Federal financial picture eroding, as government announces new capital spending, infrastructure bank

Jason Fekete, Ottawa Citizen

OTTAWA – The federal government’s fiscal position has deteriorated by billions of dollars since the budget, at the same time it’s ratcheting up capital spending and creating a new Canada Infrastructure Bank to dramatically overhaul how large projects are planned, funded and delivered across the country.
As the federal financial picture continues to erode – and spending increases – the Liberal government said Tuesday in its fall economic update it has no timetable for balancing the budget and acknowledges it doesn’t know when the gusher of red ink will end.
The new Canada Infrastructure Bank is one of the federal government’s centerpiece items announced in an economic update that – once again – downgrades projected growth and forecasts that a worsening financial situation will soon gobble up all of the billions of dollars in fiscal contingency that was included in the spring budget.
Finance Minister Bill Morneau also announced in the economic update the government is committing $81 billion in new infrastructure spending over the next 11 years on public transit, green projects, and social infrastructure. However, most of the funding is earmarked for several years down the road, beyond the government’s current four-year mandate.
“Today is about the long term,” Morneau told reporters prior to delivering the economic update in the House of Commons.
“We know that the economic situation that we’re in is challenging.”
The Liberal government projects its budgetary balance will be $1.7 billion worse in the current 2016-17 fiscal year than it forecast in the budget, when factoring in economic developments, new spending and announcements.
Add it up, and the government’s fiscal position is $31.8 billion worse over the next five years than it forecast in the March budget, completely devouring within two years the $6 billion in annual contingency that was built into the forecast to absorb unexpected economic shocks.
Between 2016-17 and 2021-22, the government is expecting to run approximately $130 billion worth of combined deficits.
The government now projects the deficit will hit $25.1 billion in 2016-17, but it will only hit that target after using all of the $6 billion contingency that had been included in the budget. The budgetary shortfall is expected to increase to $27.8 billion in 2017-18 after using the $6 billion contingency next year.
By 2021-2022, the government believes the deficit could still be nearly $15 billion, and there’s no timeline or apparent plan for getting finances back into balance.
“We lost the contingency… Now it’s gone, we spent it. And we have this $130 billion of additional debt,” said former parliamentary budget officer Kevin Page, now the head of the Institute of Fiscal Studies and Democracy at the University of Ottawa.
“Hopefully in the budget we’ll see a stronger fiscal planning framework, more fiscal rules, more deficit targets, maybe spending rule targets.”
The government, at this point, is no longer planning a contingency for future years amid a fragile economy. It is instead using the $6 billion that was allocated as contingency each year to lower its deficit projections in future years.
Starting in the upcoming 2017-18 fiscal year, the Liberals will start rolling out the next phase of its infrastructure funding, promising $81 billion more over 11 years.
The funding will include: $25.3 billion for public transit projects such as subways and light rail; $21.9 billion for green infrastructure like interprovincial transmission lines, renewable power projects, and water treatment facilities; and $21.9 billion for social infrastructure such as affordable housing, early learning and childcare, and cultural and recreational infrastructure.
As well, $10.1 billion will be allocated to a trade and transportation fund for more efficient corridors to international markets, and $2 billion for rural and remote communities for projects like building roads and expanding Internet connectivity.
“We’re talking about big, bold, historic investments in infrastructure,” Morneau said.
The Liberals will table legislation in 2017 to create the Canada Infrastructure Bank, a Crown Corporation the government says will provide “innovative funding and financing” to help get more infrastructure projects built in Canada, in partnership with municipal, provincial and Indigenous partners.
The infrastructure bank will target large institutional investors to help finance “transformational” projects in Canada and get them built more quickly and at less of a financial risk to taxpayers. The government hopes to leverage potentially $4 or $5 of private sector investment for every $1 in federal, provincial and municipal funding for a project.
For example, a major $500-million infrastructure project that would traditionally be equally funded between three levels of government could instead see municipal, provincial and federal governments contribute $100 million combined, while private investors would cover the other $400 million.
The infrastructure bank will invest at least $35 billion from the federal government into large projects that boost economic growth, through loans, loan guarantees and equity investments.
Roughly $15 billion of the federal funds will come from funding already announced for transit, green projects and social infrastructure, with another $20 billion available for investments that result in the bank holding assets, either in equity or debt.
“The Canada Infrastructure Bank, governments and investors will work together to identify a pipeline of potential projects and identify investment opportunities that provide the biggest economic, social and environmental returns,” says the economic update.
Other initiatives announced in the economic update include:
The government will create a new Global Skills Strategy that seeks to implement a two-week standard for processing visas and work permits for low-risk, high-skill talent for companies doing business in Canada;
The Liberals are planning to spend $218 million over five years to create an Invest in Canada Hub, which it calls a “high impact sales force” to promote the country globally and convince companies to invest in Canada;
Introduce new legislation to make the Parliamentary Budget Officer an independent officer of Parliament, giving it more autonomy and greater access to information held by government departments and Crown corporations. The PBO’s new mandate will also include costing of political party platform proposals; and
New legislation for Statistics Canada to give the Chief Statistician of Canada greater powers over the production and release of official statistics, and appoint the chief statistician to fixed five-year terms based on merit. The National Statistics Council will also be replaced with a newly created Canadian Statistics Advisory Council to improve independence, relevance and transparency for national statistics.
The Liberals are also promising to open up the doors to the ultra-secretive Board of Internal Economy, the multi-party committee that makes spending and administrative decisions for the House of Commons and members of Parliament.

