It’s election time in Alberta. Yay? You are forgiven for thinking election time is perpetual these days, what with the non-stop campaigning that goes on. There’s seemingly no end to the pep rallies, town halls, leadership contests, policy announcements, billboards, radio spots, and television commercials. And don’t get me started on the social media memes. Throw in a federal election this fall and municipal elections in 2020, not to mention the U.S. national election next year (meaning they’ll start campaigning hard right about yesterday) and it definitely feels like election time never stops. The only discernible difference between actual election time and all the other time is that signs appear on some of my neighbours’ front lawns.
Such is the way of the democratized world. It’s exhausting. I’d prefer it all happen on one day every four years. Keep the campaigns to one month, run simultaneously, and have a single voting day for all levels of government. I’m smart enough to differentiate between campaigns and levels of government. Free up the remaining three years and eleven months for less contentious topics like professional sports and pronoun usage.
Instead, we smear the pain over entire years, never offering any reprieve from the onslaught of politicking. It’s akin to medical doctors inventing the colonoscopy and then bio-engineering humans to have multiple colons, none of which can be concurrently tested. What we are left with is an unrelenting, soul-withering mess we shamelessly sweep under our freedom rugs.
The reason it’s a mess is because we hairless monkeys are incapable of surrendering our tribal nature. With each election, the populace, be it local, provincial/state, or national, grows evermore polarized. It’s impossible to overlook this fractioning of society. Spend any time on social media (or the nightly news) and not only does the polarization become abundantly clear but the frightening zealotry imbedded within it simultaneously wrenches your heart and ignites your basal ganglia. You either jump into the fray, keyboard ablaze, or recoil in anguish, wishing it would all go away. Sometimes it’s both. In rapid succession.
Today, however, I aim to change this narrative and, perhaps, history. Today, I gift you a glimmer of hope. This polarization of peoples is neither insurmountable nor irreversible. In fact, at this very minute I can tell you at least one thing that everybody has in common. One unifying truth, shared by us all, regardless of political affiliation or ideology. A shaky but nonetheless existent foundation upon which we can rebuild society into a vibrant, inclusive, and cohesive entity. Here it is.
Nobody wants to pay for anything.
Those on the Left don’t want to pay for anything. They want others to pay for everything, specifically “the rich”. That payment comes in the form of higher taxes, specifically for “the rich”. Conveniently, “the rich” is typically defined to be those earning more than them. Funny that. And don’t forget the “evil corporations”, so often owned and/or managed by “the rich”. They too can pay for everything. And employ everyone. At living wages.
Those on the Right don’t want anybody to pay for anything. Kudos for universality! That refusal to pay typically comes in the form of lower taxes. Aside from a few hateful bones tossed to social conservatives, cutting taxes is all The Right really believes in. They’re the “All Taxes are Bad” flag bearers (bested only by the “All Taxes are Theft” Libertarians). Conveniently, this anti-tax dogma preferentially favours “the rich”.
Ironically, and by ironically I mean not surprising in the least, despite nobody wanting to pay for anything, everybody still loves to spend. Holy shit, that’s a second unifying truth! My glimmer just became a shimmer.
With everyone wanting to spend and nobody wanting to pay, debt has predictably become the defining characteristic of our entire global financial system. Sorry Karl, but religion is no longer the opium of the people, debt is, and Canada’s addiction is worthy of a starring role in any Trainspotting reboot.
Canada’s Federal Debt Addiction
The Federal debt of this nation as of March 31, 2018, the most recent year end available at this time, stood at $671,254,000,000 (source – Government of Canada – page 28). That’s a pretty big number, two thirds of the way to one trillion dollars. Dr. Evil’s heart just fluttered.
To put this in obtuse perspective, the largest Canadian corporation by market cap is Royal Bank of Canada which is currently valued at $149,250,000,000 (on April 5, 2019). So the Canadian people, by way of our federal government, owe the equivalent of 4.5 Royal Banks of Canada. Or, if you prefer a more international flavour, one Berkshire Hathaway. Warren included.
