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Ontario Election

The manipulation of the money supply and other economic shenanigans cannot go on forever. The ultimate checksum will happen when investors no longer believe that they will be paid back, and start demanding higher "risk premiums" for government bonds. This will ratchet up interest rates everywhere else.

Now the US government might try to evade this by continuing the charade where the Treasury and the Fed buy and sell bonds from each other, but foreign investors will not be fooled. This will create a condition of flight from US currency, which will be a short term boon for nations like us as hot money flees to hard currencies and investments like Canadian land and resources, while China will also benefit as nations flock there to use Chinese currency as the new reserve currency.

This will be a very messy process, and I suspect the Chinese might not have the ability to manage the reserve currency role (and we will be pooched as well, since Canada simply does not have the ability to absorb the amount of flight currency that will be coming down.)

So right now we are in an artificial equilibrium, something like a person balanced on top of a glass globe. We are OK for now, but move in any direction.....
 
The Liberal legacy in Ontario. Whoever becomes the next leader of the Ontario Liberal Party will inherit this mess (and indeed, since virtually all the candidates to replace McGuinty are Provincial cabinet ministers, they are responsible in a large part for this), and I don't think any one of them has a plan to deal with spending or the will to take on the unions. The unfortunate fact is no other party has the ability to win a majority, nor do I think they really have to will to impliment the sorts of programs needed to reverse course.

http://fullcomment.nationalpost.com/2013/01/26/matt-gurney-dalton-mcguinty-gets-retirement-ontario-gets-his-debts/

Matt Gurney: Dalton McGuinty gets retirement. Ontario gets his debts

Matt Gurney | Jan 26, 2013 1:15 AM ET | Last Updated: Jan 25, 2013 5:52 PM ET
More from Matt Gurney | @mattgurney
As Dalton McGuinty leaves office, there are a few genuine successes he can point to. But McGuinty’s real legacy is something he won’t want to take credit for. Under his watch, Ontario stopped being the land that consequences forgot. And whoever replaces him will have to reconcile themselves to running a much weaker, meeker province than McGuinty first led.

When McGuinty took office in 2003, Ontario remained the “economic engine of Confederation.” Its many blessings made it a forgiving province to lead. His first-term stumbles — imposing his health premium on families after pledging no new taxes, pledging to shut down coal-fired power plants the province relied upon to meet its electrical needs — hurt the premier in the polls and planted the seeds of McGuinty’s reputation as a waffler. But the province kept rolling along. Lots of people didn’t much like McGuinty. But he was still viewed as mostly harmless.

His second term was when the wheels started to come off. The government wasted a billion dollars trying (and failing) to develop a system of electronic tax records. All of McGuinty’s various “investments” in healthcare, education and anything else that came along drove provincial spending higher and higher, narrowing its surpluses. Rather than control spending, he sought more and more revenues, and often fumbled badly trying to implement them.

There were the eco-taxes which suddenly appeared on Ontarians’ shopping bills, without any prior notice from the government (they were scrapped). There was the harmonization of the provincial sales tax with its federal equivalent, which McGuinty repeatedly, and falsely, claimed would not make daily life more expensive for the average citizen. Then there was the tax-by-any-other-name of skyrocketing hydro rates, necessary to fund McGuinty’s single-minded push to turn Ontario into the greenest jurisdiction on Earth, no matter what it cost the ratepayers.

Even as these problems compounded, McGuinty showed no signs of feeling pressured, which might explain why he occupied himself with decidedly second-tier priorities like micromanaging where people could buy and consume tobacco, and which weed killers they could use on their lawns. My National Post colleague Chris Selley coined the term “Premier Dad,” and it stuck. McGuinty, leader of a blessed province, had enough spare time to be father to us all.

Then the recession hit.

Ontario’s manufacturing sector shrivelled and died. Yearly deficits ballooned into the tens of billions as government revenues shrank while public-sector unions continued to collect their big new paycheques. Ontario was stuck paying a premium for green electricity even as demand for power evaporated, forcing the province to dump excess energy onto the U.S. market, often at a loss.

