We clearly don’t care – and yet we should. Not only should we care but we should be very concerned about the direction and mandate we gave our governments. Ontario’s Auditor General, Bonnie Lysyk, just delivered a scathing report on the Ontario Liberal parties attempt to better the environment, and more to the point, manage electrical power in the province of Ontario; as well as their handling of all government agencies. The Auditor General took the Ontario Liberal government to the verbal woodshed, and gave them a spanking that was rightly deserved. There was no sugar-coating the truth or leaving room for spin.

Most of us are accustomed to hearing about government waste. Regrettably, government waste has become like death and taxes. Fight it all you want, rile against it, but you’ll always finish in second. But when an audit is released, which rivals that of FIFA’s (international governing body of football), all of us should be very worried about finishing second. Here’s an excerpt from today’s National Post:

“By ignoring their own energy planning legislation, the Liberal government has cost consumers billions on their hydro bills. The average electricity bill rose 70% between 2006 and 2014, at least in part because the government ignored its own expert advice, the report notes. That has already cost consumers $37 billion in payments to power generators under what the government calls Global Adjustment.  By 2032 they will pay another $133 billion or $170 billion over 26 years”. 

It’s almost impossible to square those numbers, and to rationalize it because it’s so outlandish.  To make matters worse, when your own experts have been telling you not to do this and that your plan is horribly flawed, but you chose to ignore the council for ideological reasons, it is the highest form of tax payer contempt. (more…)

On October 19th, Canadians will choose who will lead this this country going forward. Assuming there’s a majority, a rather large assumption given current polls, Canadians will have to live with their decision for four years. Irrespective of the choice Canadians make the world will not come to an end the day after the election. The leaders of the three major parties would try to have believe otherwise, but the truth is there is very little truth in politics, and even less so during a campaign.

I was eligible to vote for the first time in 1978, and since then I have never missed the right to exercise my franchise. I never understand when people say, “What’s the point of voting, it’s not going to make any difference”. To me the point is that we have the right to vote, and that never should be taken for granted. To illustrate how precious the right is; take a moment to take stock of the oppression and brutal disregard for basic human rights around the world today. In parts of the world the oppressors will allow access to Facebook, but allowing an election which will determine who the leader of their country will be?  Well, that’s just a notion too far. Technological advancement is a by-product of society’s enlightenment, and nothing contributes to that more than the simple act of marking an X on a ballot. 

I do understand why voter cynicism and apathy exists. We all know, or least came to expect that politicians are less than truthful. They will say whatever is necessary to get a vote. Therefore, many voters to decide who to vote for based on whom they dislike the least. I must confess, (more…)

That’s not exactly what we have come to expect from the Bank of Canada.  For years it’s been none and done.  Historically when the Bank of Canada makes an adjustment to the overnight lending rate, up or down, it’s not normally a one shot proposition.  So why the change?  Well, for now there was no need to lower the overnight lending rate.  Financial and economic conditions have improved since the last rate cut.  Still somewhat tenuous but not as dire as some were suggesting.  Here’s how the Bank of Canada rationalized not making a change to the overnight lending rate, “The oil price shock has had a modest early impact on aggregate demand, and a larger effect on income.  The Bank continues to expect that most of the negative impact from lower oil process will appear in the first half of 2015, although it may be even more front-loaded than projected in January.  Nevertheless, data for 2014 as whole suggest the anticipated rotation into stronger growth in non-energy exports and investments”.

One doesn’t require expertise in breaking ciphers to decode the Bank of Canada’s position. Simply stated, there’s still concern about Alberta, relative to the price of oil, but the fallout and pain may be contained.  Also, there are always winners and losers when markets sectors fluctuate. So Alberta’s short term pain may be Ontario’s gain. Yes, it appears that the “have not” province may be in a position now to tuck away their tin cup and pencils – not for a moment do I think politicians at every level in Ontario will cease being the country’s most organized panhandlers, but the justification for handouts may become more difficult. (more…)

One of the unfortunate by-products of the “information” age is that content is required, every minute of the day.  Be it 24 hour news stations, sports stations or online publications etc.  There’s no time to think things through.  In-depth research and analysis takes times, and nobody seems to have it today.  We live in a 24 hour news cycle, and the competition is fierce.  The more salacious or provocative a story is, the greater the chance that eyeballs will be directed to it.  Case and point, Alberta.  Our friends and colleagues in that province must feel like they’re under siege.  It’s a constant bombardment of the “sky is falling” narrative. This is not an “it’s not fair” sentiment an eight year old says that when you make them go to bed by 9:30 pm.  The shame is that there does not appear to be much balance in the news with respect to the price of oil, and the impact it will have in Alberta.  There are contrary opinions in this regard, but you have to look for it.

I came across an article which suggests that the price for a barrel of oil has hit bottom.  This is not a lone opinion, and one individual who is suggesting this has a wee bit of knowledge and credibility in this regard.  (more…)

And if you’re a snowbird or you planned on spending March break in the U.S., it’s going to cost you a lot more.  The Canadian Dollar’s decline does not come as a surprise. The Loonie may be worth 82,81,80,79, 78 cents – it will all depend when and what time of day you read the blog.  The Loonie is referred to as the petro-dollar, so when the price for a barrel of oil falls by 51%; it shouldn’t come as surprise that the Loonie moves in lockstep.  What did come as surprise is the Bank of Canada’s decision to cut the overnight lending rate.  Some had predicted this could happen in 2015, but no one saw this coming so soon into the New Year.  It’s bit of shock to the system because the overnight lending rate has remained unchanged for over four years.  Every announcement from the Bank of Canada has been the same; “move on folks, nothing to see here”.  Well, there’s something to see now.

The cut to the overnight lending rate is not good news.  The cut was necessitated because of the fragility of the Canadian economy.  The Canadian economy grew by 2.4% in 2014.  The Bank of Canada has now re-forecasted its growth for 2015 to 2.1%, and 1.5% in the first six months.  Ouch!  Our economies dependence on natural resources has far reaching consequences. Oil equals jobs, jobs equal consumer spending, and consumer spending equals healthy real estate values. It’s a game of dominoes that the Bank of Canada would like to avoid.  So, a way to offset the some of the oil risk is to support other sectors, like manufacturing and exports.  Some pundits are suggesting that the Bank of Canada is manipulating our currency to make our products more affordable to external markets.  Others are suggesting that the Bank of Canada does not have the ability to manipulate our currency. For the benefit of doubt… let’s call it coincidence. The Canadian dollar decline came just in the nick of time to support other sectors of our economy, and to minimize the potential of oil becoming a contagion.  Whew, we sure got lucky.

Back in early December I posted a blog entitled, “Move aside Mortgage, There’s a New Worrisome Word”. I’m paraphrasing, but the gist of the blog was that 2015 was going to be all about oil, all the time. However, I assumed that we would have some time to ease into the consequences of cheap crude. I assumed wrong. It’s here now, and we all have to deal with it. One of the first things we as consumers should do is maybe alter our way of thinking.  I know this may seem counter intuitive, but lower interest rates and falling gas prices may make you feel good today, but it may end up making you much poorer in the future.  If you’re looking for one stat to follow, try the unemployment rate. It’s the number that tells all.

Until next time,

Cheers.