That’s a staggering number and it’s growing. The latest fiscal year just ended a week ago and the Federal debt is expected to have grown to $685,600,000,000 (source – Royal Bank of Canada – page 11). This is the number most often reported in the media and which you’ll most often see on novelty websites like the debt clock. It’s also bullshit.
OK, so bullshit might be a little strong. It’s a real, calculated number but it’s intentionally misleading. It doesn’t truthfully represent what the federal government owes, which is what you would think “Federal Debt” would mean. What it is, rather, is the total liabilities less financial assets (think cash and receivables) less non-financial assets (think tangible assets and inventory), or something more accurately called “Accumulated Deficit”. It’s akin to me asking you how big your mortgage is and you telling me you don’t have one because you have some cash in the bank, a couple cars, and a house all of which add up to more in value than your actual mortgage balance. It’s true, just not honest.
A slightly more truthful number is “net debt” which is total liabilities less financial assets only. It’s still deceiving but has removed the egregious assumption that in a fire sale we could recoup full market value for all the stuff the government owns. Not surprisingly, it’s a bigger number. At the end of fiscal 2018, Canada’s net debt was $758,763,000,000 (source – Government of Canada – page 28). Awesome! We’re now three quarters of the way to one trillion dollars; five, whole Royal Banks of Canada. Dr. Evil just popped a nitro pill.
Canada’s Provincial Debt Addiction
Net Debt is also the most commonly reported number for provincial debt. Why is that, you might ask? I have no idea. Nonetheless, you’ll be tickled pink to learn that all provinces in this sprawling nation also carry a net debt. Provincial net debt ranges from the quaint $2,135,000,000 owed by lovely PEI to the obese $323,834,000,000 owed by gluttonous Ontario (source – Royal Bank of Canada – page 11). Those are fiscal end 2018 numbers and, like the Feds, have continued to grow in the year since. The worst offenders are expected to continue to grow their debt for the foreseeable future.
Since we’re in the midst of an election campaign, you might be curious to learn that Alberta’s net debt was $19,344,000,000 fiscal end 2018 and forecast to have reached $28,127,000,000 by the end of March 2019 (source – Royal Bank of Canada – page 11). Those are big numbers and, historically, quite uncommon in this hydrocarbon-bathed province.
They’re also significantly less than the numbers typically batted around by the media and competing political parties. You won’t see those numbers in opposition talking points or plastered across election material arriving in your mailbox. You’re more likely to see numbers like $58,600,000,000 for the 2018-2019 fiscal year, growing to $95,000,000,000 by 2024. So where are those decidedly larger numbers coming from? They’re called “debt” but are double the aforementioned “net debt” reported in official financial documentation. How can that be?
Well, they’re something new, yet again. I don’t think they have a special name, and it took some painful digging to figure this out, but that $58.6 billion number is comprised of liabilities for capital projects plus borrowing for fiscal plan plus debt for pre-1992 teachers’ pension plan (source – Alberta Government – page 8). Let’s just call it “migraine debt” and know it is one more painful but necessary step closer to the truth.
Similar deconstruction of liabilities for other provinces would undoubtedly also result in much larger “debt” numbers than the ones shared above. Here’s the scary part. These numbers still do not reflect the actual total amount of money Canadian governments owe. For that number we have to go to “total liabilities”. And that number is incomprehensible.
If we ignore all the accounting machinations designed to keep reported debt numbers looking as modest as possible, and it says a lot about our world that hundreds of billions of dollars is deemed preferable, focusing only on the sum total of all liabilities, including pension liabilities, which are never included in the previously discussed debt calculations, the resulting, most truthful, total debt numbers reach comical dimensions. Comical in the sense that you have to laugh to prevent yourself from crying.