Yet Ontarians remained oddly forgiving. Perhaps they felt it wrong to blame McGuinty for global economic factors. Perhaps they were too worried about their own circumstances to care that the province’s air ambulance service was an ineffective mess of partisan nepotism, or that the government had abandoned the town of Caledonia to lawlessness rather than confront a small number of native agitators. Or maybe they were fooled by the shameful collective fantasy engaged in by all the provincial parties ahead of the last election in 2011, when no one seemed willing to truly address how bad the province’s fiscal state had become. Things were still good, right? They always had been before.

McGuinty won, again, this time with a strong minority. But Ontario had run out of runway, and the Liberals, out of options. McGuinty didn’t have the muscle to shut down opposition inquiries into the air ambulance scandal or his party’s decision to waste a billion dollars scrapping two proposed power plants that had become political liabilities. And he certainly didn’t seem to be enjoying the protracted war with the province’s teachers unions, which he insisted must reconcile themselves to the province’s weak fiscal position.

Because the truth had been revealed. All of McGuinty’s vaunted “investments” were paid for with borrowed money, drawn upon at an unsustainable rate. The province is hobbled by a debt load that is rapidly approaching $300-billion and a deficit that won’t be eliminated before 2018. Ontario, now a have-not province dependent on federal equalization transfers, has no choice but to rein in spending. International credit rating agencies have already put it on notice. A rating cut could bankrupt the province faster than any government could react. Amid all this, McGuinty decided it was time to take his ball and go home.

So, after nine years of Dalton McGuinty, what’s the upshot? Ontario remains a nice place to live, but no longer enjoys the national stature it once took for granted. Desperate infrastructure needs (especially for transportation in Toronto), continued failings in the healthcare system, the pressures of an aging population — all of these are secondary issues to the province’s massive debt. There is no room to manoeuvre or innovate. If Ontario is very lucky, it will be able to pay the bill owing on what it already has, and nothing more. Even that isn’t guaranteed.

Not all of this is McGuinty’s fault. He didn’t bring down the U.S. economy. But he was the last good times premier Ontario is likely to have for at least a generation. He spent borrowed billions on wind power and pacifying unions that would not, in the end, long remain pacified. It’s not much to show for almost 10 years in power, but it could well be a better deal than the next 10 years will bring. The bill for Ontario’s party has come due. McGuinty’s leaving it for the next generation. And it’s a doozy.

National Post

mgurney@nationalpost.com

@mattgurney
 
That was a good read.  I wonder if we will go to the polls again this year.  Since we now have a non elected premier.  Personally I am a fan of the conservatives.  I like some of what Hudak has said.  Boy some of things he says are just outright crazy too.  I haven't heard a thing from the NDP yet.

I suspect the other parties will find a way to force a election this year.  Some of the good from Hudak is getting out of the private market, dismantling some of Mcguinty programs to create savings along with lowering tax to stimulate more growth.

The bad which I cannot understand is sell the LCBO and let convenience stores sell booze? He claims privatizing the market would be more profitable than the already 100% profits the government takes on alcohol sales.  The beer store released a statement if they have to distribute their products to non centralized locations we will have to raise the cost of beer to cover the extra transportation costs.

Furthermore cigarettes are hidden out of sight to attempt to curve the addiction and negative affects in stores.  But we will stick the next worse legal drug in the people face? lol  ;D

Don't Smoke! Do Drink! lol
 
They could take a page from when Alberta changed to private liquor stores. The province only got out of the retail side and stayed in the distribution side. The net result was more access certainly, but less long term cost due to salaries, pensions, etc. There was no appreciable increase in the cost of beer/liquor/wine that I remember. If anything, the market is more competitive, and at least on the beer front, opened up to smaller producers.
 
ModlrMike said:
They could take a page from when Alberta changed to private liquor stores. The province only got out of the retail side and stayed in the distribution side. The net result was more access certainly, but less long term cost due to salaries, pensions, etc. There was no appreciable increase in the cost of beer/liquor/wine that I remember. If anything, the market is more competitive, and at least on the beer front, opened up to smaller producers.

