Other 2012 Budget Discussions

We have one about the penny, which has kind of degenerated a bit .

But what about the other key points coming out?

The border crossing limits being raised/eliminated?
OAS ages being raised? (only effects about 1/2 the sandbox though).
Federal workers being reduced?

I keep hearing from others (outside the sandbox) that most of these cuts could have been avoided had they just re-raised the GST back to 7%. Anyone agree with that one?

Never heard the GST issue before (at least I don't recall it).

I understand the OAS issue. With so many people retiring (baby boomers) and the population not growing fast enough there will be a shortfall.

I was surprised about the border spending limits. Seems counter-intuitive to growing domestic retail spending.

I have not heard enough about the budget to add much more.

I am happy the border spending limits are up....our prices are too high in Canada and I will gladly shop in the US instead.

Libs and NDP have been trying to get the Cons to put GST back to 7% since day1 of the world wide economic melt down.

who fights for the little guy again?

Goth_chic wrote:I am happy the border spending limits are up....our prices are too high in Canada and I will gladly shop in the US instead.

I wish they would have increased the liquor exemption.

The spending limits are nice, but it was rare that our family of 3 would spend more than $1200 on things that weren't already duty-free.

AGEsAces wrote:I keep hearing from others (outside the sandbox) that most of these cuts could have been avoided had they just re-raised the GST back to 7%. Anyone agree with that one?

I would rather see lower taxes in exchange for...

- less retirement welfare (aka OAS)
- the elimination of CPP
- less (or zero) CBC funding
- the end of the CRTC and CanCon rules
- the repeal/buyout of the Indian Act

... I could go on forever.

sputnik wrote:

AGEsAces wrote:I keep hearing from others (outside the sandbox) that most of these cuts could have been avoided had they just re-raised the GST back to 7%. Anyone agree with that one?

I would rather see lower taxes in exchange for...

- less retirement welfare (aka OAS)
- the elimination of CPP
- less (or zero) CBC funding
- the end of the CRTC and CanCon rules
- the repeal/buyout of the Indian Act

... I could go on forever.

- agreed, to a point
- not sure if I really grasp your intent, kindly explain
- totally agree
- totally agree
- totally agree

AgesAces- that 2% in GST if it was put back on would generate about $10-$12Billion in revenue and that is over half of the current deficit.

It may be a little regressive, but that was one of our Leaders campaign promise from a few years ago. I guess if it was put back on they could increase the GST credit cheque they send out to the poor people!

My budget highlights :

Elimination of multiple redundant environmental studies... "One Project - One Study"

5% cut to CBC budget : (50% would have been nice but it's a start)

Increased spending limits for short visits across the border.

Elimination of 19K civil service jobs.... always good to reduce bureaucracy.

My personal favorite :

CRA to carefully scrutinize foreign contributions to charitable organizations : that should come as a warning to David Suzuki.

grumpy old man wrote:

sputnik wrote:

I would rather see lower taxes in exchange for...

- less retirement welfare (aka OAS)
- the elimination of CPP

- agreed, to a point
- not sure if I really grasp your intent, kindly explain

OAS is basically a form of welfare for seniors. However I think the claw backs start way too high ($67,668) and OAS is only not paid to those making more than $110,878. There are tons of seniors who happily sit on mountains of money and barely declare any of it as income while collecting their full OAS benefit. It is a broken system that should be based on net worth and not just yearly income.

CPP should be eliminated. There is no reason why I should pay into a system at the tune of $2300 that may or may not exist when I retire. I will happily save for my own retirement and buy my own life insurance policy (to replace the CPP survivor/death benefit).

I understand the OAS philosophy. Nuking it will only hurt those that need it most. A means test at tax time should suffice.

The CPP is drastic. Too many people do not have company pensions and/or are low earners and have not saved enough to retire without worries.

Instead of cutting it make it optional. But government will be on the hook anyway when the people who cannot manage their finances properly come looking for help.

Make a law that makes it illegal to under-fund CPP or steal from it like the dippers did with Manitoba Hydro,

In this case we have to protect those that can't or won't protect themselves.

