The prize

Snakes modified

“Am I horny,” Nick asks, “or just confused?”

Well, let’s find out.

“I’ve been faithfully avoiding the plunge since before the U.S. housing crash, but times are changing, personally anyway,” says the 31-year-old from Regina. As it turns out, Nick has one kid, one on the way, a working (for now) wife, family income of $120,000 plus an eviction notice.

The financials? Seventy-five grand spread over four TFSAs and RRSPs, plus a weensy company pension. There’s also student debt, being paid off at a thousand a month. So far they’ve been happily renting a townhouse for $1,750, but the combination of this eviction thing (owner is moving back in) plus HGTV is proving too much to resist.

“So here’s my argument for buying,” he says, “given my income and the fact you shouldn’t spend more than three times what you make on a home, some of the houses for sale around me (south east Regina) are actually reasonably priced, $360,000 for a 1350 sq ft bungalow that’s in really good shape but dated is not bad. Plus you can get a 10-year mortgage for 3.99%. Anyway, I’ve got about six weeks to pull the trigger, so if you’d care to explain why I’m an idiot for taking this path, that’s greatly appreciated.”

Three-sixty for a bung. The inmates of YVR can only imagine. But then again, it’s Regina. They were melons on their heads to football games.

Still, should Nick go for it, buying that little bungalow with its cute turquoise toilet, harvest gold appliances and shag? Does it make financial sense for this almost family of four? Surely in a cheapo city with a funny name lost out in the grain fields, there must be redemption.

Well, after paying down the student debt, Nick and his brood look like they’re worth about $50,000. So buying a $360,000 house with 10% down and closing costs will pretty much wipe them out. They end up with a single asset, and a monthly nut more than twice the rent they currently pay (mortgage at 3% plus property tax, insurance, opportunity cost on the down payment, plus a modest reno and maintenance budget).

In practical terms (a new baby, mat leave, increased child care costs) these guys will save nothing, diverting all of their cash flow into something they could have rented for half the cost. Meanwhile they’ve got two kids and essentially no pensions. When you’re just 31 stuff like sending your spawn to university or retiring in dignity looks light years away. But it’s not. And people who choose to have children should be more responsible than to gamble their family’s future on a pile of bricks on the prairies.

Harsh? Too bad. Here’s why Nick’s sounding like an idiot.

First, Regina’s enough like Saskatoon to be sideswiped by the same commodity crisis. Oil is headed back towards the $40 mark, rendering most of our energy industry unprofitable. But it’s not just crude. Potash and grain are also suffering, with prices having fallen by dizzying amounts since the spring.

No wonder CMHC had this to say about a local real estate market where two years ago there were bidding wars and a condo-building boom: “In Regina, price acceleration, overbuilding in the condo market and overvalued home prices are responsible for the heightened housing market risk, although CMHC notes that price growth is beginning to wane.”

No kidding. The market is sputtering as a result of terrible fundamentals. Even Royal LePage is not blind to the mess, saying in its latest report it sees, “year-over-year median price decreases across most housing types surveyed in Regina. In the third quarter of 2015, the aggregate price of a home in the region declined 2.2% to $324,606. Over this period, the median price of bungalows declined 3% year-over-year to $298,839, while the price of condominiums fell 5.2% to $250,879.”

The local realtors add this, Nick: overall sales in September were down 14%. Single-family detached sales off 13% and condos falling 16%. Prices are 4% lower in the past year and now 7.3% below levels of three years ago. The dollar volume of sales has crashed 17% while the supply of active listings is “well above historical levels.”

Does that sound healthy? You really want to spend every dollar your family has, embrace a new load of debt and double your monthly living costs so you can catch a falling knife? What’s the prize? To swagger into work and brag you’re a homeowner.

Man, have we lost our way.

Yes, Nick. Horny. And confused. Get over it.

143 comments ↓

#1 mark on 10.29.15 at 6:09 pm

Good times. Retirement BC style:

http://www.theglobeandmail.com/globe-investor/retirement/retire-planning/bc-couple-who-owes-240000-downsizes-to-save-their-retirement/article27024622/

#2 not 1st on 10.29.15 at 6:09 pm

$360k, doesn’t seem unreasonable, until you find out that very house was probably worth about $90k in 2004.

And Sask is a one trick commodity pony. No silicon valley here or HAM to prop us up.

#3 Internal Auditor on 10.29.15 at 6:19 pm

Nick, take a scan of the jobs/industries impacted directly and indirectly by the commodity cycle. If you can withstand it and think you’re not going to move for a long long time then do it. BUT the likelihood of you being immune to a hiccup is pretty low so might be best to play it safe and keep renting. Look at it this way, is it better to be wrong about renting or wrong about owning? One of those will ruin your marriage, the other will just be an “I told you so” from your better half. Play it safe and good luck.

#4 Bargains everywhere on 10.29.15 at 6:24 pm

Nick, buy the house. You’re only 31 with one child and another on the way and you’ve still managed to save $75,000 so far, even while paying off student debt. It appears you and your wife are pretty responsible with money.

House prices may go down or they may not – nobody knows for sure. Even if your house dropped 10%, that’s only $36,000. Over the course of a lifetime, $36,000 isn’t much and if you stay in the house long enough it will bounce back.

If you wait for the ‘perfect’ time to buy, it may never happen. Don’t do that to your family. Put down roots and enjoy home ownership. There is nothing better for the soul.

#5 Retired WI Boomer on 10.29.15 at 6:25 pm

Nick – man up!

The eviction notice was only from the landlord to find another hovel to rent. It might someday be from the BANK if you buy too early.

Think it can’t happen? Look at the US. Think less than a decade ago. Lots of young who bought unprepared, as well as delusional geezers in FL and AZ got the boot from the BANK!

Think you’re special? Think again my boy. BUY, when you can put down 20% and have something in the BANK when your job gets turfed. It will probably happen sometime in your life, why not its happened to others I know, even me. 31, is hardly over the hill, don’t dig a hole.

The wiser old Phart

#6 Irish Stew on 10.29.15 at 6:26 pm

Just buy it…..everyone is doing it!

#7 BC Guy on 10.29.15 at 6:28 pm

“Nothing for under $1 million from San Jose to San Francisco.”

Tear-down shacks selling for $1.75 million.

“Anything decent is $2 million.”

Average rents $3500/month.

A tent in a backyard is $1000/month. Seriously.

Buyers from mainland China buying lots of houses.

“10-20% of houses bought by mainland Chinese sit unoccupied.”

People commuting 4 hours/day to affordable housing.

With a virtually unlimited population of wealthy Chinese buying up property in North America, housing prices will never crash. Garth, you can’t handle the truth:

https://www.youtube.com/watch?v=SBjXUBMkkE8&feature=youtu.be

#8 Chopper on 10.29.15 at 6:31 pm

Justin TrueDough will save the day for this family, after all the majority of Canadians hated Harper so they voted him out and TrueDough in. He is the their saviour and don’t forget all the terrorist that are celebrating that TrueDough was elected PM, now they can come to Canada and claim asylum.

We have a great future ahead of us my fellow Canadians. NOT

#9 Wildword on 10.29.15 at 6:33 pm

The value of a permanent nest for the family is difficult to calculate. But purchasing at $335K might force the wife to continue working, perhaps making it less of a nest. I would put up with the eviction notice and wait until houses fall below the $250K level, especially if he wants to be a one income family. It might be 10+ years before prices recover, making it a pretty expensive nest.

#10 Freedom First on 10.29.15 at 6:36 pm

Nick, 31 years old, married, one kid and one on the way, $50k net worth, thinking of buying a house in a recessionary environment which is in its early stages. And living in Regina.

Nick is living my nightmare. I am blessed.

#11 bdy sktrn on 10.29.15 at 6:42 pm

what snakes?

lol

#12 Broke Dick on 10.29.15 at 6:55 pm

Has this become a plumbing blog?
Yesterday’s pic- Yahpoo plumbing.
Today’s pic- about snakes??

#13 Paul on 10.29.15 at 6:59 pm

#11 bdy sktrn on 10.29.15 at 6:42 pm

what snakes?

lol
————————————————————-
It’s the ones you don’t see that get you!!!!

#14 Island Girl on 10.29.15 at 7:00 pm

Wow, I googled rentals in Regina and you can rent a nice big place for around $2000. We bought this spring only because we couldn’t find anything to rent (trust me, we looked) and we kept our budget at below 2.75x our annual income.
It’s amazing how many people look only at the mortgage cost and forget about the property taxes, insurance, maintenance, etc…

#15 bb on 10.29.15 at 7:02 pm

You can make a lowball offer. Lets say 225k instead of 360k. Seller might agree.

#16 BobC on 10.29.15 at 7:04 pm

Unrelated but quite a relief. I’m sure Bombardier was thinking they would have work hard and fast to improve the company.

http://www.bloomberg.com/news/articles/2015-10-29/bombardier-to-get-1-billion-from-quebec-government-for-cseries

#17 Ken on 10.29.15 at 7:05 pm

It continues to amaze me that even on a down market people believe housing going to continue going up even in a downturn in the Canadian economy. Nah like Wall Street people continue to believe its all up like NASA. Yet billionaire economist are betting against Canadian housing not to forget 48% of Canadians are living paycheck to paycheck which is a 20% increase since 2011. I am curious to know who’s going to buy those executive homes when the boomers all decide to sell to create equity and half the population couldn’t find $2000.00 for a household emergency? Delusional or economically illiterate?