Drunk Surinder Singh from Surrey smashes SUV into Attari border gate

Dawn/TNS

Amritsar/Lahore, November 16

A speeding sports utility vehicle (SUV), driven by a Canada-based NRI, crashed into the Wagah-Attari border gate early on Monday.

NRI Surinder Singh Kang was taken into custody by Border Security Force (BSF) personnel after he rammed his sport utility vehicle into the first gate around 3.30 a.m. and then drove to the next gate, about 800 metres ahead towards the international border. He then rammed his vehicle into the second gate.

The vehicle came to a stop after ramming into the Pakistani side of the border gate.

The incident raised caution among border officials, and led to the Punjab Rangers writing a letter to the Border Security Forces (BSF) seeking an inquiry into the incident, security sources said.

The crash left the gate at Attari “badly damaged” while the Wagah gate was partially damaged, witnesses at the site said.

The driver was arrested by BSF officials, while his SUV was confiscated by Pakistani officials after it breached into the Pakistani territory, sources said.

The vehicle was returned upon request of the BSF, they added.

Kang was allegedly drunk when he drove his SUV into the gate at Attari, crossed the Zero Line, and crashed into the gate at the Pakistani side.

He was questioned by security agencies and later handed over to the police. The NRI was booked under Section 307 (attempt to murder) of the Indian Penal Code (IPC) and other charges.

The NRI, aged around 50, holds Canadian citizenship and belongs to Nakodar area of Jalandhar district.

“All gates were closed at that time. It is a serious security breach that he managed to reach up to the zero line. The incident is being investigated,” a BSF officer posted in the area said.

The Attari-Wagah JCP is located 30 km from the Sikh holy city of Amritsar. Wagah, on the Pakistan side, is 20 km from the post.

(By arrangement with Dawn (Lahore) and with inputs from Tribune News Service)

Diabetics face thousands of amputations each year

ERIN ELLIS, VANCOUVER SUN

All kinds of Canadians neglect their feet, but that can be a life-altering decision for people with diabetes.

The chances of having a toe or foot amputated due to an infected wound are about 20 times higher for a diabetic. And a lower limb amputation often starts a spiral of decline: up to two-thirds of patients die within a year.

“There’s a high risk of death following amputation. In fact, the mortality rate is greater than some cancers,” explains Dr. Jan Hux, chief science officer for the Canadian Diabetes Association.

That organization is on a mission to remind the growing number of people with diabetes to baby their feet like never before. Thousands of Canadians are expected to lose their toes or feet each year despite advances in care that have brought the rate of amputations down among diabetics. That’s because the sheer number of people diagnosed is forecast to rise to 4.2 million by 2020.

There were 4,400 diabetes-related amputations across the country in 2008, the last year for which reliable data are available. That marked a small increase from 4,020 10 years earlier, according to the Canadian Chronic Disease Surveillance System.

