person in Canada who doesn't have the ability to invest (assuming they earn enough to do so of course). Some people invest via the pension contributions that are required to come off of their paycheques every two weeks, some buy RRSP's, some prefer bonds, cash or other assets. Some people don't do any of this and just spend their money on expensive homes, snowmobiles and vacations.

There is no doubt that public service pensions are a significant benefit for those people who work in that environment, but aren't they something that could be seen as something to be modelled? Maybe instead of more tax cuts, the government should implement a surtax on large corporations that would go towards retirement plans for their employees. Maybe people need to take more responsibility for their own retirement, regardless of what sector they work in. Maybe our society needs to take 3 steps back from its current state of mass consumerism and instead of short term fun, start to get back to putting money into longer term savings plans for themselves and their familes.

I get your point NMG, but unfortunately for most people with families and 2 or 3 kids growing up,there really isn't a lot of disposable income until later in life when the kids are up and gone.
Most younger couples with young kids live pretty much paycheck to paycheck and very little left over for investing.
But you are bang on about one thing...those expensive toys many people have sitting around in the drivewway should actually be cash in an RRSP.
People still buy the toys, even though they need next payday to come in a hurry just to survive!
That's called debt, and it will slowly kill you, one payment at a time!

It was BCGEU that forced the Government of the day to seperate pensions from general revenue and form the investment corporation to manage the pension fund.

All I invested was 7% of my income. And your right NMG the prioritiies of the younger generation are not programed for retirement living. So if you have a union get it to workfor you and if you dont get organized. dont belive the crap the employer feeds you. "Its to expensive"

Look at the guys that own fastfood establishments in the City. They expand exponentially all built from the backs of their employees and they tell us that a pension would be to expensive.
Cheers

And they will wonder why good people turn Bad

"And they will wonder why good people turn Bad"

...because they blame the government for all their problems?

The following is the post which Garth Turner (former M.P.) made on his blog two days ago.

With house prices rising, and incomes not, with bidding wars in many centres and real estate values at a record level, one question looms: Where’s the money coming from? How are buyers, especially newbies, pulling this off?

Well, chew on this: Two years ago when RBC did its annual survey of homebuying intentions it asked first-time buyers how much of a down payment they planned on making. Twenty-one per cent said their down would be “between $1 and $5,000.”

That was in 2007. Since then there’s every indication things have gotten worse. In fact, for people taking out mortgages today it’s estimated the average amount of equity they have is just 6%. The leaves 94% of the house value as debt. And while reliable statistics on this are hard to find, my banker buddies tell me that virtually every new loan they write these days is for 5% down, with a 35-year mortgage. After all, if you’re buying in Vancouver. Calgary or Toronto, that’s the only way banks can swing the deal.

So this answers the question of where the money to fuel this housing bubble originates. Bankers. And why would banks take the major gamble of loaning, say, $380,000 to people who are buying a $400,000 house and only have $20,000? If markets fall 10%, or even 5%, that homeowning couple’s equity is entirely wiped out. In fact, the value of the home could easily drop beneath the value of the loan, which would constitute an absolute loss for the bank.

And here’s another good question: If I want to buy that $400,000 house and have $200,000 for a downpayment, why am I paying the same mortgage interest rate as the first-timers who barely have pizza money? Don’t they constitute a larger risk? Where’s the risk premium on the money loaned to them? Why is this system so screwed up that ultra high-risk borrowers have money showered upon them by our famously conservative and prudent banks?

The answer’s simple: the banks don’t take any risk. It’s all on the taxpayers, thanks to CMHC.

And these days, Canada Mortgage and Housing Corporation is turning into a financial behemoth, as Ottawa uses it to fuel a housing boom that’s clearly turned into an asset bubble. Last year alone, CHMC did 919,780 deals worth a staggering $148 billion, or about twice what it had planned. To accommodate that, the feds have raised its allowable insured mortgage limit to $600 billion, or about double what it was two years ago.

Here’s how CMHC and the federal government are inflating the real estate bubble:

CMHC provides insurance to the lender (the bank) for the entire amount of any mortgage it makes when the purchaser has less than 20% to put down. These days, that’s virtually every new deal.
If the homeowner defaults, the bank gets 100% of its money. The taxpayer’s on the hook for the loss.
This insurance means the banks face no risk lending money to people with little or no credit rating and virtually no equity, so they charge no rate premium.
Buyers are then able to access money at the same current cheap rates as the bank’s wealthiest and most credit-worthy customers, allowing them to bid up house prices.
There is no penalty anywhere in the system, except for CMHC insurance payments, for having close to a zero downpayment.
Banks will allow borrowers to simply add that insurance payment to their mortgage principles, so many buyers are not even aware of it.
And through CMHC, Ottawa has bought up tens of billions in existing high-risk mortgages from the banks, even though there was no default, which opened up their balance sheets and allowed them to make even more high-ratio loans.
CMHC is now larger than at least one of the Big Six banks and is, comparatively speaking, unregulated.

