Planning

There are seven reasons to RSP. None of them have anything to do with retiring. Besides, the Boomers already took all the money. Thanks to our obsession with real estate, retirement is pretty much screwed for most people now under the age of 60. Every day more money goes into housing, and less into liquid assets. Too bad.

Many Boomers will probably cash out in time to save their wrinkly asses – since their offspring are still hot and foolish enough to swallow debt and buy their homes. Not so much the next generation. It’s why I keep warning you not to keep the bulk of your net worth in this asset. Soon there’ll be no exit strategy.

Nobody listens, of course. So let’s change the channel.

RRSPs bore the hell out of most people and (as I’ve detailed before) are dubious things to try and retire on. The odds taxation will rise over the next two decades, turning these into tax bombs, are close to 100%. But as tools to avoid tax now, they have no equal.

Here are seven strategies to do just that.

One. Use an RRSP to finance a baby. Or just income-split with an unemployed spouse. The rules allow you to contribute to a retirement plan in your spouse’s name up to your own contribution limits. You get to write if off your taxable income and after three years the money becomes the property of your spouse. They can suck it off and pay household expenses, and do so without tax, if not working. Or on mat leave. This way you have effectively split income, since you got a tax break and the feds financed the kid.

Warning: Stay married.

Two. If you’re so house-horny you shun me and buy, then at least let F help. Say you have a down payment of $50,000, and an equal amount in unused RRSP contribution room (check last year’s Notice of Assessment to find out). You and your partner are allowed to suck fifty grand from a retirement fund under the Home Buyer’s Plan – money that comes out tax-free and doesn’t need to be fully paid back for 17 years. At least three months before you start looking, put the deposit money into two RRSPs. This will get you a combined tax refund (in the 40% bracket) of $20,000. Now you have $70,000 as a down payment and a lower mortgage.

Three. Of course, you can also claim an RRSP deduction twice.  Contribute $20,000 to your (or spousal) self-directed RSP (the only kind of have) and in the 40% tax bracket, get a refund of $8,000. Now put this into the RSP as well, netting you an additional refund of $3,200 from current-year taxes. This means your twenty grand returned you $11,200. Now, wait two years and get pregnant.

Four. So I’ve written a few times about an RSP mortgage, and the thought of making loan payments into your own retirement fund instead of the bank sure cranks a lot of people. But remember because it costs a lot to set up and must be done at market rates, this doesn’t work so well at times like these when mortgages are cheap.

But we have an app for that.

Start with a rental property. Of course, interest on any money borrowed to buy income-producing real estate is tax-deductible. This includes an RSP mortgage. So, you could use cash inside your retirement fund to replace a conventional loan, for example, then make payments into your RRSP, and still be able to deduct this interest from the rents collected. Apparently there is a god.

Five. I keep beating on you to have a balanced portfolio, like 40% fixed income (various bonds and preferreds) and 60% growth (including a mess of ETFs and a few REITs). Dividends and capital gains are taxed minusculely but the bond interest is nailed. So make sure you stick the fixed income inside your RRSP, and move the equities and preferreds outside. This means the bonds are tax-exempt. Remember, keeping cap gains and dividends inside an RRSP is like sending me into the priesthood. Tragic.

Six.  Don’t fall for this make-an-RSP-contribution-before-March thing. That’s just a big financial industry guilt trip, and the wrong way to invest. Much better to set up a monthly contribution (like with a pre-authorized debit) then collect the tax refund every pay period. Do this by filling out form T1213 from the CRA site and sending it in to the tax guys. They will notify your payroll department, which will reduce the withholding tax on your cheque. Now you have more cash flow – a raise.

Seven. So, you decide to retire at 38 with a fat RSP. What now? How do you avoid being taxed when you take money out, after enjoying all the tax breaks when you put it in? Simple. Melt your RSP down.

Borrow a pile of money at prime (on a LOC secured by your house, for example) and invest it in a solid, balanced, managed non-registered portfolio. Now make the interest-only loan payments by withdrawing an equal amount from your RSP. Those withdrawals are taxable, but the loan interest is tax-deductible, canceling each other out. Each month, in effect, you’re transferring wealth from your registered (taxable) plan into your non-registered (after-tax) portfolio.

Finally, if you talk to TNL@TB about some of these strategies, beware. She’ll collapse.

172 comments ↓

#1 TurnerNation on 02.12.12 at 6:02 pm

First.

#2 TurnerNation on 02.12.12 at 6:04 pm

Our forum host perhaps tried slipping an early post past us ;-p

But we blog dogs never sleep.

Here is the old Suzuki bikes photo I promised.
There is both black, and orange one here.

http://imageshack.us/photo/my-images/24/bikesi.jpg/

I think it’s this one:

http://en.wikipedia.org/wiki/File:SuzukiSavage1988.

#3 TurnerNation on 02.12.12 at 6:04 pm

This weblog is like a movement (cult?) for many.

It is Garthism.

Our financial saviour was crucified in the House of Commons – by the evil king harper – for overturning the MPs’ chairs. Yet, three days later he was witnessed riding a Harley in Bunkerville.

His burden is small: each year, simply contribute $5000 into a TFSA (Turner Free Stock Account).

Feel free to bring Gold, Siver, and oil on your pilgramage to Bunkerville (but not greater than 10% of your portfolio’s worth!).

Each day at 9:30 and 4pm EST (market open and close) we shall turn to face Bunkerville (West, in my case) and give a few words of thanks for Preferred Shares.

In the name of bikes, babes, and balanced portfolios.

#4 Sebee on 02.12.12 at 6:11 pm

Is it possible to do this this for past years? Obviously RRSP contribution limits compound annually. Is there a way to dig into past tax years on these suggestions?

On some, yea. — Garth

#5 Comrade-Conrad on 02.12.12 at 6:18 pm

Seeing as F and H passed laws allowing,
30, 35, and 40 mortgages they should be arrested and tried for crimes against the populace. For setting up the frame work for this bubble to grow and burst causing untold grief, despair and deaths due to the financial strain many Canadians will be feeling someday in the near future.

#6 Min in Mission on 02.12.12 at 6:29 pm

Finally, if you talk to TNL@TB about some of these strategies, beware. She’ll collapse. – Garth

Not really, but, I was just there (the TDCanadaTrust is open on Sunday), and mentioned form T1213. Her eyes kind of frosted over.

#7 David Stanley on 02.12.12 at 6:38 pm

My wife (who does my taxes) says that if I adopt strategy No. 7 I’ll be nailed by minimum tax because 85% of my income is from dividends. However I’m sure persons with a high proportion of earned income will benefit from your strategies.

#8 sue on 02.12.12 at 6:44 pm

“….like sending me to the priesthood-tragic”…LOL The amazons would be crushed.

#9 Beach Girl on 02.12.12 at 7:08 pm

#263 Herb on 02.12.12 at 5:16 pm

#246 Beach Girl,

thank you for your uplifting comment. Having neither beard nor ‘bike, I was feeling inferior.

And why are you hanging around playing fourth fiddle to three Harleys?

____

Herb

I think you are an actual gentleman. I realize you are taken. A man of your attributes would obviously be off the market.

I am still around, as I go out for free wings on Wednesday night. Nothing has gone on South or North of the border.

The not so hot flame, has tons of money, just not such a large libido. I think people like my dinner parties.

Honestly weight 125, 5’3 slim attractive.

Not to worry, I am still out there.

#10 Stinky Cheese McGoo on 02.12.12 at 7:23 pm

#1-3 Turnernation

Youth like you always overlook the obvious details. You’re becoming much too transparent with your auto-refresher/auto-poster programs. Or perhaps you’ve got the comments already written and paste them in? Either way, you look truly sad.. Maybe you should consider a delay between posts – having both at exactly 6:04pm gives you away, sonny. Also, your comments having nothing to do with the day’s posts are another dead giveaway. However, in some ways I’m envious that you can derive such pleasure in such a silly thing as being an early poster. I, on the other hand, take joy in feeling superior to you by belittling your simple joy. Perhaps we’re not all that dissimilar.

Stinky Cheese McGoo

#11 JSM on 02.12.12 at 7:26 pm

Garth, you should be more specific or more careful.

You should warn people making spousal contributions that it is not a FIFO (first in first out) proposition.

You can not make any contributions to any spousal RSP for 3 years in order to avoid the income from being attributed back to the contributor.

This should be made explicitly clear as people often think in FIFO terms.

#12 Victor on 02.12.12 at 7:35 pm

BMO’s Chief Economist’s Sherry Cooper waxes poetic about the Canadian economy, equity markets and Canada’s housing bubble. A must watch video!

http://www.media-server.com/m/p/9y3vpoqb

#13 Seven Stars and Orion on 02.12.12 at 7:36 pm

Thanks for the reply Garth, it got my wife’s attention, and a conversation followed.

#14 bigrider on 02.12.12 at 7:37 pm

Hard to believe the government will pull a bait and switch with RRSP’s. I mean, put them in today for a 40% tax deduction only to be taxed later at a higher rate? Really? Even though they know there is a severe retirement crisis at hand and continuing to fester/worsen ?

And in the face of the TFSA ? Why bother instituting the TFSA if they are just gonna take tax revenues back somewhere else?

Not sure you’re right on that one Garth.

#15 Tony on 02.12.12 at 7:43 pm

With income taxes set to rise in the future RRSP’s may not make a lot of sense anymore.

#16 From Mississauga with Love on 02.12.12 at 7:44 pm

Garth, I asked you before if my wife contributes to her RRSP now before Feb 29 and then she withdraws it this year, would it work? Your answer was yes. TD lady told me she’s not supposed to tell me this but it works.
But here you say if we have a baby, and I contribute using my allotment, then money withdrawn when my wife in unemployed is not taxed. Is that only with MY contribution AFTER 3 years?
Would she get taxed at a lower rate or not get taxed if she withdraws HER money from HER contribution for this year if we pay before the 29th of Feb?
please clarify.

#17 Peter Goesinya on 02.12.12 at 7:46 pm

TurnerNation, with a very early post today and you’re still phirst. What the hell do you do all day?

GAWD!!!!!!!!!!!

#18 not 1st on 02.12.12 at 7:55 pm

Garth, your pity for baby boomers is sadly misplaced. They deserve none of it.

In my opinion and experience, most baby boomers were told they could have it all and make no sacrifices. So they deserve the bed they lie in.

its also my experience that the don’t give a rats a** about any of it either.

- They didn’t care how many war and death happened over the past 30 years.

- They didn’t care how big a debt was run up in the name of growth to be handed over to their children and grandchildren.
- They didn’t care when layoffs hit Gen X and Y and spared them many times.

- They didn’t care about not investing or saving. They don’t care about investing in the future of the planet.

- They don’t care about massive income equality that sees a trillion go to the banks as some nations starve.

- and they don’t care when they wield all the political power due to their numbers while every one else looks in from the outside.

I have no sympathy for any of them.

#19 phinny on 02.12.12 at 8:16 pm

Well Garth, our first ankle biter is on the way, and the wifey has no intention of working again (!)

Good for her, I say. Frugality never killed anyone.

I’ll book mark this one. Thanks!

#20 Kip on 02.12.12 at 8:17 pm

It seems odd to hear you give advice on how to buy a house.

What next? A job at CREA?

#21 Corey on 02.12.12 at 8:20 pm

#4 Start with a rental property. Of course, interest on any money borrowed to buy income-producing real estate is tax-deductible. This includes an RSP mortgage. So, you could use cash inside your retirement fund to replace a conventional loan, for example, then make payments into your RRSP, and still be able to deduct this interest from the rents collected.

Can this be done with a LIRA the same as it’s done with an RRSP? I cashed out my gov’t pension a few years back and have a whack ‘o LIRA I can’t do anything with. Interested in a 2nd rental property….