Sure. I am fine with making it optional as long as the CPP portion paid by the employer goes onto my paycheque (even if it is pre-tax).

$5000/year into an RRSP goes a long way for someone who is effectively working full time from the age of 22-65.

Lets do some math.

Assume the following

Current Age = 22
Retirement Age = 65
Projected Age of Death 85
Monthly Contribution = $400
Projected Average Rate of Return = 7%
Inflation Rate = 2.0% (increases yearly contribution)
Projected Annual Retirement Salary = $45,000

Behold the power of compounding!

Code:


Age   OpenBal Contrib Gains  ClosingBal
22   $0   $4,800   $347   5,147
23   5,147   $4,896   $714   10,757
24   10,757   $4,994   $1,114   16,865
25   16,865   $5,094   $1,549   23,508
26   23,508   $5,196   $2,021   30,725
27   30,725   $5,300   $2,534   38,558
28   38,558   $5,406   $3,090   47,053
29   47,053   $5,514   $3,692   56,259
30   56,259   $5,624   $4,345   66,228
31   66,228   $5,736   $5,051   77,015
32   77,015   $5,851   $5,814   88,680
33   88,680   $5,968   $6,639   101,288
34   101,288   $6,088   $7,530   114,905
35   114,905   $6,209   $8,492   129,607
36   129,607   $6,333   $9,530   145,471
37   145,471   $6,460   $10,650   162,581
38   162,581   $6,589   $11,857   181,027
39   181,027   $6,721   $13,158   200,906
40   200,906   $6,856   $14,559   222,321
41   222,321   $6,993   $16,068   245,382
42   245,382   $7,133   $17,692   270,206
43   270,206   $7,275   $19,440   296,922
44   296,922   $7,421   $21,321   325,664
45   325,664   $7,569   $23,344   356,576
46   356,576   $7,720   $25,518   389,815
47   389,815   $7,875   $27,856   425,547
48   425,547   $8,032   $30,369   463,948
49   463,948   $8,193   $33,069   505,210
50   505,210   $8,357   $35,969   549,535
51   549,535   $8,524   $39,084   597,143
52   597,143   $8,695   $42,429   648,266
53   648,266   $8,868   $46,020   703,154
54   703,154   $9,046   $49,875   762,075
55   762,075   $9,227   $54,012   825,314
56   825,314   $9,411   $58,452   893,177
57   893,177   $9,599   $63,216   965,993
58   965,993   $9,791   $68,327   1,044,112
59   1,044,112   $9,987   $73,810   1,127,909
60   1,127,909   $10,187   $79,690   1,217,786
61   1,217,786   $10,391   $85,996   1,314,173
62   1,314,173   $10,599   $92,758   1,417,530
63   1,417,530   $10,811   $100,009   1,528,349
64   1,528,349   $11,027   $107,782   1,647,158
65   1,647,158   $11,247   $116,114   1,774,519
66   1,774,519   -$107,552   $116,441   1,783,408
67   1,783,408   -$109,703   $116,908   1,790,613
68   1,790,613   -$111,898   $117,254   1,795,969
69   1,795,969   -$114,135   $117,467   1,799,300
70   1,799,300   -$116,418   $117,535   1,800,417
71   1,800,417   -$118,747   $117,445   1,799,116
72   1,799,116   -$121,121   $117,182   1,795,177
73   1,795,177   -$123,544   $116,731   1,788,364
74   1,788,364   -$126,015   $116,076   1,778,425
75   1,778,425   -$128,535   $115,198   1,765,088
76   1,765,088   -$131,106   $114,079   1,748,061
77   1,748,061   -$133,728   $112,697   1,727,030
78   1,727,030   -$136,402   $111,032   1,701,659
79   1,701,659   -$139,130   $109,058   1,671,587
80   1,671,587   -$141,913   $106,752   1,636,426
81   1,636,426   -$144,751   $104,086   1,595,760
82   1,595,760   -$147,646   $101,030   1,549,144
83   1,549,144   -$150,599   $97,553   1,496,098
84   1,496,098   -$153,611   $93,622   1,436,109
85   1,436,109   -$156,684   $89,201   1,368,626


You will see that at 65 have an opening balance of $1,774,519 are collecting your income of $107,552 (inflation adjusted at from $45k at 2.0%)

Should you die at 85 your kids can fight over the remaining $1.3+ million.

