Social Media Discussion

I recently placed a post on a social media site that was somewhat sarcastic towards our provincial government. The following image shows a response I received and my initial response back. I then received 9 links that were the facts to back the statement. Here is my analysis of those links.

Unless the circumstances warrant it, and this back and forth does not, I'm not one for calling people out in public and at a distance so I've chosen to put my responses here and keep the original poster out of it. I do post this at all as I feel it can be beneficial for others as a reminder to look closely before jumping to conclusions. As well, hopefully I can learn something new from anyone who reads it and has something to add or correct.


INCOMPLETEOntario's Economic Growth Outpaces G7 Countries

The article this link refers to is published by those making the claim so right off the top it can be guaranteed to have the maximum amount of spin on it, more so when government is involved. Nonetheless, let's look.

This article is really just a presser so we have to look deeper into the supporting resources. Interesting to note this line:
"The economy continues to create jobs, and the unemployment rate in Ontario has been lower than the national average for 22 consecutive months."
At least they recognize their true place in job creation: they don't have one, only people do! :) If a gov didn't have tax revenue or borrowing power they wouldn't even be able to create their own bureaucracy jobs or at least pay anyone for performing those jobs.

Looking closer at the employment numbers cited in the article, not such great data actually. Remember, employment rates are only one slice, to be sure an important one, of a many slice economic pizza all of which need to be considered before rendering a conclusion. For example: employment can rise and unemployment drop simply because folks can no longer afford the day to day expenses of living so they must head back into the work force. Conversely, employment numbers can drop and unemployment rise due to some form of automation that generates wealth but requires minimal manual intervention thereby introducing new avenues of leisure time. No, employment numbers are not indicative at all of a healthy or ailing economy.  

When put together with some other economic pizza slices, we then begin to get some context and achieve some clarity. According to the Labour Market Bulletin - Ontario: January 2017 published by Job Bank, the gap between full-time and part-time is quite substantial: full-time (+5,300) and part-time (+23,500). Additionally, the majority of the gains were in the service industry which needs to sit on top of a solid production foundation in order to be sustainable. Finance, insurance, real estate, rental and leasing lead the way but primarily due to the current housing bubble rendering this growth unreliable. Health care and social assistance (+7,500), and public administration (+7,100) industries followed but these are both cost centres not direct revenue/wealth generators.

Deeper into that report we can see there are also a large amount of automotive sector jobs that were created. According to 2015-2016 Annual Report from the Canada Financing and Leasing Association, Canadians financed $117B worth of vehicles, fleet and consumer. This is a massive amount of debt, making the automotive industry bubblish and not a solid footing at all. Additionally, while indeed a full country statistic, the majority of automotive manufacturing and production is done in Ontario so this has a direct impact when the bubble bursts. Still further, the Ontario Economic Accounts Report for the 4th Quarter of 2016 states the following statistic: "Non-residential and machinery and equipment spending by businesses both declined by 4.0%. Government spending advanced by 1.6% in 2016, with gains in current (+1.7%) and capital (+0.9%) spending." This is a very telling and concerning statistic when wealth generating business stops investing in itself or investing in new equipment to meet demand because there isn't any. At the same time in this particular instance the government increased its (our) debt and interest load. Since this spending increase occurred during a time of non balanced budget, it would have to been debt financed.

Here is yet another issue with the automotive sector. Folks are now getting the option to be exposed to 8 years worth of potential 'shit happens events' that would impair their ability to meet the payment schedule vs the shorter tradition 4-5yr car loan. This almost doubles the default risk factor…not a very stable bubble to be sitting on at all!

Summing: while the headline certainly speaks roses, the real data tells another story and not a great one at that. Interestingly, the following months showed a marked change upwards in hiring as well as big swing towards full time from part time.

