This week's Around The World deals with saving and its mirror opposite spending. The Funny to the right - courtesy of the New Yorker magazine - has a light-hearted take on spending that was all-for-naught, but the Financial Post article below highlights something much more serious. Government Waste, two words that in succession are perhaps redundant, is exemplified through the grotesque financial mismanagement and utter disregard for the savings of hard-working Ontarians. The current Liberal Governments' disastrous Green Energy initiatives have resulted in the highest energy costs for consumers and businesses in the country. And if that isn't enough, the recent decision to amortize the cost of their failed green energy programs over a longer time period will add an
additional $25 billion to the overall cost. That's approximately $2000 for every citizen of Ontario and equivalent to the cost of running every school in the province for 5 years.
This level of fiscal fecklessness requires substituting the word 'spending' with 'squandering', a rather quaint term that seldom is heard in everyday conversation. Squander -or to spending recklessly or prodigiously made its appearance in 1593 in Shakespeare's Merchant of Venice. And its best captures the way our sitting government treats taxpayer money. The 4th-last paragraph of the article includes the revelation:
"The Auditor General has estimated the global adjustment
charge cost $50 billion between 2006 and 2015 and increased
by 1,200% between 2006 and 2013."
Jaw-dropping numbers that underscore the need for all of us to save more. I have talked at length of a new type of inflation coming. Once driven by cash-strapped governments unable to reconcile revenue with expense. Where will the government come up with the additional $25 billion needed to paper over their mistakes on the energy file? Answer: You. Get ready for massive increases in taxes and user fees. It may be $75 to renew your Drivers’ License this year, but it's likely to be many times that before long. Same for accessing any government service -which was supposed to be covered through the high taxes we already pay. Conservatively our estimates suggest that retirees will need an additional 10% to 15% in retirement to cover these higher government levies. Of course there's always the option of replacing a tax-and-spend government with one that at least ostensibly feels some accountability to its tax payers. 2018 is just around the corner and Ontarians will be given exactly that chance. In between now and then re-reading the Aesop Fable about (killing) The Goose That Laid the Golden Eggs. Because that's exactly what's happening in Ontario today.
Manulife Securities Investment Services Inc.