Nothingburger

In a moment, the real news.

First the latest from Mr. Socks and the Chateau Kid – the nothingburger federal budget, 2018, delivered at a time when interest rates are rising, our biggest trade partner hates us, the country’s debt is swelling, the labour market is wonky and the housing market’s wobbly.

So what is the centerpiece? Yes, parental leave. Gender sensitivity. Free parks admittance for kids. Pay equity. #Metoo funding. More spending. Pharmacare, maybe. More deficits. But no tax attack. And, best, the PM did not wear a sari to the House of Commons.

The Liberals will increase spending by $21 billion over six years and finance that with borrowing. The shortfall needing to be financed will be $18 billion this year and gradually (hopefully, fingers crossed, please) fall to about $13 billion a year by 2022-3. So much for ‘the budget will balance itself’ and the campaign promise to have four years of $10 billion deficits before breaking even.

The threats: rising rates could knock this projection into the dumpster. Ditto for NAFTA, if the Trump machine gears up against the existing trade agreement (seems likely after he yelled at Mexico’s president last week). And, because our corporate taxes are not being aligned with those to the south or our companies allowed to write off equipment purchases faster, we may lose investment (and jobs) across the line.

The good news? No increase to the capital gains inclusion rate. No diddling with dividends. No new swipes at small businesses. No increase in marginal tax rates. And because there is now only one more budget before the next election, none of the above is likely to happen.

So, it was a great day for the 1%ers who swarm here nightly. As for the rest of you…

Remember the Whining Mommas post from yesterday? Well, lots more moaning to come now that we’ve heard from Jay Powell, the new boss at the US central bank. His lengthy comments on Tuesday were enough to scare financial markets, and send the Dow to a triple-digit loss (don’t worry – it’s temporary).

The reason: according to Jay, it looks like 2018 will contain four additional rate increases, with the next one happening in three weeks. Powell says the economy is ducky, new job creation is strong, wages are rising, inflation’s up and the recent stock market volatility was meaningless. So, up she goes.

A year ago this blog was populated with deniers who said rates would never rise. Since then they’ve increased four times in the States and three times here. By this time next year that could stand at eight American trigger-pulls and six in Canada. As stated, this means five-year mortgages will be 4% by Christmas, with everyone stress-tested at 6%. There’s no smearing Max Factor on this porker. It’s still ugly.

Nothing else – not retreating Chinese dudes, moronic Dipper politicians, sphincter-tight lending regs nor moister panic – has the same impact on real estate prices as the cost of money. When lending rates dropped to 2% last Spring, we saw houses jump in value each month more than in a robust year. Valuations in the GTA and the LM hit all-time highs. Bidding wars erupted. Sale prices soared over asking. Realtors turned into shade-wearing rock stars with groupies and flashy cars. FOMO soaked the landscape.

So here we are. Rates up sharply, detached house prices down 9% in Toronto and three times that in the northern burbs. In Vancouver a similar story, while in both regions it’s only the buzz surrounding condos – being snapped by kids who have no idea of the correlation between rates and prices – that’s masking the real story. As so many people with homes face mortgage renewals this year – at higher costs on reducing equity – the move-up market has croaked.

Now, to the pachyderm in the kitchen…

We know Canadians have $230 billion in lines of credit attached to their houses, which may also be mortgaged. We know this debt has inflated by more than 7% in a year. We know a big chunk of people with HELOCs pay nothing and just let the balance grow. We know the majority never pay them back. But why is this the fastest-rising kind of debt?

Mortgage broker Shawn Stillman says he has the answer. It’s B20. The new mortgage regulations announced in last 2016 and implemented two months ago – which dictate anyone changing or adding to their mortgage needs to go through the stress test – have pushed people into sucking off their HELOCs for new credit.

“It doesn’t make sense to break the mortgage that predates the October 2016 rule change; it makes sense to keep that mortgage in place and add something else on top,” he told an industry site. “It could be their reckoning because they may have to pay the piper for taking on this debt and not paying back the debt. Where it becomes difficult is where you have to pay the principal and the interest.”

In other words, people who can’t make ends meet and in the past upped their mortgage principal to get cash for debt consolidation at a cheaper rate, now turning to lines of credit because of B20. They can therefore easily tap into built-up equity (to 65%), get a relatively good rate (prime plus a half) and – best of all – make interest-only payments, or none at all.

Of course, HELOCs are floating-rate, non-amortized demand loans. That means (a) the cost rises immediately with each central bank increase, (b) the lender can demand repayment at any time, such as when your local housing market tanks and (c) interest-only payments means the debt is never reduced. Making no payments means it rises monthly to the limit.

“People keep taking on debt because they don’t have a choice, and they’re choosing products they’re not amortizing, so they’re not paying down that debt, and it will eventually catch up to them at some point in time. They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?

283 comments ↓

#1 joblo on 02.27.18 at 5:00 pm

February 27, 2018

PMO Memo

From: Justine Trudeau
To: All Lieberal MPs

Effective today, invitations to state dinners must go to female convicted attempted murderers only.

Yours in feminism, diversity and the middle class,

Justine

#2 Andrewski on 02.27.18 at 5:02 pm

Here’s a link to today’s Budget:

https://www.budget.gc.ca/home-accueil-en.html

#3 scooby doo on 02.27.18 at 5:03 pm

First!!! Finally :)

#4 Stan Brooks on 02.27.18 at 5:07 pm

Shouldn’t we be paying our taxes when T2 pays taxes on the lavish 200 k private vacation he got from Aga Khan as a gift?

I thought we need to follow his example. No?

—————————-

I thought there is still assault on small businesses in the budget, life passive investment constraints/private corp. dividend constraints.

GT, your view?

#5 Stan Brooks on 02.27.18 at 5:10 pm

Did i Read that properly?

sphincter-tight lending regs nor moister panic.

LMFAO

#6 Mike on 02.27.18 at 5:10 pm

Furst……

All good in GVR except some snow.

#7 AACI Home-Dog on 02.27.18 at 5:12 pm

I am wondering if Trump & all of his family will dress up like the Sikhs if & when he visits India ?

#8 A J on 02.27.18 at 5:17 pm

“There’s no smearing Max Factor on this porker. It’s still ugly.” LOL

Wow. I need a stiff drink.

I can still hear the faint whispers of ghosts from spring market past – “get in now, or you’ll never afford a house”. Feels like a lifetime ago at this point. Glad I didn’t get caught up in the FOMO like so many of my peers. What an enormous weight this country is carrying on it’s shoulders. A big lead shackle of debt around their necks. It’s like the perfect storm. And boy, what a difference a year makes.

And as I said yesterday, it’s never felt better than now to be a renter.

#9 The Chateau Kid on 02.27.18 at 5:17 pm

The Chateau kid is no politician, but a follower as a Johnny come lately. He is well educated, but knows nothing, and suspect others have been paid to guide him through the business world. This man has really never sought out a job with a resume, or worked for a boss in his life. He worked for his daddy with parental promotions up the ladder, and married well. He has done a few good things in life nevertheless, but in the political arena he is following orders like a good puppet now, rather than a critical thinker.

#10 Ex-Cowtown on 02.27.18 at 5:20 pm

#7 AACI Home-Dog on 02.27.18 at 5:12 pm
I am wondering if Trump & all of his family will dress up like the Sikhs if & when he visits India ?

++++++++++++++++++++++++++++++++

If our moister soy boy PM Trudeau visited Trump, would he grow a set? If so it might be worth it. I’ll chip in for the trip.

#11 Mike on 02.27.18 at 5:21 pm

DELETED

#12 waiting on the westcoast on 02.27.18 at 5:22 pm

Just trying to wrap my head around the idea that doing nothing while your biggest trading partner passes numerous policy changes to get even more competitive is somehow a smart move.

Oh well, at least the women will suffer equally with the men…

#13 Stan Brooks on 02.27.18 at 5:22 pm

#9 The Chateau Kid on 02.27.18 at 5:17 pm

Most business annalists have more common sense than him and on top of the incompetence he is also arrogant.
An absolutely letal combination.

He and T2 can not even comprehend their own stupidity,

I demand their IQ tests. seriously, we should have some protection from intellectually limited/challanged people coming to power.

#14 I’m stupid on 02.27.18 at 5:25 pm

I’ve said that prices will collapse once a large enough percentage hits the debt wall. B20 accelerated the impact, now we’re going to see how bad the impact is. Millennials and boomers will have something in common, they’ll both be equally screwed. One group will experience huge job losses and the other will need income they can’t get to finance retirement.

I’m embarrassed that so many Canadians screwed themselves. Embarrassed that the gov’t encouraged. Now we need to live with the consequences of mass stupidity.

I’m stupid but not that stupid!

#15 Retired Canadian Millennial on 02.27.18 at 5:25 pm

What a scary country this is becoming for us millennials. Even if you have your financial house in order, there is plenty to worry about.
I have mortgages, but that is the debt I calculated the risk:reward on myself. Its all the other debt swirling around me that worries me the most.
I’m raising my family and kids in an environment that just by being Toronto citizens (at the ages of 1 and 5), they are responsible for close to $100k in Municipal, Provincial and National debt.

#16 Chris on 02.27.18 at 5:27 pm

#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.

#17 Stan Brooks on 02.27.18 at 5:27 pm

Is there anything in the budget stating that men should give birth to kids?

And that the liebarals will keep screwing them financially until they do?

#18 MF on 02.27.18 at 5:33 pm

First off, is there really any gender issue in Canada 2018?

Anyways, I really can’t see how this budget is anything more than these idiots trying to play to their base, which they must assume is mostly women.

Funny since almost all women I know (including my mother) cannot stand T2.

Basically women are way smarter than these smug Liberals make them out to be with their carrot sticks.

MF

#19 paracho on 02.27.18 at 5:34 pm

There is trouble brewing ahead .
As someone who has his mortgage agents course but not working as an agent … I hear and see a few things in the gta area. One of my classmates actually told me how her broker and herself help clients cook up a better financial report before putting it through to lenders . How they tip the lender or the person working for the lender via an envelope , dinner , day at the golf course or Leafs game .This agent and two other actually said the vast majority of mortgage applicants last year and now should not qualify for the mortgages they received . Now with B20 these overextended individuals have no other options than a HELOC via many of these agents who again help dodge the numbers . Remember, these mortgage agents /. brokers are commission based and there is an oversupply of these individuals ( one reason I never got into it after my course plus the unethical nature of it all from the 5 interviews I did and was accepted on the spot !…. Iif I got into it 5 plus years ago … I would probably be exiting right about now ).
Rates are rising , wages are the same , uncompetitive federal policies will not bring in new investments and work and many are over indebted . I sense a repeat of 1990 in the gta… might even be worse this tome around .

#20 MF on 02.27.18 at 5:37 pm

#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.

MF

#21 Ex-Cowtown on 02.27.18 at 5:38 pm

#16 Chris on 02.27.18 at 5:27 pm
#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.

++++++++++++++++++++++++++++++

Using your logic he should dress in black face when he visits an African country. Don’t you even see how racist and insulting his actions were?

#22 Jonah on 02.27.18 at 5:40 pm

@ Garth – do you want us to end up like sears employees whose ceos were milking on holy special dividend payouts while the employees didn’t even get the pension or the Tim Hortons whose millionaires are up against $14 wage?

We need not loook south and decrease corporate taxes rather it should be made equal to what rest of us pay. For how long a special person under law called corporation would act as money laundering for rich. It is only fair if this special person is treated the same as us.

#23 Bad Math on 02.27.18 at 5:40 pm

Again with the callable loan fear mongering. If it ever gets to the point where banks were calling HELOC’s en masse, Canadians will have a lot more to worry about than underwater mortgages in BC and Ontario.

Not to mention, 200 billion is peanuts in the grand scheme of things. Even crypto, which Garth reckons doesn’t even have any underlying value, has a greater market cap than the value of outstanding HELOC’s. That’s how much of a non-issue this is.

Nobody will be calling HELOCs ‘en masse.’ Exaggeration weakens your argument. But you can be sure in areas where home values fall precipitously that banks will move to protect themselves. – Garth

#24 Reynolds531 on 02.27.18 at 5:41 pm

Seriously resisting the overwhelming urge to shred my personal investment policy and dump every cent I can find into unhedged US equity funds.

If I can’t move out of the liberal economic fantasy land maybe my money should.

#25 Stan Brooks on 02.27.18 at 5:42 pm

#15 Retired Canadian Millennial on 02.27.18 at 5:25 pm
What a scary country this is becoming for us millennials. Even if you have your financial house in order, there is plenty to worry about.
I have mortgages, but that is the debt I calculated the risk:reward on myself. Its all the other debt swirling around me that worries me the most.
I’m raising my family and kids in an environment that just by being Toronto citizens (at the ages of 1 and 5), they are responsible for close to $100k in Municipal, Provincial and National debt

————————————

You have seen nothing yet.

You are deemed owned by the masters of this place, the governments at all levels, the oligopolies.
You need to pay their ever increasing taxes, pensions, profits for very meager services, work to death and leave nothing to your kids.

Survive on 1.5 % CPP increases if lucky to retire with real inflation 7 % +.

Which part of ‘debt slave’ is not clear to you?
And don’t forget to save and invest in these RRPS accounts.

I am sure there are already plans by the elite on how to spend your money.

What really kills me is the indifference of Canadians in regards to the difference between the reported in real inflation and the implications form it – pretty much the theft and stealing of all of our RRSP contributions!

Majority of Canadians will NEVER EVER retire. Perios.

#26 Stan Brooks on 02.27.18 at 5:42 pm

pretty much the theft and stealing of all of our CPP contributions!

#27 Loonie Doctor on 02.27.18 at 5:44 pm

#17 Stan Brooks on 02.27.18 at 5:27 pm
Is there anything in the budget stating that men should give birth to kids?
——————————————————————

Healthcare is Provincial responsibility. Wynne hasn’t laid out her platform yet…

P.S. for the serious people – that was a joke!

#28 Stone on 02.27.18 at 5:44 pm

“People keep taking on debt because they don’t have a choice, and they’re choosing products they’re not amortizing, so they’re not paying down that debt, and it will eventually catch up to them at some point in time. They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?

—————-

Bankruptcy.

It’s strange this option has not been discussed much. In the US, it is a very onerous thing with very severe legal ramifications after declaring bankruptcy once. In Canada, not so much with the point being rehabilitation. With how things are going, this may well be the path for a good portion of the Canadian population. This allows them to walk away from their debt obligations and if they have no actual assets or net worth, is not a big deal. The only issue then is paying with cash for the next few years. In other words, going cold turkey on debt. With a clean slate. Is that so difficult? I don’t see a whole lot of negative consequences here.

#29 Howard on 02.27.18 at 5:46 pm

Gawd.

We better not have to f**king bail these people out.

I’m preemptively furious because I suspect that’s exactly what’s going to happen.

#30 Jungle on 02.27.18 at 5:47 pm

I used Shawn few years ago.. Great broker

#31 paul on 02.27.18 at 5:50 pm

Justine’s favorite song while traveling in his sari.

https://www.youtube.com/watch?v=i9QEAtcz3o8

#32 Karma on 02.27.18 at 5:51 pm

“And, best, the PM did not wear a sari to the House of Commons.”

BWAHAHAHAHAH

<3 GT

#33 common sense on 02.27.18 at 5:58 pm

I could faintly hear the bugle call of “Taps” playing when I read tonight’s post.

If the 4 anticipated hikes do not bring down the USA and Canada housing and stock markets, call Ripley’s.

#34 paul on 02.27.18 at 5:59 pm

#16 Chris on 02.27.18 at 5:27 pm

#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.
——————————————————————–
Our P.M was culturally sensitive? he was out of touch to put it mildly!

#35 Sierts on 02.27.18 at 6:04 pm

I’m reading this blog for some time now.
(wanted to know, if it would be smart, to invest my “foreign” money in Canada)

But, the longer I read here, the more i get the impression, that all you blog-dogs are barking up the wrong tree.

The housing situation, the debts, are just simptons.

My two cents say, that the real problems are – in the personal, that you people find it normal, to spend money, that you haven’t earned yet, – in the social, that you have replaced productive work by service jobs.

The first point should need no explanation. To the second… Agriculture, mining and industry produce new/additionally worth. That can be distributed more or less fair.
Service is nothing but a merry go round of already existing worth.
Divided into ever more parts.

#36 work and tumbel on 02.27.18 at 6:07 pm

I have to ask the Blog Dogs as I cant find anything on the CBC. Has anyone seen anything on Trudeau Government appoints Omar Khadr”s lawyer to a job as a federal judge? I think it was yesterday buy I cant find anything and it sounds so out there I have to know more.

#37 Murray the Vet on 02.27.18 at 6:07 pm

‘Debt is the slavery of the free.’- Pubilius Syrus 1st Century BC.

#38 Howard on 02.27.18 at 6:07 pm

#16 Chris on 02.27.18 at 5:27 pm
#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.

————————————-

Please tell me this is sarcasm.

How would it look if India’s Prime Minister came to Canada and donned a Mountie uniform or hockey gear or a flannel shirt at random tourist sites or gatherings where NOBODY ELSE was wearing such clothing?

And then starting bopping to Great Big Sea or attempted a First Nations chant or spiritual ritual dance?

Would people find that respectful or would they think he’s a complete moron?

#39 Im Therious on 02.27.18 at 6:08 pm

So our economy is forecasted to tank due to rising debt and capital being moved down south.

Mr Turner, nothing in life is definite, but will the 60/40 diversified portfolio save us, or is it time to punt Canadian stocks/ETFs?

