Description: You can pay me now, or pay me later; so goes the old saying from the Fram oil filter commercial. https://www.youtube.com/watch?v=OHug0AIhVoQ Well, the Government of Canada appears to have chosen the pay me later approach with its latest budget, delivered last week by Finance Minister Chrystia Freeland. The budget did contain a few revenue generating measures, such as a new tax on some digital services and increased taxes on luxury vehicles, but these are minor steps on the road to paying for the services we receive. Currently, the government is spending what columnist William Robson calls “50-cent dollars.” Half of the spending is coming from debt, not taxes. Clearly, that trend cannot continue indefinitely.
Date: April 23, 2021
1) Were you aware that your government was spending these “50-cent dollars?”
2) What do you and your classmates anticipate the government will do to increase revenue?
3) Exercise E10.11, page 10-47, of Wiley’s Financial Accounting: Tools for Business Decision-Making asks us whether a Government of Canada bond issue maturing June 1, 2027 is trading at a discount or a premium. Do some research with your classmates to determine whether current Government of Canada bond issues are trading at a premium or discount.