#18 Panhead on 10.29.15 at 7:12 pm

Looks like the “arseisoutofer” Nick …

#19 Stubble Jumper on 10.29.15 at 7:16 pm

Personally with those numbers I wouldn’t buy a $360,000 house. I’ve been able to save a ton of money by renting and living within my means. In fact we just found a new rental house that’s 32% cheaper than our current one. Looking forward to more savings and investments!

#20 gking on 10.29.15 at 7:18 pm

I’m 31, just built my own house by myself with cash, no mortgage for 390k. That’s expensive and I still don’t feel free even though I have 200k between rrsp&tfsa. Pure screwed either way.

#21 realmess on 10.29.15 at 7:18 pm

Million Dollar Shack: Trapped in Silicon Valley’s Housing Bubble:

https://www.youtube.com/watch?v=SBjXUBMkkE8

Yeah, Vancouver and Toronto not far behind…

#22 Stubble Jumper on 10.29.15 at 7:20 pm

Buy a hospital home lottery ticket, maybe you’ll get lucky

#23 Cici on 10.29.15 at 7:34 pm

Nick,

I would add the following to Garth’s sage advice:

1. According to the CMHC, there era of insane house price growth is either at or coming to an end, and many cities are overvalued (http://www.cbc.ca/news/business/cmhc-housing-overvaluation-1.3294443)
2. Your family household income is very modest (no offense, our family is in the same boat, albeit with no children to support).
3. The job situation in Canada is getting scary (new rounds of layoffs being announced every day, and not just in the oilsands, but also manufacturing, banking, etc.).
4. Your wife will soon be on mat leave (reduced salary inflow), so what happens if you get laid off? EI just ain’t what it used to be. Do you really want to take the chance of losing your savings and possibly even your home if you make the purchase and the *&)*# hits the fan?
5. As Garth says, your first priority should be taking care of your family (by continuing to save and by getting rid of student loan debt)
6. Old bungalows always require some renovation, so don’t underestimate the costs of ownership. Rather than taking this insane risk, you and your wife should sit down and make a budget that will enable you to pay off your loans in the next two to five years while increasing your savings. In five years time you should have a lot more invested $, home prices should be more reasonable and if not, you can continue to rent and enjoy your mobility.

#24 mitzerboy aka queencity kid on 10.29.15 at 7:36 pm

dat all true garth …
we also took on alota debt on a new stadium for a semi-pro football team that’s won 2 games this season to play in when its built.

other then that its okay out here

#25 I am the Babblemaster on 10.29.15 at 7:44 pm

“Man, have we lost our way.” – Garth

———————————————–

Yes. We have lost our way. We’ve embraced massive life-long debt and housing mania. That’s just the way it is and it’s not going to change. Not in Canada.

Nick might as well just join the crowd and buy. Even if prices do adjust, they won’t go down much. The whole system, including this govt. (as well as the previous regime) will do everything in their power to ensure that.

#26 Ken on 10.29.15 at 7:57 pm

CMHC warns that Canadian housing market is overvalued in most major cities

http://www.msn.com/en-ca/money/homeandproperty/cmhc-warns-that-canadian-housing-market-is-overvalued-in-most-major-cities/ar-BBmzTrf

#27 Arfmooocat on 10.29.15 at 8:00 pm

Eleven housing markets in Canada are overvalued, CMHC report says

https://ca.finance.yahoo.com/news/overvaluation-11-housing-markets-canada-cmhc-report-says-171243572.html

#28 conan on 10.29.15 at 8:06 pm

Keep renting Nick. No one is going to buy the shagadelic bong-glow. Offer to rent it and bargoon like it is Saskatoon.

#29 Holy Crap Wheres The Tylenol on 10.29.15 at 8:09 pm

For you eyes only Smoking Man!
http://www.scientificamerican.com/article/time-travel-simulation-resolves-grandfather-paradox/

#30 young & foolish on 10.29.15 at 8:10 pm

Don’t worry folks, soon you will be able to scoop up prime RE at 3 times earnings … just like in the 1960s or 70s. In the meantime, rent and invest your money in our fast growing 1st world economies.

When you grow up hopefully you’ll learn this is not a contest between houses and financial assets. Rather the goal is to obtain personal security, which usually comes through a balanced combination of both. Wise people know when to buy and when to wait. The foolish just moan about unrequited entitlement. — Garth

#31 John in Mtl on 10.29.15 at 8:14 pm

#16 BobC on 10.29.15 at 7:04 pm

Unrelated but quite a relief. I’m sure Bombardier was thinking they would have work hard and fast to improve the company.

http://www.bloomberg.com/news/articles/2015-10-29/bombardier-to-get-1-billion-from-quebec-government-for-cseries

As a taxayer, I’m on the hook for another billion bucks to them? So that’s why our provincial gov’t keeps hammering on the “austerity” nail, to bail out our once-glorious Bombardier, among other things?

Geez… I hope these planes (CSeries) turn out to be winners for years to come, otherwise here we go again…

Hum, do you all think this also might be a good buying opportunity?

#32 In the cold from Toronto on 10.29.15 at 8:24 pm

Don’t buy Nick, you will regret it later.

A family of four can easily leave in a two bedroom when the kids are small. Don’t know anything about Regina, but in Toronto, one can rent excellent apartments for $1600 / month (and I mean excellent apartments: good neighborhoods close to good schools & parks… the whole enchilada). Did I mention that hydro’s included in the $1600?

Assuming you buy with $50,000 down, and only pay the interest on the mortgage loan, you’ll have to fork ~ $12,000 on interest alone.

Add another 1% ($3,000) for maintenance (your house might need more, because of its age), and you’re at $15,000.

Add city taxes and hydro and you’re at $18,000.

So, at this point on a cash flow basis renting and owing are the same… But wait! the ownership experience comes with so much more:

• First of all, you will need to pay down the principal. Assuming you’ll do it in 25 years, that’s another $12,000 every year. These are $12,000 that could have gone towards your children’s RESP and your TFSA/RRSP. These are money which will not grow for you for 35 years. This is the lost opportunity.
• You will need a lawn mower and a snow blower, plus a shed to house them.
• You will need to buy tools to fix stuff around the house (if you’re handy) or pay people to fix stuff for you (this is more expensive).
• You will spend money on flowers and trees, maybe a swing set.
• It’s likely that during your 10 years as a house owner, the fridge or the stove will go. Maybe the boiler. This is extra money which doesn’t go into the RESP.
• Any reno, any major expense (windows & doors, a flooded basement, a new driveway or a new roof) will set you back much more.

Add all the above – and you will understand why so many of my house owning co-workers, when asked “what did you do this weekend” tell me about barbecue with friends. I am the first one to say that bbq and friends sounds awesome, just not as the only fun activity for the summer.

As a home owner, when your expenses are much higher, the only fun stuff you’ll afford is limited to a little less than $100 / week – which is what a barbeque costs (if the other family brings the beer).

As a renter, in five years, if you save diligently, and go for a balanced portfolio, you will have a bigger down payment, which will likely go further in a post bubble market.

Your peace of mind, together with the ability to survive life’s curve balls are worth much more than a house.

My 2 cents…

#33 Bottoms_Up on 10.29.15 at 8:25 pm

Nick, you can justify paying more for a home once your student debt is erased $1000/mo).

But, can you justify paying $61,000 more (20%) than the median price for a bungalow? Does this bung have one of the best lots in the city, or in the best neighbourhood? Also, for a growing family space could be an issue (babies turn into adult-sized people).

#34 Nick on 10.29.15 at 8:38 pm

The ENTIRE freaking planet is facing precipitous deflation! You got money in the BANK, you’re already ahead of 90% of everyone else. Don’t do stupid stuff. Keep renting and keep saving. Opportunity will present itself… be patient.

#35 Investorz on 10.29.15 at 8:51 pm

Instead of buying condos, people would have been better off buying the largest REITs like Brookfield Properties and Canadian appartments.

$BPY.un
$CAR.un

Look at the stocks in Google Finance. And add the 4% dividend.

#36 Ruane on 10.29.15 at 9:00 pm

“They were melons on their heads to football games. ”

‘Ware the were-melons! Or maybe wear the were-melons?

Just in time for Halloween. This made me smile.

#37 Smoking Man on 10.29.15 at 9:04 pm

#29 Holy Crap Wheres The Tylenol on 10.29.15 at 8:09 pm
For you eyes only Smoking Man!
http://www.scientificamerican.com/article/time-travel-simulation-resolves-grandfather-paradox/
…..

Seriously, Hawkings is an Idiot…

Gets respect with the sympathy card.

Universe is shrinking, giving off the delusional of expansion.

Take it from a Nectonite. The tall whites, the grays, primative compaired to shit spelling Nectonites.

I apologize for bombardry , have a thing fir aviation. Was weakened by the C70. Greatest prehistoric flying machine around.

#38 WallOfWorry on 10.29.15 at 9:12 pm

Garth…focusing on housing is missing a much larger point. The GDP report for the third-quarter at 1.5% almost assures the U.S. will fail to break 3% annual growth in 2015 for the 10th straight year. The last time the economy expanded that fast was in 2005.