#40 Eyestrain on 02.27.18 at 6:08 pm

#235 Mark on 02.27.18 at 2:57 pm
“Millennials are ditching credit cards, and it’s threatening the entire industry”

Well of course…….

Meanwhile government just keeps shoveling the money at older people. For instance, a life-long Canadian citizen senior citizen has a government guaranteed minimum income of $17,554.68, and will additionally receive an additional $400 as a GST credit….
——————
I am not sure where you get your numbers from, or your point?

If you worked for 40 years AND earned the maximum pensionable earnings AND paid into CPP you would receive $13.6k per year. Currently, the average payout is $7.7k. If you resided in Canada for 40 years, after the age of 18, OAS totals $7k per year.

I do think the OAS clawback level is set too high, but don’t the elderly deserve a little something for building the infrastructure that you enjoy ?

Little troglodyte : Are we having grandma for dinner again?

#41 Bezengy on 02.27.18 at 6:13 pm

Unsustainable .

#42 paracho on 02.27.18 at 6:15 pm

This is not going to end well . It reminds me of1990 gta . Too much debt and a changing economy . This time could be worse !

#43 zee on 02.27.18 at 6:16 pm

Garth, if people don’t sell because of the new stress test would this not decrease supply and cause prices to go up.

That’s what happened last year, supply went down and prices went sky high.

#44 common sense on 02.27.18 at 6:16 pm

https://www.zerohedge.com/news/2018-02-27/did-fed-save-wall-street-temporary-qe4

If this is true….Can you believe ANYTHING the FED says…

Your thoughts Mr. T…

#45 Cottingham a bargain on 02.27.18 at 6:17 pm

4.7 billion dollars for aboriginal affairs .

Tell me , when is that debt every going to be repaid .

#46 FOUR FINGERS WATSON on 02.27.18 at 6:21 pm

Four rate hikes of .25% , not really a big hairy deal…..if and when a 5 year mortgage reaches an ACTUAL 5-6 % is when we should start worrying.

#47 SW on 02.27.18 at 6:21 pm

#240 IHCTD9 on 02.27.18 at 3:32 pm
“…My wife would still vote NDP if they were conducting public beheadings of political opponents out in the street.”

Oh, I’d vote for that. Can I bring me knitting?

#48 common sense on 02.27.18 at 6:22 pm

#28 Cottingham

Debt get repaid?

NEVER.

#49 Umm on 02.27.18 at 6:24 pm

“Sell the house. And guess what that means?”
-Garth

A stampede to the exits and a huge up tick in inventory, which will finally crater this behemoth under its own weight?

#50 Lisa Power on 02.27.18 at 6:25 pm

My husband has been after me for several months now to consider a move to a tax free haven since our household income is not tied to Canada. We were in the precipice of a recession before but our clown PM just guaranteed it with this budget. I’m coming to realize hubby is correct. Cabo is looking good.

#51 Linda on 02.27.18 at 6:26 pm

So when this debt hog is ready for slaughter, who will be left to buy the sausages? It is all very well to say ‘sell the house’ when all other options are off the table, but that presumes there will be buyers available & willing to purchase it. The way things are going, all that is going to be left are the squeals…..

#52 Wild Bill on 02.27.18 at 6:28 pm

I’m an incorporated professional. Let me get this straight:

(1) I can no longer pay my wife a dividend (which the government would have collected some tax $ on at her marginal rate).
(2) The small business tax rate is going down.
(3) Its going to be a really good year if I make more than 50K in passive investments and more than 500K in corporate income – and I can most likely adjust my behaviour (ie. work less or change my investment portfolio) to make sure I’m under the new threshold.

How does this generate more tax revenue? If they would let me pay my wife a dividend they would get more tax dollars up front…

All these new changes just incentivized me to keep money in the Corp – which is the exact behaviour they are they are trying to change?

What am I missing here?

#53 Real life commie on 02.27.18 at 6:28 pm

$100 million for #Metoo, but $0 for our seniors and poor? Is feminism some sort of aristocracy?

#54 Pete from St. Cesaire on 02.27.18 at 6:32 pm

Again with the callable loan fear mongering. If it ever gets to the point where banks were calling HELOC’s en masse, Canadians will have a lot more to worry about than underwater mortgages in BC and Ontario.
————————————————————————-
They won’t be calling the loans. They want the people to squirm for decades under crushing debt. The banks aren’t worried, they’re all too-big-to-fail. Calling the loans and forcing personal bankruptcies would free those people to start over, older and wiser; can’t have that.

#55 Jason Sensation on 02.27.18 at 6:33 pm

To quote Andrew Coyne on Twitter “…This budget shows that the Liberals plan to spend about the same as the Harper govt, by their own preferred measure: 13.8% of GDP, on average, over the next five years, compared to 13.7% during the Harper era.”

So not sure what all the whining from Tories is about. Much the same my friends.

#56 IM in C on 02.27.18 at 6:34 pm

Hey Folks, regardless of all Justine’s fecklessness , do you really think that Canadians are going to vote Conservative?

And even if the SHTF financially speaking, do you really think the government will sit there and watch mass foreclosures? That would be political suicide. The banks will be called in and told , easy on the foreclosures, allow the debtors to pay interest only, or even grant payment holidays..

#57 ETFingGoodTime on 02.27.18 at 6:35 pm

#33 Im Therious on 02.27.18 at 6:08 pm

///////////

The TSX is junk, obsolete and almost flat for a decade. It’s embarrassing:

http://www.canadianbusiness.com/investing/canadas-stock-market-is-the-worst-performing-in-the-world-right-now/

Tech is the future, which we have none of.

My current Canadian exposure is 8% and even then, I’m tempted to redistribute that into international and emerging markets. My US exposure is high enough at the mo.

#58 chopstix on 02.27.18 at 6:39 pm

love it: emma gonzalez, that brave young Parkland student who gave an emotional and searing speech a week or so ago, has really lit a flame across the nation (heck around the world)…now has over 1 million twitter followers, more than the NRA.
https://twitter.com/Emma4Change
her speech last week or so ago, in case you missed it:
https://www.usatoday.com/story/news/nation-now/2018/02/26/parkland-student-emma-gonzalez-has-more-followers-than-nra-days/372757002/
younger people like her and her equally brave colleagues show clearly that the younger generation can display admirable leadership qualities and they make us so proud…it’s so easy to generalize the younger gen as lazy/self aborbed, or older as worn out/lazy/should be put out to pasture. both generalizations do us little justice in the end.

#59 T2 Observed on 02.27.18 at 6:43 pm

I recall he promised transparency, and all the Ministers in his Cabinet would independently manage their given portfolios without interference. What we got was quite different, but a Nancy Boy if you will. He has put one against the other in more ways than one. This man has become the laughing stock of the world with his agenda which is twisted and bent. This is not Canada anymore, because his ideology belongs as a stage performance with no end. In my opinion, this Drama Queen needs to step aside for the betterment of all.

#60 EmpCod on 02.27.18 at 6:45 pm

Told ya, demand loans should only be taken by people who can reimburse them on the spot, in other words people who don’t need to borrow in the first place.

People fall into these Big Bank traps so easily… How could anyone not be ready for the rate hikes?

Sad thing is, after pissing money all their working lives, they will soon realize they haven’t saved a dime for retirement and ask governments to bail them out.

Meanwhile, those who made great life choices accumulating assets should take the appropriate actions in the face of the incoming tax grab.

#61 Howard on 02.27.18 at 6:48 pm

#28 Stone on 02.27.18 at 5:44 pm
“People keep taking on debt because they don’t have a choice, and they’re choosing products they’re not amortizing, so they’re not paying down that debt, and it will eventually catch up to them at some point in time. They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?

—————-

Bankruptcy.

It’s strange this option has not been discussed much. In the US, it is a very onerous thing with very severe legal ramifications after declaring bankruptcy once. In Canada, not so much with the point being rehabilitation. With how things are going, this may well be the path for a good portion of the Canadian population. This allows them to walk away from their debt obligations and if they have no actual assets or net worth, is not a big deal. The only issue then is paying with cash for the next few years. In other words, going cold turkey on debt. With a clean slate. Is that so difficult? I don’t see a whole lot of negative consequences here.

———————————————-

This is interesting.

Garth, could you perhaps do a blog entry some day on the consequences of declaring personal bankruptcy in Canada? Just a request/suggestion.

#62 El Joko on 02.27.18 at 6:49 pm

I’m no fan of conservatives, I’ve voted for a conservative candidate once in my life, and after Trudeau I think I’m willing to overlook all the conservative bullshit for a decade and vote Scheer.

I absolutely hate the social justice agenda. It is driving me nuts, and I’ve been a lifelong Liberal/NDP voter.

#63 AGuyInVancouver on 02.27.18 at 6:54 pm

Worrying about deficits is so 1990’s. Just ask the Republicans.

#64 jim on 02.27.18 at 6:55 pm

#23

“Not to mention, 200 billion is peanuts in the grand scheme of things”

Umm, no.

Total US credit card debt is 1 trillion. That’s 5x Canadian helocs, for a country 10x larger. How is that ‘peanuts’ exactly?

#65 AK on 02.27.18 at 7:00 pm

“And because there is now only one more budget before the next election, none of the above is likely to happen.”
——————————————————————–
And hopefully this administration will not get elected to a second term.

#66 crowdedelevatorfartz on 02.27.18 at 7:01 pm

“The Liberals will increase spending by $21 billion over six years and finance that with borrowing. The shortfall needing to be financed will be $18 billion this year and gradually (hopefully, fingers crossed, please) fall to about $13 billion a year by 2022-3. So much for ‘the budget will balance itself’ and the campaign promise to have four years of $10 billion deficits before breaking even.”

++++++

Well done all Screwed Canadian Millenials.
Turdeau is doing it to your future faster than Harper………

#67 jim on 02.27.18 at 7:02 pm

#35

“My two cents say, that the real problems are – in the personal, that you people find it normal, to spend money, that you haven’t earned yet, – in the social, that you have replaced productive work by service jobs…
Service is nothing but a merry go round of already existing worth.”

Fair comments.

However, credit is part of US culture as well.

I think your second point is more salient. Canada is a service and resource extraction economy.

As you correctly note, societies do not become rich by consuming. Immigrants opening ethnic restaurants, or furniture stores selling people items made in China are not ways to prosperity. Nor do all those overpaid public sector workers contribute to wealth production, by and large.

#68 kommykim on 02.27.18 at 7:03 pm

All these new changes just incentivized me to keep money in the Corp – which is the exact behaviour they are they are trying to change?
—————————————

You just answered your own question. They want you to reinvest your profits and grow your business rather than trying to syphon some money off at a reduced tax rate via your wife.

#69 Troy McClure on 02.27.18 at 7:06 pm

Ferst!!!

#70 Penny Henny on 02.27.18 at 7:07 pm

Hey T.
Mark lives in his own world.
His reality is not ours.
He is Special.
/////////

#243 T on 02.27.18 at 3:50 pm
#225 Mark on 02.27.18 at 1:24 pm

Some people are just destined to be poor, that’s all I gotta say. Had she read my analysis over the years, she would’ve known not to pay anything more than 2013 prices in most locales in Canada as that was the peak.

—————

You always make me laugh Mark.

Your analysis is always a joke. 2013 was not the peak of anything Toronto or Vancouver related. I owned a few properties in the gta until I sold in 2016. I watched the markets very closely for years, spring 2017 was the peak in the GTA.

Anyone who reads your ‘analysis’ and believes it needs their heads examined. Publically available data proves you very wrong.

But – as usual – you will ignore this and all data and continue to post your indefensible arguments.

#71 Mark on 02.27.18 at 7:08 pm

“I am not sure where you get your numbers from, or your point? “

OAS + GIS tables for Single >65-year-old Canadians:

https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments/tab1-1.html

(1) I can no longer pay my wife a dividend (which the government would have collected some tax $ on at her marginal rate).

Of course you can pay the wife a dividend. She has to be a legal pro rata owner of the business, as recognized in its incorporation paperwork and through her contribution of paid-in equity or retained earnings.

Otherwise, the business has to pay her a salary for her contributions. Keeping in mind that such a salary must resemble the fair market value of services rendered to the business is the requirement when dealing with any related entity.

Why would you ever expect the behavior to be any different? Treating related entities at fair market value, which must be at least nominally externally observable (ie: not just totally in your mind) has always been a basic tenet of tax law.

So when this debt hog is ready for slaughter, who will be left to buy the sausages?

People currently invested in and/or employed in inversely correlated assets or industries.

#72 Doug t on 02.27.18 at 7:11 pm

Harpers was a bad man – T2 is an idiot -‘why can’t someone with some common sense lead this country.

RATM

#73 BK from BG on 02.27.18 at 7:13 pm

Chris on 02.27.18 at 5:27 pm
#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.
——————————
Chris – FYI ….Europe is not a country and each country in Europe has it’s own traditional clouding which is not a suit, and No PM smarty socks didn’t wear it.

#74 crowdedelevatorfartz on 02.27.18 at 7:17 pm

@#23 Bad math
“Again with the callable loan fear mongering. ”
+++++

Ok.
Try this scenario.
A friend of mine used his Condo HELOC as a personal ATM machine.
He combined his mortgage and HELOC into “one easy payment”.
Partied, took sabbatticals from work and travelled like a fool….
4 years later.
Mr Bankster calls, “You’re 2 weeks behind in your payments”

His debt had reached his Condo “equity” comfort zone for Mr Bankster.
No more line of Credit.
Cut off.
And if he didnt start making payments….no more condo.
They’d repo it

So, being the typical Canadian consumer who cant stop buying.
He sold the Condo.
Took what little money he had left and put the minimum down on another, much smaller condo and started all over again. HELOC ATM, parties, blah blah blah
Took another 2 years( Vancouver Condos always go up) but he’s sold again and is living in a mouldy rental suite in the basement of an 80 year old house in East van…..

So.
Long story short.
There will be no HELOC “margin call’ due to rising interest rates.
It will be a quiet refusal of any more credit due to falling real estate values reaching the accumulated debt of the greaterfools
THAT is when the shit will start hitting the fan…..

June? July or the Fall.
Either way.

Fugly

#75 Sam the Sham on 02.27.18 at 7:18 pm

#31 Paul
Justin’s favorite song while traveling in his sari.
==================
A better song for Trudeau from Connie Francis would be “Everybody’s Somebody’s Fool”
We could change that for Mr. Dressup to be “Somebody’s Everybody’s Fool”

#76 broader mind on 02.27.18 at 7:18 pm

Just to be sure everyone understands this post ,it states;you should buy many shares of Max Factor because it’s really fun to smear porkers. Garth ,that is the best line I have read in a long time. Fine work.

#77 Goldie on 02.27.18 at 7:18 pm

The PM’s gender obsession is getting to be a little much.
It’s come to the point that he is bring mocked internationally for his ridiculous stances on things.

#78 Mark on 02.27.18 at 7:19 pm

“[Personal Bankruptcy] allows them to walk away from their debt obligations and if they have no actual assets or net worth, is not a big deal. The only issue then is paying with cash for the next few years. In other words, going cold turkey on debt. With a clean slate. Is that so difficult? I don’t see a whole lot of negative consequences here.”

First-time bankrupts have to make payments into their Estate for at least 9 months. Second time, 24 months. If any debt was acquired through fraud, the courts can extend these periods. If the creditors believe that one is minimizing their efforts at acquiring income to make payments into the Estate, discharge can be delayed.

So most first-timers are looking at a year of some fairly profound discomfort if they go the personal bankruptcy route. Not to mention permanent loss of reputation.

#79 EB on 02.27.18 at 7:26 pm

#38 Howard – It actually betrays a rather peculiar notion about what Culture means. It’s music, clothing, and accents, and all you have to do is appreciate those things and everyone will get along. It can’t be values because Everyone Agrees With Our Values, Deep Down. It’s not different assessments of core concepts such as family, the role of a citizen, the parameters of social interactions, or of any fundamental divergence of intergroup relational strategies. Because those belong to all of us and everyone agrees with them. Its quite patronizing in its own way.

#80 acdel on 02.27.18 at 7:27 pm

#36 work and tumbel

https://globalnews.ca/news/4049900/trudeau-omar-khadr-lawyer-john-norris-justice/

#81 JSS on 02.27.18 at 7:28 pm

I don’t care about anything other than news like this:

– Scotia bank announced dividend increase today

Rub tummy

#82 crossbordershopper on 02.27.18 at 7:28 pm

little house in the middle of nowhere sask for $15000. thats right, 15K, and a 40 minute drive to the nearest city to get almost anything you need.
it could be the salvation of a retired couple. living six months up here and heading down south for 6 months. if you dont care where you live and you get all the benefits of canada.

#83 Bob Dog on 02.27.18 at 7:30 pm

Couldn’t we simplify thing by simply replacing all banks and bankers with machines that just spit out money for anyone asking for it. Who if anyone is running Canadian banks. It seems nobody is at the wheel. What do the clowns at the OSFI do on a daily basis? Is the bank of canada being run in the best interest of canada or foreign banks?

#84 AK on 02.27.18 at 7:32 pm

#72 Doug t on 02.27.18 at 7:11 pm
“Harpers was a bad man – T2 is an idiot -‘why can’t someone with some common sense lead this country.
RATM”
——————————————————————-
Harper may have been a bad man, but he left the office with a surplus.

I would rather have a bad man running the country over an idiot, any day.

#85 common sense on 02.27.18 at 7:33 pm

#72 Doug T

Answer to your question.

“Not enough people want to hear the truth.”

Ask Garth…he’s been warning people for eons and very few want to hear his educated experienced views.

So you have to lie and pander to win…see 98% of today’s world politicians for the results.