Now some might say that 7% is too optimistic or agressive, and to that I say fine.

When you look at current CPP payouts you are getting a maximum of $11,200/year.

With the same assumptions as above but shifting the projected salary to an inflation adjusted $11,200/year how low can we make the rate of return to ensure you don't run out of money before the age of 85.

Lets run the numbers.

Current Age = 22
Retirement Age = 65
Projected Age of Death 85
Monthly Contribution = $400
Projected Average Rate of Return = 2.2%
Inflation Rate = 2.0% (increases yearly contribution)
Projected Annual Retirement Salary = $11,200

Here you go. Not bad for a 2.2% annual return.

Code:


Age   Open Bal   Contributions   Interest Accrued   Closing Balance
22   $0   $4,800   $107   4,907
23   4,907   $4,896   $217   10,019
24   10,019   $4,994   $331   15,345
25   15,345   $5,094   $451   20,889
26   20,889   $5,196   $575   26,660
27   26,660   $5,300   $704   32,664
28   32,664   $5,406   $839   38,908
29   38,908   $5,514   $979   45,400
30   45,400   $5,624   $1,124   52,148
31   52,148   $5,736   $1,275   59,159
32   59,159   $5,851   $1,432   66,442
33   66,442   $5,968   $1,594   74,005
34   74,005   $6,088   $1,763   81,856
35   81,856   $6,209   $1,939   90,004
36   90,004   $6,333   $2,121   98,458
37   98,458   $6,460   $2,310   107,228
38   107,228   $6,589   $2,505   116,323
39   116,323   $6,721   $2,708   125,752
40   125,752   $6,856   $2,919   135,527
41   135,527   $6,993   $3,137   145,656
42   145,656   $7,133   $3,363   156,152
43   156,152   $7,275   $3,597   167,024
44   167,024   $7,421   $3,839   178,284
45   178,284   $7,569   $4,090   189,944
46   189,944   $7,720   $4,350   202,015
47   202,015   $7,875   $4,619   214,509
48   214,509   $8,032   $4,898   227,439
49   227,439   $8,193   $5,186   240,818
50   240,818   $8,357   $5,484   254,659
51   254,659   $8,524   $5,792   268,975
52   268,975   $8,695   $6,111   283,780
53   283,780   $8,868   $6,440   299,088
54   299,088   $9,046   $6,781   314,915
55   314,915   $9,227   $7,133   331,275
56   331,275   $9,411   $7,497   348,183
57   348,183   $9,599   $7,873   365,656
58   365,656   $9,791   $8,262   383,710
59   383,710   $9,987   $8,664   402,361
60   402,361   $10,187   $9,078   421,626
61   421,626   $10,391   $9,507   441,523
62   441,523   $10,599   $9,949   462,071
63   462,071   $10,811   $10,406   483,287
64   483,287   $11,027   $10,877   505,192
65   505,192   $11,247   $11,364   527,803
66   527,803   -$26,769   $11,017   512,051
67   512,051   -$27,304   $10,658   495,406
68   495,406   -$27,850   $10,280   477,836
69   477,836   -$28,407   $9,881   459,310
70   459,310   -$28,975   $9,461   439,795
71   439,795   -$29,555   $9,019   419,259
72   419,259   -$30,146   $8,554   397,667
73   397,667   -$30,749   $8,065   374,984
74   374,984   -$31,364   $7,553   351,173
75   351,173   -$31,991   $7,015   326,197
76   326,197   -$32,631   $6,451   300,017
77   300,017   -$33,283   $5,861   272,595
78   272,595   -$33,949   $5,243   243,888
79   243,888   -$34,628   $4,596   213,856
80   213,856   -$35,321   $3,920   182,455
81   182,455   -$36,027   $3,213   149,642
82   149,642   -$36,748   $2,475   115,370
83   115,370   -$37,482   $1,705   79,592
84   79,592   -$38,232   $901   42,262
85   42,262   -$38,997   $63   3,328


sputnik wrote:

Goth_chic wrote:I am happy the border spending limits are up....our prices are too high in Canada and I will gladly shop in the US instead.