In 2005, the US debt was a tear under $8 Trillion and has risen to somewhere between $18 – $19 Trillion. The sad reality is the US debt (like all developed nations) will continue to rise due to structural issues. The sad reality is the US cannot afford to raise interest rates as they are not growing at a rate to sustain debt servicing costs.

The stock market has an alarming high risk profile due to the fact that corporate earnings are not growing. The profitability improvements have come from reduced expenses including reduced debt charges. Additionally, the stock market has been in a cyclical bull run for 6 years and statistically is due to enter a cyclical bear. Perhaps a secular bear market?

While I agree in principal that a one asset strategy is a poor one, it is hard to take any of your analysis seriously when it is so myopic.

#39 That Nick on 10.29.15 at 9:17 pm

@Freedom First Still being in Regina is very much my own nightmare.

@everyone else I think the biggest item for me on the litany provided by Herr Turner are last months housing numbers in Regina. I certainly hadn’t seen those and they’re pretty shocking. I have been pushing for renting for a few more years, I’d definitely prefer to be in a position to have 20% down and a similar amount to stay invested.

I was/am really interested if that 3:1 number holds any water, since it would fit the Stats Can median income for Regina roughly to current house prices, excluding new builds. A big issue I have when people discuss home sales is there’s no standard candle for real estate, even condo and SFH mean nothing really unless you know details about the size, age of finished and condition of the places that are moving. I (essentially randomly) picked 1100′ bungalow with garage and mature yard for that candle here. There’s a bunch of turquoise or pink toilets available that fit this ratio.

Hopefully renting,
That Nick

I gave somewhat conservative income and investment numbers ($170k/yr with $100k net is closer).

#40 gladiator on 10.29.15 at 9:30 pm

Maybe it’s “they wear melons…”?
Or am I a spelling Nazi?

#41 Smoking Man on 10.29.15 at 9:30 pm

Message to blog dogs.

Making it…really making it.

Is that glorious day , and the days after you finaly give no shit.

Its hard to explain…but feels so good.

#42 common sense on 10.29.15 at 9:46 pm

#41 Smoking man

Does it feel so good as John Cougar Mellencamp?

Nick: Your wise to ask and even wiser to wait for a golden opportunity in the near future..

All the best!

#43 Washed Up Lawyer on 10.29.15 at 9:47 pm

Off topic as usual. Musing aloud.

It has been a while since Garth called someone a pecker.

For all you young barristers out there in Canada, there is precedent which will allow you to use the word in final argument and even call a judge a pecker.

Master Funduk, Court of Queen’s Bench of Alberta:

“Any legal system which has a judicial appeals process inherently creates a pecking order for the judiciary regarding where judicial decisions stand on the legal ladder.

I am bound by decisions of Queen’s Bench judges, by decisions of the Alberta Court of Appeal and by decisions of the Supreme Court of Canada. Very simply, Masters in Chambers of a superior trial court occupy the bottom rung of the superior courts judicial ladder.

I do not overrule decisions of a judge of this Court. The judicial pecking order does not permit little peckers to overrule big peckers. It is the other way around.”

#44 OffshoreObserver on 10.29.15 at 9:54 pm

#14 Island Girl on 10.29.15 at 7:00 pm

Wow, I googled rentals in Regina and you can rent a nice big place for around $2000. We bought this spring only because we couldn’t find anything to rent (trust me, we looked) and we kept our budget at below 2.75x our annual income.
It’s amazing how many people look only at the mortgage cost and forget about the property taxes, insurance, maintenance, etc…

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

I just don’t get RE in Canada: such an insane amount of capital allocated to a single asset–I sold my apartment block in 2010 and retired to, first, Thailand, then Vietnam.

I just moved to a 1 bdrm apartment in Da Nang, Vietnam. View of gardens and China Beach. USD120/month; Internet–the maritime fibre optic cable lands near me–USD40/month; ping 5 ms; 40 meg Up/down. Cheap fresh food; a cornucopia, including seafood and lots of veggies and fresh fruit, including mangoes, coconuts and papaya.

https://www.google.com/maps/@16.0809202,108.2448299,16z

Next move is to go Ex-Pat and never pay Canadian Income taxes, again. (Mind you I will take a haircut on “deemed disposition” and consequent capital gains taxes, but I think it is worth it in the long run.

BTW, it is about 28C today.

#45 IHCTD9 on 10.29.15 at 10:03 pm

Nick, I have a paid for house, and a nice nest egg on the go. The house was purchased in another era in real estate and has only ever been a place to live. The cost was very affordable compared to the costs you will have to deal with.

The nest egg we have now was in the same ballpark as yours when we were your age, it is many times that now thanks to making savings a priority – yes, even over the mortgage. We always paid ourselves first since our mid 20’s.

You can be where I am now with the nest egg, but you live in a new world – you can’t go there while paying down a mortgage at today’s prices. It will have to be one or the other, **or one and THEN the other**.

These days the mortgage payments are history, but I still shell out thousands in taxes, maintenance, insurance, and more for the house every year. And every year the costs increase. The house will not net me a dime when I sell it. You’ll keep plenty busy on maintenance (or shell out for a contractor).

The nest egg costs me no sweat, taxes, insurance, maintenance, snow shovelling, lawn mowing – etc, you get the picture. I look back and I’m damn glad we saved and invested, you will be too. At some point you will see 5 figure gains every year, and you begin to realize how bloody sweet of a decision you have made. Long term home ownership via a mortgage will not do this for you, no way, no how.

I was lucky to be a gen X, and could save and buy a house at the same time, you will have to choose one only, at least for now. Trudeux may open the door for you to raid your investments to buy a house down the road if you must. Load up on savings now, and drain them later, perhaps that house might only run 200k in the not too distant future.

#46 Nemesis on 10.29.15 at 10:05 pm

#JustForSmokingMan… #ForgetTheC-70… #WhatYouReallyWantIsA… #StationaryMassTemporalDisplacementUnit… #TheGeneralElectricC-204

[Telegraph] – Who was John Titor, the ‘time traveller’ who came from 2036 to warn us of a nuclear war? – As the world celebrates Back to the Future Day, it has forgotten the unknown man whose 2001 internet postings might just have saved humanity

…”Between November 2000 and March 2001, he answered many more questions. At one point he was even interviewed on a national talk radio show. He described his time machine in detail, even posting pictures of its user’s manual. A small internet cult grew up around him. Then one day he was gone, leaving his acolytes to pick over the remains. Today, there are little shrines to his name all across the internet. But who was he really?”…

http://www.telegraph.co.uk/news/science/11945420/Who-was-John-Titor-the-time-traveller-who-came-from-2036-to-warn-us-of-a-nuclear-war.html

#BonusFuture….

https://youtu.be/d68yRIE9OvQ

#47 OffshoreObserver on 10.29.15 at 10:11 pm

I have to make a further comments about 2 things:

1/ Justin’s ascension; and

2/ Bombardier Bailout.

The fact that JT was elected proves that the masses are hooked on “something for nothing.”

Again, further to my initial post above, I will not be paying for any of it.

What the hell is the PQ government doing meddling in private business–and how much is the Export Development Corporation on the hook for backstopping coddled capitalists?

Talk about unfunded liabilities!

#48 Nora Lenderby on 10.29.15 at 10:15 pm

#170 Smoking Man on 10.29.15 at 2:48 pm
Now forward time travel absolutely doable

Yep, if we are lucky we can all do that, albeit in the slow lane for a while…

#49 Smoking Man on 10.29.15 at 10:27 pm

One thing I want to do before death.

Break bacon with cohen….

#50 kommykim on 10.29.15 at 10:29 pm

RE:

#11 bdy sktrn on 10.29.15 at 6:42 pm
what snakes?

You know, the ones on the flat yellow surface. The snakes on the plane.

#51 Victor V on 10.29.15 at 10:33 pm

http://www.theglobeandmail.com/report-on-business/economy/jobs/alberta-loses-63500-jobs-in-first-eight-months-of-2015/article27037057/

Alberta lost 63,500 jobs in the first eight months of this year, according to government data, showing the toll weak oil prices have had on the western province.

The losses were the largest since the global economic crisis when the province shed 72,500 jobs over the same period in 2009. Combined with the slump in employment, the average weekly pay in Alberta fell 2.6 per cent to $1,129 in the 12 months ended in August, according to Statistics Canada’s survey of employment, payrolls and hours. Alberta’s drop was the sharpest of all the provinces and territories.

“Earnings and employment in Alberta have been on a steep downward trend since January,” said Andrew Fields, an analyst with Statistics Canada.

#52 Thinking for myself on 10.29.15 at 10:37 pm

I’ve had an epiphany of late.

If in the future, IF 30%/100 of voters are seniors AND out of the remainder 20%/100 are poor and don’t have any savings, whats to stop them from electing governments that will help them out??

…..and it hit me, there will be no retirement crisis. The real crisis will hit those people with big portfolios, capital gains, inheritance taxes, wealth based health premiums, wealth based user fees, etc.

Its simple logic.

#53 kommykim on 10.29.15 at 10:41 pm

RE:

#40 gladiator on 10.29.15 at 9:30 pm
Maybe it’s “they wear melons…”?
Or am I a spelling Nazi?