#22 OneMoreThing on 02.12.12 at 8:21 pm

#16 not 1st on 02.12.12 at 7:55 pm

Garth, your pity for baby boomers is sadly misplaced. They deserve none of it.

etc etc etc

Yes and taking full advantage of by the global elite to milk the middle class dry for the last 30 years and we are now at the pinnacle of this.

Gen Y and Xers will have to still fight with them as they cannot retire as hoped and hold onto jobs as long as possible.

Advice, stay clear of any RE for some time and watch them all bail thinking they can retire and not work. They will loose at both, RE tanks, investments tank and they will not find that job!

#23 Observer on 02.12.12 at 8:22 pm

Baby boomers – the cakewalk generation.

#24 Smoking Man on 02.12.12 at 8:28 pm

#256 Junius on 02.12.12 at 4:32 pm
#259 Herb on 02.12.12 at 5:04 pm
If you guys want to believe that the human race can influence global temperatures knock yourselves out. You can fit every human on earth shoulder to shoulder in Los Angeles. Sorry not enough of us around yet to do squat when considering the size of the Blue Marble.
Scientists What do they know, they memorize regurgitate get diplomas, then crawl on there hands a knees begging for funding, cause they are essentially useless eaters.. They will say and support any agenda by the pay mast r just so they can eat.
Scientists think the Universes is expanding, I rest my case they are that stupid.
Did you guys miss the news on climate gate 1 and 2.
Maybe this link can help you get some balance in your opinions
http://climatedepot.com/

Certified Post http://dyslexicsmokingman.blogspot.com/

#25 Mr Buyer on 02.12.12 at 8:28 pm

The Bubble has topped….
The thousand or so monkeys banging away on typewriters in my head managed to randomly assemble a thought and passed it on to the old man librarian asleep in my head to be approved for elevation into my conscious awareness. It goes something like this. Our mytho-poetic businessman, according to lore, would always be on the lookout for ways to be more efficient and to cut costs (this is entirely a myth). Anyways one would think cutting out the middleman would be one of many elements of a cost attenuation strategy. Lets take a look again at the mortgage business in Canada. While somewhat oversimplified it boils down to the Canadian public assuming risks on mortgages while banks pocket vast sums of cash to administer said mortgages (get a good mortgage calculator and check it yourself). It’s like 150k to 250k over the life of many mortgages siphoned off to the banks (I really should do the math on the present average Canadian house over the average length mortgage at the average present interest rate but it is the beginning of my work day and I really should be working at making money right now). So if I get a nice office a desk and a chair along with a telephone and a nice change of clothes I will have put at risk exactly as much as these lending institutions do when they sign up most people for mortgages and I get this +150k windfall for filling out the paperwork. While paperwork is indeed tedious at times, especially the first time filling out any given form, 150k worth of tedious it is not. Now if the banker in this scenario is not one of the biggest extraneous middlemen in modern times I do not know who is. Why on earth don’t we simply open a government office not unlike the beer store where people can come in and pick up their mortgages and free up 150k and more per household for god knows what? Are we that rich that we as a nation can continue throwing 150k per house down a black hole as we do now? Making mortgages completely public would be a really good move in my twisted imagination. What do we have to loose? We carry all the risk now anyways. I am wondering how much we could actually save doing this. Assuming of course somebody somewhere has to be paid for the privledge of borrowing their money, I wonder who that somebody actually is, or can a country simply make up money to lend, if so it is nuts that we have a bank in the way of this process…
…Buy now before everyone can afford to…
…and they landed softly ever after….

#26 Smoking Man on 02.12.12 at 8:34 pm

18 not 1st on 02.12.12 at 7:55 pm
We have no simpany for you either, now go make my burger.

Dork we boomers had nothing to do with you getting shafted Its you teachers that feminized you.

You should watchy the tv and learn from the young greeks. Rather than blame your parents.

goof
Certified Post http://dyslexicsmokingman.blogspot.com/

#27 Van guy on 02.12.12 at 8:40 pm

Poco,

203-2432 Welcher ave

You said

“bought sept 06 $279,000″

Sorry poco, it was bought in 04 for $226,900
No sale in in 2006.
Just sold in Jan 2012 for $279,500

You are a liar and no one on this blog this listen to his BS. You are immature and have no value to this blog.

#28 truth hammer on 02.12.12 at 8:53 pm

$1000 for a house in Aussie.

http://au.news.yahoo.com/today-tonight/latest/article/-/12869982/australia-s-cheapest-house/

quikie auction by sheriif yields windfall for lucky buyer.

#29 Raj on 02.12.12 at 8:56 pm

No wonder ,illigal money still keeping Toronto RE hot.

“Using money lent by ORNGE, Dr. Chris Mazza bought a home on Blackdown Cres. in 2010 for $735,000 . He had it rebuilt, and it was listed for sale two weeks ago at $1.4 million.”

http://www.thestar.com/news/canada/article/1130165–ornge-s-chris-mazza-got-1-2-million-on-top-of-pay?bn=1

#30 TurnerNation on 02.12.12 at 9:00 pm

#10Stinky Cheese McGoo on 02.12.12 at 7:23 pm

Son, it’s called a hat trick. How Canadian. Are you related to Josef? And I write my longer blog posts when they come to me, ahead of time.

In fact I had just returned from taking that bike photo and shopping, was uploading it, when I saw the latest post. I do not do F5s.

#31 Beach Girl on 02.12.12 at 9:01 pm

#18 not 1st on 02.12.12 at 7:55 pm

Garth, your pity for baby boomers is sadly misplaced. They deserve none of it.

In my opinion and experience, most baby boomers were told they could have it all and make no sacrifices. So they deserve the bed they lie in.

its also my experience that the don’t give a rats a** about any of it either.

– They didn’t care how many war and death happened over the past 30 years.

– They didn’t care how big a debt was run up in the name of growth to be handed over to their children and grandchildren.
– They didn’t care when layoffs hit Gen X and Y and spared them many times.

– They didn’t care about not investing or saving. They don’t care about investing in the future of the planet.

– They don’t care about massive income equality that sees a trillion go to the banks as some nations starve.

– and they don’t care when they wield all the political power due to their numbers while every one else looks in from the outside.

I have no sympathy for any of them.

___

And again, I go to bed happy knowing some snivelling whiner has made my day.

#32 Nostradamus Le Mad Vlad on 02.12.12 at 9:05 pm

-
“Every day more money goes into housing, and less into liquid assets.” — It was a really good lesson for our son and DIL to go through the experience of buying and selling a condo within a year, when they wised up that renting was a much better and cheaper alternative.

Sure, their debts are almost paid for, but then they can rent a TH or a duplex, and max out TFSAs for retirement and other stuff. There is nothing like having first-hand experience, and learning from it.

“TNL@TB” — is, in fact, a manifested conspiracy theory, such as the Fembots here.
*
#22 OneMoreThing — “Yes and taking full advantage of by the global elite to milk the middle class dry for the last 30 years and we are now at the pinnacle of this.”
– and –
#24 Smoking Man — “You can fit every human on earth shoulder to shoulder in Los Angeles.”

Both well put, and are further tools the elite use, in alignment with wars, uprisings etc. to keep sheeple off balance and arguing with one another.

#202 Ex-Cowtown — “MAN MADE GLOBAL WARMING IS A LIE.” — That sentence is correct, but CC will always happen because of natural cycles. Trouble is, none of it will ever be proven.

#208 disciple — “Nostra! What are you doing up? You must be closer to Greenwich time . . .” — I live in Rip Van Winklepicker land which is not of this world. Sleep for a few centuries, wake up, check the wingnuts here and go back to sleep again!

Live in Kelowna, the land of milk and honey mixed with weird politicos. Thx. for the link.

#214 Sexy and I Know It — “LMFAO IS TOTALLY AWESOME . . .” — Absolutely, and there are plenty of bands and great music across the globe. Enigma, Mike Oldfield, Candy Coated Killahz and Nickelback. Pachelbel’s Canon in D is just as gorgeous as Pink Floyd’s Shine On, You Crazy Diamond (an ode to Syd Barrett, the founder).

#221 GregW, Oakville — “Bruce Schneier is concerned that without trust, society itself may be impossible”

Indeed. If neighbors, people asking ordinary questions of others don’t trust one another for an answer, then TPTB have won, as we will have become a dumbed down race, incapable of critically thinking and basic analyzing for ourselves. Good link.
*
Speaking of uprisings, 1:23 clip ‘Owzaboud Mousaka and Baklava with riots as a side?

#33 45north on 02.12.12 at 9:15 pm

Mr. Buyer: Assuming of course somebody somewhere has to be paid for the privledge of borrowing their money

is what I’ve always believed

kee-oh-skit-ta-na (take care)

#34 Habbit on 02.12.12 at 9:19 pm

#18 not 1st Your comments reflect your narrow minded opinion and lack of experience. You make many assumptions supported by no factual evidence. Perhaps we should go back to the good old days of WW1, WW2, Korea or even the Civil War. Good times had by all then. You speak for no one but yourself. You likely have no idea that your rant is permissible due to others sacrifices.
Grow a set and lead the way if you can.

#35 Junius on 02.12.12 at 9:31 pm

#24 Smoking Man,

You said, “If you guys want to believe that the human race can influence global temperatures knock yourselves out. You can fit every human on earth shoulder to shoulder in Los Angeles.”

Now that’s logical. So much so that it even impressed the Mad Vlad meaning, of course, it must be nonsense.

We are not talking about B.O. here although with our lifestyle I can see why your mind goes straight there.

We are talking about the billions of tonnes of carbon dioxide we burn and through into our atmosphere along with the billions of tonnes of other forms of pollution. Add in the physical destruction to our waterways, landforms etc.

Need we even mention nuclear waste? Or is that fiction because you can’t see it?

I guess Ignorance is bliss. Drunk bliss but bliss all the same.

#36 dd on 02.12.12 at 9:31 pm

21 Corey Can this be done with a LIRA the same as it’s done with an RRSP? I cashed out my gov’t pension a few years back and have a whack ‘o LIRA I can’t do anything with.
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
You really mean … you choose to let it sit in cash.

#37 LG on 02.12.12 at 9:39 pm

#31 Beach Girl – As a baby boomer I need to say that your assessment that we “don’t care” is a generalizaton and, in my experience, not true.

We are all, yourself included, imbedded in our history and demographic. We can’t change that, we can just make the decisions with the information that we have at the time.

But, on the other hand, I’ll be dead – you deal with it!

#38 zman on 02.12.12 at 9:40 pm

just wondering if anyone visited the sales office for the release of new houses at jefferson forest in richmondhill

and if so how was the turn out and the prices

#39 Puzni on 02.12.12 at 9:48 pm

FML listings by frustrated market entrants:

http://fmlistings.tumblr.com/

Found this on moneyville and it says why its good time to buy a house ; crazy I think :

http://www.moneyville.ca/article/1121135–why-it-s-a-good-time-to-buy-a-home

#40 T.O. Bubble Boy on 02.12.12 at 9:56 pm

They can suck it off and pay household expenses, and do so without tax, if not working. Or on mat leave. This way you have effectively split income, since you got a tax break and the feds financed the kid.

On maternity leave, the spouse will typically collect EI (up to 52 weeks), and some on mat leave will have benefits from an employer that pay say 50% or 75% of salary for X months. Since the basic personal amount for deduction is about $10k, almost any kind of EI or other benefit will exceed this deduction.

So — unless I’m missing something, taking RRSP funds out while on mat leave doesn’t seem to be tax free?

Few receive mat leave top-ups. For most couples this is a solid income-splitting move. But feel free to live on EI, if you prefer that. — Garth

#41 The BioTech Guy on 02.12.12 at 9:59 pm

Meanwhile on planet Earth…

Went to see an open house today at 2pm. The MLS went on Thursday. The ad looked reasonable enough to go see. Just as we were knocking on the door I realized I don’t actually see an Open House sign anywhere on the driveway…

Nice lady opened the door and explained: ‘ Oh, the house is already sold, we cancelled the Open House…Sorry ‘.