#86 Costco Nation on 02.27.18 at 7:37 pm

Why it’s never discussed the increase of marginal tax rates with inflation??? Not even the declared one. In true terms, like heads of cauliflower, we are automatically taxed more percentage every year.

#87 Zapstrap on 02.27.18 at 7:40 pm

I figure in the not too distant future it may just pay a young fellow to see a surgeon and have a lopitoffame.

#88 acdel on 02.27.18 at 7:42 pm

Regarding today’s budget, very irresponsible “wow just wow”!

Interesting article: http://www.cbc.ca/news/canada/calgary/calgary-rent-office-vacancy-bitcoin-1.4553787

#89 Mark on 02.27.18 at 7:42 pm

“Publically available data proves you very wrong.”

Only problem is, there isn’t a lot of publicly available data that provides for the sales mix, or the quality changes that have occurred over the past number of years, particularly with the onslaught of brand new luxury supply to the market.

What you appear to be doing is a classic rookie RE mistake — thinking that the ‘average’ increase numbers are something that you can just multiply your property by, to come to a number. Unless you made a massive amount of investment in your properties over the past few years to keep up with the changing composition of the sales mix and that of the ‘average’ property, it is very unlikely that your individual property would have kept up with the average. And even then, if it did, such would just be a reflection of the investment made, not a systemic increase in selling prices of individual identical properties.

If you don’t want to take my word for it, have a listen to Ross Kay on TDN sometime. He came to basically the same conclusion as I, but he uses proprietary micro data (ie: individual sales), while I used a macro approach rooted in analysis of the credit marketplace.

#90 PastThePeak on 02.27.18 at 7:49 pm

#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.

MF
++++++++++++++++++++++++++++++++++

I am not one for a lot of the gender bashing, but some good natured ribbing is fine. So, I’ll bite.

Don’t know if you have any stats to back that up, but for me, where I work, I know a surprising number of boomers that have mortgages (not divorced). Most of the Gen-X peers I know at work & friends have all retired their mortgages in their 40s.

Paying down the debt was a cultural thing. I may have focused too much on that vs. diverting more to savings, but having seen my father go through tough times in the early 80’s and some neighbours go bankrupt, it was ingrained in me.

We are partly lucky, in that we work in tech/knowledge industries, and Ottawa never had the crazy run up in prices, except in a few boroughs. I say partly lucky, as I refuse to believe that choosing a good career path + studying at school + hard work + settling in a smaller city is just a random walk.

So what are we delusional about?

#91 young & foolish on 02.27.18 at 7:49 pm

So, folks on here think Mr. Socks and Chateau Kid stupid … right. Of course, they would do a better job … hehehe.

The term Armchair Quarterback comes to mind …

Like you do on this blog daily? – Garth

#92 Barbo on 02.27.18 at 7:53 pm

#57 Howard on 02.27.18 at 6:48 pm

Bankruptcy is not a way out, the mortgage lost will follow you forever until paid.

Under Canadian bankruptcy law a secured lender, like a mortgage holder, is not permitted to cancel their loan simply because you have declared bankruptcy. If you are up to date with your payments, you can continue to pay your mortgage, even while you are bankrupt.

However, if you are in arrears or behind on your payments, the mortgage holder is not required to allow you to continue with the mortgage. Even if you are not bankrupt, if you are in arrears the mortgage lender can start foreclosure proceedings and sell your house.

https://www.nomoredebts.org/debt-help/bankruptcy-canada/secured-non-secured-debts-in-bankruptcy.html

#93 PastThePeak on 02.27.18 at 7:53 pm

I don’t see Canadians voting more Conservative in the next federal election. I think the response to the perception of harder times will have more looking at NDP – so a shift further left. The younger generations are naturally inclined to this.

Perhaps will have a Liberal minority, supported by the NDP. Oh joy!

#94 young & foolish on 02.27.18 at 7:54 pm

The extremes always happen at the margins folks …

#95 Musty Basement Dweller on 02.27.18 at 7:56 pm

“Sell the house. And guess what that means?”
==============================
I’ll admit I’m ignorant on the possible repercussions of all of these out of control Lines of Credit and don’t know what the quoted part above means.
Can someone spell it out for me? Does this mean that eventually, after the debtor has to sell their house they will be underwater and owe the bank the rest of the money?
That would be scary as we all know it’s not easy to hide from a bank debt in Canada.

#96 TheSecretCode on 02.27.18 at 7:57 pm

FOMO still alive and well in the Fraser Valley of BC:

61% of all condos in the Fraser Valley sold above asking price for the Month of February.

A townhome in Chilliwack had 32 offers on it a few weeks ago.

BC credit unions are bad apples – visited the lender for my updated lending parameters at a Vancouver credit union and the lender could not even figure out the mortgage calculator on max lending – which I already know – but regularly test with the credit union to keep my finger on the lending pulse in BC. I also advised them on how they could print a page off of their computer.

These are the people handing out easy money in BC.

A 90k income will still net you a borrowed purse well into the 700k in credit unions in BC. This is down about 200k since last year due to tightening and mortgage rate increases of just over 1%.

Yes, significant drop, but available amounts that one can still borrow is still ridiculously high if you ask me.

#97 young & foolish on 02.27.18 at 8:04 pm

This was certainly a political budget … it seems that Mr. Socks knows his constituency. Deficits don’t matter.

#98 TheSecretCode on 02.27.18 at 8:07 pm

Andrew Weaver was on the radio in Vancouver yesterday talking about how the .gov is aiming to bring house prices down and that they will bring them down for a greater longer term benefit for BCers. He also stated that the Kinder Morgan pipeline will be tied up in court forever and never be built and that if the NDP change their stance on this that he will dissolve the coalition. His entire belief is in the science and he will not waver on this.

The BC NDP has a larger budget for rental housing builds in BC than the new Federal Budget which is allocating a smaller amount than BC…

Jagmeet Singh Jimmy Dhaliwal will probably take the next election and any party better consider the new younger generation who is the driving force of political influence in Canada – changing of the guard.

The BC liberals have massive branding repair and the only way to fix it is to scrap all members related to the old party that is associated with corruption and replace with fresh new faces who get back to the core of a business focus – not corruption and dirty money deals that has kneecapped BC for the next 20 years.

#99 TheSecretCode on 02.27.18 at 8:09 pm

The new BC liberal leader (who looks like a Gordon Campbell clone) is not how you re-brand if you want to win.

#100 I’m stupid on 02.27.18 at 8:10 pm

MF
and PastThePeak

Socialism is after all shared misery.

PastThePeak not everyone will be screwed. Just the group that finds it hard to save $200 a month.

#101 Mark on 02.27.18 at 8:12 pm

“Can someone spell it out for me? Does this mean that eventually, after the debtor has to sell their house they will be underwater and owe the bank the rest of the money?”

Yes, that’s what a full-recourse loan (which nearly all residential mortgage loans are in Canada) implies. It is a loan secured both by property, as well as the unconditional personal guarantee of the borrower.

A sale without the bank’s involvement in such a case would be complicated as banks do not discharge mortgages unless payment in full has been received. A “short sale” requires coordination with the bank to ensure that the bank is willing to cooperate with the mortgage discharge so that title to the property can be conveyed cleanly to the purchaser. A borrower who is only minorly in negative equity might be able to find an unsecured loan for the balance, and pay it off. But that would be a very uncommon scenario. A more common scenario is that the borrower also has credit cards, an auto loan or two, maybe a second mortgage on the house, personal line of credit, etc., and personal bankruptcy is the only reasonable way to extricate themselves from the situation.

Like as in the USA, I expect the CMHC will work with the banks to do heroic things to help borrowers and stop foreclosures in negative equity situations (ie: extending amortization periods as much as possible, etc.), but a subset of borrowers will be completely and utterly hopeless and will have to use bankruptcy to resolve their debts.

#102 Ronaldo on 02.27.18 at 8:13 pm

#88 acdel on 02.27.18 at 7:42 pm

Interesting article: http://www.cbc.ca/news/canada/calgary/calgary-rent-office-vacancy-bitcoin-1.4553787
———————————————————–
Total speculators.

#103 Bill Grable on 02.27.18 at 8:15 pm

TO #61 Howard on 02.27.18 at 6:48 pm –

I believe Alberta and Quebec are the ONLY Provinces that allow you to walk away from a Mortgage. The rest of us?You can declare bankruptcy, but you STILL OWE the Mortgage. You have to pay back that money. That’s why its called a MORT (DEATH) GAGE (CONTRACT).

A lot of people are in very deep water. The fear out here in deluded Vancouver is palatable.

My Doctor mentioned she deals with more and more people that are a bundle of nerves, and desperate because of this R/E debacle.

#104 The Great Gazoo on 02.27.18 at 8:18 pm

Interesting article in Better Dwelling today. Consistent with what you have been saying for some time Garth.

https://betterdwelling.com/canadian-real-estate-prices-to-be-impacted-by-osfi-more-than-foreign-buying-taxes-says-top-chinese-ceo/

“Vancouver’s housing boom was born in the halls of the Bank of Canada, where interest rates are set, rather than the streets of Beijing”

— Carrie Law, CEO of Juwai

“Regulating Cheap Credit Will Have Bigger Impact Than Taxing”

#105 Trumpocalypse2018 on 02.27.18 at 8:18 pm

Climate catastrophe now bearing down upon the world.

https://www.thestar.com/news/world/2018/02/26/the-north-pole-just-surged-above-freezing-in-the-dead-of-winter-stunning-scientists.html

The north pole hit this level of warming 4 times from 1980-2010.

And 4 times in the last 5 years. OMG.

And Trump will be ready for war with NK once the paralympic games are done.

The Ides of March 2018 marks the beginning of the end.

PREPARE.

#106 For those about to flop... on 02.27.18 at 8:23 pm

Greater Fool Troll Olympics.

Gold…Mark

Silver….Smoking Man

Bronze….SCM

Honourable mention….Leo Trollstoy…

M43BC

#107 Andrew Woburn on 02.27.18 at 8:25 pm

If you think that short term oil price movements don’t make much sense, maybe this is a part of it.

– Fundamentals do not matter to new breed of oil speculator

“Then who is driving oil positions higher? Newly prominent oil speculators are not necessarily reacting to news about supply and demand or utterances from Riyadh. Instead, they may be buying and selling oil based on moves in currencies, interest rates or the price of oil itself. 

“There are large investors in energy, and they don’t care about talking to people who deal with fundamentals. They have no interest in it,” says Ed Morse, global head of commodities research at Citigroup. His research team suggested in a note that so-called macro investors were becoming a “commodities whale”.”

https://www.ft.com/content/cee7050c-1b74-11e8-aaca-4574d7dabfb6

#108 TheSecretCode on 02.27.18 at 8:29 pm

A comment on current regulations brought in by BC last week:

The spec tax misses in BC. Why? BC people like myself are off the hook. Foreign buyers are a problem, but the biggest speculator in BC is BCers. Every single person I know owns multiple properties, investment condos, ect. in BC and the new spec tax does not apply to them. If it did, supply would no longer be an issue. Case in point – 3 insiders I spoke with last week in Kelowna have a collection of 12 investment condos that survive on the cash flow…if the spec tax applied (10-14k tax per year) and those things would be offloaded immediately. Not happening given the spec tax that falls short of supposedly targeting speculators.

However, CPA’s are advising their clients who do not pay income tax in BC (particularly ones who own property in the Okanagan and the Island – direct feedback) to offload second properties. Because people who do not have a BC income tax slip are getting nailed on the spec tax (average of 6k this year and 14K next year as it jumps to 2%) So, some supply will come fairly quickly because of this. But how fair is this tax when someone from Alberta offloads their property due to a huge tax bill, meanwhile the BC speculator can snap it up and add it to their 5+ property portfolio that they currently have? Still not solving the speculating issue as it just changes hands and if you are going to have a tax it should be consistent – we are all Canadians.

Thumbs down to the spec tax. Great for my personal situation as I don’t have to be as motivated on the second property as a BCer now knowing the rules let BCers side step the spec tax.

Carole James says she does not want BC housing being a stock market. Back up your talk and apply the spec tax to BCers and add a tax on all principle gains like those in stocks.

Otherwise BC housing is better than the stock market – tax free and exclusive for BC speculators now.

#109 yvrmc on 02.27.18 at 8:29 pm

SCM had a positive test and has been tossed out of the games. Bronze awarded to ???

#110 yvrmc on 02.27.18 at 8:31 pm

By the way Flop , I also find your posts informative on YVR trends, keep up the good work…..

#111 crowdedelevatorfartz on 02.27.18 at 8:31 pm

@#106 Flopster
“Greater Fool Troll Olympics.”
++++++

Was i banned for testing positive for Beano?

#112 Karma on 02.27.18 at 8:33 pm

JT should have just stuck to MJ legalization. What a turn-off he has become.

#113 Mark on 02.27.18 at 8:35 pm

““Vancouver’s housing boom was born in the halls of the Bank of Canada, where interest rates are set, rather than the streets of Beijing””

Sounds about right. Actually, more accurately, I’d suggest it started at the CMHC (which insured subprime mortgages with 0% down, 40 year amortizations at one point, with minimal limits on size), the OSFI (which allowed for minimal capital to be required to carry CMHC-insured subprime mortgages at Canada’s banks), and even the provincial legislatures which have resisted harmonization of financial regulation across Canada.

The Bank of Canada, OTOH, has been rationally responding to a very weak economy ex-RE, by keeping policy rates low. And they will likely have to lower them again as the RE bubble implodes as there is little in the pipeline economy-wise to make up for the loss in economic demand implied by the collapse of the over-indebted consumption sector.

#114 Capt. Serious on 02.27.18 at 8:37 pm

The good news? No increase to the capital gains inclusion rate. No diddling with dividends. No new swipes at small businesses. No increase in marginal tax rates. And because there is now only one more budget before the next election, none of the above is likely to happen.

Cheers to small victories.

#115 Chris on 02.27.18 at 8:39 pm

#AK

Harper inherited a surplus of $13.8B when he started his term. He successfully reduced the surplus to $1.9B by spending taxpayer dollars fighting America’s war. Do you call that smart?

Incorrect. Harper was in office during the credit crisis, which is why deficit spending was resorted to. There is no crisis now, and we still have deficits. Don’t rewrite history. – Garth

#116 Smoking Man on 02.27.18 at 8:42 pm

So I move to the other side of the world so not to get burned by socks boy. And he doesn’t pull the trigger.

I’m pissed. Now paying California taxes …..really pissed.

Atleased the weather is nice.

#117 Eyestrain on 02.27.18 at 8:43 pm

#71 Mark on 02.27.18 at 7:08 pm
Meanwhile government just keeps shoveling the money at older people. For instance, a life-long Canadian citizen senior citizen has a government guaranteed minimum income of $17,554.68,

Me:

“I am not sure where you get your numbers from, or your point? “

Mark:

OAS + GIS tables for Single >65-year-old Canadians:
https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments/tab1-1.html

Me again:

Exactly how many people have lived in Canada for 40 years, have zero income, and never worked enough in their lifetime to generate even a trifling CPP pension. That is the only way to get the number you cite. Forget the shit shovelling; pick on somebody your own age.

#118 Capt. Serious on 02.27.18 at 8:44 pm

#97 young & foolish on 02.27.18 at 8:04 pm
This was certainly a political budget … it seems that Mr. Socks knows his constituency. Deficits don’t matter.

All budgets are political. The party is in the business of getting re-elected. Duh.

#119 Canuck on 02.27.18 at 8:45 pm

It might be a good time to remind your readers whats at stake when you use your HELOC to buy that beautiful 100k boat or 80k RV and then, through no fault of your own, you lose your job and default. Think the bank wants the boat back? Noooooooo…

#120 TheSecretCode on 02.27.18 at 8:46 pm

Garth and other commenters think that the OSFI rules will have bite?

I think they will, but B20 will look like small potatoes compared to the work David Eby and Peter German are doing in BC, which will hit throughout Canada, not just BC.

Do you see the numbers coming out of Richmond BC on some higher end homes for the past week?

70% (multi-million dollar drops in the last week in Richmond / Vancouver BC). Thank you David Eby and Peter German. This is coinciding with Marc Cohodes price drop prediction as adults start to do their job. Will it spread on mass.

With just under 20 years of experience in Richmond BC. I have seen it all over that time period and these are the biggest changes to dirty money, now with the most substantial price drops coming out that I have ever seen.

Quite frankly, I have never seen such massive price reductions anywhere in the world than on a properties like what is coming out in Richmond BC in the last week. Scary and insane.

Massive multi-million dollar price reductions chopping homes in the 3 million dollar range in half or more to just over 1 million (still not affordable for most). It is still a small amount of the inventory being affected, but how much can this grow?

Let’s see if this spreads and if it could be the start of the greatest price adjustment in RE that the globe has ever seen.

My money is on interest rates increasing, which will break the mainstream Canadian RE market by mid to late 2019 (all participants – broad base) leading to our next downturn.

#121 acdel on 02.27.18 at 8:46 pm

#102 Ronaldo

True! I am just amazed that it is now going down this path, kudos to them if it works out..

#122 islander on 02.27.18 at 8:47 pm

“the cost of money”..says it all….

#123 Eyestrain on 02.27.18 at 8:51 pm

#101 Mark on 02.27.18 at 8:12 pm
“Can someone spell it out for me? Does this mean that eventually, after the debtor has to sell their house they will be underwater and owe the bank the rest of the money?”
Like as in the USA, I expect the CMHC will work with the banks to do heroic things to help borrowers and stop foreclosures in negative equity situations (ie: extending amortization periods as much as possible, etc.),

**********

Is there nothing you don’t know? The US foreclosures were epic, and fraudulent.

