Canada: A Nation in Stagflation

Currently, we are in stagflation which is a prolonged period of slow economic growth, high unemployment, coupled with a positive inflation rate resulting in decreased buying power.

Prior to the 1970s, economists thought it was impossible to have both a stagnant economy and high inflation. Historically, when unemployment was low, inflation increased, and when unemployment was high, inflation decreased.

But now we are being affected by powerful global economic forces that can throw inflation into an upward spiral.

Ideas from economist Milton Friedman (1912–2006) have been used to correct stagflation. His formula to solve the problem of stagflation was to raise interest rates and limit the amount of money in circulation. For the first time in Canadian history the government has removed a coin from circulation, the penny.

Accurately predicting both the short and long-term performance of the economy is difficult. If the government raises interest rates too soon, it could shut down a restarting economy. If it waits too long, the economy can become overheated with extra cash, causing prices to rise and inflation to soar which is where we are headed.

Mark Hopkins, the senior Canadian economist for Moody’s said:

“The federal government, focused on eliminating the budget deficit before the end of 2016, is not likely to engage in aggressive economic development plans, and cash-strapped provincial and local governments, confronting deficits of their own and rising long‐run costs of health care, have little room to do so either. Managing inflation across the western and eastern halves of the country will also be a challenge for monetary policy makers at the Bank of Canada, as the distance between the Western and Atlantic provinces limits labour mobility.”

The Bank of Canada conducted research into the possibility of targeting a lower inflation rate, switching to price-level targeting, or formally adding financial stability as a target of monetary policy. It opted against any of these.

Inflation is a two-edged sword. A little bit might be a good thing, but then how do you keep it at a little bit and not go beyond that?

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Plan to Save the Nanaimo Boat Basin

There is still time left to save the Nanaimo Boat Basin for the citizens of Nanaimo.  Everyone can do something now!

You can email any of the following and ask that they save Nanaimo Boat Basin for the people and not make it a parking lot of yachts. Email the following:

City of Nanaimo, Mayor and Council mayor&
Mr. B. Dumas, Chair of Nanaimo Port Authority
Fin Donnelly, Deputy Fisheries Critic

Watch this new video about why it is important to save the Nanaimo Boat Basin and interviews with other Vancouver Island harbourmasters.

Also, visit Save Our Harbour for more information.

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City of Nanaimo financial woes

What is troubling about the City of Nanaimo financial woes?
1) 238 Franklyn Street property
2) Budget
3) Nanaimo Economic Development Corporation

1) Why would the City of Nanaimo sell the 238 Franklyn Street  property for one dollar and then pay Tectonica $40,000 to sell it?  The land value at 238 Franklyn Street was assessed at $3.4 million, not including the building.  So why couldn’t the City of Nanaimo recoup the value of the land at least?  Who is Tectonica Management Inc.? If you visit their website they mention that one of the directors is a managing partner at J.J. Barnicke, which is now called DTZ Barnicke, a commercial real estate brokerage firm.

2) Nanaimo City Council passed 3 readings of 2013-17 Financial Budget in one night. One Nanaimo counsellor objected and asked that more time be set aside to discuss the budget.  Another counsellor even raised the point that there was more discussion over a real estate sign on Dickenson Road than the pending $160 million City of Nanaimo operating budget.  The Nanaimo City Council was assured by the City Manager that Council could pass the budget now and still make changes later. Watch the video clip Nanaimo City Council on the January 28, 2013.

Now the City of Nanaimo is going to court to force BC Ferry Corporation to pay property taxes on the land occupied by the terminals. Why do they care? (see paragraph one). The City of Nanaimo stands to lose $1 million a year if not.  How much will it cost City of Nanaimo taxpayers to hire the lawyers to put through this case?

3) The City of Nanaimo once had an in-house Economic Office that cost $350,000 now the Nanaimo Economic Development Corporation costs taxpayers $1.3 million a year. Is the goal of the Nanaimo Economic Development Corporation to make a profit for itself and is it? At the time of this article, their website appears unchanged since the last CEO left Nanaimo back in May 2012.

The money that the City of Nanaimo collects from the ferry terminals won’t even cover the costs of paying for the operation of the Nanaimo Economic Development Corporation.

When will the taxpayers break?

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