I wish they would have increased the liquor exemption.

The spending limits are nice, but it was rare that our family of 3 would spend more than $1200 on things that weren't already duty-free.

I agree. Liquor is crazy expensive here but in the US so cheap.

Deank wrote:Libs and NDP have been trying to get the Cons to put GST back to 7% since day1 of the world wide economic melt down.

who fights for the little guy again?

The GST is the golden goose that saved the Liberals throughout the 90's.

As far as I'm concerned, Lower taxes = Happier Me. I can live within my means, but the government can't. Too many public service employees giving miss-managed half a$$ service.

The border exemption looks better than it actually is. Since we are duty free with the states anyway, the doubling of the exemption limit saves $48. It's nice, but not enough to change the decision on a trip down to Grand Forks

I don't see the OAS/GIS being as big of a deal as some have said it will be. Besides - it's 10 years away! I'm not sure elimination of CPP or OAS would help anyone - people are pretty bad at doing their own savings. I know people that decry that they don't have a pension plan, but when you ask them if they contribute at least 2% to an RRSP, because that's what the employee would contribute ( normally) to a pension plan they look at you with deer in the headlights look.

The elimination of first class flights on short haul routes for MPs is a start, they should eliminate them on all routes!

Its too bad the government did not attack their own big fat pensions if they were so worried about OAS pensions killing Canada.
How many years of "public service" do those MPs have to "work" before they are "entitled" to a full pension anyway?
Its too bad the dumb-a$$ media got diverted by the "robo-scandel" to talk about what is really important to the average Canadian including themselves!
(Hope I do not get banned for that thought. )

what thought?

Deank wrote:what thought?

I meant to say rant.

nah.. its all cool.. I think we all totally agree about those bastards!

anyone else remember when the reformers said WE WILL NOT TAKE THE PENSION!!!... but then ended up signing up for it?

The MP's have until fall time to re-do their pension plan!

There really wasn't much dome overall that will hurt anyone. I cann't figure out when something is to start in 2030, what the point will be? I will be 85 and I am trying to find a way to mark that on my calendar, but I will have to rely on my grandchildren to remind me!

I guess the CBC will have to cut Don Cherry's $2,000,000 salary.

That whole corporation needs some oversight on what they pay and what the put through on their expense accounts.

They lose $110 million over the next 3 years. Out of the 1 billion, I wonder if the salaries of management will be touvhed , or will the secretaries and cleaning staff get hammered.

The cuts should be decided by the lower priced staff! Good luck to that!

rosencrentz wrote:The MP's have until fall time to re-do their pension plan!

I hope you are not holding your breath waiting for the MPs to decrease their pension plan!

rosencrentz wrote:
There really wasn't much dome overall that will hurt anyone.

Tell that to the people in the "real service industries" like fast food restaraunts.

rosencrentz wrote:
I guess the CBC will have to cut Don Cherry's $2,000,000 salary.

I would be surprised if NHL hockey was not profitable for CBC even if Don was getting that kind of money.
I find him more entertaining than the leafs which is kind of sad..

rosencrentz wrote:
That whole corporation needs some oversight on what they pay and what the put through on their expense accounts.

They lose $110 million over the next 3 years. Out of the 1 billion, I wonder if the salaries of management will be touvhed , or will the secretaries and cleaning staff get hammered.

The cuts should be decided by the lower priced staff! Good luck to that!

Should have been 10% right off the top per year.

5% for every denied access to information request

I find a $2,000,000 salary as excessive, in the same way that white collar workers in the banking industry earn?, huge bonus' and excessive , in my retired pensioner mentality, multi-million dollar salaries.

Unless they are commissioned sales? Maybe I am wrong?

no way put up the gst again, i agree with whoever said less taxes means happier me.

There should be a provision that if when it comes time for me to retire, if there wont be anything left to collect, the feds payout/back whatever i put in plus interest from the general revenue