For your edification:
https://en.wikipedia.org/wiki/2010_United_States_foreclosure_crisis

#124 Damifino on 02.27.18 at 8:55 pm

#16 Chris

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.
————————————

Comparing apples to apples, the PM would be wearing lederhosen in Germany, wooden shoes in the Netherlands and a beret in France. Cringe worthy.

#125 Damifino on 02.27.18 at 8:58 pm

The Liberals will increase spending by $21 billion over six years and finance that with borrowing.
————————–

Over six years? That’s a bit presumptuous isn’t it?

#126 Rooster on 02.27.18 at 9:05 pm

Garth, could you do an IP check on #101? I suspect a subversive, foreign element has infiltrated your defenses.

Is it just a coincidence that every time Jericho Jerry emerges from the swamp the markets take a tumble?

#127 Raven on 02.27.18 at 9:06 pm

Debt and Delerium

Why can’t Sock Clown get his balls out of his wife’s purse and man up to what differentiates leaders from followers?

Don’t pet the dog the wrong way or reality bites, your feminist ass.

Sorry, will head to Florida now, buy suspenders, ski (spend the kids inheritance) and complain about the government full time…..lol

#128 tccontrarian on 02.27.18 at 9:08 pm

“…lots more moaning to come now that we’ve heard from Jay Powell, the new boss at the US central bank. His lengthy comments on Tuesday were enough to scare financial markets, and send the Dow to a triple-digit loss (don’t worry – it’s temporary).” -Garth
————————————————————-
Only day-traders benefit from what the Fed Chair says. Many are still buying passive index funds (like SPY), which are then ‘forced’ to buy underlying equities that benefit disproportionately due to weighting.

SPY — Top Holdings

Stock Weight Amount
Apple 3.91% $10,681,650,058
Microsoft 3.13% $8,543,643,629
AMAZON.COM 2.58% $7,061,989,545
Facebook INC. Class A 1.86% $5,086,618,161
J.P. Morgan Chase & CO. 1.74% $4,754,430,923
Berkshire Hathaway INC. Class B 1.72% $4,712,802,967
Johnson & Johnson 1.50% $4,102,344,736
Alphabet INC. Class C 1.46% $3,984,525,299
Alphabet INC. Class A 1.44% $3,934,969,326
Exxon Mobil 1.43% $3,894,166,673
Bank of America 1.34% $3,654,556,915
Wells Fargo & Company 1.13% $3,096,146,675
Intel 0.99% $2,717,301,309
AT&T 0.97% $2,659,981,650
Visa INC. Class A 0.96% $2,622,768,677
Unitedhealth Group 0.96% $2,635,110,572
Pfizer 0.94% $2,561,676,348
Home Depot 0.94% $2,558,161,074
Cisco Systems 0.94% $2,580,160,032
Chevron 0.93% $2,534,123,556
===================================

#129 Ljp on 02.27.18 at 9:12 pm

Rent prices of condos in Squamish are on their down. Last summer, a 3 bedroom, 2 bath condo (~1500 sq ft) was being advertised for ~ $3k. They are now being advertised for ~ $2400.

#130 tccontrarian on 02.27.18 at 9:13 pm

“They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?” GT
———————————————————–

It means more supply (inventory), less demand —> a sizeable drop in prices. You say maybe 40%, I say 60-70% depending on locality.

But we can agree (I think), that it’s all good for those without debt and lots of cash.

TCC

#131 Andrew Woburn on 02.27.18 at 9:15 pm

#103 Bill Grable on 02.27.18 at 8:15 pm
TO #61 Howard on 02.27.18 at 6:48 pm –

I believe Alberta and Quebec are the ONLY Provinces that allow you to walk away from a Mortgage. The rest of us?You can declare bankruptcy, but you STILL OWE the Mortgage. You have to pay back that money. That’s why its called a MORT (DEATH) GAGE (CONTRACT).
====================

I can’t say I know the bankruptcy rules across all provinces but I would be surprised if that is true. It is my understanding that bankruptcy erases almost all debt. Even so, it is not a step to take lightly, especially if you ever want to get a mortgage again. It is also my hazy understanding that only certain types of mortgage are non-recourse in Alberta so, if you’re underwater in Red Deer, check the small print before you laugh and mail in the keys.

#132 Dave Ahem on 02.27.18 at 9:17 pm

Garth, won’t there be political fallout of house prices crash? I was [email protected] in 2007 when my clients couldn’t sell after buying. I watched the market dry up over night. Then we got 40 year AM’s, zero down and cash back mortgages and things went right on chugging. How are boomers going to react when their nest eggs get destroyed by policy?

#133 Leo Trollstoy on 02.27.18 at 9:21 pm

#55 Jason Sensation on 02.27.18 at 6:33 pm

I told ya that all parties are the same

I’ve always been right

Only the rich are protected

Which is awesome for me

#134 KLNR on 02.27.18 at 9:25 pm

@#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.
____________________
not this gen Xr. Some what invincible, liquidated my profits last Feb moved to a smaller more efficient house. even cut my prop taxes by close to 60%. Most gen Xers I know in TO are doing alright, livin within their means and have houses as homes not investments

#135 Loonie Doctor on 02.27.18 at 9:26 pm

#52 Wild Bill on 02.27.18 at 6:28 pm
I’m an incorporated professional. Let me get this straight:

(1) I can no longer pay my wife a dividend (which the government would have collected some tax $ on at her marginal rate).
(2) The small business tax rate is going down.
(3) Its going to be a really good year if I make more than 50K in passive investments and more than 500K in corporate income – and I can most likely adjust my behaviour (ie. work less or change my investment portfolio) to make sure I’m under the new threshold.

How does this generate more tax revenue? If they would let me pay my wife a dividend they would get more tax dollars up front…

All these new changes just incentivized me to keep money in the Corp – which is the exact behaviour they are they are trying to change?

What am I missing here?

—————————————————————–
Hey Wild Bill,

Good to see another professional poke their head up out of the trenches and comment here. Hope you have a helmet and flack jacket. I am also a professional (physician in my case).

On the income splitting piece – If you needed the cash to live on, then you would pay it out of your corp. It was previously best to split that with spousal dividends. If you still need that same cashflow now, then government will now collect more tax as you pay out all of that money to yourself at the higher rate. The only way to leave the money that you would have dividended to a spouse in the corp instead is to spend less. That said, there are still many ways to income split with a spouse. I have explored and acted on a number of them while researching for my own situation and blog. Garth has mentioned many ways on this blog.

On the passive income piece. I agree, we can modify our behaviours to avoid punishing ourselves. You can lower your business income to below the threshold by paying yourself a salary (a business expense) and then using an RRSP. When that RRSP deduction is maxed out and you are getting too much passive income in the corp, that is probably a sign to simply work less to get down below the threshold or take up a second business that is taxed separately. Lot’s of ways to approach it.

All of these “tax the high income earners” strategies will result in behavioural changes as people will naturally weigh how much work/sacrifice is worth how much take home pay. The way I see it, these policies will encourage people to spend less and work less. Not necessarily a bad thing as long as there are more workers to fill in the gaps created. I have already changed my behaviour and work about 25% less. My family likes it. Me too. I think that the government is hoping that we will just run headlong and bash our heads against the tax wall when they are making their revenue generating predictions. I suspect that most of us are smarter than that, but I could be wrong.

#136 Rooster on 02.27.18 at 9:26 pm

#84 AK on 02.27.18 at 7:32 pm
#72 Doug t on 02.27.18 at 7:11 pm
“Harpers was a bad man – T2 is an idiot -‘why can’t someone with some common sense lead this country.
RATM”
——————————————————————-
Harper may have been a bad man, but he left the office with a surplus.

I would rather have a bad man running the country over an idiot, any day.

*************
Because Angela Merkel is busy leading Germany?

AK, please sleep on that thought.

#137 Mark on 02.27.18 at 9:28 pm

“Exactly how many people have lived in Canada for 40 years, have zero income, and never worked enough in their lifetime to generate even a trifling CPP pension. That is the only way to get the number you cite. ”

My point was, the government guarantees a minimum income to all Canadians who meet basic eligibility criteria, of $18k/year after the age of 65. Guaranteed basic income already exists in practice for Canada’s seniors.

If the government provided such a guarantee to the Millennials, many of whom, either for lack of employment opportunities, or simply because they are studying, have incomes that more closely resemble $0, I am sure that the economy would be more vibrant for people in that age group. After all, I was responding to a post that claimed abnormally low credit card use amongst such demographic.

As for ‘picking’ on anybody, I offered up no debate of the morality of this policy, ie: depriving the young while lavishing the old. I will leave you to review the prior debates of such matters (often by SCM, and often considerably controversial), and will not engage further.

#138 Leo Trollstoy on 02.27.18 at 9:34 pm

Forget the shit shovelling Mark

Hes gettin rekt tonite showing again the thought process of the misinformed and financially poor

I feel bad for the noobs who visit here

I also feel bad for the Canadians in Toronto and Vancouver who bought real estate at peak-price in 2017

#139 For those about to flop... on 02.27.18 at 9:41 pm

Pink Snow falling in Richmond.

Featured these guys once before when I first showed they were in trouble.

They just lowered the price to $999,999 and put it back up all shiny and new.

Looks like they didn’t have Danyluk yet…

M43BC

9060 Danyluk Crt,Richmond.

Paid 1.29 August 2017 asking 1.43 ass 1.25 now asking 999k

https://www.zolo.ca/richmond-real-estate/9060-danyluk-court

https://www.bcassessment.ca/Property/Info/QTAwMDA1V1kyMg==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#140 Money laundering side effects on 02.27.18 at 9:50 pm

Death of a community with rising rents for local business owners.

https://globalnews.ca/news/3924007/robson-street-store-closing-after-93-per-cent-property-tax-increase/

https://globalnews.ca/news/3963115/councillor-calls-for-review-to-protect-vancouvers-heart-and-soul-small-businesses/

#141 Terry on 02.27.18 at 9:57 pm

NAFTA cancellation proofing my Canadian portion of my portfolio at this present time. A lot of TSX listed companies have been drifting lower for months now in anticipation of NAFTA getting cancelled. I do think NAFTA will go down. Canada is not aligned with the U.S. anymore and the Trump Administration does not like the Liberals here in Canada. I’m getting out and selling my Canadian equity positions before the axe falls on this country.

#142 IHCTD9 on 02.27.18 at 10:09 pm

#61 Howard on 02.27.18 at 6:48 pm
#28 Stone on 02.27.18 at 5:44 pm
“People keep taking on debt because they don’t have a choice, and they’re choosing products they’re not amortizing, so they’re not paying down that debt, and it will eventually catch up to them at some point in time. They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?

—————-

Bankruptcy.

It’s strange this option has not been discussed much. In the US, it is a very onerous thing with very severe legal ramifications after declaring bankruptcy once. In Canada, not so much with the point being rehabilitation. With how things are going, this may well be the path for a good portion of the Canadian population. This allows them to walk away from their debt obligations and if they have no actual assets or net worth, is not a big deal. The only issue then is paying with cash for the next few years. In other words, going cold turkey on debt. With a clean slate. Is that so difficult? I don’t see a whole lot of negative consequences here.

———————————————-

This is interesting.

Garth, could you perhaps do a blog entry some day on the consequences of declaring personal bankruptcy in Canada? Just a request/suggestion.

———-

The US had jingle mail, mass personal bankruptcies would look the same. The banks and CMHC would get creamed. Both might get some kind of help from the feds, then taxes and/or government borrowing would go parabolic to cover it all.

Or the debt might get parked in a public Corp and left to be forgotten a la Fannie May / Freddie Mac

#143 Victor V on 02.27.18 at 10:11 pm

January 2018: Detached, Markham

http://torontorealestatecharts.com/2018/02/06/january-2018-detached-markham/

Summary:

– Markham detached home sales down 38.8%, active listings up 252.5% year-over-year (YoY)
– TTM Sales to active listings ratio (SALR) is trending downward
– Average Markham detached home price is down 19.8 % YoY
– Median Markham detached home price is down 17.3% YoY

#144 John Dough on 02.27.18 at 10:14 pm

#135 Loonie Doctor on 02.27.18 at 9:26 pm
#52 Wild Bill on 02.27.18 at 6:28 pm
I’m an incorporated professional. Let me get this straight: ………
All these new changes just incentivized me to keep money in the Corp – which is the exact behaviour they are they are trying to change?
What am I missing here?

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

I’ll try but I don’t expect any applause. The preferential tax treatment for small business is designed to aid those who take no small risks in generating new jobs for Canadians. The tax rate is low because most small businesses fail. The government wants to assist those who need it, with the intention that the successful business will generate additional tax revenues by all who are employed in the future.

It was not intended for professionals, who enjoy recession-proof, higher than average incomes for the duration of their careers where the risk of failure approaches zero, and there is no possibility for business expansion. I am not jealous and I think you deserve your salary. I do not think you deserve to take advantage of rules that do not and should not apply to your specific employment situation.

Loonie Doc’s blog has an extensive cost/benefit analysis on changing your own tires. Honestly, I couldn’t get thru all of it, but I think I know how it ends. I am waiting for the blog on changing your own light bulb.

#145 Mark on 02.27.18 at 10:26 pm

“I’m getting out and selling my Canadian equity positions before the axe falls on this country.”

So what’s your theory on what might happen to Canada if NAFTA is cancelled?

If the CAD$ falls, would that not make Canadian firms more competitive?

If the CAD$ rises due to a NAFTA cancellation, wouldn’t that be positive for Canadian equities?

Canada has underperformed so badly in the past decade equity-market wise. Don’t you think it might be a bit brash to write it off when investors have already pretty much left it for dead relative to other asset classes?

This is why it is sometimes important to have balance and to either be rigorously committed to an algorithm, or work with an advisor who can help navigate the hype.

With how much cash Canadian firms have these days to re-invest, you’ll have no problem unloading your shares. But it might be worth pointing out that the TSE/TSX actually performed better pre-NAFTA than post-NAFTA if you go back and look at it historically.

#146 PastThePeak on 02.27.18 at 10:33 pm

#97 young & foolish on 02.27.18 at 8:04 pm
This was certainly a political budget … it seems that Mr. Socks knows his constituency. Deficits don’t matter.
+++++++++++++++++++++++++++++++++++

You are right, in that not enough Canadians have any consideration for deficits / accumulated debt. And really, why should they?
– Never talked about in all of their 14 years of schooling
– Barely touch upon by MSM. More stories and articles related to the federal debt-to-GDP ratio being no biggy. And of course we just “out it to ourselves”, so it isn’t even a real thing.
– Most gov’ts will say it is manageable and all is good. And we have to do it for the children! Or the cause of the day.

Sure, the Canadian federal debt isn’t that bad against the GDP – but no one realizes the provincial debts are greater, making our overall debt-to-GDP relatively high.

#147 David TO on 02.27.18 at 10:58 pm

People voted for him back in 2015 because in the Liberal campaign he promised to BALANCED the budget by 2018/19 fiscal year, now we are in 2018/19 and he says the deficit will hit 18.1 Billions! Spending the money you don’t have and keeps borrowing from the greedy banks (eventually pass the burden to the unborn next generations to come). While the interest rates are increasing dramatically in the coming years and now he said by 2022/23 the deficits can be reduced to 12.3 Billions.

Fool me once, shame on you;
Fool me twice, shame on me;

#148 FortDB on 02.27.18 at 11:09 pm

#135 Loonie Doctor on 02.27.18 at 9:26 pm

Hey LD:

I have a PC (lawyer); On the passive income front, do you have a recommendation for an accountant?

Interesting anecdote about the government. My MP, Arif Virani, called me on the weekend to address my emails to him, in which I expressed concerns about the tax changes for small corps. This was a week ago. He obviously did not even know the details of the changes announced in the budget. He talked about changes that did not happen. He promised to get back to me on how the government would handle grandfathering my corp’s existing portfolio without conflating it with new money.

#149 C7.R on 02.27.18 at 11:12 pm

#20 MF on 02.27.18 at 5:37 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.

Most delusional and indebted? This generation still had some concept of the starter home, and bought within their means at prices they could afford below what they were pre-approved for. The disciplined and frugal Gen X’ers may now be protected, though not invisible it the debt crisis because they paid off there mortgage and are enjoying the home they made for themselves, unphased by meaningless monthly or annual drop in their property values, why? Because the value and importance they place on their home is not measured in dollars.

#150 Vik on 02.27.18 at 11:15 pm

Is there a possibilty of either you, Doug or Ryan providing a commentary about Warren Buffett’s 2017 letter? Lots of interesting stuff in there thats discussed here often like stocks, bonds, weightages, fees .Thanks

#151 Suede on 02.27.18 at 11:15 pm

True Though…

He’s done.

But can Scheer really take him out?

I’m not convinced. Andrew’s kind of boring.

Double that TFSA and i’ll drive people to the voting booth myself.

#152 Ronaldo on 02.27.18 at 11:20 pm

http://bonniemclean.ca/mylistings.html/listing.v1032416-935-old-lillooet-road-north-vancouver-v7j-2h7.36949694

This was a listing from March of 2014. The price rose 60% or $300,000 in the next 4 years to $798000. Incredible. 38 times more than I paid for it.

It’s interesting to see where the price of my first home that I purchased in Dec. of 1969 has gone in 48 yrs. I had the unit that backed onto this particular one.

These units were built just below where Capilano College is located today. I was 23 at the time and married for 2.5 years but no children yet. Our first would arrive a year and a bit later.