That is very true. Here in Innisfail (pop 8000ish) we used to have one ALCB store, there are now 5 stores with a greatly increased selection and sales all the time.



Larry
 
kevincanada said:
That was a good read.  I wonder if we will go to the polls again this year.  Since we now have a non elected premier.  Personally I am a fan of the conservatives.  I like some of what Hudak has said.  Boy some of things he says are just outright crazy too.  I haven't heard a thing from the NDP yet.

I suspect the other parties will find a way to force a election this year.  Some of the good from Hudak is getting out of the private market, dismantling some of Mcguinty programs to create savings along with lowering tax to stimulate more growth.

The bad which I cannot understand is sell the LCBO and let convenience stores sell booze? He claims privatizing the market would be more profitable than the already 100% profits the government takes on alcohol sales.  The beer store released a statement if they have to distribute their products to non centralized locations we will have to raise the cost of beer to cover the extra transportation costs.

Furthermore cigarettes are hidden out of sight to attempt to curve the addiction and negative affects in stores.  But we will stick the next worse legal drug in the people face? lol  ;D

Don't Smoke! Do Drink! lol

The Premier appointee will do everything possible to avoid an election and stay out of reach of the voters, until such time as the Union movement is pacified anyway (nothing like having a $300 million dollar war machine behind you in an election). I am also fairly certain that the NDP will come on board, since they can extract the most outrageous terms and conditions with every bill in exchange for support while also freeing them from the labour and expense of an election. I might also note that the NDP's money machine in Ontario is pretty low, so they have added incentive to avoid the polls as well:

http://news.nationalpost.com/2013/01/27/ontarios-incoming-premier-vows-to-work-with-opposition-avoid-elections/

Ontario’s incoming premier vows to work with opposition, avoid elections

Ontario’s incoming premier says she will recall the prorogued legislature by Feb. 19 and work with the opposition to avoid a general election.

Kathleen Wynne won the Ontario Liberal leadership race Saturday and is set to become Ontario’s first female leader and Canada’s first openly gay premier.

Ms. Wynne says Ontarians do not want a general election and don’t like the fact the house has been idle since Premier Dalton McGuinty made his resignation announcement in October.

Once she’s sworn in, Wynne will have to mend relations with the powerful teachers’ unions, who are angry at the Liberals for using a controversial law to force contracts on about 126,000 public school teachers.

Related
Convention notebook: Candidate speeches had it all from bold to funny to boring
Scott Stinson: Ontario Liberal leadership candidates struggle to distinguish themselves
Barbara Kay: How the Ontario Liberals blew their first chance at a female premier
Ontario Liberal 2013 leadership convention: As it happened
.
Public sector unions, who protested by the thousands outside the convention hall Saturday, have vowed to use their organizational might to defeat the Liberals in the next election.

Ms. Wynne will also have to deal with a trail of controversies McGuinty left behind _ from the political decisions to cancel two gas plants in Liberal ridings, to a criminal probe of the Ornge air ambulance service.


Ms. Wynne’s victory foils a number of trends. She is the rare party leader from Toronto, where she represents the riding of Don Valley West, and she will become the province’s first female premier and also its first openly gay premier. Supporters of Sandra Pupatello, who was beaten on the final ballot, had said the Toronto factor would work against Ms. Wynne, and the incoming Premier provided one of the day’s biggest surprises when she addressed the question of her sexual orientation in her morning speech to delegates, saying Ontarians wouldn’t be troubled by it.


Convention notebook: Candidate speeches had it all from bold to funny to boring


The renovated Maple Leaf Gardens — it’s now home to a grocery store with an arena on top — in downtown Toronto has been a gathering point for various protesters. Pro-horse people. Anti-wind people. Pro-teacher people. On Saturday morning a large OPSEU crowd thronged the entrance to the arena, and some of those assembled shouted “Shame!” at delegates as they filed past. The labour movement has long been displeased with the Liberals, but berating grassroots members seems an odd way to win them to your side.

