The current Quebec government is at least trying to tame its deficit and start chipping away at its huge debt. But there are some people out there who question whether or not Quebec's public debt is really such a serious problem, and therefore whether our provincial government's "austerity" policies are truly necessary.
December is a time for reflection, especially when it comes to your finances. The expensive holiday season -- think gifts, party outfits, and festive drinks -- means you're probably thinking about how to stick to a budget and keep costs down in 2014. It's also a time to reflect on mistakes, which is why I've rounded up the top personal finance fails of 2014. The purchases that made me cringe, the examples of internet over-sharing that made me wonder how someone's identity wasn't stolen sooner. All so you can avoid their mistakes in 2015.
Consider that in 2013/14 interest on the provincial debt was $10.6 billion. According to the province's fall fiscal update, that was just over half of all provincial sales tax revenue paid by Ontarians last year ($20.5 billion). So Ontarians should know that when you pay your provincial sales tax at the till, half of it flutters away just to pay your provincial government's debt interest.
Nine-million baby boomers will retire from the workforce over the next two decades, and when they do, they will start to consume the most expensive forms of government programs. This is great news for seniors, but terrible news for our public finances and for young Canadians forced to foot the bill. Generation Y has been dubbed the "Millennial" generation because we came of age at the turn of the new millennium. A more fitting name for this cohort is Generation Screwed.
The Conservatives should be commended for sticking to their commitment to the balance budget. But balancing the budget cannot become an end in itself or it can come to serve as a justification for spending increases with limited economic benefit. Reducing personal income tax rates and capital gains taxes would be a productive use of future surpluses.
Looking at our study, the percentage of women filing bankruptcy who were living on their own, either because they were single, divorced or widowed, increased over the four year study period. The largest growth occurred in women who were divorced or separated. We also saw an alarming increase in the percentage of female single parents declaring bankruptcy.
If you are planning to move after you retire, put some careful consideration into the cost of living for that area. Look into the cost of real estate and see how far your money will stretch if you downsize from your current home. If you're moving to a different town or province, it's also worth looking into potential tax advantages for senior citizens in that area.
While I know I'm on the right track with my finances, I'd be lying if I said staying out of debt has been easy. In fact, it's been a bigger challenge than I ever could've imagined. But that's just one of the lessons I've learned since making my final payment. Here's what a year of being debt-free has taught me.
Although aging Canadians were typically the most financially stable age group, older Canadians are piling up debt more quickly than other demographics. A recent study by the Vanier Institute of the Family showed that more than 70 percent of those aged 55 to 64 held some form of debt in 2012, up from 61 percent in 1999.
The important thing is to write the goals down and post them somewhere that you see them everyday. Don't be embarrassed about putting them on the fridge and having your friends see them when they come over for a visit. You may not be proud of falling into debt but you should be proud of overcoming it.
These challenges facing Ontario are well documented. Yet the government's policy direction is not moving in the right direction. Recent developments suggest that the government intends to continue growing spending on the types of policies that have contributed to the problem such as high deficits and a new round of corporate subsidies.
This month, Canadian students finish exams and begin hunting for summer jobs. A student working the counter at Taco Bell for minimum wage would have to work eight hours a day, seven days week, for almost the entire summer to cover tuition, never mind the cost of specialized or technical degrees. Students have a responsibility to work and pay for at least some of their education. Also a responsibility, when choosing their college or university program, to think about whether they are choosing a field of study where there is a real demand for jobs.
Put simply, the aging of Canada's population has resulted in large and growing unfunded liabilities. The funding shortfall is estimated at $792.3 billion for the CPP, $494.4 billion for OAS, and $894.7 billion for medicare. Together the unfunded liabilities in Canada's public pensions and health care programs total $2.2 trillion or $134,841 for each income taxpayer. These unfunded program obligations make up more than half of total government liabilities. And their sheer size calls into question the structure of taxing current workers to provide benefits for retirees. Ultimately, to maintain current levels of spending in the future, taxes will have to increase or benefits for other programs will have to be cut -- or both.
When dealing with advisors, an important consideration is competency. If the person you're working with isn't competent, how much is it costing you? I might find that my client's banker is overcharging them or their accountant is less than adequate, only to hear them say that they can't move their business because the person they deal with is nice or maybe even a friend.