Freshly out of debt after paying off my 1965 pontiac and $500 in the bank. I borrowed the down payment of $3000 from my mother and paid her back shortly after the deal was made by borrowing the $3000 from the bank for what I told them was for furniture. No problem there.

The place cost us $20,800 which was 2.5 times my income so very affordable. Interest rate was 9.75%.

I had been paying rent of $132 plus $8 for parking in a hi-rise in the West End so a bit more than I was paying in rent but still only around $220 for PIT and condo fee. Worked out to 1/3 of my gross salary at the time so very affordable. Only thing is I had to drive to work now to downtown Vancouver (20 min.) whereas before it was a 5 minute walk down to West Pender from our rental apt. on Haro.

My wife’s income ($250/mo.) was not taken into account when I qualified for the mortgage as that rule was not in effect at the time. That was implemented in the 70’s as I recall during that recession and when housing was in the tank. The gov’t provided $1000 grant for 1st home buyers which had to be paid back if you didn’t live in the place for 3 years.

I recall at the time that a house in West Vancouver in British Properties sold for around $50,000 which was a lot of money then. A house in the city for example in Mt. Pleasant would have been around $23,000. Same place today in original state would be $1.8 million or 78 times more than what it was then.

So yes, things have changed considerably from those days and a million does not get you much anymore. Something major has to occur to get things back to reality. The thing is, wages have really only increased about 10 times from back then when I compare what I earned then to what a similar position would pay today. Housing prices are totally out of whack to inflation over that time period. Anyway, I thought this might be of interest to some on the blog. Oh, and bananas were 10 pounds for a dollar back then.

#153 TRUMP on 02.27.18 at 11:20 pm

COMPETE WITH THE USA

Its simple……. Canadian government workers have to take a salary and pension reduction so we can lower taxes for the middle-class….

Which is tqhe class that actually works and contributes to the GDP.

OUCH!!!!!

#154 The Fat Lady on 02.27.18 at 11:23 pm

Rome wasnt toppled over by anything else other than greedy government workers..

We got our own Candian version of Cesear.

#155 Trojan House on 02.27.18 at 11:32 pm

#92 Barbo on 02.27.18 at 7:53 pm

“…if you are in arrears the mortgage lender can start foreclosure proceedings and sell your house.”

Foreclosures are rare in Canada. More likely a power of sale. Ontario, for sure power of sale. In NB, if the mortgage is not paid, it goes to auction after being advertised for 4 weeks.

#156 Alberta Ed on 02.27.18 at 11:33 pm

T2 is no longer Mr. Socks. He’s now Mr. Dressup.

#157 panchothefool on 02.27.18 at 11:33 pm

A couple of Christmas ideas for the pooch…
http://costummer.net/shop/mini-sombrero-hat/
https://www.ebay.com/p/Small-Medium-Mini-Multicolor-Sombrero-Hat-for-Pet-Dog-Costume-Accessory/1429873834?iid=312048229448&var=610795371662

#158 Hiding On the Backstreets on 02.27.18 at 11:39 pm

“The Liberals will increase spending by $21 billion over six years and finance that with borrowing. The shortfall needing to be financed will be $18 billion this year and gradually (hopefully, fingers crossed, please) fall to about $13 billion a year by 2022-3. So much for ‘the budget will balance itself’ and the campaign promise to have four years of $10 billion deficits before breaking even.”

The governments and media collude to keep people ignorant. You must search “Money as Debt”, “The Hidden Secrets of Money”, and a host of other informative economic lessons available on the internet these days. See how the monetary system really works. It’s not for your benefit.
The masses who are running up personal debt are too busy with tv,shows, twitter, pinterest and facebook to take control of their own finances.

Prosperity is eroded slowly, insidiously from the population by evil governments, while the debt slaves spend their time watching sports, entertainment, buying useless crap made in foreign countries.

The deficit number is incidental. Governments will not ever pay down debt. Never have since the central banks commandeered the creation of currency. Never have, never will. Politicians kick the can down the road, past their own election cycle. The next group of lying hypocrites make up their own fantasy policy.

Only a fool would expect governments to responsibly manage the economy. 4-5 year cycle. Get elected. Promise. Say things that people want to hear. Tell them they’re spending for “the people”. Super sad.

Educate yourself. Save yourself.

#159 panchothefool on 02.27.18 at 11:44 pm

“First the latest from Mr. Socks and the Chateau Kid – the nothingburger federal budget,–Garth”

Is it just me or is the Commander in Chief starting to ressemble an extra in a B grade remake of Lawrence of Arabia or South Pacific. Would love to apply for a summer job in his wardrobe department. Next up, Trudeau Goes Amok as Samurai!

#160 Stan Brooks on 02.27.18 at 11:49 pm

#57 ETFingGoodTime on 02.27.18 at 6:35 pm
#33 Im Therious on 02.27.18 at 6:08 pm

///////////

The TSX is junk, obsolete and almost flat for a decade. It’s embarrassing:

http://www.canadianbusiness.com/investing/canadas-stock-market-is-the-worst-performing-in-the-world-right-now/

Tech is the future, which we have none of.

My current Canadian exposure is 8% and even then, I’m tempted to redistribute that into international and emerging markets. My US exposure is high enough at the mo.

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

The actual article is titled:

Canada’s stock market is the worst-performing in the world right now

A decade of slumping energy shares is hurting the TSX. Canadian investors need to seek out more tech exposure

———————

Pretty much states what I have said. Some comments:

1. TSX is energy heavy but with the wrong expensive dirty energy.
Noticed lately the diversion of CAD from the price of crude oil?

2. TSX is also financial heavy at time of peak debt.
Sucks the life out of the economy.

3. The ONLY thing worth considering in TSX is mining and agriculture/small chunk of it.

4. CAD is melting down due to financial and monetary follies.

5. Invest in tech, are you kidding?
It is sad to see Canada destroying the lifes of all that engineering talent that still comes out from our universities.
No chance to find entry level jobs due to Temporary Foreign Workers (lieberals boosted further that).

Bragging that labour is cheapest here in attempts to bring Amazon HQ.

Are we something more than just a giant debt slaves cheap labour camp?

6. Invest in Canada overall?
With Poloz at BOC and his ‘crush the loonie’ policies and with the esteemed financial minister (a glorified HR manager with no practical experience whatsoever) killing business and the ’emotionally intelligent’ PM?

Really?

———————–

Stay away from TSX and any CAD nominated assets.
Diversify internationally.
Avoid CAD bonds like the plague. Inflation 7-8 % and official CPI 1.5. Really?

#161 panchothefool on 02.27.18 at 11:53 pm

#50 Lisa Power on 02.27.18 at 6:25 pm
… Cabo is looking good.”

Mexico??????Be careful white slaves are going for 50 cents on the dollar
http://www.newsweek.com/missing-italian-men-sold-mexico-820497
Italian Men Mysteriously Missing in Mexico ‘Sold for $53’ to Criminal Gang, Their Relatives Say”
No way I get traded for less than the price of a bitcoin and future draft choice!

#162 Hiding On the Backstreets on 02.27.18 at 11:59 pm

#13 Stan Brooks on 02.27.18 at 5:22 pm

#9 The Chateau Kid on 02.27.18 at 5:17 pm

Most business annalists have more common sense than him and on top of the incompetence he is also arrogant.
An absolutely letal combination.

He and T2 can not even comprehend their own stupidity,

I demand their IQ tests. seriously, we should have some protection from intellectually limited/challanged people coming to power.
___________

You can’t possibly think that enough Canadian sheeple will wake up and NOT elect a Lib majority next fed election? Be afraid. Be very afraid.

#163 Stan Brooks on 02.27.18 at 11:59 pm

#146 PastThePeak on 02.27.18 at 10:33 pm

Sure, the Canadian federal debt isn’t that bad against the GDP – but no one realizes the provincial debts are greater, making our overall debt-to-GDP relatively high.

———————————–

It is not just federal government debt.

There is CHMC liabilities sold on the bond market masked as MBS – tons of it, guaranteed by taxpayers.

Banks just underwrote it. Liability is on the taxpayers.

Then we have provincial debts and municipal debts.
Ontario in crisis.

Then we have crushing personal debt.

The last 10 years we cruised only based on ever increasing total debt. As of lately 300 billions per year of it.

There is one small place to grow further debt – municipalities, guaranteed by our property taxes.
(what and see how much will they rise and then judge how much of an asset a house is) and then it is officially game over.

Inflation is already here and the worse thing is BOC can do nothing to increase meaningfully rates.

Looking for their pathetic excuses in 2018. 1 rate increase max.

They will use anything real and imaginary as an excuse not to raise rates.

CAD and retirees? Doomed.

#164 BillyBob on 02.28.18 at 12:06 am

#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.

MF

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

You’re coming across as a bitter Millennial loser even more than usual today. Filling in for SCM?

If it makes you feel better, I’m one Gen X-er who doesn’t own property, nor do I regret it. My own path has worked out far better, wealth-wise. Granted, it took me far off the beaten track to places I previously never knew existed.

But hey, carry on wondering why nothing ever changes when you never do anything different lol.

#165 Stan Brooks on 02.28.18 at 12:06 am

#145 Mark on 02.27.18 at 10:26 pm
“I’m getting out and selling my Canadian equity positions before the axe falls on this country.”

So what’s your theory on what might happen to Canada if NAFTA is cancelled?

If the CAD$ falls, would that not make Canadian firms more competitive?

If the CAD$ rises due to a NAFTA cancellation, wouldn’t that be positive for Canadian equities?

Canada has underperformed so badly in the past decade equity-market wise. Don’t you think it might be a bit brash to write it off when investors have already pretty much left it for dead relative to other asset classes?

This is why it is sometimes important to have balance and to either be rigorously committed to an algorithm, or work with an advisor who can help navigate the hype.

With how much cash Canadian firms have these days to re-invest, you’ll have no problem unloading your shares. But it might be worth pointing out that the TSE/TSX actually performed better pre-NAFTA than post-NAFTA if you go back and look at it historically.

——————————

Canada is 2 % of the world economy. Estimated to further shrink as a percentage.

TSX is local, not a global exchange.
You are trying to catch a falling knife.

To diversify properly you should keep no more than 2 % of you asset in it.

You should buy Russian and Venezuelan equities if you believe in your logic/nonperforming assets and expect huge payout.

Big Canadian Businesses are moving money out of here. Why do you think there is no offshore heaven tax investigation but chasing small business instead?

If NAFTA is cancelled, who are you going to compete with, China and India in cheap labour with our cost of living?

We are pretty much going to be equal to Turkey but they have advantage of not having debt and much better weather/tourist industry.

Far behind even Spain.

#166 april on 02.28.18 at 12:18 am

# 132 – They’ll deal with it like everyone who lost in the last bust dealt with it. Some win some lose.

#167 Smoking Man on 02.28.18 at 12:26 am

If life was a day and your at 3pm.
Why the hell not.

#168 Stan Brooks on 02.28.18 at 12:26 am

#144 John Dough on 02.27.18 at 10:14 pm
****************

I’ll try but I don’t expect any applause. The preferential tax treatment for small business is designed to aid those who take no small risks in generating new jobs for Canadians. The tax rate is low because most small businesses fail. The government wants to assist those who need it, with the intention that the successful business will generate additional tax revenues by all who are employed in the future.

It was not intended for professionals, who enjoy recession-proof, higher than average incomes for the duration of their careers where the risk of failure approaches zero, and there is no possibility for business expansion. I am not jealous and I think you deserve your salary. I do not think you deserve to take advantage of rules that do not and should not apply to your specific employment situation.

Loonie Doc’s blog has an extensive cost/benefit analysis on changing your own tires. Honestly, I couldn’t get thru all of it, but I think I know how it ends. I am waiting for the blog on changing your own light bulb.

—————————

Is this Mr. fairness who reads this blog in his spare time?

As this logic pretty much matches what we see expressed by Mr fairness.

Mr fairness never ever run a small business, he was appointed to his daddy’s company so he does not understand that:

1. small business income is not employment income.
2. small business in professional corporation is not professionals with guaranteed lucrative income who simply avoid paying taxes.
3. this country needs family income taxes, like the rest of world.
4. Mr fairness is not accounting for small Business risks, lack of benefits, uncertainty.

He equals government employees with private contractors and doctors who run offices in terms of income taxes but conveniently forgets about risk and expenses that small business face.

Mr fairness is either confused or lies with straight face, in both cases this seems to marvelously benefit his pension company.

Mr fairness pretends that he is competent to judge on the above topics alone. He is not. He is incompetent.

Mr fairness should resign.

#169 VICTORIA TEA PARTY on 02.28.18 at 12:31 am

BAPTISM OF FIRE COMING SOON THE JUSTIN

It’s NAFTA I’m mentioning in this space, not the budget.

I can’t think of one major issue that Canada’s premier heavy-weight negotiators have coughed up since talks began way back when.

While that nice lady (trade minister), usually wearing a red dress, and grappling with a microphone and chirping incoherently at the conclusions of numerous rounds of talks, there are STILL no signs of “success” for Canada. Why?

Now talks are being held in Mexico.

On Tuesday Trump and the Mexican president hung up on each other following a phone chat about who’d pay for “the wall.”

Hours later Bob Lighthizer, the US Trade Representative heading up the US-side of the NAFTA talks, appeared on a FOX TV cable network show to explain that the US is punching hard against Canada and Mexico for more US-based jobs in the NAFTA talks.

He said when he talks to Trump who “ran on this NAFTA)…it’s workers, ranchers, farmers. That’s it. It’s wages and it’s jobs.”

If the US can renegotiate that deal with Mexico, he was asked specifically, “and hopefully with Canada, IF THAT’S POSSIBLE, we’re going to find more jobs (for the US in America).”

And then he said this: “It’s part of the problem between the two countries, the kind of thing we’re looking at is to have a better (trade) balance, a higher regional content but also a US content and a way to organize to keep track of which is which.”

He added, “It’s complete nonsense to say we don’t need manufacturing,” he added.

As for Trump’s involvement in all of this here is what he said: “..the president is beyond engaged. He cares about jobs and wages…wages and jobs (he discusses this often on a daily basis).”

And JT our go-to leader?

What’s happening there young man; what’re you thinking?

Let us know!

He needs to be out on the Canadian hustings hustling for us, and not conducting cringe-worthy fashion shows in India and other mystical/mythical “palaces” of higher levels of apparent consciousness.

As for our brand new politically-correct and gender-pumping budget?

Just as St. Garth of Nothing Burger City hints at, it’ll all come unglued real soon.

Trumped bigly.

#170 For those about to flop... on 02.28.18 at 12:45 am

#141 morrey on 02.26.18 at 11:35 pm

(Every day this blog’s comments section contains more examples, thanks to the investigative work of one person.)
oh dear. You too are drinking the cool aid. Nothing posted by that dude is verifiable EXCEPT the current asking price. I have never ONCE seen the historical trends of which he pontificates about.

/////////////////////////

How hard is it to click on the b.c assessment link when I do a CONFIRMED PINK SNOW post?

Still haven’t worked out if you have Canker Sores or are just Cantankerous…

M43BC

#171 BCWally on 02.28.18 at 1:00 am

Does anyone out there know what ratio the banks use to call margins? I know there is a set ratio of current value to leverage on futures trading. I read that in a falling stock market the jewelry stores in New York get busy as traders hock watches and earrings to make the margin call from the brokerage. I’m trying to figure out how much the market value of a home would have to fall before the bank would start making margin calls.

#172 Foo Fighter on 02.28.18 at 1:03 am

#147 David TO on 02.27.18 at 10:58 pm
People voted for him back in 2015 because in the Liberal campaign he promised to BALANCED the budget by 2018/19 fiscal year, now we are in 2018/19 and he says the deficit will hit 18.1 Billions! Spending the money you don’t have and keeps borrowing from the greedy banks (eventually pass the burden to the unborn next generations to come). While the interest rates are increasing dramatically in the coming years and now he said by 2022/23 the deficits can be reduced to 12.3 Billions.

Fool me once, shame on you;
Fool me twice, shame on me
——–
Two words: Electoral Reform. This Government has been an international embarrassment.

#173 Dolce Vita on 02.28.18 at 1:15 am

But you can be sure in areas where home values fall precipitously that banks will move to protect themselves. – Garth

Good one. Same thinking on my side.

The big question is, what the Banks will think “precipitously” equals in % or $’s.

I believe the Banks will go “quid pro quo”.

For every $ they lose in Fixed Asset unsecured RE value, that $ will be replaced by a $ in cash flow; thus, there is probably not going to be a “precipitous” number. And that make sense as the Banks are not a charitable organization.

Refinancing like your Davisville Moms story is one way to get that Cash $ increase, yet, another will be to get HELOC holders to pay up “some”. Define “some”, will be anybody’s guess.

Either way, it seems anything connected to RE will get fleeced for cash $ by the Banks and this year.

It will not end well for the economy and earnings growth.

#174 Dolce Vita on 02.28.18 at 1:43 am

#74 crowdedelevatorfartz

Thanks for defining the Banks line in the sand when it comes to HELOC payments.

A very good story, indeed. Thank you.

What I liked about it was that guy [eventually] got taken out of the economy as to his ability to borrow money and not invest it wisely: “a bad economic player”. He will be out of the economy for a decade or more, good.

Hope more stories like that emerge in 2018.

The economy is in need of a purge of people like that, which add nothing to the wealth of Canada; rather, squander it.