Garth. I think I understand the prevailing RE winds but this is reality on the ground in west GTA today.

In fact, this also points to confused realtor. I would start having doubts if I priced too low. Who needs to sell in 48 hours ???

Wait. — Garth

#42 Kaganovich on 02.12.12 at 10:01 pm

#25 Mr Buyer

Excellent point, but be aware that it is ideas like yours above that can get you eliminated or disappeared or whatever. But really, I don’t see why taxpayers are backstopping this housing market that has gone off the rails either.

#43 Devore on 02.12.12 at 10:10 pm

#14 bigrider

RRSPs are not taxed. There’s no such thing as an RRSP tax. It’s just income tax. There are no tax exemptions to income derived from RRSPs, and there will not be in the future. Income tax is income tax.

#44 george on 02.12.12 at 10:16 pm

The ghost of elections past is coming back to haunt Stephen Harper.

The Liberals are pointing out that when Harper campaigned against Liberal prime minister Paul Martin in 2005, he promised he would defend seniors’ public pensions.

In a speech to seniors in Guelph on December 9, 2005, Harper said seniors, like his mother, had worked for years to pay into the public pension system and that they expected it to be there for them.

“My government will fully preserve the Old Age Security (OAS), the Guaranteed Income Supplement and the Canada Pension Plan, and all projected future increases to these programs. And we will build on those commitments,” Harper promised before winning the election in 2006.

Old Age Security Canada: Harper Was Against Pension Changes Before He Was For Them

#45 not 1st on 02.12.12 at 10:20 pm

#18 not 1st Your comments reflect your narrow minded opinion and lack of experience. You make many assumptions supported by no factual evidence. Perhaps we should go back to the good old days of WW1, WW2, Korea or even the Civil War. Good times had by all then. You speak for no one but yourself. You likely have no idea that your rant is permissible due to others sacrifices.
Grow a set and lead the way if you can.

__________

Don’t give me that freedom line B.S. All those wars were started by boomers and their forefathers messing around in politics and the economy and places they had no business and then they act so shocked when a recession or depression pops up or a war erupts. Give me a freaking break. While you are saluting the flag in your old age I’ll be paying for your depends.

#46 JimmyAAA on 02.12.12 at 10:24 pm

While somewhat oversimplified it boils down to the Canadian public assuming risks on mortgages while banks pocket vast sums of cash to administer said mortgages (get a good mortgage calculator and check it yourself). It’s like 150k to 250k over the life of many mortgages siphoned off to the banks

Why on earth don’t we simply open a government office not unlike the beer ? Making mortgages completely public would be a really good move in my twisted imagination. What do we have to loose? We carry all the risk now anyways.

I like this idea in principle, but it will never happen as long as Ezra Levant and his kind spend all their time cursing everything government does that private corporations could do and make money. Note I did not say do more efficiently, I said make money.

I am not so naive to believe that governments are not more efficient than private enterprise, but neither am I so naive to believe that private enterprise will do something in my best interest unless said best interests align with their stated goal of profit. This is not a bad thing, but neither is government.

#47 the math guy on 02.12.12 at 10:35 pm

#27 Van guy the whiz realtor on 02.12.12 at 8:40 pm
Poco,
203-2432 Welcher ave
You said
“bought sept 06 $279,000″
Sorry poco, it was bought in 04 for $226,900
No sale in in 2006.
Just sold in Jan 2012 for $279,500
You are a liar and no one on this blog this listen to his BS. You are immature and have no value to this blog.
____________________________________________such hostilities –bad day selling today??
if you had a little patience with anything you did, you may be able to comprehend much of what is debated on this blog before flying off in a dumb rant

if you knew what you were doing with your so called access to the mlsexchange you would have seen that i did make a mistake with the listing on Welcher(see below)–number 202 is associated with mls#918903–not #203 as i had stated–
even though you checked 203 you have failed to note the difference in the mls numbers–great realtor you are!
so if you check #202 i think you can confirm that my previous pricing is right –please tell me what did it go for (202 i mean)it sold too
i don’t see any rant about anything else i’ve posted –how about that one on wilson eh–correct–i know–my source is so much better than you

ps bought in 2004 –you better check your source –was built in 2005–pre-sale???–you don’t know how to get those–do you?

here’s the original post –i make it too easy for youv918903–203-2432 Welcher–bought sept 2006–279k—-listed nov2011 299.9k—reduced jan2012–285k—haven’t got the sale price yet but the link below is the twin–also at 285k –you can see that 285k will buy you the same today as it did over 5yrs ago
http://www.realtor.ca/propertyDetails.aspx?propertyId=11290318&PidKey=375166606

after writing all this, i doubt you’ll be able to figure it out or you’ll be responding to other uninvolved posters like you tend to do

#48 ex bc boy on 02.12.12 at 10:38 pm

I love the last idea of borrowing money and transferring wealth from registered to non registered. Its got me horny. question- will I be able to get a loan if I dont own a house? If I have $300,400,500? grand can I borrow $300? this is the amount I need for my rrsp I believe.

Of course you should be able to. — Garth

#49 NoName on 02.12.12 at 10:41 pm

Hi Garth

You mentioned short term bonds other day , what about building ladder bond mainly from provincial bonds as alternative to just holding bond index fund. Reason why province or fed gov have taxation power, and person will have more control over ladder diy ladder bond than bond index fund? How bad have to get for some provinces to become California north?

I would not choose this moment to enter the bond market. — Garth

#50 Smoking Man on 02.12.12 at 10:44 pm

35 Junius on 02.12.12 at 9:31 pm

Ignorance is bliss Junius, what you fail to see Grass Hopper is it’s an illusion cast by the machines magician.

The magic man took your eye of the ball ( The destruction of your buying power and enslavement) and got you to focus on kissing and saving the trees, while his hand is emptying your back pocket. Now that he has emptied them, he’s going for your kids pockets, and grand kids pockets. As you and your kind sing kombia under the Avitar tree.)

It’s to late for you to see it, the cement has been cast and has dried between your ears.

Me The Great Smoking Man knows how to pick pockets, it takes one to know one.

Certified Post http://dyslexicsmokingman.blogspot.com/

#51 poco on 02.12.12 at 10:47 pm

Van guy the whiz realtor

thought i would change my handle for when i was replying to your posts only because you are always wrong in your “figuring” but didn’t get any response the last couple of times so will go back to the one you can’t compete with–have a nice night

#52 rentin on 02.12.12 at 10:49 pm

“Now make the interest-only loan payments by withdrawing an equal amount from your RSP. Those withdrawals are taxable, but the loan interest is tax-deductible, canceling each other out. ”

So instead of paying the government income tax you are paying the bank with 100% interest payments? Seems like a matter of picking your poison. Neither seems too tasty.

How about incorporating a company, working for no salary and take out 10-15k a year from the RRSP. Say for 20 years. That should kill most peoples RRSP and keep yourself in the minimum tax bracket? If you need some more money, just dividend it out. Use the OTCGE of 750K in the end to nicely end the day.

#53 Van guy on 02.12.12 at 10:52 pm

#47 the math guy on 02.12.12 at 10:35 pm

See u changed your name because you are embarrassed. You are an idiot. This unit was listed by the developer in 04 while it was under construction. Go ask your realtor buddies.

And if you think I’m a realtor, your an idiot. A realtor would be pumping. I think we are going through a correction, but it’s just started. Your posts are 50% correct. All realtors here rip the crap out of Garth. Garth is the king. Do you think that Mike Stewart would say that?

#54 Stupesing in Cabbagetown on 02.12.12 at 11:15 pm

#45 not 1st – wow, so much resentment! Of course you’ll be paying for our Depends, as we paid for your schooling, the roads you drive on and your mother’s maternity leave. And one day, after a lifetime of contributing, someone will pay for your Depends.

#55 Bill on 02.12.12 at 11:30 pm

You are once again suggesting that a self directed RSP may be used to finance non arms length commercial property. This is not so. Only rental property held at arm’s length qualifies. Non arm’s length residential property on the other hand is ok provided the mortgage is insured. Only CMHC currently provides such insurance.

Of course. That is a given. — Garth

#56 Bob on 02.12.12 at 11:39 pm

Hey Garth,

Check out this projected chart I found on estimated TO RE prices to 2030.. it’s quite the beautiful chart if I must say:

http://i40.tinypic.com/2hwzjur.jpg

#57 Fleabitten Monkey on 02.12.12 at 11:41 pm

Hi Garth,
Can you please confirm on the HBP payback period of 17yrs?
Thank you

Two years grace, 15 payback. — Garth

#58 Beach Girl on 02.12.12 at 11:56 pm

#26 Smoking Man on 02.12.12 at 8:34 pm

18 not 1st on 02.12.12 at 7:55 pm
We have no simpany for you either, now go make my burger.

_____

Making my night even better. You are on the mark boyfriend.

Best line of the year so far. Can I get fries with that?

_____

#37 LG on 02.12.12 at 9:39 pm

#31 Beach Girl – As a baby boomer I need to say that your assessment that we “don’t care” is a generalizaton and, in my experience, not true.

We are all, yourself included, imbedded in our history and demographic. We can’t change that, we can just make the decisions with the information that we have at the time.

But, on the other hand, I’ll be dead – you deal with it!
______

Have no idea what you mean. Serious. What are you saying? What am I supposed to deal with? As we probably will both be dead.

#59 larry elford on 02.12.12 at 11:58 pm

I agree Garth…….financial industry is now joined at the hip with regulators to scam your retirement away. See the examples and some of the tricks at http://www.youtube.com/user/investoradvocate?feature=mhum

#60 Paul on 02.13.12 at 12:02 am

Hi Garth,
Can you please confirm on the HBP payback period of 17yrs?
Thank you

Two years grace, 15 payback. — Garth

But here’s the best part. Sell the house and you can use that 50k in other investments. As long as you pay the required amount back every year it looks like they don’t really care.

#61 nonplused on 02.13.12 at 12:07 am

Gold star, Garth, gold star. I have a lot of money in RRSP’s because I have one of those work “matching” programs and have to take the free money. I am going to bookmark this post and read it several times.

Not sure if I can stay married, but she’s taking the money either way if she leaves so I still think it makes sense.

#62 45north on 02.13.12 at 12:07 am

not 1st: All those wars were started by boomers and their forefathers messing around in politics and the economy and places they had no business

“Besides, it is misleading because it allows us to rest on the easy illusion that it is ‘they’, the naughty statesmen who are always responsible for war while ‘we’ the innocent people, are merely led. That impression is a mistake.”

The Proud Tower, Barbara Tuchman

not first and not right

#63 AA on 02.13.12 at 12:12 am

thanks for the blog Garth…finally listed my condo in Toronto this weekend…at a crazy price in my view and showings happening…just waiting for a greaterfool…any takers :)

#64 Timbo on 02.13.12 at 12:17 am

http://twitpic.com/8j3x22

a Greek twitter from A Canadian on how the parliment takes in football while outside things burn..

warning to the language used.

is it coming our way? lower wages are not going to help raise a tax base to pay down debt. What a shame……

#65 Al on 02.13.12 at 12:25 am

Its so true that retirement is for the over 60 crowd. For those of us in our 40s its history. The RRSP is a great way to fund your emergency fund. If you lose a job (downsized sorry right sized) you can take out your RRSP and they take 10% off for tax. Its a nice way to get the govt to contribute to your emergency fund. Sure it would be great to have max RRSP plus an emergency fund, but that is not realistic for all of us.

#66 Van guy on 02.13.12 at 12:31 am

#63 AA on 02.13.12 at 12:12 am

thanks for the blog Garth…finally listed my condo in Toronto this weekend…at a crazy price in my view and showings happening…just waiting for a greaterfool…any takers :)
_____________________________________________

I’m not sure what the condo market is exactly like in TO right now. But what I’m hearing is there are lots of condo projects that are completing this year. In Vancouver, if you list a condo at a crazy price, chances are you will get no viewings and then forced to drop the price. That could stale your listing and then you will get vultures coming in and lowballing you.

