Monthly Archives: February 2016

What the F*ck is the ORPP?

Hey, I’ve been hearing a lot about this new ORPP that the Ontario Liberals want to bring in.  What is it?

It’s supposed to be the Ontario version of the CPP – the Ontario government will deduct a certain amount from your paycheque each week, and your employer will match that amount.  Do that for x number of years and you are eligible to receive an Ontario pension cheque in your glorious retirement to add to the Canadian pension cheque you get.

OK, but do we need another pension?  Sounds redundant.

According to Wynne you do.  Household savings rates have slipped from a high of about 20% in the late 70’s to less than 5% of household income.  So her thoughts are we aren’t doing enough saving to provide for ourselves in our old age and the CPP doesn’t cover it, so they’re going to come and “help” us save more money.

That’s right, didn’t she say she’s only introducing this because Harper wouldn’t improve the CPP?  But wait a second… isn’t her buddy Justin Trudeau in power now, and didn’t he say that he would improve the CPP?

Yes, but it was never about Harper or the CPP.  Harper did plenty for assisting people with saving for their retirement by creating TFSAs and other vehicles, and still the rate of household savings fell – there’s over $100 billion in unused capacity in RRSPs and TFSA’s in Canada.  Harper took the view that government should provide vehicles for savings, but that how much you saved was ultimately your responsibility.  And by and large people didn’t take that responsibility.

So now Wynne wants to force us to save money?

Exactly right.  It’s actually referred to as “forced retirement savings plan”.  You have no choice in the matter.  Which is a typical liberal approach; they’re looking out for us, they have our best interests at heart, so do as we say.  Nanny statism at it’s finest.

So everyone is being told they have to contribute to the ORPP?

Not everyone – approximately 35% of Ontarian’s already have a pension plan.  Wynne says those people will be exempt… well, some of them.

Huh?

Not all pension plans are the same.  In simplistic terms there are Defined Benefit plans, where the contribution amount may fluctuate but you know exactly how much you are going to pull out in retirement, and Defined Contribution plans where how much you contribute is defined, but how much you pull out is going to vary depending on how your investments have done.  The ORPP is a DB plan, and so Wynne wants the ability to review existing DC plans – and if they aren’t up to her standards you’ll be forced to contribute to the ORPP.

So what’s the chance my DC plan will be exempted?

Pretty low, my friend.  Unless your contributions are 8% of income, which is a pretty high bar that has been set by the Liberals.

Alright, but defined benefits sounds great, there’s no guess work, no worrying about the how well my investments might be doing…  So how much would I get out of the plan?

Well, if your income is around $90k/year and you start contributing to the plan in 2020 when it’s in full gear, after 40 years of contributions you will be eligible for approximately $12,800 per year upon retirement.

Umm… in 2060?  What’s $13k a year going to worth in 2060?

Who knows?  Probably not much.  Will there even be a Canada or Ontario in 2060?  Who knows?

But I don’t get it, why so little?  How much am I contributing to collect that amount?

Your payroll will be deducted 1.9% of income and your employer will be forced to match that contribution, so effectively every year an amount equal to 3.8% of your income will go into the plan.  Government pension plans usually return about 2% per annum.

What?  That’s worse than the stock market!

Yes, it is.

But then why not encourage people to save and invest on their own, they’ll have a better return?

Because governments have been doing that for 30 years, and the rates of savings are still not going up.  The Liberals need to come save us from ourselves.

But surely some people are saving money!

They are, but it’s just a different manifestation.  Household equity has increased 76% since the late 80’s – people put their money into their houses, real estate and other non-obvious retirement investments.  It’s not the best of ideas, but between high mortgage costs, high taxes and increases in the cost of living, perhaps there isn’t as much disposable income available for savings.

So why do this?

The ORPP is being sold as a needed supplement to the CPP, but it’s really just another revenue tool for the Ontario government.  They’re too scared to actually raise taxes, so they’ve come up with this clever scheme to take money out of our pockets – for our own good.

Huh?

Sure.  Consider that there are approximately 4.5 million Ontarians with incomes over $30,000 per year.  If we take the 35% ORPP exemption rate that still leaves 3 million potential contributors.  If the mean income is $31,800 per year, a 3.8% contribution deduction probably equals about $3 billion per year.