#175 Ppppp on 02.28.18 at 2:02 am

#134 KLNR on 02.27.18 at 9:25 pm

@#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.
____________________
not this gen Xr. Some what invincible, liquidated my profits last Feb moved to a smaller more efficient house. even cut my prop taxes by close to 60%. Most gen Xers I know in TO are doing alright, livin within their means and have houses as homes not investments

___________________________

My GenX circle are all pretty well off out of this Real estate bubble. Remember that we are the silent loner generation. Never bought into the disillusion since none of the marketing was directed towards us. Most of us actually exercise financial caution and independent thought since we grow up in an analog world and we are mostly that middle sibling that gets ignored.

Most of my friends have either sold at the peak, are forever renters or have pushed to pay off their house during this period of low interest rate. Please leave us out of this fight.

#176 JettaFlair on 02.28.18 at 3:48 am

This automailed into my RE Folder today:

https://www.bcassessment.ca/Property/Info/QTAwMDAzWEVTUg==

$1,238,000 OP
$1,210,000 LP

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

Consider this one a counterbalance to things. I have it on good authority that this sold for 500k over asking but if you compare to Assessed it’s only 100k over. Well reno’d and the like.

https://www.bcassessment.ca/Property/Info/QTAwMDAzV0VBNw==

$999,999 LP
$1,500,000 SP (unconfirmed but RE-liable source)

Certain markets are still hot here in Metro (Burnaby in this case) if the listing price is “good” and the FOMO is stoked.

#177 Karma on 02.28.18 at 4:24 am

Tim Ferriss on the Rubin Report. Sounds applicable to Canada nowadays…

“That smugness is why they got their teeth kicked in”.

https://www.youtube.com/watch?v=QP2-8Zox4W8

#178 Howard on 02.28.18 at 4:41 am

#55 Jason Sensation on 02.27.18 at 6:33 pm

To quote Andrew Coyne on Twitter “…This budget shows that the Liberals plan to spend about the same as the Harper govt, by their own preferred measure: 13.8% of GDP, on average, over the next five years, compared to 13.7% during the Harper era.”

So not sure what all the whining from Tories is about. Much the same my friends.

————————————–

Apples and oranges.

What percentage GDP do you think PM Prancer would spend if in power during a global financial crisis? I can tell you it would be significantly higher than 13.7%.

Not to let Harper off the hook. There were many things he should’ve done to cut the fat. Sell the CBC, first of all.

#179 buttercup on 02.28.18 at 5:08 am

#29 Howard on 02.27.18 at 5:46 pm
Gawd.

We better not have to f**king bail these people out.

I’m preemptively furious because I suspect that’s exactly what’s going to happen

———-
Good Grieff, I forking hope not!!

The sheeple are content to stay ignorant, from what I’ve observed. Why, what choices do they have?

Math is hard! Even for the Lieberals, or so it seems…

#180 Howard on 02.28.18 at 5:15 am

From Andrew Coyne’s piece in the National Post today :

Budgets used to be written by the Finance department. This one appears to have been written out of Status of Women Canada (the budget proposes to make it a full department, but on the evidence it would appear to have taken over the entire government) or perhaps a campus gender studies course.

#181 Under the radar on 02.28.18 at 5:34 am

144
Deduct rent, staff, payroll taxes ,general office overhead. There are no government or employer pensions to fall back on either , not to mention the years of school and the cost of education.How much do you think is left after all that? Professional corps were given the advantages you speak of precisely because of the above. To take full advantage of the rules you need to leave funds in the Corp which means not living large.

#182 Bobby on 02.28.18 at 6:02 am

I think Andrew Coyne summed the federal budget up quite nicely by saying it was a budget that had nothing to do with the economy or budgeting. Rather it is just a political statement.
From the outset, I expected little from this government and they certainly haven’t disappointed. Very little has been accomplished under their mandate to date and I expect very little going forward.
I do expect the Liberals to make a host of very expensive promises next year that they have absolutely no intention of keeping. But hat doesn’t matter, it seems Canadians will believe anything.
Mr Trudeau, like Mr Horgan here in B.C. and Ms Wynne in Ontario are appealing to their respective bases, the young who believe that they are entitled to everything but someone else always pays. Business doesn’t exist to make a profit but rather is there to provide jobs and pay taxes. By working hard, saving and investing and making sound financial decisions, you are someone to be punished not applauded. How dare someone be successful.
Common sense and substance have left the room here in Canada. Peoplekind and other stupidness is the clarion call as we move forward. This will not end well.
I’m not sure who is dumber, the people we elect into office, or the voters that put them there.

#183 theoryAndPractice on 02.28.18 at 6:22 am

“First the latest from Mr. Socks and the Chateau Kid – the nothingburger federal budget, 2018, delivered at a time when interest rates are rising, our biggest trade partner hates us, the country’s debt is swelling, the labour market is wonky and the housing market’s wobbly.” -GT

… meanwhile , in a galaxy far far away :

http://money.cnn.com/2017/09/19/investing/norway-pension-fund-trillion-dollars/index.html

http://www.cbc.ca/news/thenational/national-today-newsletter-budget-ghana-peacekeepers-norway-1.4552553

#184 Leo Trollstoy on 02.28.18 at 7:02 am

Range-bound loonie

Told ya so

Beat mark again

#185 A J on 02.28.18 at 7:29 am

Not every blog post needs to incite a game of “which generation is the most screwed / most inept / most lazy / most ignorant / etc.” If the economy tanks, people from every generation could go underwater. This generational debate is literally pointless and a waste of time.

#186 SimplyPut7 on 02.28.18 at 7:30 am

#28 Stone on 02.27.18 at 5:44 pm
#61 Howard on 02.27.18 at 6:48 pm
#142 IHCTD9 on 02.27.18 at 10:09 pm

Scott Terrio talks about this online on Twitter (https://twitter.com/ScottTerrioHMA), BNN and podcasts:

Second from the top #61 The ins and outs of bankruptcy with Scott Terrio
https://itunes.apple.com/ca/podcast/mostly-money-mostly-canadian/id523360095?mt=2

Talking Out Loud About Debt with Scott Terrio
https://www.hoyes.com/blog/talking-out-loud-about-debt-with-scott-terrio/

People may be able to do a consumer proposal instead of a bankruptcy, which would allow them to keep their homes while paying off a reduced amount of debt that they have outstanding with their creditors.

Favourite tweet from Scott Terrio, Dec 14, 2017, 10:17 pm:

Young house-flipping guy/casual landlord who ended up owing $2.6 million in unsecured debt & filed bankruptcy for only $1,800? That’s neither normal nor is it right, but it’s the law. And the courts didn’t differ on discharge. http://podcastapp.io/the-ins-and-outs-of-bankruptcy-with-scott-terrio-bedebtsavvy-e26386000/

#187 maxx on 02.28.18 at 7:37 am

#7 AACI Home-Dog on 02.27.18 at 5:12 pm

“I am wondering if Trump & all of his family will dress up like the Sikhs if & when he visits India ?”

Very likely not. That would be über déclassé…….

#188 TurnerNation on 02.28.18 at 7:37 am

‘Morning Komrades.
Before the new Quota Inspektors come by my place of business I’ll crop by hair, dye it green. Add a large nose ring and neck tattoo. Store a bong on my desk.
For good measure etch a pentagram on my arm.

Oh yeah baby fast track for a Government job coming up! In the Snowflakes dept. Now to work on my dour, outraged expression.

This is what it’s come to
X42ON I guess.

#189 maxx on 02.28.18 at 7:44 am

#13 Stan Brooks on 02.27.18 at 5:22 pm

“……I demand their IQ tests. seriously, we should have some protection from intellectually limited/challanged people coming to power.”

The court of international public opinion has already rendered a non-digital result on that score.

#190 TurnerNation on 02.28.18 at 7:53 am

TRENDS: the daily beat of socialism. Champagne Liberals want your reversion to the mean. Hard working, high IQ, high earner? Not fair!!

1/2 a billion eh? Bet that never sees the light of day. You could give 50,000 people $10,000 each. Or sending staff to expensive conventions and trips and grant money to “study the issues”.

https://www.thestar.com/news/gta/2018/02/28/good-quality-of-life-just-a-dream-for-too-many-torontonians.html

“The foundation administers almost $500 million in assets for individuals, families and organizations who want their charitable donations used to improve Toronto’s quality of life.”

“The report acknowledges Toronto has much to celebrate — its population is growing, its skyline is rising and its economy is booming. But many residents are not sharing in the city’s wealth and opportunity. And that undermines Toronto’s commitment to fairness, the report warns”

#191 crowdedelevatorfartz on 02.28.18 at 8:07 am

@#170 Flopster
“Still haven’t worked out if you have Canker Sores or are just Cantankerous…”
+++++

I believe an entirely different word is necessary.

“cankerous”

#192 Howard on 02.28.18 at 8:29 am

On the subject of bankruptcy.

It certainly would not be a good situation (to say the least) for a younger person, but wouldn’t it be a viable option for an elderly person who does not plan to acquire another mortgage or make any major purchases for the rest of his/her life and therefore not needing a high credit score?

#193 crowdedelevatorfartz on 02.28.18 at 8:30 am

….on a more important “note”.

The year we legalize pot is the same year we render $1000.00 Bills worthless?

Drug dealers take note. Only the govt will sell pot on street corners.

http://www.cbc.ca/news/politics/bank-notes-legal-tender-1000-bill-1.4554758

#194 crowdedelevatorfartz on 02.28.18 at 8:35 am

@#185 A ( big space in between) J

“This generational debate is literally pointless and a waste of time….”
+++++

As emperor Titus once observed ,
“The mob wants blood.”

#195 maxx on 02.28.18 at 8:42 am

#16 Chris on 02.27.18 at 5:27 pm

“#AACI Home-Dog

What’s wrong in being culturally sensitive? Did you complain when the PM wore a suit to Europe.”

Being culturally sensitive has ZERO to do with dress.

#196 etf's on 02.28.18 at 8:45 am

hate to say I told ya so…no protection from the downside

ytd
XIC- -2.98%
average canadian equity mutual fund- -2.54% ( those with F series are significantly better than this)

have a good day…:)

#197 Ian on 02.28.18 at 8:46 am

US Q4 GDP growth revised down to 2.5% just now.

The era of slower growth and massive inflation is well underway.

#198 Loonie Doctor on 02.28.18 at 8:48 am

#144 John Dough on 02.27.18 at 10:14 pm

I think that knowing the value of your time is important for anyone. Especially at lower income levels (that was at the end). It helps you to make more rational and balanced decisions in my opinion. You are entitled to yours. I am also not offended that you don’t like my writing style either. I am very detail oriented and that is not for everyone. It is different from the usual quick overview of a topic interspersed amongst a bunch of ads.

Medicine is not as risky as many businesses by any stretch, but it does have some risks. There are also other lower risk businesses too. I don’t think it is a contest. Hard to judge it all I think. That is the thing about fairness – it is subjective and you can have different opinions. The better you know a business, the better your opinion about it generally.

Some concrete examples for medical practice risk. You are beholden to one payer who can unilaterally set prices – as we have seen in Ontario with 4-5% clawbacks for everyone while the costs of running your practice continue to rise. We don’t lose our jobs in recessions, but we often have to work for less just like many others do. Some other fees were drastically cut and fees for those billing more (like those who pay for large practice infrastructures/equipment) were cut more and their business models threatened. I have seen practices expanded and jobs created and I have seen them lost. Some specialties make a lot and don’t have that business risk – they are usually incredibly hard to get into though so carry a different risk. It’s just a reality/risk of the system.

Medicine is also not a guaranteed return on your time investment (and yes I think time is worth money as per my tire changing example) or your financial investment. Medical education is subsidized, but most trainees finish with over $100K in debt in their late twenties or early thirties. You could sacrifice years studying and busting your butt trying to get into medical school and not make the cut. That is the most common outcome. You’ll never get those years of your youth back.

You can get into medical school in Canada and the government cuts residency spots enough that you can’t get one. A couple of years of that and you are done. Don’t believe me? Just look up about the suicides that have occurred. Tragic side effect of tight central planning.

You can complete a highly competitive residency and fellowship and after 15 years of post-secondary training have a hard time finding work because you are dependent on OR time that is being rationed out by cash-strapped governments. Just ask the young surgeons. The issue with surgeon underemployment isn’t need/value, but rather rationing. Yep, others can study for years in a field that isn’t valued by society and end up a barista. Also sad, but part of the risk/benefit analysis people hopefully make.

It is possible that you don’t know all of the risks of running all businesses that you aren’t a part of. I certainly don’t, nor do I pretend to. I do understand medicine though.

Could doctors be treated like employees? Sure, but that brings a different set of risks and benefits and isn’t the path that has been chosen to date. Maybe that will change. In the interim, we need to do the best we can with the cards dealt and I actually think that there are plenty of ways to build a good career and financially plan in medicine – even with these rule changes. I also think medicine is a great privileged career for non-financial reasons and would do it all again. To each their own.

-LD

#199 Loonie Doctor on 02.28.18 at 8:52 am

#168 Stan Brooks.

Thanks.
-LD

#200 For those about to flop... on 02.28.18 at 9:02 am

Hey Crowdie,I’ve got gas…

M43BC

“This Map Shows the Cheapest Gas Station in Your State

Gas is one of the most import commodities in the United States. We’re a large, spread out country and we’re always on the go. That means we need cars and trucks to quickly take us to our destination. The problem is, gas isn’t cheap. If you want to save on gas prices, look at the map below and see which gas station chain offers the lowest price in your state.

Inside of every state on the map there are the name and logo of the gas station chain that offers the lowest gas prices in that state. There are three tiers of gas prices: states that are dark green have gas chains that offer between $2.50 and $2.99 per gallon of gas, states that are just green prices between $2.00 and $2.49 per gallon and states that are light green offer prices between $1.50 and $1.99 per gallon. The data were collected from Business Insider. To determine the list, BI analyzed information from GasBuddy.com’s lists of Top Ten Lowest Gas prices in every state; this information is based on daily input from its 60,000,000 plus users and is subject to change.

States with gas chains that offer high prices per gallon tend to lie within the Northwest region of the United States, although there are some exceptions. New York, Pennsylvania, Maine and Vermont all lie within the highest tier of prices. One reason states in the Northwest have higher gas prices may be due to Hurricane Harvey, according to GasBuddy and Oil Price Information Service.

But there are states outside of the Northeast that don’t get hit by hurricanes, but still have high gas prices. Both Alaska and Hawaii have the highest gas prices, but that is likely due to how remote those states are. The chain that offers the lowest prices in Hawaii is Freedom at $2.92 per gallon, which is the highest price for gas in the country. California is neither remote nor suffers from hurricanes, yet the chain with lowest gas prices in California is the third highest in the country at $2.73 per gallon.

One trend to notice is the prevalence of the chain wholesale company Costco found throughout the country. Costco appears far more than any other company as the chain with the lowest gas price across the 50 states. But Costco doesn’t offer the same prices in those states. For example, Costco is the chain that offers the lowest gas prices in Texas at $1.95 per gallon, which is the cheapest price in the country. At the same time, Costco is also the chain that offers the lowest price in Connecticut at $2.49 per gallon, which is much higher than Texas and nearly falls into the highest price tier.

Various gas chains are represented on the map, but not all offer the same prices. But don’t be fooled by Costco’s prevalence on the map. Costco still must raise and lower prices based on the relative competition for gas services in those states. If you want to save money on gas costs, you’ll have to consider both the state and the gas chain.”

https://howmuch.net/articles/cheapest-gas-station-in-every-state

#201 IHCTD9 on 02.28.18 at 9:11 am

#182 Bobby on 02.28.18 at 6:02 am

I’m not sure who is dumber, the people we elect into office, or the voters that put them there.
_____________________________________

Unfortunately, it’s the voters.

Nothing but trouble ahead if this sjw/identity politics/anti-capitalist sentiment continues.

Usually, this stuff doesn’t change after it’s off and rolling until folks are rioting by the millions, people are dying, and families are out hunting dogs and cats to feed themselves.

Hopefully Canada does not have to go down this road before they collectively smarten up.

In the meantime, I’m keeping my ear to the ground. It’s the first time in my life feeling that the bad stuff we see happening on the news isn’t so far away from my future reality.

I’m with PastThePeak who commented yesterday “I no longer believe that what happened in Venezuela couldn’t happen here.”

#202 jacques on 02.28.18 at 9:18 am

#147 David TO on 02.27.18 at 10:58 pm
People voted for him back in 2015 because in the Liberal campaign he promised to BALANCED the budget by 2018/19 fiscal year, now we are in 2018/19 and he says the deficit will hit 18.1 Billions! Spending the money you don’t have and keeps borrowing from the greedy banks (eventually pass the burden to the unborn next generations to come). While the interest rates are increasing dramatically in the coming years and now he said by 2022/23 the deficits can be reduced to 12.3 Billions.

Fool me once, shame on you;
Fool me twice, shame on me;
————————————-

Really surprised that back in 2015 you believed a guy who’s lived on a trust his whole life and never done a real job or run a business, and whose campaign slogan is “I’m a Trudeau” as if the PM can be inherited…………….

#203 Stan Brooks on 02.28.18 at 9:22 am

#152 Ronaldo on 02.27.18 at 11:20 pm
http://bonniemclean.ca/mylistings.html/listing.v1032416-935-old-lillooet-road-north-vancouver-v7j-2h7.36949694

This was a listing from March of 2014. The price rose 60% or $300,000 in the next 4 years to $798000. Incredible. 38 times more than I paid for it.

It’s interesting to see where the price of my first home that I purchased in Dec. of 1969 has gone in 48 yrs. I had the unit that backed onto this particular one.

These units were built just below where Capilano College is located today. I was 23 at the time and married for 2.5 years but no children yet. Our first would arrive a year and a bit later.