Good luck to you

#67 GL on 02.13.12 at 12:43 am

This is your best post on financial planning. Thanks.
It seems to me that the 50K withdrawal from RSP is for primary residence, isn’t it? Can a couple withdraw 50K from RSP to purchase a rental appartment bloc that they won’t be living in?
Thanks again,
GLK

#68 TEMPLE on 02.13.12 at 1:17 am

Hi Garth, great post, thanks. Quick question- regarding strategy 7, what about the RSP withholding tax? Is the tax deduction from the investment loan going to be enough to offset that? Those withholding taxes can get quite punitive…

Thanks!

TEMPLE

#69 GL on 02.13.12 at 1:19 am

#64GL on 02.13.12 at 12:43 am

I went to CRA’s website, regarding the possibility to withdraw 50K from RSP to purchase a rental appartment bloc that they won’t be living in. Well the website says you must ” …. intend to occupy the qualifying home as your principal place of residence no later than one year after buying or building it. …”.
See http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/menu-eng.html

So all you need is the “intend” to occupy the appartment bloc. Well that is easy!

Actually, the french version of CRA’s website (http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/prncpl-fra.html) is more explicit in stating that only the “intent” is needed and that you could change you mind afterwards. Here is what it says :

“Il se peut que vous n’occupiez pas l’habitation admissible avant la fin de la période de 12 mois qui suit l’achat ou la construction. Si c’est le cas, nous considérons que vous avez tout de même satisfait cette condition si, au moment où vous avez retiré les fonds de vos REER dans le cadre du RAP, votre intention était bien d’occuper l’habitation admissible comme lieu principal de résidence …”

Sorry for the french guys! But Canada a bilingual country so should you.

GLK

#70 TRT on 02.13.12 at 1:21 am

Well put #18 not 1st and #22 one more thing!!

Boomers one day in the near future will not be laughing…the younger generation will soon have voting majority. Plus immigration changes will soon only allow younger people to immigrate. You think they will want to pay for Boomer fluff? Hahaha

It’s only a matter of time.

And smoking man, enough of the BS.
And Beach Girl, we are three now and growing daily. How’s that future outlook now?

#71 Bruce on 02.13.12 at 1:27 am

Are you certain about the RRSP vehicle vs personal investing. I ran the numbers over 40 years in a detailed model, 20 working years, 20 retired, with tax brackets inflated with CPI. RRSP drwadown rate was 7%, same was drawn for no RRSP for equivalence. Capital returns 6.5% pa, dividend returns 4.50%, cash rate of 3.20% pa for reinvestment. Taxes calculated for income and capital gains as required. RRSP drawdowns paid into cash account. Total returns on a post tax basis showed the RRSP vehicle total final net worth at the 40 year mark substantially higher than that for the non RRSP method. RRSP post income tax on drawdowns TNW was $4.67m vs non RRSP post taxes of $2.78m on same assumptions. Amount paid in was 12% of 120k at year 1 initial salary. Wages inflated for CPI. The compounding of the investment amounts (RRSP at no tax) and non RRSP at post tax rates was the major contributor. All Fed and State (Saskatchewan) taxes applied as due. Tax brackets indexed for CPI. RRSP appears a hands down winner, even if additional taxes are considered a likely outcome……?

#72 poco on 02.13.12 at 1:32 am

#53Van guy the whiz realtor on 02.12.12 at 10:52 pm
And if you think I’m a realtor, your an idiot. A realtor would be pumping. I think we are going through a correction, but it’s just started. Your posts are 50% correct. All realtors here rip the crap out of Garth. Garth is the king. Do you think that Mike Stewart would say that?
____________________________________________
ya right –you didn’t pick up on that change after i gave you all the clues you needed to decipher it, did you !!!! who’s the idiot???
can’t confirm that mls# 918903 can you bozo-read the post again —”comprendo” –haven’t got all that information at your fingertips like you brag you do–i guess we’ll have to change your handle to “wanna-be realtor”–couldn’t pass that exam or what?–you’re not fooling anyone–

not only 50% right –i’m still batting 1000 –unlike your 0% — you’re all over the map buddy–slow down and think –you know you made a dumb move by taking a loss on the property you sold in the downturn of 08-09, but you are obssessed with this housing thing–sit back relax–it will happen in Van as it is in other locations–but seriously, do you really think Van prices will fall to where you can afford them–i don’t see it–you could be waiting a long time and waisting many good years til you can buy again—i see you in 2045–”hey Garth i’m finally going to buy”

Garth is the king—-do you get down on your hands and knees before you go to bed at night and pray to the King?
hey wanna be–here’s a couple more for you — all in the same area—tell us all–how much are these sellers underwater??? do you have these at your fingertips or do i have to wait a couple of days like usual

can you decipher these??—–i wonder if anyone else can??
http://www.realtor.ca/propertyDetails.aspx?propertyId=11303857&PidKey=-791416931

http://www.realtor.ca/propertyDetails.aspx?propertyId=11201757&PidKey=-1079011999

http://www.realtor.ca/propertyDetails.aspx?propertyId=11371394&PidKey=-921607396

#73 Nostradamus Le Mad Vlad on 02.13.12 at 1:49 am

-
Soros Lends a clearer understanding of what is going on world wide, and The US Fed has an explicit goal: Devalue the US$ by a third (Soros will probably make a nice profit from this); Poorhouse How the money men treat us; Naughty Brit. bankers in tax scam; High Oil – Gas Prices when TSHTF in the MEast, and Good Summary; BoA Flirting with Turbo-Traders; Pot Pourri of finance stuff.

China; No Payin’, No Gain; 4Closures set to rise; Blistering Growth China’s inner provinces; Gold Standard Returning there is an awful idea; Growth; RE and Fertility (?) 28:57 clip Canada pre- and post-1929; Podcast Garth Turner and John Williams; One Down, more to go; Who Is buying the market? The elite are, that’s who; Putin and the Oligarchs; Gold and Silver Top five miners; Walmart Layoffs Things are getting bad.
*
Ron Paul A classic example of the paid-for and controlled m$m; The Toilet aims to please everyone; Standing Up to the big boys; Asteroids and Nukes are like chalk and cheese — they will never get along; Ten Quadrillion calculations a second. Goes with BPOE’s two quadrillion Chinese; Secret CourtsOrwell would be proud; Queen of Sheba Archeologists hit pay-dirt; Brain Cells created from skin, and 6:56 clip Cancer can be cured within week, and Running Out of cancer drugs; Syria and NATO Of course, most here already know that the US and others run NATO; Cyborg Brain The Borg have been created. Like Frankenstein, we have created our own monster; Free Energy is available, yet two new nuke plants okayed.

5:18 clip Secret behind Whitney Houston;s death; disciple – Can the UFO take the Bush clan back with them to wherever it was they came from? James in Bondage Yes, the Aston Martin DB5 is back; 68 years old Garth, there’s hope for you and the Amazons yet!

#74 patsan on 02.13.12 at 2:11 am

Hey Garth,

I started punching the numbers for the melt scenario and found that there are some mathematical limitations to the scheme and that it might be mission impossible for someone with no assets other than RRSP.

Assume:
- 200k RRSP portfolio that generates 5%
- 200k loan with 5% interest

During a year:
- pay 10k of interest on the loan
- withdraw 10k from RRSP
- RRSP increase 10k

The problem is that the RRSP portfolio will continue to be earning interest equal to withdrawals. To make the scheme work, one should consider borrowing several times the RRSP balance. As it will take 11 years to melt 200k RRSP with a 400k loan for a working person, it is probably wise to start the meltdown well before the retirement date.

#75 Canadian Watchdog on 02.13.12 at 2:15 am

New article on Bloomberg.

Toronto Bubble Risk Topping New York in Condo Market: Mortgages

http://www.businessweek.com/news/2012-02-13/toronto-bubble-risk-topping-new-york-in-condo-market-mortgages.html

#76 Teuton on 02.13.12 at 2:20 am

#25 Mr. Buyer
You really should spend a little time on your calculations – banks lend money that has a cost – so they make a spread of say 2% on the mortgage balance outstanding. So to make $150K in spread ( before admin costs) over a 30 year amortized loan, the size of the loan is monstrous, well above a typical residential mortgage of $300 or $400K

#77 Hicksville Alberta on 02.13.12 at 2:40 am

CBC tv news info report on Chinese immigration to Vancouver reporting one in four new immigrants to Vancouver are Chinese and that has been the trend for the last ten years.

Went on to interview an (apparently well off) immigrant saying that Vancouver was the focal point for so many emigrants from China that it is now the most (Chinese) Asian city in North America and thus the implication the trend will continue.

Further made the case that things should be adapted more in Vancouver to allow/ enable the new community to start their new businesses in their more traditional ways or something like that.

Don’t know what or whether this matters but there is no doubt that a good part of many places in this country are being sold out and/ or colonized very rapidly by others with the consent and support of both the Federal and many Provincial Governments.

House in 4400 block on West 12th (Point Grey) was listed at 3,488 Mn and sold in 10 days last week at 3,378Mn.

Sold a few years ago as a tear down at 1.400Mn and a new place was built and sold a year or so ago at around 2.400Mn and this type of thing that just seems to go on year by year by year at ever increasing prices.

This is the new Vancouver and in due time even the east side of Vancouver ought to gradually start a more methodical tear down and rebuild stage.

I think a lot of what is happening on T.O. is the same type of money and since a lot if not most of it has been “made” in the past 10 or 20 years or so in the Homeland, a lot of which is from levered speculation and/ or “connections”.

Same thing is happening in the Alberta oil patch with billions of barrels of oilsands leases being purchased at 25 cents and up per barrel in the ground.

There is no doubt that this kind of thing will continue and if that is what people want then so be it, but it does not make sense to sell out one’s legacy financial assets and resources just because someone comes around waving wads of paper “cash” which continues to be debased and has no long term fundamental value.

Anyway, that just appears to be the trend and the trend ought to continue for the forseeable future.

#78 John Prine on 02.13.12 at 2:46 am

#18, Not First.

Wow, Are you ever feeling sorry for yourself.

I remember us “Boomers” getting atomic bomb testing in Alaska stopped, I was there. the rest of your whine doesn’t even warrant comment.

Text yourself a latte and complain some more…So sad.

#79 Freedom first on 02.13.12 at 3:10 am

Garth, I read a lot of conflicting opinions on “real return bonds.” Do you believe they deserve a place in ones’ portfolio? Thank you!

#80 The Dude on 02.13.12 at 3:51 am

Awesome post. Thanks Garth!

#81 Aussie Roy on 02.13.12 at 4:07 am

Aussie Update

The banks “Minsky moment” try it’s a Minsky kind of year.

COMMONWEALTH Bank-owned Bankwest has been branded “heartless” by angry customers facing financial ruin after the bank slashed their property prices and began calling in loans.

In a wide-sweeping audit called Project Magellan, the bank has drastically revalued the loans of more than a 1000 commercial clients — some by as much as 75 per cent.

http://www.dailytelegraph.com.au/news/banks-dastardly-act/story-e6freuy9-1226268653429

RBA “we want lower rates” – Banks (and the bond market) say NO.

http://www.smh.com.au/business/all-the-big-banks-lift-rates-20120213-1t1ae.html

Analysts Roger Montgomery and Leith van Onselen say an out-of-cycle rates rise is likely, indicating there is not enough competition in the Australian banking sector.

Video http://www.youtube.com/watch?v=wMVMIQxQSeU

Banking jobs going quicker than a snow flake in the Aussie outback.

http://www.theage.com.au/business/anz-to-cut-1000-jobs-20120213-1t0uc.html

Aussie city and region, price update in January – Stinky

http://blog.residex.com.au/wp-content/uploads/2012/02/January-2012-Capital-City-Statistics1.jpg

My God our media is backward. I mean it. It has no idea what is going on beyond a press release shoved in its face. It’s baffling.

http://www.macrobusiness.com.au/2012/02/its-a-credit-crunch-stupid/

Over the past year, I have written extensively on the economy-wide implications of Australia’s slowing housing market including, amongst other things, worsening government finances, slowing retail sales, and lower jobs growth.