More like a grammar Nazi.

#54 45north on 10.29.15 at 10:49 pm

BobC: Bombardier is competing with Air Bus and Boeing. It needs a miracle.

Cici: from your link: House prices overvalued in 11 of Canada’s 15 biggest cities, CMHC says

including Toronto. Trudeau’s going to need a miracle.

#55 benchwarmer on 10.29.15 at 10:50 pm

Cenovus cuts 700 more, ouch! http://calgaryherald.com/business/energy/cenovus-says-about-700-jobs-will-be-cut-in-second-half-of-2015-double-earlier-prediciton

#56 Murphy on 10.29.15 at 10:52 pm

Nick.
Buy the place.
In ten years you will have sunk another 50K into it and ten years after that you will sell it for 450K and think you died and gone to heaven cause it is 450K in your pocket even if you are into it for 600.
Makes you feel like a winner!

#57 Suede on 10.29.15 at 10:58 pm

Sometimes I forget Manitoba and Saskatchewan are part of Canada.

My wife says I’m ignorant, but I wonder if I just ignore certain things.

#58 Pump and dump on 10.29.15 at 10:59 pm

#37 Smoking Man

Enough with the guilt over BBD. The white gods have forgiven…

#59 Patrick on 10.29.15 at 11:02 pm

#52 Thinking for myself on 10.29.15 at 10:37 pm
I’ve had an epiphany of late.

If in the future, IF 30%/100 of voters are seniors AND out of the remainder 20%/100 are poor and don’t have any savings, whats to stop them from electing governments that will help them out??
_____________________________________

It doesn’t even matter, at least 60% of (my fellow) millennials are left leaning. Which makes no sense since they will be the net payers into the system. That is called indoctrination. You would think that the most over-educated generation would at least be able to think for themselves.

If the people of Ontario pass up on Patrick Brown then it is sealed. Permanent socialist governments till we’re broke. Well we’re kinda already broke, but really broke.

#60 lala on 10.29.15 at 11:40 pm

I don’t know everything but you guys don’t know what you know. My knowledge is based on experience not on books. So….book a flight to Cuba or South America, get married to a nice young girl and live your retirement stres free. Dual citizens are the blessed ones, I keep my Canadian passport in one pocked and in the other one my Austrian passport ready for exit. Freedom First salut to you, you seems like a sane one.

#61 Wailing Whales on 10.29.15 at 11:43 pm

Garth

The bailout of Bombardier shows that big brother will not let the big fish in Canada sink….even at the expense of wiping out shareholder value….the same will happen with RE…expect a bailout with the taxpayers on the hook for billions….

Not a chance. — Garth

#62 Bast on 10.30.15 at 12:02 am

The best thing my father ever did was show me an amortization table of our mortgage, with totals. He showed me how much money we would actually spend paying off the mortgage compared to the purchase price, and I was, well, a gobsmacked 15-year-old. Could not believe how much the house “really” cost us. I think all mortgage brokers should be regulated to inform individuals taking out mortgages of these projections. An eyeopener, for sure.

#63 Ruane on 10.30.15 at 12:02 am

#40 Gladiator
Maybe it’s “they wear melons…”?
——–
Yes, I’m pretty sure that’s what he meant and that he just typo’d or something. It’s just that the mental picture of someone turning into a piece of fruit at full moon brought me so much amusement I needed to comment :)

And not at all…I’m the grammar/spelling nazi for this one.

#64 Millmech on 10.30.15 at 12:03 am

#45
Right on the nose,perfect,I would add that they should be saving 30% of net for retirement,it’s what I have done fore the last 17yrs and in three years wil be able to retire with income the same as what I make full time.Nice to know that I can retire before fifty if I so desire and not have a reduction in lifestyle,no stress.Nick just think of your investments as a Timmies coffee and use the mantra “double double”every twenty years.Go long and do the math from a reverse engineering stand point.Look 20 years ahead and do the math.

#65 Freedom First on 10.30.15 at 12:06 am

#35 Investorz

I own 0 individual stocks. REITS are good, but I prefer to buy the basket of REITS like ETF’s ZRE, XRE for example. If your net worth is over $1,000,000 ignore my post.

#66 Cautious on 10.30.15 at 12:07 am

Re 32 In the cold from Toronto

Please post a few links to the ‘excellent’ two bedroom flats for $1600 in Toronto you claim exist. I’m looking for the whole enchilada.

#67 Tony on 10.30.15 at 12:16 am

Keep on renting because as the price of housing falls each year so will your rent.

#68 TRT on 10.30.15 at 12:31 am

People NEED real estate to live in.

People DONT NEED stocks/bonds.

Simple.

#69 Vundo on 10.30.15 at 12:54 am

#10 Freedom First: you might think that situation is scary, but my reading of your posts tells me that you’ve never wanted to be in Nick’s predicament. I have. The most frightening thing for me is that it wasn’t as long ago as I’d like to think that I would have envied a man who, in Nick’s situation, went ahead and bought that house at the first opportunity without a second thought. There are a few reasons I didn’t get there, the main one being discovering this blog by dumb luck. I, too, am blessed.

And I am glad, #39 That Nick, that it wasn’t too late for you either.

#70 Mark on 10.30.15 at 2:15 am

Just got an email in my inbox. Apparently the global mining industry’s market capitalization has fallen beneath $1T.

Contrast this with Canada, which has approximately $0.9T in subprime mortgages alone on its books.

Bombardier is competing with Air Bus and Boeing. It needs a miracle.

Except that there’s very little overlap between Bombardier’s product offering and anything that Airbus or Boeing credibly offers. Not sure why such a claim, that Airbus/Boeing are in competition with Bombardier gets repeated. It simply doesn’t stand up to scrutiny if one actually sits down and compares the airplanes.

#71 Red Deer Rob on 10.30.15 at 2:52 am

Love reading the comments here from Canadian’s abroad. Your experiences give me an idea of what is possible.

As a thirty one year old in the energy industry, with no kids or wife, I am reflecting on all my options in case I become laid off again.

The high cost of living in Canada coupled with a recession and shrinking work opportunities makes me consider moving beyond our border. It’s a big world out there.

#72 another Nick on 10.30.15 at 3:29 am

I’ve been browsing MLS listings in Calgary…probably hundreds of new listings in the past 1 month. Prices haven’t fallen much yet, but the desperation is palpable. Many, ‘quick sale’ type listings.

#73 Nagraj on 10.30.15 at 6:46 am

Hallowe’en at the Harpers.

Episode I: Early that night.

Laureeny’s draggin’ the candy to the front door when she sees Gypsy the cat in the living room sipping something reddish out of a highball glass with a straw.
“Bloody Mary?” inquires Laureeny.
Gypsy: “Chinchilla and tonic.”
Laureeny walks a few steps further – and then, as she realizes – faints.

Harpo who’s just entered the kitchen to get some food for Charlie the chinchilla, notices the mess on the counter and yells, “Laureeny! What the hell did ya put into the blender?!”

TBC

********************************************

(It’s not that Nagraj is incapable of commenting on “Surely in a cheapo city with a funny name lost out in the grain fields, there must be redemption.” But Hallowe’en is comin’ up.)

#74 Contrarian Coyote on 10.30.15 at 7:34 am

#71 Red Deer Rob on 10.30.15 at 2:52 am
Love reading the comments here from Canadian’s abroad. Your experiences give me an idea of what is possible.

As a thirty one year old in the energy industry, with no kids or wife, I am reflecting on all my options in case I become laid off again.

The high cost of living in Canada coupled with a recession and shrinking work opportunities makes me consider moving beyond our border. It’s a big world out there

So, true. I did the expat thing for 10 years and loved it. Some of my friends like yourself made the move out of Alberta from O&G and EPCs all around the world. Most are in the Middle East or SE Asia pulling nice expat packages. Risky place to live, but they’re compensated very well for it.

My advice would be go for it. You’re in a perfect situation being single and with energy industry experience. Friends of mine set themselves a target time/savings amount. Some hit it and move on to another country or return to Canada. In the end, it is experience that few others will have back in Alberta. Good luck.

#75 Dough on 10.30.15 at 7:37 am

Learned something new today.

un·re·quit·ed

adjective

adjective: unrequited

(of a feeling, especially love) not returned or rewarded.

Thanks Garth

#76 Worried about provincial debt on 10.30.15 at 7:38 am

Garth and blog dogs,

Some advice requested.

I am seriously concerned about the indebtedness of provincial governments. Again this week, I look at Quebec massively buying into Bombardier and Ontario selling off Hydro as examples of mortgaging the future and burning the furniture to heat the house.

I can’t see how this won’t all come back to bite residents in the future, and don’t want to face crushing tax increases and devastated economies.

So here is my question:

If I want to remain in Canada, which province(s) would be considered most fiscally sound for residents and taxpayers, now through about 2040 or so? Territories included too – I like the north and could move there, if it was the best choice. This will be mainly for retirement years, so I am not much concerned about personal employment.

(Please, no partisan hack attacks. Politicians from both right and left have bungled our finances in most provinces; I am just looking to mitigate risk of this affecting my personal finances)

Suggestions and your reasons are welcome!

