Chapter 6

Chapter 6
B.C. economy expected to expand by a healthy 3.2% in '07

In 2007, British Columbia's market is likely to grow by 3.2 per cent next year regardless of the impact of slow U.S. expansion. Vancouver will still be the third fastest growing city country after Calgary and Edmonton. According to the article, “The Canadian Chamber of Commerce says real GDP growth will be 2.8 per cent for 2006 when all the numbers are counted, and it will slow to 2.4 per cent next year, primarily because of lower U.S. demand for Canadian exports.” The manufacturing of products has a huge impact on the Canadian exports. As the manufacturing goods reaches to the highest price value, the values for other commodities are also increased.

The new form of liquidity has sustained financial market but it also brings increased in risks. As long as the cost of capital remains low, liquidity can expand. But once capital becomes more costly, the new liquidity will contract much more sharply than monetary aggregates did in the past. So the resultant impact on asset prices could be severe and the deflationary pressure enough to pitch the global economy into a deep recession. Global liquidity is pumped up by the mechanism of world trade. But that also means global liquidity could be significantly reduced overnight if central bankers were to set the dollar. The real economy progressively channels currency demand into the major currencies that drive global liquidity, and central banks act to ensure that this pattern is preserved in the store of assets they control.

As currency flows from financing GDP into international trade and then into paying for imports, it becomes increasingly concentrated in dollars and euros. At the level of GDP, the euro and the dollar account for 46% of the value of global currency. The US dollar and euro account for 54% of the value of international trade but for 83% of the currencies used to pay for it. The real economy flows of global GDP and international trade flow to a series that increasingly focus currency use in two or three of the world's main currencies.

Every time that spending increases, GDP increases. The total impact of any increase in spending on GDP is determined by use of the multiplier. There is a difference in impact on GDP when comparing expenditure changes and tax changes. The difference results from the influences that tax changes have on saving. Part of any increase in taxes is financed through savings, while part of any tax reduction finds its way into saving. In certain instances, the level of total spending in the economy may not e enough to provide everyone with a job even though the economy is expected to expand. The economy may not be at full employment level of GDP. The more people willing to work, the higher the employment level will be.

Link: http://www.canada.com/vancouversun/news/story.html?id=d5784f75-410c-46f8-95dd-d45a1a6e313f&k=89403

Chapter 5

Chapter 5- The 10-year world boom

This article states that Canadian business has stated the world economy by banking, exchange rates and government regulation in the last 10 years. During these 10 years, the growth in Canada has been generally steady. The annual real growths over the last five years have insulated the United States. Over the last five years, the growth in US reaches 3.5 percents whereas Canada achieves at 1 percent. Comparing the distinction between the US and Canada, the Canadians GDP per capita has reached over for the past five years. Since the relative growth for Canada has not change, but the growing world economy is sliding. The total world GDP is 2.1 percent, Canada now accounts for 1.84 percent.

One economic strategy that spans most of the world's financial system is the focal point on keeping inflation relatively low and steady. Inflation rates in developed countries drift between 2 percent and beneath 4 percent. During these burst of inflation that might force central banks to increase interest rates to recession-causing levels, the actual inflation hazard is smaller. If the inflation rate goes from 2.5 percent to 3.5 percent, it is clearly stated that taking a massive economic contraction to set the inflation back. A country’s GDP rate would increase when the inflation rate would decrease. One thing that could speed up the rate of the decline in GDP would be to increase the jobs opportunities. The weakness in growth has not worked its way into the job numbers, which have stayed fairly low. Both the goods-producing sector and the service sector were not surprise, due to weaken in the U.S economy. The poor performance of the service sector did catch the economists off protector. The weak point was spread across wholesale and retail trade, as well as transportation and warehousing.

GDP is the measure of the value of all goods and services produced in Canada. The gross domestic product includes only final goods and services, not goods and services used to make another product. Changes in the gross domestic product are in indication of economic output. I think that Canada is clearly not participating in the world growth boom to the extent that it should. A low GDP rate is not good for the country or even people. New business owner would look at the country’s GDP before starting a business. If the overall GDP for that country were not high compared to other country, then the business owner would not invest. As a result, the economy would decline and it affects the job opportunities. The rate of employment would decreases since no one is willing to spend their money in this economy.