On Friday, RP Data posted an interesting blog about the pain being felt by the real estate industry from falling transaction volumes and lower house prices

http://www.macrobusiness.com.au/2012/02/real-estate-agents-feel-the-housing-chill/

Sure glad there isn’t and we never had a housing price bubble here in Australia – LOL.

#82 Blacksheep on 02.13.12 at 4:09 am

Getting to be a reoccurring theme on this blog.

All this intergenerational bitching at each other seems misplaced. Check out Strauss-Howe’s 1997 book, The Fourth Turning. These two historians / economists researched the last 500 year and found patterns that repeat approximately every four generations, or 80-90 years.

It goes something like this:

The twenty year old granddaughter, cannot understand why her 85 year old Great Grandmother, doesn’t throw anything out, and has shelves full of food preserves in the basement. Living through the depression and the second world war, Grandma experienced a much different world than someone raised circa 2012.
We’ve gone from the dirty thirty’s to a Facebook world in 80 short years.

I can see the generational progressions from modesty to excess in my own family.

My point is, we are all a product of our life experiences. The thing that should be concerning people at this point in history is the current, fourth turning generation has for the most part never heard,
first hand accounts on the horrors of war. Never
heard story’s from grandparents on eating potato peel soup to avoid starvation or burning household furniture, to avoid freezing in the winter.

Expectations of privilege can prompt political calls for protectionism, which feeds nationalism and economic rivalry, in a now deleveraging world.

Link:
http://en.wikipedia.org/wiki/Strauss-Howe_generational_theory

“Those who cannot remember the past are condemned to repeat it.”
George Santayana.

take care
Blacksheep

#83 AlexanderTheGreat on 02.13.12 at 4:39 am

Rumour has it February numbers are not looking good so far for Vancouver sales. If Feb #’s are bad and sales continue to fall, I expect a ton of listings to come on the market. Just like #63, people will rush to list their condos and we will see listings go through the roof. No one wants to wait until April to list when the world is crashing around them.

#84 martin9999 on 02.13.12 at 4:42 am

Not sure you’re right on that one Garth.–

this is how purely imbecile the masses are. somehow they doubt the person who wrote the book on taxes and revenues in canada: the minister himself. it really proves that Freud was right somehow about his theory

#85 Pr on 02.13.12 at 4:47 am

A single familli dwelling(SFD) now, in Vancouver, IS more than: ONE MILLION thirty four thousand dollars 1 034 000$. The prime minister Harper, Flaherty and CARNEY and the BANQUE OF Canada, should be investigated by the citizen of Canada.

#86 Lee on 02.13.12 at 4:47 am

#58 Beach Girl

#37LG mistakenly took your quoting of #18 as content in #31.

At least that’s how I see it.

#87 Canuck Abroad on 02.13.12 at 5:13 am

14 / bigrider – This is very easy for a government to do and not at all unusual. And remember, we are talking a long time frame here. If you are in your 40s and you might not take the money out for 10 or 20 years, there’s no way to predict tax rates that far in the future.

One of the most frustrating things for me has been the ever changing tax rates on income and tax treatments of pensions in the UK. The top rate of income tax is now 50% in the UK (new as of a few years ago, previous top rate was 40%), so if you paid into your pension when your rate was much lower (say, relatively low income taxed at 20%) and you are suddenly flush with income later in life, you are paying 50% tax on the top band now.

What’s proposed is even worse, because it will hit way more people. Pension contributions currently get a tax refund at your own tax rate. So, if you are in the 40% band (pretty easy) you get an automatic 20% refund when you paid in and can claim another 20% when you file, for a total refund of 40% (same as your tax band). Now, the government is proposing to cap the tax refund at 20% only. So, if you are silly enough to continue to put money into your tax plan in the UK so will get only 20% tax relief, but if you are in a higher tax band at retirement, face it being taxed at 40% or even 50%!

So, just a couple of examples, but really, beware of saying your government wouldn’t do that to you. It will.

#88 Canuck Abroad on 02.13.12 at 5:21 am

Thanks for this article Garth. Have saved it for future reference as I might move to Canada in the next few years. I think there is a way to move my SIPP out of UK, still working on that part…

#89 Ben on 02.13.12 at 7:03 am

The brewing tax bomb that RRSP savings will ignite is a real sleeper for most people.

Many people assess their “net worth” by including their RRSP savings with no consideration given to the tax liability to come.

Mr. Turner, you would do a HUGE service (perhaps even as much as you have in putting the RE market into clear perspective) by delving into the mysteries of accessing that money and the tax implications involved.

It would be even BETTER if you could share some additional thoughts on minimizing RRSP taxation.

There is a LOT of money in RRSP savings and the tax bomb that awaits may well be significant enough to damage some of the more fragile retirement plans of some folks. At the very least they need some semblance of a reality check.

Your insights would be most helpful and appreciated.

#90 Beach Girl on 02.13.12 at 8:18 am

I realize I have too much in RRSPs, but in the day, they were the vehicle of choice. Will start drawing on them? I’ve personally known people dying with lots of money invested.

The thing is, it is peace of mind, for a lot of people.

When I die, will I know the govt got half? Probably not, dementia, just old age. But I have them till I die.

By then I will have probably milked them dry myself, with medical needs, ect… . I bet the govt hates people who are fit, don’t smoke, and drink and eat moderately. We are here forever. SUCK on that. Much like an insurance policy.

Except insurance companies are bandits. Would never buy life insurance, as there will already be to many happy hands out when I leave. Do not want to encourage matricide.

Still, I don’t know the time of my departure from this world or this site. But I feel secure in the knowledge that they are there.

#91 bigrider on 02.13.12 at 8:18 am

Devore, I know income is income regardless of earned or RRSP withdrawal, I should have been more clear. What I meant to imply is that maybe the Governement may impose some type of grandfathering or other differentiation sometime in the future with income verse RRSP withdrawals. I mean, why offer TFSA’s and encourage saving among an already evident retirement crisis, if they are just gonna whallup you on the tax front. Seems contradictory, no?

Aside from an RRSP withdrawal verse non registered loan
match to avoid paying taxes on RRSP withdrawals that Garth speaks of, you could also consider flow throughs, buying them at regular intervals and diversifying to avoid taxes payable as well.

#92 truth hammer on 02.13.12 at 8:26 am

You tell me. Who is more ridiculous? The crazy economists who predicted that the US real estate bubble would never end or the crazy Canadian pimps who are reading the same song sheet?

1.

http://davidlereahwatch.blogspot.com/2006/12/david-lereahs-most-corrupt-foolish-and.html

2.

http://www.bloomberg.com/news/2012-02-13/toronto-bubble-risk-topping-new-york-in-market-for-condominiums-mortgages.html

The parellels are frighteningly similar….and the zany dopey silly prognostications of the Canadians (who had an opportunity to learn from the mistakes of the past) should be setting your hair on fire.

It took one day for the US housing market to become a quagmire into which sales fell off the cliff. Which is your day? Tomorrow ….next week?

Get the popcorn out honey…….theres a barn burner coming on.

#93 Mr Buyer on 02.13.12 at 8:51 am

#76Teuton…I stand corrected. So the monsterous amount of money in interest goes where exactly? From the perspective of an imbecile like myself I see over the life of a mortgage that a huge sum in interest is paid (not to mention that is at incredibly low interest rates presently and said rates are a moving target set to move upwards at any given bank’s discretion). If the amount of cash paid in interest is going somewhere other than in the banks pockets I am all ears. Trust me, I know that I know very little. Here is a link for a mortgage calculator at CMHC….
http://www.cmhc-schl.gc.ca/en/co/buho/buho_012.cfm
I plugged a bunch of numbers in and it is stunning. Even if the bank is not pocketing the entire amount paid in interest why do we need them. They assume zero risk.

#94 Sebee on 02.13.12 at 9:05 am

Here is an argument on UK high dept level. Interesting.
From Telegraph.co.uk

Yes, household debt relative to income rose to unprecedented levels just before the bust and remains way above what RBS considers “sustainable”. Yet the point that is frequently forgotten is the asset side of the balance sheet, which as can be seen from the Office for Budget Responsibility table below, remains far in excess of the debt.

The physical assets alone (mainly housing) were last year worth 382pc of income. Add in financial assets such as pensions and other forms of saving, and the figure rises to 827pc of income, an excess over the debt of 667pc.

#95 detalumis on 02.13.12 at 9:08 am

Strategy # One. The uber best way to income split and one that actually will let your spouse stay at home while the itty bitty kiddies are young is to separate. There is no requirement to move out of the marital home anymore, it’s not your fault that you don’t have enough money left to do so. You just need to pay her child and spousal support which will eat up oh half your income, this effectively makes you both jump down into lower tax brackets and you likely have $1,000 or more a month extra money from tax savings without having to do any actual saving. When the kids are older and she wants to go back to work you then can reconcile.

This is tax evasion. It’s illegal. — Garth

#96 Mr Buyer on 02.13.12 at 9:10 am

#25 Mr. Buyer
You really should spend a little time on your calculations – banks lend money that has a cost – so they make a spread of say 2% on the mortgage balance outstanding
……………………………………..
I am at a bit of a loss as to what exactly that means but if you are saying they make 2% on a mortgage then that is 100k on a 400k house (I simply plugged 2% in the mortgage calculator, 25 year mortgage, monthly payments). Before you get all hyped about math, I have actually passed two calculus classes in my past. The statement “they make a spread” holds absolutely no mathematical meaning to me. Now 2% holds a prescise mathematical meaning to me. Were you saying that the banks retain 2% of the interest they collect because if that is true then they would walk away with something like 3k on alot of mortgages but if it is 2% on a mortgage then we are back to huge sums of money being paid out for little or no reason as the people of Canada are in fact making the loan.

#97 Lizard on 02.13.12 at 10:01 am

Garth, if it was not for the fact that you have the title of Honorable, I’d be tempted to refer to you as a voodoo wielding financial evil genius. But being as your Honorable (and you earned it), I guess I’ll have to settle with just calling you a financial genius.

I especially like points 4 and 7.

#98 McFurnish on 02.13.12 at 10:05 am

@Comrade-Conrad #5

You’re advocating the equivalent of arresting someone for not stopping you from jumping off a cliff. Way to dodge personal responsibility, buddy.

#99 robert james on 02.13.12 at 10:28 am

If anyone is interested what Ground Zero might look like..http://www.century21.ca/jason.neumann/Blog/Kelowna_and_Okanagan_Foreclosure_Property_Sales_For_January_2012

#100 BPOE on 02.13.12 at 10:48 am

Here’s a plan. Buy BPOE. CMHC is saying house prices are going up! Looks like F raising the ceiling for CMHC big time.
http://www.vancouversun.com/Housing+market+expected+remain+steady+CMHC/6144119/story.html

#101 Herb on 02.13.12 at 10:51 am

#62 45north,

too bad Barbara Tuchman didn’t tell us who determines the reasons for going to war, creates the rationales to make these reasons palatable, and propagates this propaganda by any means possible to get and keep “the people” on side. The people eventually may clamour for war, but only after they’ve been carefully led to this point by someone else.

The First World War Tuchman wrote a couple of books about shows this pretty clearly. And the Vietnam War shows what happens when propaganda is revealed to be a busted flush and “the people” take over. Heck, you don’t have to go back that far in history. Iraq and Afghanistan will do nicely.

