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Economy

Province of Ontario

August 28, 2013

RBC- $181,965 Billion at March 31, 2014

© Robert G Parker & UWCISA S - 2July 17, 2014 V-3

Annual Inflation Rate – Major Canadian CitiesEconomy

The Annual Rate of Inflation Has Been Less that 2% for Most of the Last Decade

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Economy

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Economy

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Economy

Richest 20% (highest taxable income) paid 75% of the Personal Income Taxes

Richest 1% accounted for 11% of total personal income and paid 20% of the Personal Income Taxes

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Economy

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Economy

The population does not appear to understand the consequences of out of control and ever expanding government spending

“A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy." Alexander Tyler 1887

We need to educate people about taxation

Starting at an early age

43.8%

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Economy

Impact on Business and Society

Risks and Impacts

Canada and the Provinces will have to increase business and personal tax rates to fund an ever increasing debt

Canada will become a more expensive country in which to operate a business

Canadian made products will become uncompetitive in the global marketplace

Worsening relative economy

Increased unemployment

Difficulty in attracting capital investment

Loss of Canadian entrepreneurs and expertise to other countries

Inability of private sector to compete with public sector for employees

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Pensions

With overly generous defined benefits plans governments and the private sector are faced with restructuring their pension plans.

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Pensions

Some Private Sector Organizations also have Defined Benefit Pension Plans

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Pensions

Ontario’s municipal pension plans - OMERS is currently at $7.3-billion deficit. Ontario’s Workplace Safety and Insurance has an unfunded liability of $12.3-billion. The Ontario Teachers’ Pension Plan had an unfunded liability of $17.2 -billion as of Jan. 1, 2011, totalling $36.8 billion.

Source: Globe & Mail and Financial Post 2012Source: Canadian Federation of Independent Business. 2008

Public Accounts do not include Hospital, Municipal, Regional or Other MUSH sector Pensions

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Pensions

Impact on Business and Society

Risks and Impacts

Canada and the Provinces are engaged in pension plans that are massively underfunded and ultimately unsustainable

Funding expensive public sector pension plans when many Canadians do not have a plan will generate increased public backlash

With a significant portion of Canadian society relying on “government” as their employer, scaling back the pensions of this group will have significant economic impact

Less disposable income as employee pension contributions are increased

Less future disposable income as pension obligations are scaled back

Demand for additional assistance from those without adequate pension plans

The Canadian “worker pyramid” model may become unsustainable

Increased focus on automation and robotics as businesses encounter significantly increased payroll taxes