#77 Compound Interest on 10.30.15 at 7:54 am

I used to think that if people understood how compound interest really worked then they would not get into debt so easily or so much. But, I have come to the understanding that even if they did, they would have to put aside their desires that they form as a result of what they learn in their formative years. Aspiration and nostalgia appear to be two key factors in shaping our expectations. The combination of these two factors seems to create a reality distortion field that effectively clouds the thinking of people who should know better.

The comment from Bast, #62, reminded me of what my father did but he took a slightly different approach. He talked about how you could live off the interest from a million dollars and not have to work. In effect, he made me see that saving money had a very desirable outcome – independence. He was also quite open about how much work could really suck at times (my description, not his). This re-inforced the need to save. Forget about poor dad and rich dad; best dad is smart dad.

In the ensuing years, I have learned that work can indeed suck at times, and that as we age, we become less interested in playing the game. Past age 50, you could consider yourself to have a target on your back when it comes to employability. The time to do long term planning to mitigate risk is really in your 20s and 30s as Garth has so clearly illustrated ad infinitum although not ad nauseum. A ten year plan for saving that starts in your 50s has a much slimmer change of being realized.

Toss in the rapidly changing nature of the workforce, the increasing use of automation, downward pressure on wages, absolutely out of control consumption leading to the assumption of debt, and we could, as the Brits say, come a cropper. Yes, Canada is in many ways a great place to live and we are all very fortunate but more and more of us are going to be on the outside looking in, blinded by consumption, hobbled by debt, and impoverished.

#78 Batty wisdom on 10.30.15 at 8:14 am

#73 Nagraj on 10.30.15 at 6:46 am
Hallowe’en at the Harpers.

Episode I: Early that night.

Laureeny’s draggin’ the candy to the front door when she sees Gypsy the cat in the living room sipping something reddish out of a highball glass with a straw.
“Bloody Mary?” inquires Laureeny.
Gypsy: “Chinchilla and tonic.”
Laureeny walks a few steps further – and then, as she realizes – faints.
—–
Where’s the bats?

#79 The real Kip on 10.30.15 at 8:20 am

Nick, buy the place. Seems cheap enough and given the fact you have four people to soon feed it’s a good move. And 3.99% for 10 years? You should be able to get better than that.

Go kick the soccer ball around with your kids and enjoy your home, don’t listen to the flakes in here.

#80 Holy Crap Wheres The Tylenol on 10.30.15 at 8:25 am

#37 Smoking Man on 10.29.15 at 9:04 pm
#29 Holy Crap Wheres The Tylenol on 10.29.15 at 8:09 pm
For you eyes only Smoking Man!
http://www.scientificamerican.com/article/time-travel-simulation-resolves-grandfather-paradox/
…..
Seriously, Hawkings is an Idiot…
Gets respect with the sympathy card.
Universe is shrinking, giving off the delusional of expansion.
Take it from a Nectonite. The tall whites, the grays, primitive compared to shit spelling Nectonites.
I apologize for bombardry , have a thing fir aviation. Was weakened by the C70. Greatest prehistoric flying machine around.
____________________________________________
Never heard of a C70, you sure its a cargo plane. Don’t recall even seeing as a trainer. You not talking about a C7 Caribou are you? Once saw a XB-70 on the runway it was awesome.

#81 broader mind on 10.30.15 at 8:32 am

Luckily the a-snake was voted out.

#82 Holy Crap Wheres The Tylenol on 10.30.15 at 8:32 am

#59 Patrick on 10.29.15 at 11:02 pm

#52 Thinking for myself on 10.29.15 at 10:37 pm
I’ve had an epiphany of late.

If in the future, IF 30%/100 of voters are seniors AND out of the remainder 20%/100 are poor and don’t have any savings, whats to stop them from electing governments that will help them out??
_____________________________________

It doesn’t even matter, at least 60% of (my fellow) millennials are left leaning. Which makes no sense since they will be the net payers into the system. That is called indoctrination. You would think that the most over-educated generation would at least be able to think for themselves.

If the people of Ontario pass up on Patrick Brown then it is sealed. Permanent socialist governments till we’re broke. Well we’re kinda already broke, but really broke.
_____________________________________________
Well at least this KID has some business experience even though it was in the legal department of Magna. Oh yes and he was the youngest person ever on the Barrie counsel. Does he have any tattoos? There is always hope!!!!!!!!!!!! Ahh who am I kidding, were all toast!

#83 Holy Crap Wheres The Tylenol on 10.30.15 at 8:38 am

#11 bdy sktrn on 10.29.15 at 6:42 pm
what snakes?
lol
_________________________________________
Snakes, I dont know no snakes.
https://www.youtube.com/watch?v=Re3MIrFE7ow

#84 Holy Crap Wheres The Tylenol on 10.30.15 at 8:41 am

Nick should take his money go to Vegas double down on black. He will be back to Prairie town and be on dole or living in a 3000 sq ft Bung on the river. Flip the coin and give it a try. Cozy…………

#85 US's Person on 10.30.15 at 8:42 am

@lala re: ” Dual citizens are the blessed ones, ”

Not if one of your citizenships is American, and you live outside the USA. My how things change!

#86 lee on 10.30.15 at 9:08 am

# 66 Cautious,

Go to the Minto apartments website and look at the GTA. Two bedroom suites listed for around $1,600 all over Toronto, even Three bedroom, many furnished. Funny how your agents don’t know about this. This is what you compete with when you buy a condo to rent. Word is getting out.

#87 Ralph Cramdown on 10.30.15 at 9:08 am

So I’ve been on hold for ten minutes listening to some nice string quartet music, interrupted every 20 seconds by “Thank you for your patience. Please stay on the line for the next available operator.” This is Ackman’s Pershing Square conference call, wherein he’ll presumably explain how Vaieant is a super investment. And his website’s crashed. Bullish? “10,000 more participants than anticipated.”

Happy Hallow’een, everyone.

#88 Ralph Cramdown on 10.30.15 at 9:14 am

Pershing Square says Valeant’s big problem is not investing enough in PR. And they’r really sorry about the string quartet music that keeps interrupting the conference call… they asked for “yakety sax,” the Benny Hill theme song.

#89 Tony on 10.30.15 at 9:29 am

The trade of the day today looks like TVIX for the big percentage gain. I’m all in today. UVXY is another one.

#90 Ralph Cramdown on 10.30.15 at 9:36 am

Ackman, to 10,000 people: “If someone could turn up the temperature; it’s quite cold in here.”

#91 Rational Optimist on 10.30.15 at 9:45 am

“Anyway, I’ve got about six weeks to pull the trigger”

Yikes. The worst time to buy is when you feel like you have to.

This guy has to find another rental no matter what, so he has the ability to (when he really wants to buy) be aggressive.

#92 ANON on 10.30.15 at 9:47 am

#76 Compound Interest on 10.30.15 at 7:54 am

I used to think that if people understood how compound interest really worked then they would not get into debt so easily or so much.

It is possible for people to understand it, however it is impossible to accept it in the context of money, even if it is taught in schools, and arithmetic is probably one of the few things which can be trusted as absolute truths. Money is extremely misunderstood, either taken for granted, or vilified, or worshiped, or all at once (this one is always a hoot), definitions abound, as do explanations and complex definitions, tomes are written trying to quell the obvious dissonance, and for a very good reason:
Humans are driven by narratives reinforced by promises in a positive loop. Calling promises-by-token (or proxy) as being debt usually implies that it is a bad thing, however there is a duality here. Promises by proxy are also the driver of expansion. How’s that for a fundamental existential dilemma? Isn’t it a lot easier to simply take one side, rather than to accept the duality and its obvious consequence, and try to go on with your life? :)

#93 young & foolish on 10.30.15 at 9:58 am

The 1% went to war on the global consumer, now we have reduced consumer spending, soon to be followed by lower earnings reports.

Sure hope you are not depending on that 7% average return this year.

#94 lee on 10.30.15 at 10:01 am

Does anyone know why VDC (eft) is paying such a huge yield at 7.0% or so? It is a U.S. consumer staples etf.

Also, is Valeant a good buy or a dud? Anyone? They say their accounting is fine. Is it a buying opportunity?

#95 young & foolish on 10.30.15 at 10:10 am

“He talked about how you could live off the interest from a million dollars and not have to work.”

It’s getting harder and harder to live off “dead money” …
nowadays, you have to pay someone 10K a year to help you make 40-50K through investments long and short.

#96 Dup on 10.30.15 at 10:22 am

Garth I think you were a little hard on Nick…
His income was not unreasonable when compared what we see in crazy GTA; where people with less income buy million dollar homes.

#97 young & foolish on 10.30.15 at 10:24 am

… the markets are red again this morning …. I am sooo frustrated (not to mention short-sighted) !

#98 Jas on 10.30.15 at 10:32 am

This BBC documentary looks at the policies and behaviors that caused both the crash of 1929 as well as many of the world’s current financial problems

https://www.youtube.com/watch?v=VQzEWeGJLP0

#99 young & foolish on 10.30.15 at 10:43 am

“Please post a few links to the ‘excellent’ two bedroom flats for $1600 in Toronto you claim exist.”

Hahaha … you will be living with roaches, mice, and drug dealers at those rental rates in Toronto.