#102 Mr Buyer on 02.13.12 at 10:53 am

#42Kaganovich…be aware that it is ideas like yours above that can get you eliminated or disappeared or whatever
………………………………………….
Upon reflection I wish to retract my statements underlining the extraneous nature of Canadian Banks with respect to CMHC backed mortgages. It would be a very bad idea for Canadians to have thier government create a governmental provider of mortgages. Banks are very efficient in the mortgage bussiness and make the appropriate amount of money once the actual amount they make is determined and the hard work they put in day in and day out bringing a mortgage to term. I would further like to add that it is entirely unreasonable to expect banks to assume the risk for the CMHC backed mortgage loans they make. We are lucky to have them because if they got angry and closed thier doors to us then there would be no way for average people such as myself to make a million dollars buying and selling houses to one another. It is also perfectly acceptable for banks to continue lending money and driving the prices of houses up beyond the amount of money people earn in a lifetime or two as it is normal bussiness practice to maximise market share. I would also like to close out by stating that I have a long history of bad ideas and I am not to be trusted or even paid attention to generally, just ask anyone who knows me. Besides, nobody reads these posts anyways and no one is going to do any of the nonsense I suggest.

#103 Dorf on 02.13.12 at 10:54 am

Nobody listens, of course. So let’s change the channel.

Zackly !

I walked into the gas station yesterday where a lady was filling 8 plastic fuel cans in the back of a pickup. I talked to her on the way by and mentioned nicely and kindly that it was pretty common for those things to build up static electricity and ignite, and it is suggested to put them on the ground to prevent that from happening.

“Oh, is that right ?”, she says, appearing concerned and surprised at the same time.

She filled all 8 in the back of the truck while I went and got my coffee. I came out and she was not burnt to a crisp, thereby making me a liar and/or wrong about the whole thing. She won !

Why would somebody listen to anything contrary when they are under the gross illusion that they are winning ?

I suspect that if it had ignited, she would be upset, but moreso she would be angry at me for being right.

#104 Herb on 02.13.12 at 11:10 am

#24 Smoking Man,

I didn’t find any news in your link, just PHD propaganda (you know, piled higher and deeper).

What’s your answer to the “who profits” question? Besides you from judicious investment, of course.

#105 Dorf on 02.13.12 at 11:20 am

Turnernation 1-3…Love it !

Aside:
This article was so good, Garth, I printed it off and stuffed it into my Garth file, along with your book….AKA..Dad’s Bible (how not to grow up to be a douchebag).

#106 John Prine on 02.13.12 at 11:23 am

#70 TRT, Generational warrior

We will have the voting majority for another 30 years, remember how we all live longer? Who ALWAYS shows up to vote? The elders…………Assuming by your post you are probably 18 now so look forward to controlling society when you are about 60, when all your priorities have changed. Ha ha ha.

I can spend a bit of time on this blog every day because I am retired, you should be in class or at work.

#107 Kenny on 02.13.12 at 11:25 am

As to number 3. If people haven’t filed a T1213 then consider doing this as an gross-up. Take the contribution divided by one minus your tax rate, subtract the contribution. This gives you the exact amount that if you deposit just before March you’ll get back on your taxes.

eg: $20,000 / (1 – 0.40) == $33,333. Minus the original $20,000 == $13,333. If you contribute an extra $13,333 (from an LOC or RRSP loan) you’ll get that money back and can pay off the loan. Now you’ll have multiple years of returns in without waiting for the government.

#108 Junius on 02.13.12 at 11:26 am

#81 Aussie Roy,

Great posts. The article on the credit crunch is spot on.

I am surprised that the Bank of Australia has not moved to lower rates. Do you think there is a reason for this?

In Canada, of course, rates cannot go lower. We are now seeing the impact of credit contraction on the banks as they unilaterally raise rates as well. We are just at the beginning of the process now but you can already see the effects.

#109 Van guy on 02.13.12 at 11:50 am

Poco,

I lost $7k on my condo. So what. I admit that was a bad buy. But I made $ off other units. The “1″ I lost out on, I learned that condos were no longer appreciating anymore. I’ve lived in Van for over 20 years. I’m still here, affordability ain’t the problem. Risk is. I don’t enjoy being a pig farmer.

#110 MoneyMyHoney on 02.13.12 at 11:52 am

http://www.theglobeandmail.com/report-on-business/economy/housing/two-steady-housing-years-ahead-cmhc/article2336199/
Everything will be alright (by hook or by crook) for two more years. Those guys have a better rate of getting their predictions right.

#111 DoomedinSask on 02.13.12 at 12:20 pm

100th!

#112 disciple on 02.13.12 at 12:24 pm

Canada’s Stonehenge:

http://canadastonehenge.com/2009/01/sun-temple-discovery-in-alberta-informs-stonehenge-research/

Something magical and terrible happened with our minds:

http://www.youtube.com/watch?NR=1&feature=endscreen&v=Xbp6umQT58A

#113 Preciousss on 02.13.12 at 12:32 pm

Purchasing a foreclosed property in the early stages of a down market is simply a little less of bum deal.

Better to purchase after they have festered for a few years and become a huge headache and eyesore for the banks, towns, and governments.

Be patient. The RE parasite will do everything it can to press your greed buttons. Resist.

#114 Waterloo Resident on 02.13.12 at 12:33 pm

Norway’s private debt burdens will grow to about 204 percent of disposable incomes this year. That makes Canada’s 154% look small by comparison !

http://www.bloomberg.com/news/2012-02-12/norway-faces-severe-credit-shock-as-household-debt-swells-fsa-chief-warns.html

#115 cowtown cowboy on 02.13.12 at 12:53 pm

Hey Garth,

Can you elaborate on why you shouldn’t hold dividend paying stocks or have capital gains inside an RRSP or LIRA?

Cheers,

W

#116 disciple on 02.13.12 at 1:11 pm

Some of us find it hard to stick to the plan… The truth about women:

http://www.youtube.com/watch?NR=1&feature=endscreen&v=5_fX4t0m9L4

#117 cramar on 02.13.12 at 1:16 pm

I heard a commercial today on a Toronto radio station today advertising some kind of housing development. It stated that they could get you into your own home for just a $1,000 down!

#118 Blacksheep on 02.13.12 at 1:19 pm

Disciple # 107,

I too am a big Stefan Molyneux fan. In my opinion, this is the best short video I have found, that attempts to enlighten the masses.

“To see The Farm, is to leave it”

take care
Blacksheep

#119 Blacksheep on 02.13.12 at 1:27 pm

Was #107, now Disciple #112

Link attached for clarity:

http://www.youtube.com/watch?NR=1&feature=endscreen&v=Xbp6umQT58A

Blacksheep

#120 disciple on 02.13.12 at 1:28 pm

Just crunching some numbers, and guesstimating through extrapolation that the annual gross commissions paid out by home sellers nation-wide would be close to a billion dollars. And using 3-year old data available on Service Canada website, there are about 15,000 agents?

1,000,000,000 divided by 15,000 = 66,666.66 average salary. (A lot of 666′s there hmmm). Anyway, I was wondering about the total number of financial advisors in Canada and the total commissions/fees paid to them and how that number compares with the RE industry. I’m too lazy today to pursue but I did find this that someone might find useful:

http://www.moneysmartsblog.com/canadian-financial-advisor-qualifications-courses/

#121 disciple on 02.13.12 at 1:32 pm

Apparently, you have to be a “member” to get sales data for Mississauga/Brampton. But thanks, Lydia:

http://www.lydiasellshomes.com/4a_blog.php?subject=35965

#122 FullofFear on 02.13.12 at 1:41 pm

OK. Bonds go into the RRSP. Stocks that could go to the moon, go into the TFSA. Where do the REITs go?

#123 Victor on 02.13.12 at 1:54 pm

“Condo construction has always been rather prone to boom and bust cycles, and this one seems particularly strong,” said Sheryl King, an economist with Bank of America Merrill Lynch in Toronto. “Builders seem to overestimate how much demand is going to be out there, and that’s when you tend to see some abrupt pull-back.”

Canada’s housing market is about 10 percent overvalued, with inflated prices primarily in Vancouver, Montreal and Toronto, King said in a telephone interview. “We would call it a bubble,” she said.

http://www.businessweek.com/news/2012-02-13/toronto-bubble-risk-topping-new-york-in-condo-market-mortgages.html

#124 Buzz in cowtown on 02.13.12 at 2:13 pm

CMHC states 2 steady years ahead: http://www.bnn.ca/News/2012/2/13/Two-steady-housing-years-ahead-CMHC-.aspx

#125 888realtor on 02.13.12 at 2:14 pm

CMHC sees steady housing market ahead:
http://www.moneyville.ca/article/1130438–housing-market-expected-to-remain-steady-for-two-years-cmhc-predicts?bn=1#

– What a relief… at last we’ve got an unbiased expert opinion we can fully rely on…

let’s sing some karaoke song with the Beatles:
“I have to admit it’s getting better
It’s getting Better Better, better all the time…”

#126 Snowboid on 02.13.12 at 2:19 pm

#113 Preciousss on 02.13.12 at 12:32 pm…

Based on what we saw in the US, unless you are a contractor or know a good one, I wouldn’t recommend most ‘stale’ foreclosures.

We only had to look at a few, plus some that had been repaired by incompetent DIYs, to realize they are high risk.

#127 debtified on 02.13.12 at 2:53 pm

Average Housing Prices in Fort McMurray

Date Single Family Multi Family Duplex

Dec-10 $685,970 $419,422 $443,786
Jan-11 $719,305 $395,488 $489,233

Nov-11 $755,181 $408,005 $512,235
Dec-11 $729,092 $387,244 $550,983
Jan-12 $724,209 $392,261 $618,700

Source: http://woodbuffalo.net/AboutCostHouse.html

#128 Young Old Fart on 02.13.12 at 2:54 pm

I would not choose this moment to enter the bond market. — Garth

======================================

Garth, I followed your advice and got into bonds in 2010. I have done quite nicely thank YOU very much. (9%)

Are you saying now we should get out?

But then go where?

#129 new_era on 02.13.12 at 3:01 pm

I’ve been watching my neighbourhood house sale.
And also been to around 7 open houses the last few weeks.

I personally thought the warning shot fired off by CMHC running out of money, Bank warning economy is slowing,
and housing is expected to go down. Will slow sales around my area, (East Van, Burnaby).

But no, it appears houses are still selling.

However, chatting to people during the open houses, I realize several things,

1. All the houses and condos I look at had tons of Asian Potential buyers. (But all were canadians looking to upsize, buy first or 2nd/3rd/4th) houses or condos

2. Some were in a panic, because they want to get in before the new mortgage rules kick in preventing them from buying in the future.

3. Many doesn’t think houses cannot go down and feel if they wait they will be priced out forever.

Do your own research get out there ask questions. I’ll be interested to see what other people in different areas are encountering. So far I haven’t seen one foreigner. But who knows, there may be a boatload sailing in at this moment

#130 spaceman on 02.13.12 at 3:11 pm

Another strategy to explore, the HBP states you can borrow the money from your RRSP, and then at the end of the taxation year (starting in the second year) you eather pay it back, or pay the tax on it. So, If I pay my portion, but don’t pay back the other 1/2 which is in my wifes name, she includes it as income, (which is under 10,000 anyway) and effectivly we just pay the minimal tax on the money already borrowed. This way we can stretch it out and fudge the 3 year rule. Another method of income splitting, as I put the money in and am in the 40% tax bracket.

#131 EB on 02.13.12 at 3:16 pm

#24 Smoking Man – Folks will tell me not to feed the trolls, and they’re right, but I can’t resist pointing out that you’re complaining about the Useless Eater Scientists on a device that exists because of some silly researcher working on something as amazingly useless as the electrical properties of silicon when lightly contaminated with other atoms. Or how about people who wasted their time figuring out how bacteria prevented themselves from getting infected by viruses? Oh right, there’s nearly an entire chunk of modern genetics and medicine! Really your entire point is so deeply, deeply silly that it merits no response, but I had to at least say something.