Wow!  Where does all that money go?

If it’s similar to the CPP, that pension invests in a mix of private equity, debt and infrastructure.  Debt = Ontario government green bonds.  Infrastructure = Ontario Hydro One and other pet infrastructure projects in the province that the province will sell shares in.

Wait… so a lot of that ORPP money will just come back to the government in terms of general revenue?

Yep.  So it’s essentially just another tax to help Wynne bank roll her government’s addiction to spending.

Wow.  That’s downright dishonest and deceptive.

Welcome to Ontario.

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Celebrity Vanity

NBA All Star weekend in Toronto produced some moments, like that, ahem, interesting version of O Canada sung by Nelly Furtado.  But there was also this embarrassing bit of Canadian chest-thumping to an American TV audience;

So many questions this brings to our minds… like why did this asshole think it was appropriate to use a post-game interview of a celebrity basketball game as a venue for spouting out his political views?  Was he asked about his politics?  Would he agree that while, sure, the US has some things to learn from Canada, perhaps Canada has some things to learn from the US?  Why is health care the first thing that he points out, when our health care system is hardly a role model for responsiveness? And, most importantly, who is this dude?

Look, we get that artists are leftists, and shall ever be thus.  Conservatives are, by principle, generally in favour of balance, stability and rational government.  Artists are about pushing boundaries, being avante garde, exploring new forms and structures.  The greatest homage one artist pays another is that he or she “changed music”, or “revolutionized film making”, or “questioned our stereotypes”, or such platitudes.  So yes, artists and conservatives are at odds; balance and stability doesn’t sound like change and revolution.

Then you have the phenomenon of “champagne socialism” whereby people have so much money and affluence that they are removed from the daily anxieties of normal working stiffs; no mortgage, no car payments, what’s a few extra couple thousands on their tax bills…. ha! we don’t even know exactly how much money we have!  So, removed from those day-to-day worries they are free to take in the world from a 50,000 foot elevation and pontificate on the virtues of all sorts of grand social engineering schemes whether it be climate change, refugee crises, racism or healthcare.  And it doesn’t even matter how many homes these people own, like renown champagne socialist Jeremy Irons, or how much carbon dioxide their yachts are pumping into the atmosphere, like renown warmist Leo DiCaprio, they’re somehow immune to accusations of hypocrisy.  Like the Arcade Fire dude who can afford whatever health care he needs, in whatever country.

There’s a great political ecosystem out there with checks and balances.  Eventually, history tells us, when the pendulum swings too far in one direction, there is a correction in the other.  Can these artists and champagne socialist thrive and make money in an unstable world?  That’s the irony, that they need the platform built by conservatives.  And so Win Butler, take a breath, things are not so desperate in the fight against the right that you have to take any little opportunity to push your pet leftist causes, just enjoy your moment at a silly little celebrity event and come to the realization that at the end of the day you need us.

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Clickbait

The Guelph Mercury is the latest newspaper to close shop here in Ontario and in Canada.

The newspaper industry is not what it used to be primarily because advertising dollars have moved elsewhere to other mediums.  The core reason being that fewer and fewer people read newspapers, the kind you can hold in your hands while sitting on the throne, and advertisers want to spend their money where eyeballs will see them.

Sure, the argument is that people are now getting their information from other mediums; mobile devices, television et al. so it’s not necessarily the death of journalism we’re witnessing but a messy transformation to a modern and more accessible format.  OK great, but let’s be honest, what people digest on line is not the same as having that good old newspaper in front of you.

Ever try and read an article online?  Better avoid looking to the sidebar where there’s teasers for more salacious articles about celebrity penile enhancements or quick ways to lose weight.  Don’t click on hyperlinks to other articles that show up mid-piece, you’ll just end up reading half of that article until you get to the next hyperlink in that article, or worse you’ll have a queue of new articles in your shortcut bar that will tempt you to switch to them before you’ve finished the first article.  And what articles do you read online?  If something (like this blog post) is more than a thousand words, do you invest the time and attention, or are you more likely to find something shorter and more stimulating?