Newsroom : Ontario's Economic Growth Outpaces G7 Countries
2016-17 Third Quarter Finances
2016 Ontario Budget
Newsroom : Ontario Adds 28,800 Jobs in January
Newsroom : Strategic Investments Creating Foundation for Prosperity

Provincial Outlook March 2017

Screenshot from 2017-06-02 21-09-16.png
This is a link to an RBC report that contains projections not facts, and actually states that BC's economy is better than Ontario. Also refers to auto sales and housing which we know to be debt based bubbles. Finally, it's published by a bank which will paint the rosiest picture they can without out right lying. It's part of the banking business model: a very healthy chunk of their bottom line comes from loans, bad forecast means folks/businesses are not willing to take on new or additional risk and loans dry up.

There's another little debt gem in this report:

The 2017 CAPEX survey indicated that private firms and public-sector organizations intend to boost their spending by 4.0% this year, thanks in large part to a strong 10.3% increase by public administrations (led by municipal and region governments). Firms in the real estate and manufacturing sectors also plan to ramp up their capital spending noticeably by 19.8% and 8.3%, respectively.

10.3% increase by government with money they generally don't have so have to borrow, at interest, thereby continuing to increase the overall debt which in turn has compound interest added into it in turn increasing the size of the debt and so on. Interest payment growth will soon go "hockey stick". The second part of the quote speaks to increased spending in real estate and manufacturing. We know that real estate is currently just a bubble so that's not a reliable investment number and from the governments own data we know that a good portion of current manufacturing is automotive related which is debt based growth, unsustainable and has a 'pay the piper' back end in the form of payments with interest.

Summing: this is actually a warning document and not the bouquet of flowers that RBC would have you believe. It also has no real value to this conversation due to it being projection and not fact.


Ontario's Economy Is Kicking Canada's Ass Right Now

Ontario's Economy Is Kicking Canada's Ass Right Now - not a single source provided for any of the claims made in this article (automatically disqualifying it), claims made entirely by two sitting members of the current government. Researching the other articles in this set that did have some source material plus my own deeper hunting shows that these claims are just rosy spin and do not reflect the underlying economy nor its interconnectedness/dependency to all the other economies of the planet.

Summing: irrelevant and disregarded

Ontario regaining status as economic engine for Canada

ahh, some good stuff in this one! From the top:

"Canada's big banks are forecasting that Ontario will lead the country in economic growth this year or be within a hair of the top of the pack."

Forecasting again by an entity (banking system) that has something to gain from painting roses and something to lose painting lumps of coal; re-occurring theme. Even a cursory economic look around the Interwebnet and hard statistical data soon shows that the underlying basics & fundamentals, the very foundations of a solid economic structure are not just weak but beginning to crumble and picking up speed. If allowed to continue, this crumbling will have such a profoundly negative effect on our global economy that forecasting won't be worth the pixel it's printed on.

"Unemployment sits at its lowest level in 16 years."
The author makes this assertion via a link to another CBC article which in turn links to yet another CBC article talking about national data. The word Ontario is not present once in the article. Feels like a bait and switch. No matter, I'll find the info on my own, thanx anyway CBC. According the StatsCan document referenced in the article (aka "Statistics Canada reported Friday") which is the Labour Force Survey, April 2017, check this line out:

"In Ontario, employment held steady in April. The unemployment rate fell 0.6 percentage points to 5.8%, mostly due to a decline in the number of youth searching for work."

This is a pretty blatant misrepresentation of the real data by the CBC author then. He is using a statistic to help justify a rosy point but does not include the meaning behind it which is different than the point he is trying to justify! A low unemployment rate means jack shit towards a healthy economy if that rate is derived from folks not longer even looking for work. The exact opposite actually, indicating a shift towards an unhealthy economy (given our current western economic status quo. A statistic like this might mean something different to other cultures/societies, past & present and might be a good thing, but not here). Yet further, the StatsCan document paints a less than rpsy picture of current trends, contrary to the CBC author portrayal. His assertion:

"And that economic success is being felt across a range of sectors, including manufacturing, real estate, finance and technology."

According to StatCan, manufacturing actually declined, albeit somewhat marginally. Real estate/finance are bubbles so essentially 3 out of 4 of his backing claims should be discarded.

"Corporate profits in Ontario are up significantly. You can tell by the province's corporate tax revenue, which jumped a whopping 16.8 per cent last year, and 19.6 per cent in 2015."