#132 Regan on 02.13.12 at 3:42 pm

I wanted to address some of the free-floating sexism on the blog – the regular admonitions to ‘grow a pair’ or ‘man up’ and the blog comments about which gender manages money better etc. I generally look at all of them in good humour, but would like to remind everyone that:
1. When sales people, loud-mouth idiots and the interwebs can manipulate your sense of security by attacking your masculinity as a way to manipulate you – you are prone to doing stupid things like buy a house because someone tells you “If you don’t do what I say then you are a [insert demeaning phrase here].”
2. Someone telling you to man up and NOT do something stupid isn’t really addressing the issue that economic advice and gender identity aren’t really related issues.
3. Being free to be yourself and know what you want makes you far more powerful and happy as a person. Hopefully, also more able to make better housing and investment decisions too.

#133 Mixed Bag on 02.13.12 at 4:07 pm

Garth,

Strategy Seven is unclear to me. After melting down the RRSP to pay the interest on the investment loan, you still have the principal on the investment loan to pay. You write: “Each month, in effect, you’re transferring wealth from your registered (taxable) plan into your non-registered (after-tax) portfolio.” But the wealth is going toward the interest-only payment, not to the portfolio at all.

Oh, what’s that you say? The investment has grown? What if your RRSP meltdown completes at a time when your investment has lost all its gains, or worse? Then you’ve lost a portion of your RRSP and you still owe the principal on the loan. Your loan has, in effect, become sub-prime.

Even if well-managed, would the growth on the portfolio be large enough to not only pay down the principal on the loan, but be equal to at least the after tax amount of the initial RRSP investment? You have a 100K RRSP to melt down, you take a 100K investment loan. The portfolio must not only preserve its initial investment, but net more than the after tax dollars of the 100K withdrawal to make going through this exercise worthwhile.

If anyone out there has the time and energy to put together a table of this calculation, I’d love to see it. Start with an easy number, 100K investment. For taxes, use a middle class bracket.

Some days I wonder why I do this… — Garth

#134 Mixed Bag on 02.13.12 at 4:09 pm

Alright, you didn’t state that the investment loan is to be the same size as the RRSP amount to be melted down. Now how to calculate the appropriate amount to borrow?

#135 gladiator on 02.13.12 at 4:13 pm

@114 Waterloo resident:
204% of DISPOSABLE income means 204% of the money the Norwegians get after taxes. If Canadian average tax rate is, say 25%, then 153% of debt to average (pre-tax) income is actually… 204% of the disposable average income in Canada!
calculation: 153% / 0.75 = 204%

#136 GuyInBurnaby on 02.13.12 at 4:14 pm

Was on my way to work this morning and the bus went along burris. Between Walker and Canada way, there are 6 houses on sale and only one sold. It is a nice area and I don’t think those for sale sign are there for long time.

#137 poco on 02.13.12 at 4:30 pm

#130spaceman on 02.13.12 at 3:11 pm

i’ve looked into that situation–you can pay all or any portion back into your RRSP, but the minimum is one fifteenth of your total amount per year after the 2nd year –you cannot add more than the one fifteenth of the total amount withdrawn to your taxable income in any year –check their web site— it’s a tough read

#138 John G. Young on 02.13.12 at 4:39 pm

#132 Regan,

Thank you.

#139 Bill Gable on 02.13.12 at 4:41 pm

No Trouble in Canadian Housing ?

“There’s little evidence, based on a wide range of economic indicators, to suggest the Canadian housing market is overvalued and ripe for a steep correction, said a top forecaster at Canada Mortgage and Housing Corp.

In a forecast released Monday, the national housing agency said it expects housing starts to decline slightly in 2012 from last year’s levels but sales of existing houses to pick up slightly. The agency expects Canada’s housing market to remain “steady” for 2012 and 2013, which it expects to be years of relatively high activity.

The report’s author, Mathieu Laberge, CMHC’s deputy chief economist, said in an interview his analysis shows no sign of trouble ahead in Canada’s housing market, as anticipated in some quarters.

“At the moment, we don’t see a problematic overvaluation or overheating in the Canadian market,” Laberge said, calling much of the talk about a pending correction in Canada’s housing market “white noise.”

“There’s no clear sense that there’s a house price bubble.”

However, Laberge said CMHC continues to closely monitor developments in the marketplace.

Most of the concern over Canada’s housing market is focused on condominium developments, especially in Vancouver and Toronto. Laberge said inventory levels of completed and unsold condo units for most Canadian urban centers are below recent historic peaks reached a few years ago.

Still, the Vancouver and Toronto markets bear watching given their importance to the Canadian economy.”

>>D’ya think? Vancouver Housing prices have tripled in 10 years – and last night there was more HYPE on HAM. Tons of Beijing big shots buying BMW’s cash.
Buying crap for millions.

There is something smelly about all this. Mr. Turner – people are leaving Vancouver as it becomes a Chinese Colony – matter of fact one of the Chinese interviewed said the drive is to turn Vancouver into North America’s Asian City.

That should please BPOE and Smoking Man.

http://tinyurl.com/7heuurv

#140 jess on 02.13.12 at 4:46 pm

U.S. bank reforms could hurt Canadians, Flaherty fears
‘Unintended impacts’ could harm Canadian interests

..could someone explain to why …reform and regulation were needed.

#141 John Prine on 02.13.12 at 4:47 pm

Good news….CBC noon news story says that everybody in Canada can relax about house pricing as CMHC just said that the market will be solid for another 2 years, appreciating a little and mortgage rates will remain low. How can they go against all the empirical evidence that is around us every day?

#142 KingBubbles on 02.13.12 at 4:55 pm

Another damning report for Canadian House Prices:

http://www.businessinsider.com/the-most-overpriced-housing-markets-in-the-developed-world-2012-2

#143 BPOE on 02.13.12 at 5:02 pm

Ohhh how wrong the American was. 40% plus price declines LOL. A comedian he is. WOW.

#144 BPOE on 02.13.12 at 5:07 pm

Nice to see the Wall Street Journal reporting that everything is looking good in BPOE. Folks once the HST debacle is settled we are ready to transcend to the next level in pricing. Up Up and Away! The super City is being put together but the American and Junius amongst others are sleeping. I see it and it is AWESOME! A new Colony is being built. A safe haven – that Colony is Vancouver. Few people understand what is going on. they cling, like the American to outmoded ideas and frameworks. The change has begun and housing is the flagship of all that is coveted in theNew Earth Headquarters Vancouver

#145 jess on 02.13.12 at 5:13 pm

This is so funny

Awesome Amendment to “Personhood”: the “Spilled Semen” Clause
Democrat in Oklahoma has tagged an amendment onto her state’s proposed Personhood law, making sure that the government doesn’t just intrude into women’s reproductive lives, but men’s as well:

Oklahoma State Senator Constance Johnson, a Democrat, has offered an amendment to the “personhood” bill pending in the state legislature. The pending bill, if passed, would declare that “the unborn child at every stage of development (has) all the rights, privileges, and immunities available to other persons, citizens, and residents of this state.”

Johnson writes that “the Personhood bill would potentially allow governmental intrusion into families’ personal lives by policing what happens to a woman’s eggs without any similar thought to what happens to a man’s sperm.” Her amendment reads:

“provided, however, any action in which a man ejaculates or otherwise deposits semen anywhere but in a woman’s vagina shall be interpreted and construed as an action against an unborn child.”…read more

http://www.alternet.org/newsandviews/article/788681/awesome_amendment_to_%22personhood%22%3A_the_%22spilled_semen%22_clause/

#146 Kris on 02.13.12 at 5:20 pm

#41 BioTech Guy.
West of Miss’ga, I see the same ground realities as you say. Properties sold in a week or so. Not much supply. The only homes staying weeks on the market have location issues, and/or trying to set the next high-bar for their area by over-pricing.
So prices aren’t trending higher but they’re not lower either – Let’s see what the Spring has in store.

#147 smart buyer on 02.13.12 at 5:29 pm

141 John Prine on 02.13.12 at 4:47 pm

We just sold a condo here in Calgary for 405K (2.5% above asking price!). Bought in Jan. 2009 for 267K cash, spent 20K for some renovations; the property was rented Jun 2009 to Nov 2011 for 1650/month minus condo fee&tax of 500/month.

I might be oblivious to empirical evidence but you must agree that I could have done worse.

#148 jess on 02.13.12 at 5:31 pm

In a new investigation of the deplorable labor conditions at the Foxconn factories in China, Arun Gupta reveals that the exploitation of workers runs deeper than anyone had imagined: astonishingly, thousands of teenagers, some as young as sixteen, are being forced to work as “interns” at Foxconn as a requirement for graduation from vocational schools and universities. Intern Nation author Ross Perlin spoke to Gupta about the ways in which government and university officials have collaborated to provide a flowing supply of employees to the electronics manufacturer:

It turns out the story is much worse. Researchers with the Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) say that legions of vocational and university students, some as young as 16, are forced to take months’-long “internships” in Foxconn’s mainland China factories assembling Apple products. The details of the internship program paint a far more disturbing picture than the Times does of how Foxconn, “the Chinese hell factory,” treats its workers, relying on public humiliation, military discipline, forced labor and physical abuse as management tools to hold down costs and extract maximum profits for Apple.

To supply enough employees for Foxconn, the 60th largest corporation globally, government officials are serving as lead recruiters at the cost of pushing teenage students into harsh work environments. The scale is astonishing with the Henan provincial government having announced in both 2010 and 2011 that it would send 100,000 vocational and university students to work at Foxconn, according to SACOM.

. Scholars who study China’s economy and labor market link rural underdevelopment to the creation of a massive migrant work force that serves as the foundation of the country’s industrialization. Deprived of many rights, migrants are recruited to work in Foxconn’s city-sized complexes by government employees with false promises of good-paying jobs that will help them escape rural poverty. A large percentage of migrant workers are student interns as they are recruited from poor rural regions like Henan and sent to work in coastal metropolises like Shenzhen.
http://www.versobooks.com/books/797-intern-nation
read more…

http://sacom.hk/

http://www.alternet.org/story/154043/iEmpire%3A_Apple%27s_Sordid_Business_Practices_Are_Even_Worse_Than_You_Think/

==============

#149 Junius on 02.13.12 at 5:49 pm

#132 Regan,

You are missing the fact that the “man up” crowd are those who live behind their computers and would be the last ones to have the guts to do this in person. You can refer to it as small man syndrome or whatever but I can guarantee you that if you met any of these fools in a dark alley they would run the other way.

#150 Junius on 02.13.12 at 5:51 pm

Garth,

I hope today’s Blog addresses this CMHC Press Release as news item. It is just so shockingly embarrassing.

I feel a blog post coming on……….

#151 45north on 02.13.12 at 6:07 pm

Herb: too bad Barbara Tuchman didn’t tell us who determines the reasons for going to war, creates the rationales to make these reasons palatable, and propagates this propaganda by any means possible to get and keep “the people” on side.

from her book “The Guns of August”:

referring to Kaiser William: “Envy of the older nations gnawed at him”.

Kaiser William: “Soon, with my great Navy to endorse my words, they will be more respectful”.

The book tells us who determined the reasons for the First World War, who created the rationales and who propagated propaganda.

Barbara Tuchman’s great contribution is to stick with one war and one time.

#152 Smoking Man on 02.13.12 at 6:32 pm

#131 EB on 02.13.12 at 3:16 pm

At leased some came out and said what I said was stupid. Eb you are sort of right. But just sort of Maybe I should have said 1 in a thousand are not useless eaters.

But this is my point, to become scientist, you need to go through obedience training camps, Once done you usually end up in a field you’re not trained for and have no interest in. But you do it because the pay is good and you need to recoup your investment.

Great discoveries and invention are brought to us by Creative People. Creative people typically are rebels, and not everyone learns the same way, some are Audio, some Visual, and some by Reading.

University today is a complete waste of time and money. It would be far more productive to allow high school grads to simply pick a field they are passionate about, intern for free for 4 years, no tuition and you get the right people in the right occupations.