Nicholas Carr wrote about this in his excellent book “The Shallows”.  Despite having access to more information than any other generation before us, we are actually less knowledgeable and less able to process and understand that information because of the medium that it’s being delivered in; the internet.  The internet is a great tool and one that has created significant gains in wealth and productivity for us all, but it’s also one increasingly built around the premise of satisfying desires for instant gratification and instant stimulation.  That article  you’re reading isn’t getting your juices going?  Just click on another article.  Getting bored slugging through some dense information?  Surf away from that page.   Oh, why would I read about some arcane pension plan reform when there’s an article about a Big Brother contestant being caught in a home porn video advertised next to the text I’m reading?

How many of us are guilty of “doing the wheel” where we have these 6 or 7 websites that we regularly visit: Facebook, Twitter et al and rather than read a book, a newspaper, actually endure some boredom, we just surf from one of these sites to the next to the next and very often back to the first site we visited, just searching for some stimulating information that satisfies are need for a hit of dopamine to the brain.

So, it’s right to lament the loss of these newspapers.  We are definitely losing something and the argument can be made that we’re increasingly becoming not necessarily a low information society, but a low quality information society where people know more about celebrity boob jobs than what your government is up to.  It certainly is one way to explain how governments, like the Ontario Liberals, can be corrupt and blatant about it, and yet operate with confidence that come election time, no one will care.  Because no one will really know.

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…Sigh

We won’t spend too much time on Justin Trudeau’s foreign policy, because we’re clearly un-Canadian in our views according to the (ex-Marxist) Stephane Dion, and thank God the Liberals are here to get the country back to its (supposed) pacifist roots.

JT’s dismissal of ISIL as a threat to Canada or western existence is a disgusting pretense for pulling our bombers.  We’ve talked before how it’s an odd contradiction that we argue our bombers are meaningless (about 2% of the total bombing missions in Iraq to date) and yet he’s hungry to castrate our economy on the altar of climate change (our GHG emissions being about 1.5% of the global total, and falling).

Yes, if you’d like to be technical JT, ISIL or whatever Islamic terrorist group you want to consider are not bringing an end to the West any time soon.  But they’re bringing an end to Middle East stability.  They’re influencing terrorist attacks in Europe and the US.  Europe has now done a severe about-face and is starting to round-up and deport hundreds of thousands of Muslim men whose asylum is illegitimate, and that’s going to get downright ugly before it’s over.  France, an ally, is at war with these people.

We don’t buy that it’s just JT trying to save face by holding to an election promise.  It’s Liberal arrogance that Canada can live in a vacuum and that our multi-culti values will immunize us from any of the problems in the rest of the world, we’re the Great Hotel, come check in and get a room, service is first-rate.

There’s a solution to the whole Syrian refugee crisis; go in, wipe out Assad and ISIS, install a proxy-state and establish stability with force.  It’s simple, but simple things are not necessarily easy.  Training?  Aid?  For what and for whom?

Just ludicrous.

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Goodies

John Robson writes a niece piece on yet another example of leftist folly when it comes to managing our government.

Anyone older than a millennial can remember the consternation of the 1990’s and Ross Perot and Preston Manning and the concerns about debt and deficits.  Those two never achieved power, but they pushed the agenda of control such that the Clinton and Chretien governments, despite being “liberal” took their cues and balanced the books (albeit on the backs of strong economies, built on policies of their predecessors).

But since then, even under the watch of supposed conservatives like GWB and Stephen Harper, we’ve backslid to the point where, as is pointed out in the article, the interest payments on our debt is more than what we spend on education and healthcare in this country.  And where are these interest payments going?  Some of it goes to people and institutional bond holders on this continent, but in large part it goes to Saudi princes and the Chinese government.  It’s been said that yearly interest payments by the US on government bonds held by the Chinese actually covers the annual cost of the Chinese military.  It’s crazy, that one superpower is paying for the competing superpower’s military.

But who’s to blame?  Most everyone.  There are two sides in elections; one that promises lots of goodies, and one that doesn’t.  People like the goodies.  Oh, you can point out that hey, someone’s got to pay for those goodies – higher taxes!  But when the higher taxes never really materialize, people just say “sure sure”, and vote for the goodies.  There are higher taxes, but they’re just being deferred to the next generation… but who cares about that?  I don’t have any kids, what do I care? or They can just do the same thing we’re doing and pass it down to their kids! or This spending is “investment” that will help us GROW out of our troubles! or We’re creating a better world for our kids to inherit!