A nation of debtors. Guaranteed.

http://www.greaterfool.ca/2009/10/16/ottawas-bubble/

Very good post charles!
What the B.C. government is actually telling us with these little pearls they release in regards to the HST,is that we are going to get it,like it or not!
These releases are also a form of brainwashing designed to make people subconciously think it is already a done deal.
The government does this by talking and acting like it is.
That only shows that they are not going to listen to anyone in B.C....period!
We are probably done, but that comes as no suprise!
I really don't think the voters (those that do vote!)of this province pushed back hard enough,and while it may be too late,that does not mean we should simply back off and let them have their way with us...again.
With what we know about it so far,there isn't much doubt it is a tax grab by a very desparate government.
The best we can hope for is someone in government will screw up really badly,and with the bombs coming out of Victoria lately,that's a very real possibility!
We may get the HST anyway,but it would be satisfying to see someone crash and burn anyway.
Can we say...GORDON CAMPBELL?

Oh oh. Better buy my family's funerals now, eh?

Boy-o-boy, I can hardly wait for the NDP, their unions and all those salivating Campbell hater's, like seamutt and andyfreeze to put "their" government back in power and throw out that awfull HST that's coming, once and for all, and forever !!

Guess I shoudn't really be all that worried about the HST, should I, because the NDP will fix it for us in a couple years anyway, and whatever extra I pay from my pension for those two or three years, probably won't put me on a cat food diet for at least that long.

Its nice to know we've got legions of "protectors" out there waiting in the wings to trounce our current "opressors" in positions of power today.

Now do us a favour, give us a little comfort, and let us know what "you're" gonna do when you take control in the next election.

I'm all ears.

palomino

Well palomino - I can tell you what the NDP wont do
1) Beat the Liberals at lies - Gordo has a lock on that record
2) Can't top the liberals on cost overruns - they are gold medalists there
3) wont be able to give money to their friends as the Liberals have driven BC into a deficit faster than a race horse on steroids.

Next summer when the HST is passed into law, (it's a done deal, folks, so get over it)maybe every taxpayer or should I say OVER taxed payer do a lot of soul searching and decide to seek out what they can live without. A good start would be gambling. Casinos and lottery tickets make the government a lot of dough. An addiction? Bummer. Can't quit smoking? Then maybe cut down. Make yer own booze. Anything to strangle the tax system in our lives. Easier said than done? Think about it. It is the ultimate of stupidity to whine about the HST on thew way to the casino or lottery booth to drop a substantial amount of money. Voluntary taxes need to be abolished. After all, whining about taxes and wasting money on gambling makes one a hypocrite. Doesn't it? I have almost quit buying lottery tickets. Based on the simple premise of getting tired giving my money to winners in Qweebec and Ontariario. This kind of (hardship for you) protest makes protesting more effective than mingling with a bunch of unwashed surly deadbeat ne'er do wells who just don't like the government. Except when cheque time comes. Stick it to the man. Especially his wallet.

Mr PG you got to be Liberal because i sure if the NDP won you would be saying they are the problem

Nobody has mentioned that the HST will also apply to your Mutual funds, Segregated funds and ETF's. I have questioned the BC Government and have received no response addressing this issue. Guess who these types of investments affect the most? All those people who don't have a good plated Government Pension. So, we will be penalized even more by trying to save for our own retirement, thanks to the efforts of these crooks. If they didn't know what they are doing before I enlightened them, they better do their homework. I will do all in my power, influence and ability to convince everyone I know that the HST is not in our best interest. I don't care what they say. I will be paying more than $1,500 per year in taxes than I currently pay. That is not acceptable to me. Don't be snowed, don't accept their dribble, don't give up, don't think it is a done deal just because they would like us to think so.

"Voluntary taxes need to be abolished."

If people want to go to a casino or buy lottery tickets, who are you or I to say they can't? Remember, if government sponsored gambling goes away, the money has to made up somewhere else. And then gambling will be become another revenue generator for the gangs.

"Mr PG you got to be Liberal because i sure if the NDP won you would be saying they are the problem"

I'll gladly vote NDP if they say they'll scrap the HST. But we all know they won't.