Freshly out of debt after paying off my 1965 pontiac and $500 in the bank. I borrowed the down payment of $3000 from my mother and paid her back shortly after the deal was made by borrowing the $3000 from the bank for what I told them was for furniture. No problem there.

The place cost us $20,800 which was 2.5 times my income so very affordable. Interest rate was 9.75%.

I had been paying rent of $132 plus $8 for parking in a hi-rise in the West End so a bit more than I was paying in rent but still only around $220 for PIT and condo fee. Worked out to 1/3 of my gross salary at the time so very affordable. Only thing is I had to drive to work now to downtown Vancouver (20 min.) whereas before it was a 5 minute walk down to West Pender from our rental apt. on Haro.

My wife’s income ($250/mo.) was not taken into account when I qualified for the mortgage as that rule was not in effect at the time. That was implemented in the 70’s as I recall during that recession and when housing was in the tank. The gov’t provided $1000 grant for 1st home buyers which had to be paid back if you didn’t live in the place for 3 years.

I recall at the time that a house in West Vancouver in British Properties sold for around $50,000 which was a lot of money then. A house in the city for example in Mt. Pleasant would have been around $23,000. Same place today in original state would be $1.8 million or 78 times more than what it was then.

So yes, things have changed considerably from those days and a million does not get you much anymore. Something major has to occur to get things back to reality. The thing is, wages have really only increased about 10 times from back then when I compare what I earned then to what a similar position would pay today. Housing prices are totally out of whack to inflation over that time period. Anyway, I thought this might be of interest to some on the blog. Oh, and bananas were 10 pounds for a dollar back then.

———————————-

Very interesting post.

My expectation is that things will deteriorate rather quickly with discouragement by US on continuation of current Canadian cheap dumb unqualified labour based primarily on cheap loonie policies and the necessity for Canada to compete internationally with cheap labout from Mexico, India, China which basically will be the doom of the labour force in Canada.

Yes, we will have houses and some services, including financials but the backbone of the economy will be gone with all the consequences – destroyed loonie, huge inflation (especially horrific in imported food, watch all that grocery prices!) with no meaningful interest rate rises.

There will be huge outflows of investment capital out of this country due to absolutely ridiculous and incompetence, outright damaging lieberal policies.

The glorified and arrogant elitist HR manager serving as fin. minister can not even comprehend the impact from US tax cuts on businesses, he sits, observes and does nothing/actually contributes actively to destroying small businesses.

What do we think will happen here, doctors will work for free while renting basements?

#204 Bytor the Snow Dog on 02.28.18 at 9:26 am

62 El Joko sez:

“I’m no fan of conservatives, I’ve voted for a conservative candidate once in my life, and after Trudeau I think I’m willing to overlook all the conservative bullshit for a decade and vote Scheer.
I absolutely hate the social justice agenda. It is driving me nuts, and I’ve been a lifelong Liberal/NDP voter.”

————————————————————

You must be my long lost brother! This is exactly what I’m going to do. We need a little shift to the right.

What remains to be seen is if the Conservatives are actually any different…

#205 Shety12 on 02.28.18 at 9:32 am

#116 Smoking Man on 02.27.18 at 8:42 pm
So I move to the other side of the world so not to get burned by socks boy. And he doesn’t pull the trigger.

I’m pissed. Now paying California taxes …..really pissed.
================

Baby boomers are not cheap.

https://californiapolicycenter.org/can-californias-economy-withstand-1-3-trillion-of-government-debt/

#206 Stan Brooks on 02.28.18 at 9:37 am

They/the agency in charge of housing don’t know (or pretend they do not know) why there is a limited supply of housing in Toronto.

https://ca.finance.yahoo.com/news/torontos-housing-supply-challenge-growth-061135143.html

How about speculators holding 60-70 % of new built condos/and houses in some places in hope of magical appreciation?

These/CHMC are the same people that ‘insure’ more than half of a trillion in mortgages and they do not know their market!

how about stupidity, incompetence, corruption?

#207 Victor V on 02.28.18 at 9:41 am

https://www.bnn.ca/fed-s-powell-sends-global-stocks-reeling-to-five-day-low-1.1013431

LONDON – World stocks were set to snap a record 15-month long winning streak on Wednesday, tumbling another quarter percent after new Fed boss Jerome Powell’s comments suggested the possibility of four U.S. interest rate rises this year rather than three.

Barely recovered from an early-February sell-off, equity sentiment has been shaken by Powell and by data showing China’s manufacturing sector slowing to its weakest in over 1-1/2 years and Japanese industrial output down the most since March 2011.

Equity futures signaled Wall Street would open flat after declines of more than 1 per cent on Tuesday when the U.S. Federal Reserve chief delivered his debut testimony to Congress.

Powell had struck a mildly hawkish note, noting inflation had risen since December and vowing to prevent the economy from overheating.

But that was enough for traders to add bets on the Fed squeezing in another rate rise this year, with futures now pricing a one-in-three chance of a fourth hike.

#208 IHCTD9 on 02.28.18 at 9:46 am

#179 buttercup on 02.28.18 at 5:08 am
#29 Howard on 02.27.18 at 5:46 pm
Gawd.

We better not have to f**king bail these people out.

I’m preemptively furious because I suspect that’s exactly what’s going to happen

———-
Good Grieff, I forking hope not!!

The sheeple are content to stay ignorant, from what I’ve observed. Why, what choices do they have?

Math is hard! Even for the Lieberals, or so it seems…
_______________________________________

Any bailout would be done via borrowed money, to be recouped later via future taxes. This being the case, you have options. Draw a line in the sand and commit to not paying more than “X”% of your income in taxes. No matter what. Make a plan, execute, make it happen. I do it every day, one way or another.

If your total tax load was 50% 10 years ago, and it’s 40% today – 5 years after a 100 Billion dollar RE bailout happened – you haven’t paid a dime for it. Get that percentage down, and you win.

Freeze your tax enslavement in time, Mine formally froze last year, and I’m currently going backwards in time with more cuts and offsets. My life is getting simpler, my wallet fatter, and my household hardened.

No matter your race or colour, if you are a private sector schmuck making a decent wage, born here, and of the Male persuasion – precious little of your taxes go towards your demographic anyway. 20-30 years from now, all the infrastructure will be “pay per use”, CPP/OAS might keep you in coffee for the month, health care certainly won’t be better, but better than 50% of your remittances will go to fund backwards thinking ideologues in all their various flavors and useless pursuits. You yourself get jack squat out of the deal.

Your money, your call.

#209 Tater on 02.28.18 at 9:49 am

#61 Howard on 02.27.18 at 6:48 pm
#28 Stone on 02.27.18 at 5:44 pm
“People keep taking on debt because they don’t have a choice, and they’re choosing products they’re not amortizing, so they’re not paying down that debt, and it will eventually catch up to them at some point in time. They’ll have to pay more interest because rates will be higher, so they may simply not pay off their mortgage and sell the house,” says the broker.

Sell the house. And guess what that means?

—————-

Bankruptcy.

It’s strange this option has not been discussed much. In the US, it is a very onerous thing with very severe legal ramifications after declaring bankruptcy once. In Canada, not so much with the point being rehabilitation. With how things are going, this may well be the path for a good portion of the Canadian population. This allows them to walk away from their debt obligations and if they have no actual assets or net worth, is not a big deal. The only issue then is paying with cash for the next few years. In other words, going cold turkey on debt. With a clean slate. Is that so difficult? I don’t see a whole lot of negative consequences here.

———————————————-

This is interesting.

Garth, could you perhaps do a blog entry some day on the consequences of declaring personal bankruptcy in Canada? Just a request/suggestion.
————————————————————–
A guest post with an LIT would be great. You can also follow Scott Terrio on twitter, he opines on this often.

#210 maxx on 02.28.18 at 9:49 am

#55 Jason Sensation on 02.27.18 at 6:33 pm

“To quote Andrew Coyne on Twitter “…This budget shows that the Liberals plan to spend about the same as the Harper govt, by their own preferred measure: 13.8% of GDP, on average, over the next five years, compared to 13.7% during the Harper era.”

So not sure what all the whining from Tories is about. Much the same my friends.”

Imitation is the sincerest form of….budget by default??

Well now, on Mr. Harper’s watch our dollar exceeded parity with the USD, our relationship with foreign countries far better than it is today (continues to decline too, as, let’s face it, who can take this “team” seriously), we didn’t have the supreme bs about the TFSA being “only for the rich”, we currently have a PM, whose workplace has a ginormous “Canada 150” sign at the front gates (!), spouting in India about Canada’s 100th (showing up for work more often might have helped), obscene, wasteful taxpayer spending on culturally INSENSITIVE vacation wardrobes – and the list grows daily like a cancer of stupidity.

Libtards ought to learn the difference between whining as opposed to having the truth reflected at them.

We have a bunch of highly destructive, self-reinforcing, naïve, immature and breathless dilettantes running the show – for now.

#211 Whipster on 02.28.18 at 9:51 am

#141 Morley

It ain’t rocket science. You click on zolo listing and get info including price drops and days on market. Then go to BCassessment and enter address. Previous sold history of last 3 yrs listed right there for you.

Always verifiable. You’re welcome

#212 Victor V on 02.28.18 at 9:55 am

Laurentian Bank continues to review problem mortgages

https://www.bnn.ca/laurentian-bank-continues-to-review-problem-mortgages-1.1013534

TORONTO – Laurentian Bank of Canada said on Wednesday it was continuing to review problematic mortgages sold to an unnamed third party last year and may need to repurchase more of the loans.

Laurentian said in December that it might have to buy back about $304 million in mortgages sold to an unnamed third-party purchaser after an audit found “documentation issues and client misrepresentations”.

#213 Tater on 02.28.18 at 10:05 am

#103 Bill Grable on 02.27.18 at 8:15 pm
TO #61 Howard on 02.27.18 at 6:48 pm –

I believe Alberta and Quebec are the ONLY Provinces that allow you to walk away from a Mortgage. The rest of us?You can declare bankruptcy, but you STILL OWE the Mortgage. You have to pay back that money. That’s why its called a MORT (DEATH) GAGE (CONTRACT).

A lot of people are in very deep water. The fear out here in deluded Vancouver is palatable.

My Doctor mentioned she deals with more and more people that are a bundle of nerves, and desperate because of this R/E debacle.
—————————————————————
This is completely untrue. A shortfall on a mortgage becomes just another unsecured debt in a bankruptcy. It’s a pervasive myth that keeps people from exploring all their options when they get in trouble because ignorant people (like you!) continue to spread this nonsense. Here: http://www.macleans.ca/economy/realestateeconomy/heres-how-canadians-could-walk-away-from-their-homes-if-house-prices-fall/

#214 Yorkville Renter on 02.28.18 at 10:07 am

#144 – a lawyer or accountant is not necessarily a license to print $$$… you have to manage your books, find/manage/keep clients, pay vendors, sometimes keep up with continuing education, etc.

There’s plenty of risk compared to collecting a pay cheque every other week.

#215 IHCTD9 on 02.28.18 at 10:14 am

#175 Ppppp on 02.28.18 at 2:02 am
#134 KLNR on 02.27.18 at 9:25 pm

@#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.
____________________
not this gen Xr. Some what invincible, liquidated my profits last Feb moved to a smaller more efficient house. even cut my prop taxes by close to 60%. Most gen Xers I know in TO are doing alright, livin within their means and have houses as homes not investments

___________________________

My GenX circle are all pretty well off out of this Real estate bubble. Remember that we are the silent loner generation. Never bought into the disillusion since none of the marketing was directed towards us. Most of us actually exercise financial caution and independent thought since we grow up in an analog world and we are mostly that middle sibling that gets ignored.

Most of my friends have either sold at the peak, are forever renters or have pushed to pay off their house during this period of low interest rate. Please leave us out of this fight.
__________________________________________

I’ve always said GenX was the luckiest generation ever.

I agree with the above posts – most of my GenX peers are living in paid for houses, a couple still working the same jobs they got out of College/University. Those who bought in the GTA are sitting on a PILE of money compared to their purchase price. 90% of them are married with wives who work – the majority with good paying careers.

Hell, I’d say 90% of my GenX buds and family who are married dual income families are looking at a very comfortable retirement. Everything just fell into place for Gen X’ers (well the early ones at least).

#216 -=jwk=- on 02.28.18 at 10:29 am


The Chateau kid is no politician, but a follower as a Johnny come lately. He is well educated, but knows nothing, and suspect others have been paid to guide him through the business world. This man has really never sought out a job with a resume, or worked for a boss in his life. He worked for his daddy with parental promotions up the ladder, and married well. He has done a few good things in life nevertheless, but in the political arena he is following orders like a good puppet now, rather than a critical thinker.

Best description of Trump ever. Why you call him the Chateau kid though? Dont get the reference…

#217 Smoking Man on 02.28.18 at 10:37 am

Dumb. Dicks sporting goods to not sell Ar-15.

Know your customers.

A Starbucks philosopher is never going to buy a gun. Altho moraly it’s probably the right thing to do. Feel good rush. But when you let emotion dictate business models your going to lose market share Every time.

#218 Bon Bonds on 02.28.18 at 10:54 am

I was thinking that CMHC bonds might be a good shelter from the storm. It seems like I can’t lose.

“CMB carry the full faith and credit of Canada, and constitute a direct unconditional obligation of Canada.”

I don’t think the taxpayer has anything to fret about, as there’s only about $200 Billion in CMB’s. But wait, there is another $483,937,705,288.47 of mortgage-backed securities on the CMHC’s books. And somebody called the “Guarantor of the Special Purpose Vehicle” is on the hook for another $82 billion in covered-call bonds. I think that’s us, but I’m still not worried.

KPMG conducted a thorough audit of CMHC (in 2008). I’d rather worry about JT’s chequebook balance.

https://www.cmhc-schl.gc.ca/en/hoficlincl/in/camobo/upload/canada-mortgage-bonds-fact-sheet-2018-02-15.pdf

https://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/upload/mbs-r120-current-principal-balance.pdf

#219 Howard on 02.28.18 at 10:55 am

Our friend who left Toronto for Quebec City has made the MSM :

https://www.theglobeandmail.com/globe-investor/personal-finance/genymoney/why-this-family-is-done-with-toronto/article38110212/

Guess the Globe reads this pathetic blog, too. – Garth

#220 Gonkman on 02.28.18 at 11:01 am

#134 KLNR on 02.27.18 at 9:25 pm

@#20 MF on 02.27.18 at 5:37 pm
#14 I’m stupid on 02.27.18 at 5:25 pm

You forgot Gen X…quietly the most delusional and indebted of the all. All bought real estate in 2002-2009 and think they are invincible because of central banker manipulation.
____________________
not this gen Xr. Some what invincible, liquidated my profits last Feb moved to a smaller more efficient house. even cut my prop taxes by close to 60%. Most gen Xers I know in TO are doing alright, livin within their means and have houses as homes not investments

___________________________

My GenX circle are all pretty well off out of this Real estate bubble. Remember that we are the silent loner generation. Never bought into the disillusion since none of the marketing was directed towards us. Most of us actually exercise financial caution and independent thought since we grow up in an analog world and we are mostly that middle sibling that gets ignored.

Most of my friends have either sold at the peak, are forever renters or have pushed to pay off their house during this period of low interest rate. Please leave us out of this fight.

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

Ditto..

I paid down all my debt from 2008-2014 when rates went lower. I had a 1.75% rate on my Variable mortgage for a while. Mortgage got retired in 2014. 15 Years to pay off my home.

Now in stashing the LOOT time.. TFSA’s (Maxed), RRSP (Will be maxed Next Year), Kids RESP’s are stuffed as well..

My largest payment per month is my Property Taxes at $450 a month.

As the previous Gen-Xers chimed in.. I saw my Parents struggle in the 80’s with rates and I was taught to live within my means and debt was BAD…

My house was NEVER an investment. It was a place to live/raise my family and roof over our heads. Sure it is worth 250% more than I paid for it almost 20 years ago…. but I don’t plan on using it as an ATM ever.

#221 Alistair McLaughlin on 02.28.18 at 11:04 am

@ 183 TheoryAndPractice, Norway might have a nice fat sovereign wealth fund, but Norwegian households are more indebted than we are.*

Canada household debt to GDP – 100.5%
Norway household debt to GDP – 107.8%

Canada household debt to disposable income – 173%
Norway household debt to disposable income – 195%

Source: https://tradingeconomics.com/

No doubt Norwegians enjoy an excellent standard of living, but I fail to see the point of having a rich government while private citizens are heavily indebted and heavily taxed. Obviously Norwegians have decided that public wealth is more desirable than individual wealth, and that’s nobody’s business but their own. But I hope I never see the day when Canadians demonstrate such blind faith in the wisdom and benevolence of our government.

*Yes, I’m aware of recent headlines screaming that Canadian households are most indebted in the world, but that was based on a 25 country survey by the OECD which excluded the 6 countries (Denmark, Netherlands, Cyrpus, Norway, Australia and Switzerland) with higher household debt levels than us.

#222 Old Ron the Realtor on 02.28.18 at 11:12 am

You gotta love the red meat Libertarians on this web site.

Folks, deficit spending is keeping the lights on. And please don’t tell me that trickle-down economics works better. A corporate tax cut usually results in more share buy backs and not one single new hire.

Expect greater deficits going forward, as the real estate market returns to normal, look for that occurrence to shave 1% to 1.5% off GDP.

But cut the Fed Liberals some slack, our deficit is disproportionally much smaller than Trump’s Spend-O-Rama.

#223 aa5 on 02.28.18 at 11:18 am

With the economy rolling with the success of our deficit stimulus, and because of the American economy taking off.. the Liberals are a shoe-in for the next election.