***

The proceedings began on Saturday morning with speeches from Greg Sorbara, chair of the Liberal campaign organization, Yasir Naqvi, MPP and party president, and Bob Rae, the interim federal Liberal leader. Problem was, they were speaking to an arena that was sparsely filled and it was before 9 a.m. Mr. Rae in particular tried to give a rousing speech that called Liberal troops to battle against “Harris, Harper, and Hudak,” but the response was flat. We’ll storm the barricades right after a coffee, sir.

.
“It has been a remarkable night,” Ms. Wynne said after the results were announced just before 8:30 local time. She thanked her campaign team, her children and her partner, Jane Rounthwaite.

“Believe it or not, this was the easy part,” she said to a crowded arena floor at Maple Leaf Gardens. “We are going to need all of you working together.”

“We have to be ready at any moment to into a campaign,” she said, but added that Liberals must also be ready to govern.

The final tally was 56% of delegates for Ms. Wynne and 44% for Ms. Pupatello.

The delegated convention format was expected to provide opportunity for tense moments, and did not disappoint.

Moments after it hardened into a two-woman race after the second ballot, Ms. Wynne pulled off the day’s biggest coup, with Gerard Kennedy and Charles Sousa both dropping out before the third ballot. Mr. Sousa walked his delegates across the floor at Maple Leaf Gardens to join Team Wynne. Mr. Kennedy followed the same path moments later.

The third ballot remained, but unless large numbers of Sousa and Kennedy delegates had decided against following their candidates, Ms. Wynne was already poised to become Ontario's 25th Premier.

The battle was tight through two ballots, with Ms. Pupatello, the former Windsor MPP who quit politics in 2011 for a Bay Street job, taking 39.4% of delegates to Ms. Wynne's 36.2%, leading to immediate speculation that one of Charles Sousa (9.8%) or Gerard Kennedy (13.7%) — or both — would endorse someone before third-ballot counting was to take place.


Congratulations to @Kathleen_Wynne & all the candidates. Proud to pass the torch, and trust Ontario is in good hands. #onpoli #olp #olpldr—
Dalton McGuinty (@Dalton_McGuinty) January 27, 2013
.
Ms. Wynne was seen as the more natural landing spot for Mr. Kennedy — she has worked for him in the past — but the Sousa supporters were said to be fairly divided in terms of which of the two leaders to support. Mr. Sousa encouraged his delegates to support Ms. Wynne while Mr. Kennedy told his to make their own choice, though he said Ms. Wynne better represented what he wanted to see in the next Premier.

Ms. Wynne beat expectations on the first ballot, securing 28.6% of the 2,084 votes, just behind Ms. Pupatello's 28.7%. Her team said she received 50 votes more than anticipated, which gave her momentum that was amplified when Dr. Hoskins, the Toronto MPP and former director of War Child Canada, said he would back her after he was eliminated on the first ballot with 7.2% of delegates.
 
kevincanada said:
The bad which I cannot understand is sell the LCBO and let convenience stores sell booze? He claims privatizing the market would be more profitable than the already 100% profits the government takes on alcohol sales. 

The profit that the government makes on the sales of alcohol is from the taxes is it not?  I've heard no suggestions that the government would stop collecting taxes (or lower the tax rates) on the sales of alcohol at private outlets so that income for the government should remain. 
 
GR66 said:
The profit that the government makes on the sales of alcohol is from the taxes is it not? 
I stand to be corrected, but what about the difference between what the province pays for the liquor, and what it sells it for?  If it's making profit from the sales over and above the taxes collected, then it's the product profit that disappears.
 
kevincanada said:
The bad which I cannot understand is sell the LCBO and let convenience stores sell booze? He claims privatizing the market would be more profitable than the already 100% profits the government takes on alcohol sales.  The beer store released a statement if they have to distribute their products to non centralized locations we will have to raise the cost of beer to cover the extra transportation costs.

The beer store is fear mongering so they can keep the monopoly. Think of all the costs associated with LCBO/Beer stores. Building, wages, power, water, gas, etc etc etc. Transportation is far cheaper than all of those. Its worked everywhere else its been tried, so why is Ontario addicted to more and more government employees?
 
kevincanada said:
That was a good read.  I wonder if we will go to the polls again this year.  Since we now have a non elected premier.  Personally I am a fan of the conservatives.  I like some of what Hudak has said.  Boy some of things he says are just outright crazy too.  I haven't heard a thing from the NDP yet.