The total, all-inclusive debt owing by the federal government of Canada end of fiscal 2018 was $1,157,402,000,000. (source – Government of Canada – page 28) The total, all-inclusive debt owing by all combined provincial, municipal, and aboriginal governments in Canada end of fiscal 2017 (most recent data I could find) was $1,366,660,000,000. (source – Government of Canada – page 55) In other words, the Canadian people are currently liable, at all levels of governance, for a grand total of $2,524,062,000,000. Let me spell that out for you; two trillion, four hundred and fourteen billion, nine hundred and fourteen million dollars. That’s 17 Royal Banks of Canada. 4 Berkshire Hathaways (Warren still included). 2 Amazons (Jeff included but not his ex). Or $65,162 for every man, woman, and child in the country. I think Dr. Evil just burst his Mini-Me.
Of course, all that frenzied credit spending is the government’s doing and as we all know, what the government does is not our fault. If there’s one thing we can agree on it’s that all governments waste money and it is never our responsibility. Wait a minute. Is that a third universal truth? I think I just burst my Mini-Me!
It is true, though. Every one of us can point to some decadent expenditure that this government or that government made and use it to remove any personal responsibility for these staggering debt numbers. Be it orange juice or gazebos, ferries or dams, subsidies or bailouts, helicopters or (cough) no helicopters, we all have a reason to blame the other side and wash our hands of accountability. Everyone’s political party of choice has run up debt at some point, ergo, none of us are to blame.
Canada’s Personal Debt Addiction
Which is an incredibly childish and selfish way to view this issue but one that would have, perhaps, a modicum of credibility were our own personal finances not such a shit show. The most recent Stats Canada numbers show all Canadians combined currently hold $1,442,519,000,000 in mortgage debt and another $799,462,000,000 in other liabilities (think credit cards and car loans). These numbers combine for a total of $2,241,981,000,000 in total consumer debt. Let me spell that out for you: two trillion, two hundred and forty-one billion, nine hundred and eighty-one million dollars. (source – Statistics Canada). Code Blue – Dr. Evil’s lair!
The combined personal debt of Canadians is nearly the same figure as the combined government debt of Canadians (88.8%). In other words, our government is an absolute reflection of our people. This explains why the only party openly advocating deficit spending won the last national election. And the party in power before that cut taxes in their first year of governance and pointedly waited until the final year of their mandate, the election year, to “proudly” balance the books. And why all governments, of all stripes, in all provinces, tend to run deficits more often than surpluses. Nobody wants to pay for anything.
And before my provincial brethren of decidedly right-leaning, political persuasion start flap-jawing about the NDP and socialists and Liberals and every other boogeyman toward whom they’re so collectively fond of finger-pointing, Albertans have the highest average personal debt of all Canadians and by a substantial margin. We carry about 40% more personal debt than Canadians as a whole, and about 15% more than the next most profligate debtors, British Columbians, they of the money-laundering real estate bubble. This is true now and was true before the oil industry shat the bed. We Albertans are the richest Canadians and, apparently, the neediest.
See? We’re not as polarized as we think. We’re a remarkably unified bunch. Unified by spending. Unified by debt. To the tune of $4,766,043,000,000 (or 32 Royal Banks of Canada, if you’re keeping score). We’ve begun our journal to a quadrillion dollars. There’s a number you don’t hear every day. By the way, your share works out to $128,600. Certified cheques only, please.
The banks, of course, will be sure to get that personal debt back. We’ll be held accountable for that debt one way or another. Well, most of it anyway. There’s a reason the most valuable corporation in the country is a bank (as is number 2 – TD, number 5 – Scotia, and number 7 – BMO); they know how to make money. And as we all learned in 2008, if things do get dicey, the federal government will swoop in to lend a helping hand.
All that government debt, though? Ha! Yeah, that’s never getting paid back. Ever. We are all but outright defaulting on it, believing, instead, that “growth” will solve everything. We’ll simply grow the economy faster than the debt can eat our solvency. All political parties have jumped on this delusional bandwagon and we along with them. Left, Right, or anywhere in between, we have all placed our faith in the saving grace of perpetual economic growth.
Oh my. That’s… That’s a… I can barely restrain my squealiest glee… That’s a FOURTH universal truth we all share! And not just us, but the entire world. This is incredible! Go. Just go. Start naming schools after me now.