Link: http://www.canada.com/nationalpost/columnists/story.html?id=0f75a780-682f-40ae-ad68-7845a667b58b&p=2

Chapter 4-Canada’s New Government Announces Tax Fairness Plan

The new Tax Fairness Plan is intended for the Canadians. It’s a plan designed to level the playing field between income trusts and corporations. The new Tax Fairness Plan is necessary to restore balance and fairness to Canada’s Tax System. They are necessary to ensure our economy continues to grow and prosper. They are necessary to bring Canada in line with other throughout the world. The plan is the result of months of careful consideration and evaluation. The actions are clear, crucial for all Canadians. The provisions is to reduce the level of taxation on corporate dividends, the landscape has changed dramatically over short period of time. Top Canadian corporations, operating within the current rules, have announced their purpose to adapt to the income trusts. If corporations don’t pay their share of taxes, this tax weight will raise onto the shoulders of hardworking individuals and families.

Taxes should be equitable, or fair. One approach to defining equity is to insist that all individuals who are in similar circumstances pay the same amount of tax. The problem in terms of equity arises where individuals in different circumstances are concerned. Even though income tax provides the greatest source of revenue for government, it is agreed that those with higher incomes should pay more tax. First, the government is recommend to apply a Distribution Tax from publicly traded income trusts. This will level between trusts and corporations. Secondly, the general corporate income tax rate as part of Tax Fairness Plan will be reduced. As an outcome of this measure, there will not be more government revenue produced from the corporate sector. Thirdly, the government increases the Age Credit Amount. This measure will provide tax aid for low and middle-income seniors. The Tax Fairness Plan will distribute more than a billion dollars of new tax relief yearly for Canadians.

Even thought someone with a higher income pays more in taxes than someone with a low income, the sacrifice that each has to make in paying taxes is though to be the same. With the regressive approach, the low income individual pays a higher percentage of income in taxes and thus is making more of a sacrifice than someone in a higher income tax group. There are different tax rates for different types of income. Government tax policy also has to be consistent with a desire for economic development. Equalization payments are to provide a reasonable level of public services without resorting to extremely high levels of taxation in order to get the money for the services. Equalization payments are not the only sources of money transfer between the provinces. The federal government makes equalization payments to some provinces.

Overall, it is agreed that individuals with similar circumstances should pay the same amount of taxed. It is not agreed, however, how individuals in different circumstances should be treated. Canadians find themselves with a tax system that is less fair and an economy that is less productive and competitive. Left unchecked such corporate decisions would result in billions of dollars in less revenue for the federal government to invest in the priorities of Canadians, including more personal income tax relief. These decisions would also mean less revenue for the provinces and territories, several of which have made representations for the Canadians. I think that this situation is not right and it is not fair. It is the responsibility of the Government of Canada to set our nation’s tax policy, not corporate tax planners.

Link: http://www.fin.gc.ca/news06/06-061e.html

Chapter 3-Health Care in Canada

Canada's health care system is a publicly funded health care system, with most services provided by private entities. It is not a true public system even though the government calls it. Health care is the prevention, treatment, and management of illness and the preservation of mental and physical well-being through the services offered by the medical, nursing, and allied health professions. The healthcare industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product of most developed nations. Health care can form an enormous part of a country's economy.The healthcare industry includes the delivery of health services by health care providers.Usually such services receive payment from the patient or from the patient's insurance company; although they may be government-financed. There are many ways of providing healthcare in the modern world. The most common way is face-to-face delivery, where care provider and patient see each other. This is what occurs in general medicine in most countries. However, healthcare is not always face-to-face; with modern telecommunications technology, patients can communicate over the phone, video conferencing, the internet, email, text messages, with the care provider.

The largest government health program is medicare. The largest group the federal government is directly responsible for is first nations. Native peoples are a federal responsibility and the federal government guarantees complete coverage of their health needs. For the most part First Nations people use the normal hospitals and the federal government then fully compensates the provincial government for the expense. The federal government also covers any user fees the province charges. The federal government maintains a network of clinics and health centres.The largest of these is the health care costs paid by the worker's compensation system. Despite being a provincial responsibility, the large health costs have long been partially funded by the federal government. To considerable pressure on the provinces, and combined with population ageing and the generally high rate of inflation in health costs, has caused problems with the system.