I suspect the other parties will find a way to force a election this year.  Some of the good from Hudak is getting out of the private market, dismantling some of Mcguinty programs to create savings along with lowering tax to stimulate more growth.

The bad which I cannot understand is sell the LCBO and let convenience stores sell booze? He claims privatizing the market would be more profitable than the already 100% profits the government takes on alcohol sales.  The beer store released a statement if they have to distribute their products to non centralized locations we will have to raise the cost of beer to cover the extra transportation costs.

Furthermore cigarettes are hidden out of sight to attempt to curve the addiction and negative affects in stores.  But we will stick the next worse legal drug in the people face? lol  ;D

Don't Smoke! Do Drink! lol

Kathleen Wynn is an MPP, and therefore was elected.  The Premier, like the Prime Minister, is never elected except as an MPP.

That said, I have a feeling there will be an early election.  It is a minority government...
 
milnews.ca said:
I stand to be corrected, but what about the difference between what the province pays for the liquor, and what it sells it for?  If it's making profit from the sales over and above the taxes collected, then it's the product profit that disappears.

I would think that the product profit is more than offset by the amount of taxpayer money required for infrastructure, staff etc. Divesting itself of these responsibilities would be ultimately more profitable. It would be interesting to see what the LCBO operating figures are.
 
ModlrMike said:
I would think that the product profit is more than offset by the amount of taxpayer money required for infrastructure, staff etc. Divesting itself of these responsibilities would be ultimately more profitable. It would be interesting to see what the LCBO operating figures are.
Unless I'm reading this wrong, according to the attached bits from the 10-11 Annual Report ....
http://www.lcbo.com/aboutlcbo/annual/2010_2011.pdf
.... LCBO transfered ~$1.5 B to Ontario coffers as a dividend over & above the taxes collected.  If I am reading this right (and I stand to be corrected), methinks the private sector would have to sell a whole lot more wine/booze to make up for that kind of revenue loss if the LCBO's retail infrastructure is sold off.
 
Remember, the Beer Store is not a government operation; rather, it's a private company with a monopoly that's oeprated by three larger international brewing companies - none of which is Canadian.

Of course the three big brewers don't want to change - more choice at retail means less sales for their poor quality suds.
 
The LCBO does indeed jack up the prices on booze (not including taxes).  They were lambasted by the Ontario AG in 2011 http://blog.paulmckeever.ca/2011/12/05/auditor-generals-report-lcbo-colludes-with-suppliers-to-overcharge-purchasers/  and various Sun Media scribes, have written a few articles about the LCBO's practices.  As the largest single buyer of booze on the planet, they enjoy quite the discount from their various suppliers, and their near monopoly on sales of wine and spirits, enables them to set what ever price they want.
 
Considering a 60oz bottle of Crown Royal is 20USD in California when in Ontario its near 80CAD, you can bet there is a huge markup.
 
PuckChaser said:
The beer store is fear mongering so they can keep the monopoly. Think of all the costs associated with LCBO/Beer stores. Building, wages, power, water, gas, etc etc etc. Transportation is far cheaper than all of those. Its worked everywhere else its been tried, so why is Ontario addicted to more and more government employees?

True, the beer store wouldn't want to change ergo fear mongering in is in their favour.  Looking locally. my town population is 150,000 there is 3 beer stores.  I'm making up numbers as I go but what does it take to reload 3 stores? a truck? 2 trucks? 1 or 2 days of man power labour.

There has to be over 100 convenience stores here.  No way a couple of guys are going to supply that many stores.  These costs have to absorbed somewhere.
 
kevincanada said:
True, the beer store wouldn't want to change ergo fear mongering in is in their favour.  Looking locally. my town population is 150,000 there is 3 beer stores.  I'm making up numbers as I go but what does it take to reload 3 stores? a truck? 2 trucks? 1 or 2 days of man power labour.