Unless that corp is paying decent dividends to shareholders then the only real benefactors are those at the top of the corp and their banking peers, not the average Joe & Josephine. Big profits do not automagically mean healthy economy in any way. Folks seem to jump to the opposite conclusion. The vast majority of those profits need to be plowed directly back into the jurisdiction, or reasonably close adjacent jurisdiction, from where they were originally derived or these numbers are meaningless in our context here save to further indicate how wealth is syphoned from the bottom to the top.

"Ontario businesses surveyed by the Bank of Canada say sales are up and they're looking to invest in new equipment and hire additional staff."

This appears to be more word salad and not great reporting. From the referenced report Business Outlook Survey - Spring 2017, 'Ontario' is mentioned twice: once with regard to cap and trade, no bearing in this discussion, and this:

"The balance of opinion of close to zero continues to mask a divergence between the Prairies, where sales growth slowed, and the rest of the country, particularly Ontario and British Columbia, which experienced stronger growth."

While I'm going to give them the benefit of the doubt that it's just writing style, interesting how "sales growth" is mentioned with the Prairies but only "growth" with Ont & BC. Normally one would pay no mind, however, central banks are notorious for couching words, bait and switch, propaganda, etc. so I rarely take anything from these organizations at face value. Anyway, OK, so the report says stronger sales for Ontario but does not say by how much. All data that I can see is on the national level. The comment on investing in new equipment and hire additional staff is based on this national data, nothing at all specifically mentions Ontario. Here are the only two references:

"The balance of opinion for investment in machinery and equipment continued to increase after a two-year period of weakness (Chart 3). Many firms expect the increase in expenditures over the next 12 months to be modest, and several are limiting investment to maintenance items. Yet, the result suggests that plans to invest in Canada have become more widespread, buoyed by firming domestic demand."

The CBC reporter does not mention this bit about businesses investing in themselves does he? Very disingenuous and misrepresentative. Maintenance is about status quo to assist with future investment protection but not at all about "Ontario regaining status as economic engine for Canada".

"Although many firms expect additional spending to be modest, intentions to increase investment have become more widespread, driven by strengthening demand. Hiring intentions remain positive overall." ~ "Consistent with improving indicators of future sales, many firms plan to add staff to accommodate the anticipated increase in demand."

Not a single reference to Ontario and yet the CBC author would have you believe there is.

We can't go much further than this on the report as more detailed data does not appear, but there are many questions left unanswered, however, given the source, I'm not at all surprised.

Next in this piece we have the usual typed bites from the banking crowd "all is good" "quite impressive" "quite strong" and of course one from the Conference Board of Canada sourced from a report that is behind a pay wall. Again, a cursory glance at hard data shows these statements to be fluffalicious at best.

But now, after all the article fanfare and hoopla has died down do we get to what's really going on. Finally our intrepid reporter presents at least a bit of reality. Not any quoted banker types in this part either, bad for business. Here is the statement that tells the true tale:

"But if you're a typical Ontario worker, you're not necessarily feeling as rosy about your own personal economy as the provincial economic figures would indicate. That's because wages aren't growing at anywhere near the pace of the gross domestic product (GDP). Statistics Canada figures show the average weekly earnings of Ontarians grew just 1.1 per cent in 2016. That's below inflation so, on average, the typical person took a pay cut last year."

We have some further information in the article but it does not change the impact of the above statement, which says it all, so I'm going to stop quoting here. A case can made for sustaining a small economy on simply business-to-business production and sales, however, the vast majority of an overall economy is driven by consumer spending. Business spending is a result of consumer demand.

OK, one more quote:

"Despite that chill, there are signs that Ontarians' consumer confidence is on the upswing."

At least I had the honesty to use the term "somewhat marginally" when talking about manufacturing numbers slipping. The upswing the CBC author is referring to is basically the same percentage amount.

Summing: wow, thankfully done with this piece. Poorly written and disingenuous, skating on dishonest, it really belongs in the bit bucket in the corner. Discarded as irrelevant. Crawley should be ashamed, not up to his past standards for sure.