A concern that low-income person may be able to afford adequate health care has prompted governments to keep the price of health care low. The price of going to the doctor was reduced to zero. If effect, governments have introduced price on health care. Price result in shortages, and governments are faced with the problem of rationing health care. Those people who were concerned about their health and could afford it would probably get the necessary vaccination. They would purchase the vaccination from a doctor or health clinic. In this transaction, both would benefit. The doctor is paid for services and the consumer receives immunization against the disease. In this situation, a government may step in to ensure that more of this service is provided. This intervention may be accomplished by using tax dollars to subsidize the doctor or the health clinic. Increase government spending on health care would benefit both doctors and patients. Many Canadians have private health insurance, often through their employers, that cover these expenses.

I personally think that health care is important for our daily life. The demand for the health care is necessary for each indivdiuals. I believe that the government should focus its attention on health care system. Due to the average population ageing increases, the demand for health care increases. When there are more people waiting for the operation line in hospitals due to increases of sickness. The federal government had the responsibility of protecting the health and well-being of the population.

Link: http://www.hc-sc.gc.ca/ahc-asc/pubs/public-consult/2000decision/1-cas_e.html

Chaper 2-Growth Predicted for Commercial Real Estate As Residential Brethren Suffer Slowdown

Many of the real estate companies have been unscathed by the housing market slowdown. The market of corporations has services of real estate revenues and enough of offset growth in investment sales by the investors. With the low unemployment, the rent for offices space decrease, and people without jobs increases. The cause of unemployment is the result of slowdown of real estate market. If the rise of housing causes the economic to grow, the employment would increase.

Consumers will buy more of a product if the price is low and less of it if the price is high. When the price of a product increases, the less of the product can be purchased with the current level of incomes. When the price of a product increases, consumers may substitute another, cheaper, product for it. Consumer demand for a product is not likely to stay over time. The consumer makes the decision about which products will be offered for sale jointly. The factors that influence consumers demand are always changing such as the price of houses. As the population increase, the demand for most product increases. The effect of a change in any one of these factors is changing in time.


I believe that the price of a product will increase in the near future, consumer are likely to buy the product. With housing being important consumers item that is it, buyers were eager to purchase houses at the lowest possible price. The expectation of future prices has no influenced the gold and silver market and the stock markets. Rapidly rising prices led to the belief that prices would continue to rise. On the other hand, if people expect prices to be lower in the future, they will postpone purchase until a later date.


Link:
http://biz.yahoo.com/ap/061109/market_spotlight_real_estate_services.html?.v=2

Chaper 1-Water – Scarce Resource

Water is scarce resource, so water pricing is increasingly seen as an acceptable instrument of public policy. Water-use charges, pollution charges, tradable permits for water withdrawals or release of specific pollutants, and fines are all market-based approaches that can contribute to making water more accessible, healthier and more sustainable over the long term. One particular area of water policy that has become increasingly subject to pricing principles is that of public water supply and wastewater services. Efficient and effective water pricing systems provide incentives for efficient water use and for water quality protection. The metering of water consumption is a prerequisite for the application of efficient water pricing policies. The more water you use, the more amount payment you have to pay.

Scarcity is anything that has a limited supply. Global warming and climate changes will threaten Canada’s freshwater fisheries and the state of our drinking water. Lower water levels are having an impact on shipping in the Great Lake. The federal government decided not to put an outright ban on water exports. If some provinces started exporting bulk water, water would become a tradable commodity. The federal government has also approached the United States to request that the International Joint Commission study the impact of bulk water removal on lakes.

I personally think water is an important resource that living organism need to survive. The demand for water by Canadians is quite high. In fact, we are the second highest water users in the world, following by the Americans. Apart from needing water to drink, Canadians also require a great deal of water for our modern conveniences like households. Not many of us have an unlimited supply of dollars on hand, because the amount of money that we posses is limited, we must decided how to allocate it among various purchase. It is only when things are not limited in supply that we do not have to make such decision. Water is a scarce resource even for Canadians. The fact of its scarcity is forcing us to make regarding the use of this valuable resources. Personally, I believe water is brought to us by the nature and we could not control the amount produce.

Link:
http://www.un.org/waterforlifedecade/