I want down the self taught method, I’m the best in my field, nothing lights me up more that when a PHD quant says it can be done. And I do it. 10 thousand hours as a hobby before I turned pro. Every dime I make goes to CRA, because my trading income is sick.

I do it for love…

But the education industrial complex today is a money making machine, why do doctors from 3rd world countries come to Canada and drive taxi’s, Because the machine never got it’s loot.

I say the Universe is shrinking all the time, not one person has called me out on it, but if you do the math, its equal to expansion, Only the brightest of the bright will get it.

So tanks for the troll food. Yummy

Certified Post http://dyslexicsmokingman.blogspot.com/

#153 Smoking Man on 02.13.12 at 6:39 pm

150 Junius on 02.13.12 at 5:51

See Junius your all fundi-Mental

Never anticipating the herd and the machine moves.

That’s why Im never wrong, I look at both side of the coin.

Certified Post http://dyslexicsmokingman.blogspot.com/

#154 jess on 02.13.12 at 6:49 pm

tiO2

I wonder if Mr. Harper discussed this type of theft and chinese companies…read Duponts claim

http://www.atimes.com/atimes/China/NB11Ad01.html

U.S. and Chinese Defendants Charged with Economic Espionage and Theft of Trade Secrets in Connection with Conspiracy to Sell Trade Secrets to Chinese Companies (U.S. Department of Justice)
China Tangled Up in Industrial Espionage (by Peter Lee, Asia Times)
China and Russia Lead in Stealing U.S. Economic Secrets (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Titanium Dioxide Report (Petrosil)

#155 jess on 02.13.12 at 7:00 pm

Smoking man said:
University today is a complete waste of time and money.

…especially if one can steal the recipe, not check credentials “pad the resume”

former Harvard students was indicted for falsifying the resume that got him into the Ivy League school and several scholarships. Last year, California regulators found out that a new law to regulate air pollution was based on statistical work done by a researcher who hadn’t earned a doctorate in statistics from the University of California at Davis as he had claimed. Three years ago, the dean of admissions at the Massachusetts Institute of Technology had to resign when it became clear she had inflated her resume with degrees she never received.etc etc

http://scienceinthetriangle.org/2010/07/dukes-pottigate-another-scandal/

Why do they not remove the license of these people?
http://abcnews.go.com/blogs/health/2011/09/09/duke-sued-over-cancer-trials/

The 90-page lawsuit alleges that Duke ignored warnings about flaws in Potti’s research and even tried to cover them up. The lawsuit makes two dozen claims, which range from to negligence to fraud.

“Duke conducted clinical trials on cancer patients that should never have occurred. The trials were based on bad science,” plaintiff attorney Thomas Henson told ABC11. “Researchers across the country had been telling Duke and warning Duke about the bad science.”

#156 Nostradamus Le Mad Vlad on 02.13.12 at 7:11 pm

-
#132 Regan — “3. Being free to be yourself and know what you want makes you far more powerful and happy as a person.” — Bravo and well said! If people followed this sentence, there wouldn’t be so many dumbass sheeple in the world, bleating “Yes sir, no sir, three bags full sir.”

#153 Smoking Man — “. . . I look at both side of the coin.” — Always two sides to every story.

Banks are getting hiccups about lending, yet CMHC says housing is good. One will be chewed on and spat out. Choose wisely.
*
Cow Tail

A foursome was on the last hole and when the last golfer drove off the tee he hooked into a cow pasture. He advised his friends to play through and he would meet them at the clubhouse. They followed the plan and waited for their friend.

After a considerable time he appeared disheveled, bloody, and badly beaten up. They all wanted to know what happened.

He explained that he went over to the cow pasture but could not find his ball. He noticed a cow wringing her tail in obvious pain.

He went over and lifted her tail and saw a golf ball solidly embedded. It was a yellow ball so he knew it was not his.

A woman came out of the bushes searching for her lost golf ball.

The helpful male golfer lifted the cow’s tail and asked,

“Does this look like yours?”

That was the last thing he remembered.

#157 Habbit on 02.13.12 at 7:30 pm

#45 not 1st Must be nice to know it all and know what everyone’s business should be. Mind your own.

#158 Form Man on 02.13.12 at 7:40 pm

#153 smoking man

so apparently we all would be better off if no one attended university, and everyone sort of self-educated…….
that should work out well for engineering electrical substations, bridges, high-rises etc. I mean what is the worst that could go wrong ?
smoking man you are a complete idiot

#159 Smoking Man on 02.13.12 at 7:58 pm

Speaking of Coins, I collect old nickles, and keep em in a tin horton coffy tin, few years a go I had a break in, they took Jewlery and cash, worth about 1000, but the idiots where too stupid to not take the nickles.

Each one is worth about 5 to 20 bucks, and I have thousands.

There is treasure everywhere, you just got to know how to spot it.

Certified Post http://dyslexicsmokingman.blogspot.com/

#160 P & T S on 02.13.12 at 8:06 pm

Smoking Man – although I hate to have to agree with you on the matter of “Duff Graduates”, I’m afraid you are dead on the Money. The University System seems to be more concerned with beating any original thought processes out of new entrants, and “education” is nowadays synonymous with Indoctrination – an “if you want to Get ON you MUST think the same as everyone else” mentality. Even Ph.D. students seem a lot diffent to those being produced 30 years’ ago – and it’s not that an unfair comparison to suggest that today’s “Mass Market” Ph.D.s are actually of a similar academic calibre to the “First Degree” students a few decades ago, when Higher Education was not a Marketable, Money-Making operation, but a genuine means to educate the academically “significantly above average” students.

When I did mine in the early 80′s I was exposed to HEAPS of new ideas, and learnt so much – far more “per year” than during my Undergrad. years, and most of the info was tenuously (if at all) directly related to my Project. It was (for me) an unbeatable mind-broadening and genuine learing experience, especially since I was no longer tied to the Undergrad 8 to 5 timetable.

Contrast this experience with today’s “Doctoral Students”: they all can “talk the talk” but where’s the underlying depth and breadth of knowledge? Beaten out of them by dogmatism and the “Need to Comply”.

No wonder the number of Students who fail to submit, and / or completely fail their Viva (i.e. not permitted to resubmit under Gerneral Regulations) is on the increase.

And these are the people who are supposed to be creating our “Bright New Future”?? We both still live in hope, but every day that hope is becoming more battered by the proliferation of “silly Thinking”, especially in the ranks of the Connected and Powerful. We HOPE Garth is right, in that everything will somehow muddle throough and there really is a light of sorts at the “end of the Tunnel” but we must say that the light does seem mighty dim these days!

#161 John Prine on 02.13.12 at 8:15 pm

#147 Smart Buyer.

Good on you, we sold our lakeview Okanagan property last March and got $368k more than we paid for it a long time ago, we were lucky to have the right combination, there are many like ours still for sale 11 months later and everything has dropped off in that area. Bit of good luck when you get the right buyer. These changes seem to be starting in areas where people traditionally migrate to when they get a little older, the Okanagan, Victoria and mid Vancouver Island are experiencing a big drop in sales, I imagine Calgary and other areas where there are more young, working families will hold out longer. I am sure Garth’s predictions are correct but with the government propping things up and the “real estate” lifestyle advertising everywhere you look it is just taking a little longer. If you have a realtor friend you will know that they are privately very concerned .

#162 TurnerNation on 02.13.12 at 8:32 pm

#103Dorf on 02.13.12 at 10:54 am

As I’ve heard it, the static charge builds up on/in the fuel itself in a plastic can. Grounding the plastic can itself has no effect.

One must ground the fuel (e.g. drop a probe into jerry can hole and clamp to ground).

Whereas a metal can conducts the fuel’s charge, and one may ground the entire can in this situation.

#163 Nostradamus Le Mad Vlad on 02.13.12 at 8:36 pm

-
Moody’s Realigning itself; Twitter censoring Greek protests? Observer Now is not the best time for a Greek holiday; Viva Greece! Money + Cost of War Prohibitive, to say the least; The First Dominoes? Cascading through Swan Lake; Democracy with TPTB a.k.a. EU – IMF, etc.; Greece explodes “Looks like that deal the Greek Cabinet made with the EU and IMF may be moot. When the Greek government falls, there is no way to keep those trillions in credit default swaps sold by Wall Street from triggering. That will destroy the US economy and the Federal Government with it. Greece, the birth place of democracy, might just halt the rush into WW3! The Greeks have balls Americans only dream of! Like Iceland, they are showing the way to the future.” wrh.com; The US Fed GS involved, and GS swaps; Unrepayable There is no debt ceiling. The ceiling blew away in a hurricane; Transitioning to a third- or fourth-world economy; 9:20 clip Soros blame game; 6:37 clip Greeek gangrene?
*
Fukushima Something ain’t right — temp. rising; Bovine Excrometer’s FF Iran has no reason to go bombing other countries; Kannaduh There is more to the NDP leadership vote; Monsanto Guilty of poisoning; 2:30 clip Cop kills marine; 6:10 clip The west + The Toilet vs. Assad. ObL not incl.; The Independent and the BBC Don’t ask; Road to Perdition or WW3; Blood Brothers Mexican drug cartel and gangs; More of The Toilet’s FF propaganda BS; CC destroyed Valentine’s Day “With all of Europe in a record hard winter and confirmation by satellite that the Himalayan glaciers have not shrunk since 2003, FOX is really showing itself as a presstitute for Al Gore and the Carbonazis with this pathetic reach.” wrh.com.

#164 Herb on 02.13.12 at 8:49 pm

#151 45North,

extend your “research” beyond Guns of August and get back to me. If you want to do WWI in crayons, I recommend watching “Oh What a Lovely War” on DVD.

#165 Kilby on 02.13.12 at 8:51 pm

8 new SFH listings on market today so far $400K to $600K in Qualicum Beach. People seem to want to be listed very early this year, usually not so many until March.

#166 TurnerNation on 02.13.12 at 9:18 pm

#112disciple on 02.13.12 at 12:24 pm

Great video find, disciple. I recommend everyone watch at least a few min of it.

#167 a prairie dawg on 02.13.12 at 9:21 pm

More fiscal restraint in Ottawa. Good job…

http://ca.news.yahoo.com/blogs/canada-politics/federal-government-spends-30-000-fight-2-653-162726661.html

#168 blase on 02.13.12 at 9:43 pm

In my experience, women are just as guilty of using masculinity slurs to get men to do what they want. Also, Just like the old saying “there aren’t any atheists in a foxhole”, there aren’t any feminists on a moving day (or when building a deck, a fence, fixing a car, paying for an engagement ring)

#169 eaglebay - Parksville on 02.13.12 at 10:29 pm

#154 jess on 02.13.12 at 6:49 pm
“tiO2
I wonder if Mr. Harper discussed this type of theft and chinese companies…read Duponts claim
U.S. and Chinese Defendants Charged with Economic Espionage and Theft of Trade Secrets in Connection with Conspiracy to Sell Trade Secrets to Chinese Companies (U.S. Department of Justice)
China Tangled Up in Industrial Espionage (by Peter Lee, Asia Times)
China and Russia Lead in Stealing U.S. Economic Secrets (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Titanium Dioxide Report (”
———-
What secrets?
No need, just Google it.

#170 The Thing in the Basement on 02.13.12 at 10:57 pm

114 Waterloo – you might enjoy this:

http://www.nytimes.com/2009/05/14/business/global/14frugal.html

“Oil for leisure” in Norway.

#171 geneticistx on 02.14.12 at 12:00 am

Everyone in Toronto must be rich!!! The city workers just got a 6% pay increase!!!!!! Okay, how are they gettin’ that extra coin?? You guessed it, an increase in property taxes. So prices of houses go up, property taxes go up. We’re so screwed in the GTA…

#172 Al on 02.14.12 at 9:09 pm

Excellent advise on RRSPs – thank you Garth.