There has to be over 100 convenience stores here.  No way a couple of guys are going to supply that many stores.  These costs have to absorbed somewhere.


Here in Texas (the little part I'm in - each county has its own laws) only a handful of convenience stores stock beer and wine, but almost every large grocery store does.

By the way: just before I left Canada I picked up a bottle of a mass market Australian Chardonnay in the LCBO for about $12.00; just last week I bought the same bottle here in the neighbourhood WalMart grocery market for $5.00. Competition works. Also BTW: both Walgreens and CVS, big "drug stores," à la Shoppers Drug Mart sell wine and beer.  :dunno:
 
E.R. Campbell said:
Here in Texas (the little part I'm in - each county has its own laws) only a handful of convenience stores stock beer and wine, but almost every large grocery store does.

By the way: just before I left Canada I picked up a bottle of a mass market Australian Chardonnay in the LCBO for about $12.00; just last week I bought the same bottle here in the neighbourhood WalMart grocery market for $5.00. Competition works. Also BTW: both Walgreens and CVS, big "drug stores," à la Shoppers Drug Mart sell wine and beer.  :dunno:

Competition works, but that isn't the problem.  Our high prices in Ontario are due to the government taxes.  Each case of beer has multiple flat taxes and a point of sale tax.  When reading the local papers about it they often do a break down.  It usually comes in to around 50% tax, the other 50% is making, distributing and profits regarding beer.

If the Toronto Sun Newspaper can be trusted it somewhat explains it.
http://www.torontosun.com/2012/12/04/time-for-lcbo-robbery-to-end

some quick clips from the article
"A 750-ml bottle of Crown Royal at Outlet Liquor in Buffalo is $17.  In the LCBO it’s $27.95." and
"...a 750 ml bottle of rye, rum, gin, scotch or vodka starts out costing the LCBO about $5.52..." and
"...There is a $12.72 in LCBO mark-up..."

$17 in buffalo 12.72 plus 5.52 = $18.24 here

The cost of hooch is somewhat comparable to the USA if we wipe out the Government taxes on it.  At best with competition the cost drops a couple of dollars and the cash strapped province looses A massive amount of income in return for a big fat one time cheque on the sale of the corporation.
 
I have no complaints about sin taxes: we elect the people we do and they do the best they can to find the money to give us what we demand. Taxes on booze is one good way of doing it.

But: while I understand that the LCBO's huge buying power allows it to get wines at bargain prices (giving more "room" for taxes) I am unconvinced that that and the Beer Store's monopoly are, in any meaningful way, good business practices. Warehousing and delivery/distribution are highly competitive businesses which, I am absolutely certain, can be done more efficiently and effectively by competing actors than by one, big, corporate player.
 
E.R. Campbell said:
I have no complaints about sin taxes: we elect the people we do and they do the best they can to find the money to give us what we demand. Taxes on booze is one good way of doing it.

But: while I understand that the LCBO's huge buying power allows it to get wines at bargain prices (giving more "room" for taxes) I am unconvinced that that and the Beer Store's monopoly are, in any meaningful way, good business practices. Warehousing and delivery/distribution are highly competitive businesses which, I am absolutely certain, can be done more efficiently and effectively by competing actors than by one, big, corporate player.

This actually is not the beef dare I say most people have.  I personally am for selling the LCBO.  The problem is the bold face lies we are told and the end result of those actions.

The leaders are promoting the sale, but they are saying it will be more profitable for the province if the private market takes over and lower the cost of alcoholic beverages.  This is a line of garbage, because the province is the sole recipient of all forms of revenue from those sales.

The leaders are pitching it as lower costs to the consumer and higher revenues.  It is mathematically impossible.  Then with adding alcoholic beverages to retail stores.  It is (moral/health) issue here slap in the face.  People have spent years trying to remove tobacco products from stores and public view.  Retailers are not allowed to advertise tobacco anymore, cigarettes have to be hidden behind the counter.

The reason being is addiction and health problems of cigarettes, Alcohol has similar health issues associated with it, but now it is okay to stick that in the face of the people but not tobacco?  In my eyes it is very hypocritical thing to do.
 
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