#100 dosouth on 10.30.15 at 10:57 am

Meanwhile back in the real estate world…..

Victoria market not as hot as thought…./a>

#101 Tony on 10.30.15 at 11:00 am

Time to make some money, will be selling out my positions at 3:20pm today.

#102 r1200c on 10.30.15 at 11:10 am

Two other considerations… buy a townhouse or duplex for 100 grand off…
Or add another $150/month and find a very cool rental from some poor sap that bought thinking the market would go up forever…

#103 Gregor Samsa on 10.30.15 at 11:14 am

#72 another Nick,

Severance, EI, and savings will continue to prop up the Calgary housing market for some time to come. People would rather eat cat food than sell at a loss.

Add in historic low interest rates, and when a laid off person wants to sell their house, someone who works at Tim Hortons will eventually come along and buy it.

But cracks are definitely forming in the system. “For rent” signs are starting to sprout like crazy…

#104 We're doomed I tell ya on 10.30.15 at 11:28 am

#92 Tony on 10.30.15 at 11:00 am

Time to make some money, will be selling out my positions at 3:20pm today.
——————
Thanks Tony for the update. Don’t be a minute late. Important to know.

#105 Nagraj on 10.30.15 at 11:29 am

#77 BATTY WISDOM “Where’s the bats?”

The two cute little vampire bats have been sleeping late because of depression.
They found out – via the CBC – that the Harpers might not take them along to Alberta, on the grounds that they’re so very used to their comfy little homes which Laureeny had built onto the outside of 24 Sussex. (They live in them mortgage and rent and tax free.) They would miss Laureeny terribly. Not to mention the fact that Maureen McTeer has proposed razing 24 Sussex to the ground. And Margaret Trudeau has made it clear her son will not be moving into that fire trap.

But once they smell Charlie the chinchilla’s blood all over the kitchen counter they will rouse themselves to investigate.

You are a very perspicacious blogdog. And I commend your interest in our fuzzy flying friends.

#106 jess on 10.30.15 at 11:33 am

The retirement savings accumulated by just 100 chief executives are equal to the entire retirement accounts of 41 percent of U.S. families — or more than 116 million people, a new study finds.
“This CEO-to-worker retirement gap is a lot bigger than the pay gap and one more indicator of the extreme level of inequality that is really tearing the country apart,” said Sarah Anderson, the report’s co-author and the global economy project director at the Institute for Policy Studies.Some of the chief executives with the biggest retirement stashes are at companies that have cut retirement benefits for new employees.

see A Tale of Two Retirements
http://www.ips-dc.org/tale-of-two-retirements/
http://www.bloomberg.com/news/articles/2015-10-28/top-100-ceo-retirement-savings-equals-41-of-u-s-families

#107 jess on 10.30.15 at 11:36 am

87 Ralph Cramdown on 10.30.15 at 9:14 am
In 1906, Lord Loreburn, sitting in the House of Lords, uttered these words on the matter of corporate residency:

“In applying the conception of residence to a company we ought, I think, to proceed as nearly as we can upon the analogy of an individual. A company cannot eat or sleep, but it can keep house and do business. We ought, therefore, to see where it really keeps house and does business. An individual may be of foreign nationality, and yet reside in the United Kingdom. So may a company. Otherwise it might have its chief seat of management and its centre of trading in England under the protection of English law, and yet escape the appropriate taxation by the simple expedient of being registered abroad and distributing its dividends abroad.”

This maxim, established in De Beers Consolidated Mines Limited v Howe (Surveyor of Taxes) (1906) 5 TC 198 has been applied since its original release through to the present day.

the place of incorporation and the place of central management and control of the company in determining corporate residency.
http://www.taxation.co.uk/taxation/Articles/2012/10/24/48781/keeping-house
======================================
The probe by the Large Business and International division of the agency has included an examination of Valeant’s tax arrangements following the 2010 merger with Canadian Biovail, a so-called “inversion” deal that enabled the former US company to dramatically reduce its tax bill.
see – posted by Dan McCrum on Friday August 15th, 2014 11:22. Tagged with IRS, Valeant.

BEPS, treaty shopping and the Canadian response
July 2014 By Timothy S. Wach

Tax games: Are some companies playing with fire?
Al and Mark Rosen / November 26, 2014
“Canada allows profits to be repatriated tax-free from lower-tax jurisdictions with which it has a tax treaty. In the pharma business, regardless of where the sales take place, profits can be recognized largely in the jurisdiction that holds the intellectual property for the drugs. Through the magic of transfer pricing agreements, the profits can be consumed by IP licensing fees.

Since the combination with Biovail, Valeant has managed to lower its cash tax rate to 3% in 2013, versus 36% in 2009.”
http://www.advisor.ca/tax/tax-news/tax-games-are-some-companies-playing-with-fire-169872

#108 conan on 10.30.15 at 11:40 am

You could make a decent lapel pin out of that signage. Independent MPs could “wear” it proudly.
Only they would know what it truly means. Well, except for the blog dogs.

#109 valleyrenter on 10.30.15 at 12:15 pm

Hey Garth, might be time to revive Cowtown Deathwatch. Was reading an article about luxury homes selling for les than half of original list. Even the realtress in the story has hers listed at $2.25mil, even though she feels it “should be listed at $2.8mil”.

#110 Holy Crap Wheres The Tylenol on 10.30.15 at 12:17 pm

Good Luck JT.

http://www.advisor.ca/news/economic/joe-oliver-says-liberals-wont-be-able-to-keep-deficit-from-ballooning-193850

#111 earlybird on 10.30.15 at 12:21 pm

Rents are going down in Cowtown….about 11% off for a one year lease in the complex we are in. A nice start to the day!

#112 omg the original on 10.30.15 at 12:25 pm

And I like Regina and worked in Regina and still visit there.

BUT……..$360k for a bungalow in a city of 220,000 in the middle of nowhere is nuts.

12 years ago that same house was $160-$180K.

Once again goes to show that people get “used” to high prices and that’s just what they believe things to be worth.

Nick’s at least being somewhat sensible – I have nephews and nieces in Regina and S’toon in much the same income position spending $450-$550K on starter homes??

The prairie cities may be the most irrationally bubbly of all cities in Canada.

#113 omg the original on 10.30.15 at 12:48 pm

BC Guy on 10.29.15 at 6:28 pm
“Nothing for under $1 million from San Jose to San Francisco.”

Tear-down shacks selling for $1.75 million.

“Anything decent is $2 million.”
————————

Actually that whole area is going through a tech boom to rival the late 1990s early 2000s.

because of that its the place to be right now in North American if you offer high end services, entertainment or collectables.

Saw one article were a guy rent a money gun for parties – it shoots cash into the air. Prices of 1970, ’80 and ’90s collectible cars have gone up 3x to 7x – notice how these are from the era that most tech entrepreneurs are from. Silly tech money just waiting to be spent by its 35 year old holders.

Its not the Chinese causing this its the super innovative America tech industry.

But the point you are trying to get at is that this will happen in Vancouver – not likely – too small of tech industry.

If somebody wants to be damp and innovative in North America they would locate in Seattle, where there is already a uber-critical mass of tech firms and everything is cheaper and simpler.

#114 Ralph Cramdown on 10.30.15 at 1:07 pm

#94 young & foolish — It’s getting harder and harder to live off “dead money” … nowadays, you have to pay someone 10K a year to help you make 40-50K through investments long and short.

Don’t let anyone convince you that investing was easy in the old days, but is more difficult now. When rates were high, people were deathly afraid of inflation, just to give one example. For a flavour of investment difficulties back in the day, I’d recommend Loeb’s ‘The Battle for Investment Survival.’ So old that it’s out of copyright, and available for free here:
https://archive.org/details/battleforinvestm00gera

Kinder Morgan is paying 7.5% on the common, is controlled by a billionaire who pays himself $1 per year and regularly buys more stock for himself in the open market, and has just raised its dividend. If and when investors decide 6% is enough yield, you’ll have made 25%. How difficult do you want to make this?

On the other hand, Pershing Square just wrapped up its conference call, after taking about four times as long to explain Valeant than Valeant itself did on its conference call on Monday. Key takeaways:
– they’d buy more if they had the money. Why don’t they have the money?
– Valeant’s problem is that its stockholders are too smart, and other possible (dumber) buyers can’t figure out the accounting

#115 IHCTD9 on 10.30.15 at 1:16 pm

#75 Worried about provincial debt on 10.30.15 at 7:38 am
Garth and blog dogs,

Some advice requested.

I am seriously concerned about the indebtedness of provincial governments. Again this week, I look at Quebec massively buying into Bombardier and Ontario selling off Hydro as examples of mortgaging the future and burning the furniture to heat the house.

I can’t see how this won’t all come back to bite residents in the future, and don’t want to face crushing tax increases and devastated economies.

So here is my question:

If I want to remain in Canada, which province(s) would be considered most fiscally sound for residents and taxpayers, now through about 2040 or so? Territories included too – I like the north and could move there, if it was the best choice. This will be mainly for retirement years, so I am not much concerned about personal employment.

(Please, no partisan hack attacks. Politicians from both right and left have bungled our finances in most provinces; I am just looking to mitigate risk of this affecting my personal finances)

Suggestions and your reasons are welcome!
___________________________________________

I feel the same, but the reality is I really like were I live, and the roots go deep – not much chance to leave unless I go by myself :).