Ontario regaining status as economic engine for Canada - Toronto - CBC News

High School Graduation Rate Reaches All-Time High of 85.5 Per Cent

Screenshot from 2017-06-05 09-47-27.png
Some positive indicators in the statistics here but we do have to be very careful when claiming victory. Governments, provincial in the case of Canada, claim a monopoly over eduction. They claim control on what is curriculum and control on how it's delivered. They also claim sole jurisdiction over the creation of alternative programs and have a whole bunch of our tax money or borrowed money to play with. Aside from the inevitable few complete program failures, of course the gov is going to be able to claim victory and we did this and that. What they did was nothing more than implement common sense. Of course work experience is helpful, of course gearing programs for how kids learn makes sense, of course being able to deliver educational materials in a variety of methods is a good thing and the list goes on.

It hardly takes a government to engage in common sense (the reverse often happens when government does intervene) and it should be dead simple to implement it. This can be accomplished by any free market and society, no government required.

Two more thoughts here: this statistic and its accompanying real world people can easily be changed simply by altering the criteria to pass/graduate: 75% becomes 74% for example. Marks have an inherent teacher bias as well, they're only human too (I will note here however, the teachers that I currently know in my life I consider examples of how to teach. They also work very hard to minimize the impact of their biases, they are professionals. Having said that, I have been exposed to the inside of the education system all my life and I can say with certainty that this is more the exception than the rule). Secondly, claims are made: "with more students than ever graduating with the skills and knowledge they need to reach their full potential." How is this metric measured? Marks? Memorizing and regurgitating is not learning, but I suppose in some way could be considered a skill unto itself.

Summing up: good to see some focus on education for sure and apparently some good work being done but nothing here is the magic of government, it just seems that way as they have a monopoly. Any group of humans getting together with a focus on a common goal, in this context education, would have come to similar conclusions and created similar programs but I reckon done a whole lot sooner and a whole lot more effectively. Further, I believe, assuming no highjacking by personality or special interest, that these groups would also have already left our current model behind as outdated and ineffective but that is an entire discussion on its own.

Newsroom : High School Graduation Rate Reaches All-Time High of 85.5 Per Cent

Interesting side notes, no connection implied:    
  • the year prior to 2004 which the article references (2003 also being the year the liberals won the election from the tories) was the last grade 13 year
  • 2004 was also part of a continuing trend of significant decline in the drop out rate

University Attainment

a statistically interesting article but in this context it could actually be called a red herring. There is nothing at all in this piece discussing government or its impact on these statistics. History has shown that given the opportunity (referring to the complete package: location, family situation, health situation, ability to learn, etc. and not just financial ability), folks will get that higher eduction on their own if they want or need it, no government required.
Summing up: interesting but irrelevant to the discussion at hand.

Where have smog days gone? Hamilton hasn't had one since 2013

Ontario has a land area of 917,741 Km/sq whereas Hamilton is 1,371 Km/sq so this is hardly indictive of the entire province. Additionally, the article mentions the obvious: weather, not government as a driving factor. Nextly, the interviewee who is implying some is credit is due his group for cleaning up the air is part of a non government organization. Lastly, the time frames talked about in the article conincide somewhat with the wind down of regular US Steel/Stelco operations there resulting in less emissions.

Summing up: interesting but irrelevant to the discussion at hand.

Ontario to Provide Free Prescription Drugs for Children and Youth

this one is a 'yuge' yikes! The article is essentially a massive debt accumulation list all the while a propaganda piece for a 'balanced budget'. What is happening in fact is more debt accumulation despite the claims of a balanced budget. Ontario splits its operation spending from its capital spending, so while the operational budget shows balanced, the capital portion continues to incur more debt due to length of contracts, long term projects, etc. Additionally, since there is no surplus in the budget to pay down debt, an additional ~$11B in interest payments are added to the pile. Finally, assuming the inevitable complete economic collapse hasn't occurred yet, when interest rates rise so will these payments in a big way. As an aside, the liberals have roughly tripled the debt they inherited in 2003 from rounded $110B to rounded $310B!

Summing up: this article actually shows how poorly the liberals are doing at governing.