Forty-five percent of Democratic voters in the Iowa primary last week identified themselves as “socialist”.  Probably similar numbers to what you’d get in Greece (Italy will be 2016’s Greece, watch).  How’d that turn out for them.

Eventually people will stop loaning you money, especially when they no longer trust future generations to pay it off.  That day is coming, soon.  Then there won’t be any goodies for anyone.

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David Suzuki’s Minority Report

There he goes again, suggesting (not for the first time) that we arrest Stephen Harper for his “criminal” inaction on climate change.

We’re not the best ones to make arguments against the whole climate change hysteria, there are plenty of excellent persons and blogs that are dedicated to that cause, and we defer to them.

But it boils down to four questions about the Climate Change debate.

  1.  Is Climate Change real?

Maybe.  Sure.  The earth has gone through a great number of climate change cycles during it’s existence, including several ice ages and several hot-house periods.  They’ve found alligator bones near the Arctic Circle… did those alligators drive there in their SUV’s?  But for the sake of argument here, let’s concede that the earth is in fact warming…. again.

2. Is Climate Change man-made?

This is where the IPCC term “anthropogenic global warming”  or AGW comes in, i.e. that man made “pollutants” (if you consider carbon dioxide a pollutant) is the main cause of Climate Change.  This is more contentious.  You may get us to concede that AGW is a contributor, but to what extent?  What percentage of our current global warming can be directly attributed to our carbon dioxide emissions?  There is no answer that quantifies it.   But again, let’s concede for the sake of argument that we are contributing some appreciable amount to the current global warming.

3.  Are the effects of Climate Change catastrophic?

Here’s where we go rogue; no.  Virtually every IPCC prediction for the doomsday effects of AGW on the earth, from the early part of the century to recently have been false.  Global sea levels – more or less the same… no flooding of Miami or islands in the South Pacific.  Himalaya glaciers melted by 2013?  Just the opposite in fact,  ice caps have increased, not only in the Himalayas but in parts of the Arctic and Antarctic.  Global temperatures have more or less held steady for the past 18 years, despite claims to the contrary about the “hottest year on record” et al.  Climate models have failed to accurately predict future conditions thus far, so why are we trusting that they will get it right eventually?  The effects of Climate Change will not be catastrophic or something that we cannot adapt to.

4.  Do you trust the government to stop Climate Change?

Hell, no.  And last time we checked, there was no WORLD GOVERNMENT that could force China, India, Russia and Brazil to hold their carbon output.  Canada is a mere 1.5% of global greenhouse gas emissions, and of that 0.7% was attributed to the oil sands, which is slowing down given global gas prices.

So, David Suzuki is an unfortunate example of that poor soul who shouts into an echo chamber and thinks his own thoughts said out loud are validation of his dumb ideas.  He cannot predict the effects of climate change, so what are we arresting Harper for?  And Harper was supposed to do what to stop global warming?

Go away old man.

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The Circus Keeps Spinning Through OuterSpace

Yeah, this is not really news Mr. Coyne.

Yet, it’s funny.  He points out how the Liberals have buried a line about the ORPP being used to finance infrastructure at the bottom of their budget, and then also buries his pointing that out… at the bottom of his column.  Why not lead with this?

In fact, what the ORPP deductions amounts to is a tax.  The ORPP will have all sorts of contribution money that it will need to turn around and “invest”.  Why not invest in Ontario Green Bonds?  No one else is buying that shit.  Why not buy one of the pieces of Hydro One coming up for sale?  Or maybe the LCBO in a few years?  And all that money gets rolled back into the Ontario government’s general budget so they can spend it – and not exclusively on infrastructure, but on public sector salaries and favours to friends of the OLP.

If they just came out and said, “we need to raise taxes to fund all of our spending” they’d be pilloried, and rightly so; there’s no revenue problem in our province, only a spending problem.  So instead they concoct this corrupt idea, an accounting ponzi scheme, where money being taken in to supposedly fund future retirement income is invested in government assets – assets of a government that is going broke ergo those assets will be practically worthless going forward.

It’s all lies.  Lead with the lying part Mr. Coyne.

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