I’d keep a hopeful eye on Alberta if I were you – see what happens after the next election and take it from there.

You do have options to stay and not be financially destroyed by Government depending on your resolve. That is my plan, here is a quick overview of what I have in mind:

1. Get off conventional heating fuel

2. Get off the grid

(I will hopefully be doing both simultaneously via a hay/straw fed gasifier of my own design)

3. Cut your retail consumption. Buy as much as you can used. Stuff like old made in USA tools and equipment are better quality than the new made in China big box store crap anyway.

4. Cut your motor fuel use, or even eliminate it – options are out there – again depending on your resolve. Look into gasification, learn it, there are thousands in the USA running stationary engines and driving around on wood, used cooking oil, straight veggie oil, reclaimed diesel, home refined used motor oil, and more. Look up Wayne Keith on Youtube, he has not bought any gasoline for his farm truck for over a decade.

5. Get out into the country and onto 50-100 acres or so. Field and forest mix. This will make everything easier, and open many doors.

6. Can you eat off the land? – try it out. Your sweat equity get’s you eating for free and it’s better for you to boot. It seems like everyone my parents age has a huge garden and a chicken coop out in the country. If a couple mid 70 year olds can produce so much food that they have to give some of it away, think of what you could do.

This is not for everyone, but it is right up my alley. I love this stuff! If I have my way I will be paying next to nothing towards energy of any kind, and no taxes on same either.

Out in the boonies, buying and selling UTT as well as barter just happens. I don’t agree with that now, but there may come a day when I don’t care anymore – it really depends on how voraciously government goes after what I have managed to store up. The more immoral they become, the less moral I will become.

Sure I’ll get dinged on property taxes, but when I retire, the Province and Feds will have a hard time getting much out of me.

Or that’s the plan anyway.

#116 Joke of the Day on 10.30.15 at 1:27 pm

Vancouver, one of the country’s priciest real estate markets, has not been listed among the high-risk markets, although CMHC says it is now detecting “moderate” evidence of overvaluation.

Priceless

#117 kommykim on 10.30.15 at 1:39 pm

RE:

#62 Bast on 10.30.15 at 12:02 am
The best thing my father ever did was show me an amortization table of our mortgage, with totals

I looked at the same thing in the 90’s when my mortage was at 9%. Made extra payments and payed that sucker off in 14 years saving a ton of money on interest. Today is a little different with low interest rates and it is better to invest the extra cash (TFSA) and pay the mortgage off later with the growth if interest rates spike in the future.

#118 Smoking Man on 10.30.15 at 1:59 pm

#109 Holy Crap Wheres The Tylenol on 10.30.15 at 12:17 pm
Good Luck JT.

http://www.advisor.ca/news/economic/joe-oliver-says-liberals-wont-be-able-to-keep-deficit-from-ballooning-193850
……..

The scariest thing in Canada is Butts. Sociopathinc Tree Hugger. He’s the back door man for Wynee and Justina.

#119 Nemesis on 10.30.15 at 2:11 pm

#FunnyOldWorld… #IsYourDog’Licensed’?,Or… #HuntersWhoNameTheirDogs”Trigger”… #ProofPositiveThat… #ItDoesn’tPayToTemptFate…

[WAPO] – In the past five years, at least six Americans have been shot by dogs

…This past weekend, a chocolate Labrador retriever named “Trigger” accidentally shot an Indiana woman in the foot during during a hunting trip, according to news reports. The Indiana woman had left her loaded shotgun on the ground with the safety off. Trigger stepped on it…

https://www.washingtonpost.com/news/wonkblog/wp/2015/10/27/a-dog-shoots-a-person-almost-every-year-in-america/

#120 bdy sktrn on 10.30.15 at 2:11 pm

Kinder Morgan is paying 7.5% on the common, is controlled by a billionaire who pays himself $1 per year and regularly buys more stock for himself in the open market, and has just raised its dividend
—————————
Mr. C you need to start a blog about this.

tell us more.

#121 BobC on 10.30.15 at 2:28 pm

#105 Jess
I’m sure they would say it’s wonderful. You should join the club and become a CEO.

#122 The Great Canadian Bubble Co. on 10.30.15 at 2:31 pm

My wife and I lived in the Middle East for many years. You need to learn the difference between the Gulf and the Middle East in general. Night and day. Places like Qatar, Bahrain, UAE and Muscat are very safe, welcoming and easy to live in. Great packages and quality of life for Western expats. Hard for North Americans to believe places so close in geography can be so different. Never ever locked my house or car while I lived there. I do in Toronto ….

#123 No. 3530 GM Generator Car on 10.30.15 at 2:39 pm

‘ The foolish just moan about unrequited entitlement. — Garth’

Garth – This sentence describes perfectly all the house-lusty millennials out there. BTW, you’ve been coming up with some great lines recently. Somebody should make a book of your quotes. This next one, from yesterday, is classic –

‘My reply was what you’d expect from a pucker-lipped, calcified, emotionless curmudgeon who sees nothing but augmenting risk in a one-horse, house-lusty portfolio strategy in the age of interventionist politics.’

Superb!

#124 BATTY WISDOM on 10.30.15 at 2:56 pm

#104 Nagraj on 10.30.15 at 11:29 am

#77 BATTY WISDOM “Where’s the bats?”

The two cute little vampire bats have been sleeping late because of depression.
They found out – via the CBC – that the Harpers might not take them along to Alberta, on the grounds that they’re so very used to their comfy little homes which Laureeny had built onto the outside of 24 Sussex. (They live in them mortgage and rent and tax free.) They would miss Laureeny terribly. Not to mention the fact that Maureen McTeer has proposed razing 24 Sussex to the ground. And Margaret Trudeau has made it clear her son will not be moving into that fire trap.

But once they smell Charlie the chinchilla’s blood all over the kitchen counter they will rouse themselves to investigate.

You are a very perspicacious blogdog. And I commend your interest in our fuzzy flying friends.
———————————–

I’m gonna go out on a limb and bet “perspicacious ” has never been used on the blog before!

I wonder what Laureeny has been feeding them, who’s blood?… socialist’s blood? how will they fend for themselves…

#125 S.Bby on 10.30.15 at 3:01 pm

#112 omg
Prices of 1970, ’80 and ’90s collectible cars have gone up 3x to 7x – notice how these are from the era that most tech entrepreneurs are from.

Really? What would qualify as a collectible car from the 70’s to the 90’s? Is there such a thing?

#126 Ralph Cramdown on 10.30.15 at 3:03 pm

#119 bdy sktrn — “Mr. C you need to start a blog about this. tell us more.”

If I start a blog, I’ll let people here know. Garth thinks picking stocks is a bad idea for most people, and out of respect for that, I don’t post picks (much). But I would like to dispel the notion that Fed action has driven valuations of everything to dumb levels. There’s almost always something on sale in the stock market, and if you spend an appropriate amount of time looking, you can find it. Kinder Morgan isn’t a micro cap, it has an easy to understand business, a moat, and management is aligned with shareholders. I don’t think Richard Kinder would raise the dividend if he thought he’d have to cut it again later. But O&G prices are in the doldrums, the forecast is for a mild winter in N.America meaning less NG used for heating, Kinder is issuing prefs which will convert to common (a wee bit of dilution) and Everybody Knows that pipelines and utilities underperform in a rising rate environment. Result? A bargoon.

FD: You’re damn right I have a position. A big one. Initiated recently. Unlike the electron-stained wretches who write all the crap at motleyfool and seekingalpha, I’m talking my book.

#127 Bottoms_Up on 10.30.15 at 3:28 pm

#39 That Nick on 10.29.15 at 9:17 pm
———————————–
3:1 dwelling price to family income results in different standard dwellings fitting the bill for every city. For Toronto it’s a condo, for Ottawa a townhouse and for Regina a bungalow.

Keep in mind the 3:1 ratio use to be based on one income, not two.

#128 Nemesis on 10.30.15 at 3:28 pm

#BonusFunnyOldWorld,Or…

#OddSynergies?…

[TimesColonist] – Victoria mayor muses on combining casino, sewage plant

…”Victoria Mayor Lisa Helps has mused publicly about the possibility of combining a casino with a new regional sewage treatment plant following rejection of an earlier proposal to co-locate the facility within the Provincial Legislature.”…

http://www.timescolonist.com/news/local/victoria-mayor-muses-on-combining-casino-sewage-plant-1.2099829

#YouCan’tMakeThisStuffUp…

[Guardian] – Toilet-themed Russian restaurant appeals to novelty diners

“It’s not everywhere you can eat good food from a toilet bowl and drink from a urinal at very reasonable prices.”

http://www.theguardian.com/world/2015/oct/30/russia-crazy-toilet-cafe-restaurant

[NoteToGT: Minor editorial liberties with the Victoria piece…]

#129 Freedom First on 10.30.15 at 3:32 pm

#76 Compound Interest

You had a smart dad is right. And you listened. Few do. Good on you.

Yes, being on my own at 17 through unforeseen circumstances turned out to be a blessing in disguise. The decisions I made in my 20’s & thirties were along your Dad’s line of thinking exactly. He and you are right. Those decisions ended up having the exact very good consequences I had hoped for. And, any idiot can do it, I know.