The road to the operating room starts with foot numbness called diabetic neuropathy.

“Pain is an important defence mechanism. If you or I had a pebble in our shoe, we wouldn’t walk three steps without taking it out. The person with diabetes will walk on it all day,” says Hux.

That creates a sore that remains unnoticed because nerves to their feet have been damaged due to high blood sugar and a lack of oxygen from poor blood flow. That same lack of circulation — again coupled with high blood sugar — creates the perfect environment for infections to grow.

“They’re more likely to get an injury and they’re less likely to be able to heal it,” says Hux. That’s why diabetes accounts for up to 70 per cent of all non-traumatic limb amputations.

Wayne Sidsworth, a 56-year-old management consultant from Hamilton, Ont., watched the process claim his foot in a matter of days. He had been diagnosed at 37 with type 1 diabetes and thought he had it under control. It turned out that a blockage in the main artery of his leg — likely formed before he knew he had diabetes — couldn’t be repaired through several surgeries.

He knew then his lower leg would have to come off, but was unprepared to watch a tiny cut on the sole of his foot transform from a dime-sized sore to a gangrenous limb over the course of a weekend. A surgeon removed it in an emergency operation on the Monday morning.

“I woke up at 9 o’clock without my leg,” Sidsworth recounts. “I got through that part OK. The hard part was rehabilitation, learning how to walk again.”

His advice to others? Get diagnosed. Sidsworth believes he could have avoided some of the damage by getting his blood sugar down from its sky-high levels earlier.

Hux agrees, but goes further. The CDA says 57 per cent of diabetics don’t follow doctors’ orders because they can’t afford the medical supplies to monitor their blood sugar levels or the medications that can help. As a result, only half of Canadians with type 2 diabetes have their blood glucose levels under control and therefore run the risk of slow-healing wounds along with heart diseasekidney damage and blindness. That’s why the CDA endorses proposals for a national Pharmacare program to make sure low- and middle-income patients receive proper care.

“If people can manage their blood sugars well and have the resources they need to do that, then the damage to the nerves won’t happen. This cascade can be avoided where a barefoot walk in the park leads to a below-the-knee amputation,” says Hux.

Sole searching

Foot care advice from the Canadian Diabetes Association:

  • Wear shoes that fit with clean socks.
  • Avoid going barefoot — even in the house — or wearing flip-flops or footwear that presses in one spot.
  • Check your feet daily for cuts, sores and cracks, using a hand mirror to see the bottoms if needed.
  • Don’t use over-the-counter corn and wart removers.
  • Seek help if you notice a wound. Foot specialists can offer advice for protecting a sore.
  • The CDA’s Clothesline program is collecting gently used shoes to distribute to homeless shelters across Canada. For more information call 1-800-505-5525 or download the Clothesline app to find the nearest drop box.

Diabetes in brief

Blood sugar. The key factor in all diabetes is the body’s inability to process sugar. It can be caused by a lack of insulin — the hormone produced by the pancreas to regulate it — or insulin resistance, which is a key indicator of pre-diabetes. Regular finger-prick blood tests throughout the day show diabetics their blood sugar levels so they make changes in food intake, exercise or medication to keep them stable. Uncontrolled high blood sugar causes damage throughout the body. Prolonged high or low blood sugar can cause a diabetic coma.

Type 1 diabetes. Also known as juvenile diabetes, the disease is often diagnosed in children and teens and typically require insulin injections to stabilize blood sugar. It accounts for about 10 per cent of cases and is a serious chronic illness that requires a lifetime of attention.

Type 2 diabetes. This condition is a fast-growing plague in North America that now makes up 90 per cent of all diabetes. It can be brought on by carrying extra weight, a lack of exercise and poor diet. It can sometimes be controlled by lifestyle changes. Damage to the body accumulates the longer it goes uncontrolled.

The epidemic. In 2000, 1.3 million Canadians had diabetes. Ten years later that number more than doubled to 2.7 million. It affects every sphere of society, but has hit First Nations particularly hard, with prevalence about 40-per-cent higher than the rest of Canada.

Sources: Canadian Diabetes Association, National Diabetes Surveillance System