Never follow the herd. Following the herd is a tough way to learn life’s sometimes cruel life lessons. Listening to guys like Garth, you, and your Dad is much much much easier.

#130 Bottoms_Up on 10.30.15 at 3:44 pm

#75 Worried about provincial debt on 10.30.15 at 7:38 am
———————————-
I think you also need to worry about your municipal and federal arrangements too.

However, provinces deliver healthcare, so you will likely want access to the best care for the lowest provincial tax hit. Perhaps a mid-size Ontario city?

#131 Holy Crap Wheres The Tylenol on 10.30.15 at 3:45 pm

Ill put some $$ on Garth’s next Header for tonight.
“Scary”

#132 nubbers on 10.30.15 at 3:51 pm

Nemasis @118
Interesting article. It also mentions that since 2004, there have been 10 instances of dogs shooting people in America, but only 1 instance of a cat shooting someone.

Clearly, the statistics speak for themselves. It’s not that aloof looking cat that has it in for you, but your so called ‘best friend’.

#133 Broke Dick on 10.30.15 at 3:53 pm

#124 S.Bby on 10.30.15 at 3:01 pm
#112 omg
Prices of 1970, ’80 and ’90s collectible cars have gone up 3x to 7x – notice how these are from the era that most tech entrepreneurs are from.

Really? What would qualify as a collectible car from the 70’s to the 90’s? Is there such a thing?
————————————————–
Acura NSX
Buick Grand National
GMC Syclone
GMC Typhoon

to name a few

#134 Holy Crap Wheres The Tylenol on 10.30.15 at 3:53 pm

#117 Smoking Man on 10.30.15 at 1:59 pm

#109 Holy Crap Wheres The Tylenol on 10.30.15 at 12:17 pm
Good Luck JT.

http://www.advisor.ca/news/economic/joe-oliver-says-liberals-wont-be-able-to-keep-deficit-from-ballooning-193850
……………………………………………………………..
The scariest thing in Canada is Butts. Sociopath-inc Tree Hugger. He’s the back door man for Wynee and Justina.
____________________________________________
Is he related to Seymour Butts? Oh yes he fits in well with Wynne-Bag he had previously worked with senator Allan MacEachen, and George Smitherman.
Hoist the rainbow flag mates.
“Sloop John B”
The Beach Boys

We come on the sloop John B
My grandfather and me
Around Nassau town we did roam
Drinking all night
Got into a fight
Well I feel so broke up
I want to go home

So hoist up the John B’s sail
See how the mainsail sets
Call for the Captain ashore
Let me go home, let me go home
I wanna go home, yeah yeah
Well I feel so broke up
I wanna go home

The first mate he got drunk
And broke in the Cap’n’s trunk
The constable had to come and take him away
Sheriff John Stone
Why don’t you leave me alone, yeah yeah
Well I feel so broke up I wanna go home

So hoist up the John B’s sail
See how the mainsail sets
Call for the Captain ashore
Let me go home, let me go home
I wanna go home, let me go home
Why don’t you let me go home
(Hoist up the John B’s sail)
Hoist up the John B
I feel so broke up I wanna go home
Let me go home

The poor cook he caught the fits
And threw away all my grits
And then he took and he ate up all of my corn
Let me go home
Why don’t they let me go home
This is the worst trip I’ve ever been on

So hoist up the John B’s sail
See how the mainsail sets
Call for the Captain ashore
Let me go home, let me go home
I wanna go home, let me go home
Why don’t you let me go home

#135 Holy Crap Wheres The Tylenol on 10.30.15 at 3:59 pm

#131 nubbers on 10.30.15 at 3:51 pm

Nemasis @118
Interesting article. It also mentions that since 2004, there have been 10 instances of dogs shooting people in America, but only 1 instance of a cat shooting someone.

Clearly, the statistics speak for themselves. It’s not that aloof looking cat that has it in for you, but your so called ‘best friend’
__________________________________________
It doesn’t make sense Dogs are mans best friend and cats are the enemy. I just don’t trust those cats, dam cats. Especially talking cats! Ask Brian Fellows!
http://www.rochesterunderground.com/rochester/index.php?Itemid=109&id=2960&option=com_content&task=view

#136 Ralph Cramdown on 10.30.15 at 4:11 pm

#131 nubbers — “Interesting article. It also mentions that since 2004, there have been 10 instances of dogs shooting people in America, but only 1 instance of a cat shooting someone.”

If I had to choose sides, I’d call myself a dog person. But on those stats, I’d wonder whether the cats weren’t just smart enough not to get caught. Stay frosty, people.

#137 family beagle on 10.30.15 at 4:46 pm

#114 IHCTD9 on 10.30.15 at 1:16 pm
#75 Worried about provincial debt on 10.30.15 at 7:38 am

I have one of those off grid places IHCTD9 describes. It’s in BC. Why BC? Because it has micro-environments. Regions of BC operate almost independently with their own trade routes/priorities/civic obligations. Kamloops is a world away from Creston. And Williams Lake is light years from West End Vancouver. Each community is unique and distinct, affording me a playground of diverse cultures, rugged backwoods, and urban centers. The problem with BC is that regions are so microcosmic (Tumbler Ridge vs White Rock, Tofino vs Nelson) it’s difficult to really immerse and experience it all. One lifetime is too short. Shipping goods from BC is also expensive.

Everything I need to live a life including healthcare is within 15 mins, I pay $250/yr property taxes on my own little valley bordered by an ecological preserve. I searched for a long time and decided on a pretty locale in the dry climate of the southern interior. I’m zoned CR-1 for small business, farm, campground. It generates income May-Sep. I work in Lower Mainland over winter and rent.

Living ‘off-grid’ takes time to set up and ongoing labour. For me, it’s not about ownership; it is about living harmoniously within a specific setting. I’m trying to minimalize my impact and appreciate what was already here. The wildlife runs the place. I’m on site six months per year. I would advise travel and check out a few communities to see if they have the ammenities you need. It takes a while to get used to the overwhelming freedom and isolation. I suspect in the future, some trades and healthcare support will be lost to attrition/urban migration. Make sure you can manage without injuring yourself. People in smaller towns are very accomodating and sharing resources between neighbours is a lifestyle. For the taxes I pay, I think the services I get are quite fair. We are out of the fire protection area, but there is brand new asphalt on our road. Rentals, motels, hotels, rv parks are plentiful and cheap here, check it out. Sales pitch over.

#138 Doug in London on 10.30.15 at 5:26 pm

@TRT, post #68:
Yes, people do need real estate to live in, but it DOESN’T have to be owned by the person living in it. It can be rented instead, and in the grossly overpriced markets we see now in many cities, renting is by far the more economical option.

As for stocks and bonds (or other investments like ETFs and REITs) you don’t actually need any of them but if you are trying to accumulate and grow wealth they sure beat GICs, especially now when many are on sale. There are some AMAZING deals out there now!

#139 Haha - Meltdown on 10.30.15 at 9:49 pm

How mortgage fraud is thriving in Canada’s hot housing market
http://www.theglobeandmail.com/report-on-business/economy/housing/mortgage-fraud-on-the-rise-among-brokers-trying-to-help-clients-qualify/article27051297/

#140 Milla on 10.31.15 at 12:51 pm

Advice on what home to have generally does not make sense. Of course generally it must be obtained for a reasonable price. With income 50K to buy 1 million home is a brainless act. However, one will enjoy to live years in the trailer at the lake, which is awesome. While for some one else a cozy little house is only one way to feel good. Renting is fine. I rented for 8 years. Financially I had more freedom and was mobile. With a new job moving to a new apartment close to the job was just great. On the other hand hidden superiority of a landlord or bold reminder of superiority was annoying. So, if one is insusceptible to landlords control he/she will be fine. For those more sensitive it is hard. Also, if one is smart and clean, quiet and wise not to have a confrontation with landlords/neighbors , it does not mean that his/her partner or children can behave the same way. It is nice to have a decent income and to afford renting of a nice home from nice people. But see how many “nices” one shall be lucky to get. Sounds as a not common case. Also if you have family in this difficult time isn’t it great to be able to share it with your adorable adult children to let them save on rent or mortgage (hope temporally) ? One can do it if he owns a home. One hardly can arrange it if he rents. Thanks, Garth, I bought some American Equities and seems it works.

#141 jrochest on 11.01.15 at 12:17 am

Bungalows in Regina (and Saskatoon) weren’t 180K 12 years ago — they were 130K *8* years ago. I tagged along when a friend went house shopping in Saskatoon back in 2006, and a 1 1/2 story in Nutana was 150K.

At least in Saskatoon, prices are dropping, as are rents. You should be able to find a place to rent for the same price or less than what you are paying now. Then you can buy two or three years from now for considerably less than current asking prices.

#142 Jasmine on 11.01.15 at 7:04 pm

A light year is a unit of distance, not time, Garth.

https://en.wikipedia.org/wiki/Light-year

PS love your blog.

#143 Jasmine on 11.01.15 at 7:09 pm

Now that I’m thinking about it maybe you did mean it as distance. E.g., “retirement is a million miles away.” Seems kind of awkward but I guess it could work. I withdraw my previous comment.