The fear among my clients was that the Liberals would go hardcore anti-wealth creation.. but the Liberals appear to be passing that test. The tax system and tax credits are more progressive than when they were elected.. but not in an overboard, economy crashing way as some European countries went.

#224 Classical Liberal Millennial on 02.28.18 at 11:18 am

SCM must be so happy with the 300 mentions of gender and intersectionality in a GD federal budget.

#225 Lisa Power on 02.28.18 at 11:24 am

The current situation in house prices could have been avoided if more houses were built to meet demand, thus keeping prices reasonable. We have more than enough land- second biggest land mass in the world with a population of 38 million. The US has a fraction of our land mass and 10X the population so why is their housing priced so much lower. Wouldn’t the laws of supply and demand make it the opposite? With plenty of land (yes in the LM and GTA), why isn’t it being turned into houses? This would solve the problem of uncontrollable prices and gives cities their workforce.

#226 Alistair McLaughlin on 02.28.18 at 11:29 am

@ #103,

Remaining mortgage debts do not follow you after you declare bankruptcy. They are wiped out. The only way you keep the mortgage debt through bankruptcy is if you also keep the house (which sometimes happens in bankruptcies, believe it or not).

Recourse simply means the bank is allowed to pursue you until you declare bankruptcy. Non-recourse means you can turn in the keys without declaring bankruptcy.

#227 Linda on 02.28.18 at 11:43 am

#71 Mark: yes, people with cash will be able to buy properties. The point is whether they would want to purchase the property in the first place.

Regarding bankruptcy, seems like quite a few people think it is an easy-peasy, no-brainer process. Not. Plus, unless you plan to pay cash for the rest of your life you will at some point be applying for credit again. Expect your interest rate to reflect your (bad) credit rating & expected level of risk. Oh, that credit record is reset/wiped clean after X number of years & thus won’t be taken into account? Good luck with that, you’ll need it.

#228 Alistair McLaughlin on 02.28.18 at 11:49 am

@ Dave Ahem, once again, you’ve got your story line all mixed up. Zero and forty was brought in in 2006, when the housing market was booming. The zero and forty insured mortgage was eliminated on October 15 2008, at the very beginning of the Great Financial Crash, before Canadian housing even started to correct. (I mistakenly said it was eliminated in 2009 yesterday, but I was wrong on that – I just looked it up).

Here’s a timeline of how the CMHC rules changed from 2006 to December 2015:

https://www.ownthemountains.com/single-post/2016/01/02/Timeline-of-Changes-to-CMHC-Mortgage-Guidelines-Since-2006

#229 Guy in Calgary on 02.28.18 at 12:01 pm

Just got notice that the FI I work at will no longer allow our credit card customers to purchase crypto. Free country my arse.

#230 Stone on 02.28.18 at 12:12 pm

#186 SimplyPut7 on 02.28.18 at 7:30 am
#28 Stone on 02.27.18 at 5:44 pm
#61 Howard on 02.27.18 at 6:48 pm
#142 IHCTD9 on 02.27.18 at 10:09 pm

Scott Terrio talks about this online on Twitter (https://twitter.com/ScottTerrioHMA), BNN and podcasts:

Second from the top #61 The ins and outs of bankruptcy with Scott Terrio
https://itunes.apple.com/ca/podcast/mostly-money-mostly-canadian/id523360095?mt=2

Talking Out Loud About Debt with Scott Terrio
https://www.hoyes.com/blog/talking-out-loud-about-debt-with-scott-terrio/

People may be able to do a consumer proposal instead of a bankruptcy, which would allow them to keep their homes while paying off a reduced amount of debt that they have outstanding with their creditors.

Favourite tweet from Scott Terrio, Dec 14, 2017, 10:17 pm:

Young house-flipping guy/casual landlord who ended up owing $2.6 million in unsecured debt & filed bankruptcy for only $1,800? That’s neither normal nor is it right, but it’s the law. And the courts didn’t differ on discharge. http://podcastapp.io/the-ins-and-outs-of-bankruptcy-with-scott-terrio-bedebtsavvy-e26386000/

———

Based on the above, this is the likely path many individuals will take. Bankruptcy or consumer proposal. They can walk away with clean hands and in the meantime get themselves some cash collateral credit (credit card, loan, RRSP loan) to get their credit reestablished. It isn’t all doom and gloom after all.

So easy and no actual consequences. Keep on pigging out everyone. Because you can…

#231 Keith in Rio on 02.28.18 at 12:13 pm

#213 is correct regarding mortgage deficiency balances. BK wipes them out.

So here in Canada we elected “Mr. Dressup” as PM. Best foreign tour ever by any leader !! It’ll be meme fodder for weeks.

Those of you my age will know who I am talking about from TV……..our finance minister kinda reminds me of Mr. Rogers…….heh.

#232 James on 02.28.18 at 12:43 pm

#217 Smoking Man on 02.28.18 at 10:37 am

Dumb. Dicks sporting goods to not sell Ar-15.
Know your customers.
A Starbucks philosopher is never going to buy a gun. Altho moraly it’s probably the right thing to do. Feel
good rush. But when you let emotion dictate business models your going to lose market share Every time.
——————————————————–
If you knew anything about guns little Smoking knucklehead then you would know that this is not the sort of gun that the general population should have access too. Though it can be used for hunting, the AR-15 isn’t really a hunting rifle. Its standard .223 caliber ammunition doesn’t offer much stopping power for anything other than small game. A real hunter does not need a semi-automatic rifle to hunt, if he does he sucks, and should go play video games. The Colt AR-15 is a lightweight, magazine-fed, gas-operated semi-automatic rifle. It was designed to be manufactured with the extensive use of aluminum alloys and synthetic materials. Extremely light for a rifle. It is a semi-automatic version of the United States military M16 rifle. Colt’s Manufacturing Company currently uses the AR-15 trademark for its line of semi-automatic AR-15 rifles that are marketed to civilian and law-enforcement customers. The Colt AR-15 uses 20- or 30-round staggered-column detachable box magazines. Low-capacity 5- or 10-round magazines are also available to comply with legal restrictions, for hunting, for benchrest shooting or where a larger magazine can be inconvenient. How do I know these things little Smoking Twit? I hunt! One shot, one kill! This is not a hunting rifle it is an assault rifle and should not be marketed to the general population. Especially a weapon that can have a 30 round clip.
BTW People like you should not have access to automatic weapons!

#233 Howard on 02.28.18 at 12:51 pm

#227 Linda on 02.28.18 at 11:43 am

Regarding bankruptcy, seems like quite a few people think it is an easy-peasy, no-brainer process. Not. Plus, unless you plan to pay cash for the rest of your life you will at some point be applying for credit again. Expect your interest rate to reflect your (bad) credit rating & expected level of risk. Oh, that credit record is reset/wiped clean after X number of years & thus won’t be taken into account? Good luck with that, you’ll need it.

————————————–

Let’s say you’re elderly and will never make another major purchase again.

While still owning your home + mortgage, and still having a good score, you acquire a rental apartment. You already have all the credit cards you need, and acquire more of them with the latest possible expiry date. You already have a paid-off automobile that has many years of life ahead of it (or, alternatively, you do not drive, period).

Under this scenario, it seems a no brainer to simply declare bankruptcy and walk away from a mortgage if it surpasses the value of the house + taxes/fees/realtor commission. You’ve already procured an apartment. You already have credit cards. By the time you need to renew your credit cards, the hit to your credit rating will be lessened and in any case, you can pay your rent with post-dated cheques and buy food in cash or debit. And this being Canada of course, you don’t have to worry about paying for healthcare.

Why WOULDN’T you take the bankruptcy route?

#234 James on 02.28.18 at 12:53 pm

#217 Smoking Man on 02.28.18 at 10:37 am

Dumb. Dicks sporting goods to not sell Ar-15.

Know your customers.

A Starbucks philosopher is never going to buy a gun. Altho moraly it’s probably the right thing to do. Feel good rush. But when you let emotion dictate business models your going to lose market share Every time
_______________________________________
BTW Little Smoking twit your osmosis with Donald J Trump is beginning to show. By staring your lecture with an demoralizing word. “Dumb”
Oops, your osmosis is contagious, Little Smoking twit.

#235 Pre-retiree on 02.28.18 at 12:55 pm

#135 Loonie Doctor
All of these “tax the high income earners” strategies will result in behavioural changes as people will naturally weigh how much work/sacrifice is worth how much take home pay. The way I see it, these policies will encourage people to spend less and work less. Not necessarily a bad thing as long as there are more workers to fill in the gaps created. I have already changed my behaviour and work about 25% less. My family likes it. Me too. I think that the government is hoping that we will just run headlong and bash our heads against the tax wall when they are making their revenue generating predictions. I suspect that most of us are smarter than that, but I could be wrong.
______________________
No, you are right. I am in a similar position as you, and I taken a number of steps last year that will SIGNIFICANTLY reduce my income tax burden.

#236 Stan Brooks on 02.28.18 at 12:58 pm

#218 Bon Bonds on 02.28.18 at 10:54 am
I was thinking that CMHC bonds might be a good shelter from the storm. It seems like I can’t lose.

“CMB carry the full faith and credit of Canada, and constitute a direct unconditional obligation of Canada.”

I don’t think the taxpayer has anything to fret about, as there’s only about $200 Billion in CMB’s. But wait, there is another $483,937,705,288.47 of mortgage-backed securities on the CMHC’s books. And somebody called the “Guarantor of the Special Purpose Vehicle” is on the hook for another $82 billion in covered-call bonds. I think that’s us, but I’m still not worried.

KPMG conducted a thorough audit of CMHC (in 2008). I’d rather worry about JT’s chequebook balance.

https://www.cmhc-schl.gc.ca/en/hoficlincl/in/camobo/upload/canada-mortgage-bonds-fact-sheet-2018-02-15.pdf

https://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/upload/mbs-r120-current-principal-balance.pdf

———————————————–

1. There is $483,9 billions in MBS on CHMC balance sheet

https://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/upload/mbs-r120-current-principal-balance.pdf

2. There is $232.8 billion CAD (~$186.2 billion USD) in outstanding issuances as of Feb 15, 2018 in CMB

https://www.cmhc-schl.gc.ca/en/hoficlincl/in/camobo/upload/canada-mortgage-bonds-fact-sheet-2018-02-15.pdf

3. There are mortgages insured on banks balance sheets

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

Canada has 58 % of public mortgage insurance

https://www.bankofcanada.ca/wp-content/uploads/2015/12/fsr-december2015-mordel.pdf?redirected=1

which is around 1,477 billions

so we are looking at 860-900 billions in guarantees on residential mortgages by the taxpayer!

Why if our banks are sound?

——————————–

It is a huge giant gasbag and a house of cards.

#237 IHCTD9 on 02.28.18 at 1:01 pm

#204 Bytor the Snow Dog on 02.28.18 at 9:26 am
62 El Joko sez:

“I’m no fan of conservatives, I’ve voted for a conservative candidate once in my life, and after Trudeau I think I’m willing to overlook all the conservative bullshit for a decade and vote Scheer.
I absolutely hate the social justice agenda. It is driving me nuts, and I’ve been a lifelong Liberal/NDP voter.”

————————————————————

You must be my long lost brother! This is exactly what I’m going to do. We need a little shift to the right.

What remains to be seen is if the Conservatives are actually any different…
__________________________________________

Modern Canadian Politics = politicians fearing accusations, loss of power, social media flame fests, etc… Same deal, all parties.

Scheer may cool the sjw agenda a bit, but can do little to right our finances if he wants any chance at a second mandate.

It would be nice to have classic Liberals actually leading the party again. Jean Chrétien looks like an alt-right soldier of Odin next to Trudeau. Canadians currently have a choice between exclusive hard left special interest pandering and money burning, and whatever Scheer turns out to be. Nothing in the middle.

Frankly, Scheer is not the kind of Con I like either. I’d much prefer a Harper/Harris style that hauls around more brass than John Philip Sousa. I am still planning on voting Trudeau for an A-Bomb on the economy, but would rather see non-violent changes backed with results. I don’t think Scheer will pull it off. He won’t get a majority, one mandate and done.

IMHO, we’re going to get a government scared to death of it’s voter base turning on them. One that has to pander to 50-60 different special interests. Social media and public shaming dictate policy these days. Image projection and virtue signaling are more important than the economy. Half the caucus will get metoo’ed out of a job no matter who wins. Whatever quivering fear stricken suckers that remain will spend the rest of their mandate avoiding questions and acting as benign and non-controversial as possible while getting nothing done.

#238 Dear Veronica on 02.28.18 at 1:02 pm

Please stop trying to send me that Interac E-Transfer. My credit card got hacked yesterday and I’m in no mood for your monkey business.

XO your “dad”

Anybody got any tips on which internet security firms to invest in?

#239 Stan Brooks on 02.28.18 at 1:13 pm

US , they had 10.6 trillion in mortagages at the peak of their bubble, now around 9,9 trillion

#240 Babylon Berlin on 02.28.18 at 1:14 pm

I couldn’t watch the final episode last night – I thought Netflix was down. They just emailed me and said I’m a deadbeat without a credit card. What’s on CBC tonight?

#241 SimplyPut7 on 02.28.18 at 1:14 pm

#230 Stone on 02.28.18 at 12:12 pm

Scott made it sound like you can’t knowingly keep adding to your debt because you think a bankruptcy judge will just wipe the slate clean. And that you can’t miss any payments from your reduced debt obligations (which can take several years to pay off) or the creditors may go after more assets e.g. the house they let you keep.

Also, some creditors are easier to negotiate with than say the big 5 banks, who won’t give in so easily.

The consumer proposal sounded more like probation than a ‘get out of jail free’ card.

#242 crowdedelevatorfartz on 02.28.18 at 1:20 pm

@#174 Dolce Vita
“Hope more stories like that emerge in 2018. ”
+++++

Careful what you wish for. If this real estate meltdown is anything like the early 80’s….Fugly.

I have another acquaintance who’s wife went Full time into the reno biz.
They would buy a condo reno it. Move in and exactly a year later . Put it on the market.
She’s paid herself a very nice salary over the past decade as the “contractor” organizing trades. Designing. etc.
All while the markets have been going up up up.
I warned him about 6 months ago after listening to him blather on non stop about how “brilliant” they were with their flips.
” Careful, the CRA could reassess you and say your prime residence is being used for income/ business. And the markets are changing, slower sales, lower prices”

His reaction? ” Its different here. Offshore money will always want to buy, blah blah blah.
Then he confidently stated, “CRA cant “change the rules”.
To which I laughed, ” The CRA can do whatever they want and you’ll go broke trying to fight them”

Fast forward 6 months.
Their latest “Brilliant move” isn’t “moving”
They refuse to drop their price since, after all, it IS a business for her…..
But they’re fortunate…. CRA hasnt come knocking…….yet.

#243 ubul on 02.28.18 at 1:22 pm

216 -=jwk=- on 02.28.18 at 10:29 am

The Chateau kid is no politician, but a follower as a Johnny come lately. He is well educated, but knows nothing, and suspect others have been paid to guide him through the business world. This man has really never sought out a job with a resume, or worked for a boss in his life. He worked for his daddy with parental promotions up the ladder, and married well. He has done a few good things in life nevertheless, but in the political arena he is following orders like a good puppet now, rather than a critical thinker.

Best description of Trump ever. Why you call him the Chateau kid though? Dont get the reference…

….

Care to share who’s order Trump is following, who’s puppet is he?

#244 Stan Brooks on 02.28.18 at 1:25 pm

I will copy the FT article here

https://www.ft.com/content/e692a116-71f1-11e7-93ff-99f383b09ff9

Covered bonds: the European link to Canada’s house price boom

Canadian banks have turned to Europe’s covered bond market for mortgage funding

#245 soost on 02.28.18 at 1:43 pm

The bigger trends point to collapse but I can tell you the warm weather last week got EVERYONE house horny. Open houses looked like the ones I saw at peak price. I feel that the Toronto core fire has been reignited. Just my little anecdote of experience. 151 roe was absurd – the house was horrible

#246 Tater on 02.28.18 at 1:46 pm

#229 Guy in Calgary on 02.28.18 at 12:01 pm
Just got notice that the FI I work at will no longer allow our credit card customers to purchase crypto. Free country my arse.
—————————————————————-
So in your definition of a free country, a company can be forced to process transactions it doesn’t want to? Using a network they built themselves?

#247 PastThePeak on 02.28.18 at 2:00 pm

#222 Old Ron the Realtor on 02.28.18 at 11:12 am
You gotta love the red meat Libertarians on this web site.

Folks, deficit spending is keeping the lights on. And please don’t tell me that trickle-down economics works better. A corporate tax cut usually results in more share buy backs and not one single new hire.

Expect greater deficits going forward, as the real estate market returns to normal, look for that occurrence to shave 1% to 1.5% off GDP.

But cut the Fed Liberals some slack, our deficit is disproportionally much smaller than Trump’s Spend-O-Rama.
+++++++++++++++++++++++++++++++++++

A bit of sh*t to unpack there, but here goes:

If it takes deficit spending “to keep the lights on” 10 years after the last real recession, during a time of (relatively) good growth and record low unemployment, then there are serious problems.

Expect larger deficits going forward – I certainly do. I expect the bond agencies to start to notice in a few years. That “top notch” rating that Chateau Boy was going on about isn’t going to last.

As for debt-to-GDP, if you only look at federal level, then it isn’t horrible – ~$650B CAD in an economy of 1.6T USD (~2T in CAD$, or ratio of 32%). However, the collective provincial & municipal debt is now higher, with a total Canadian public sector debt closing on 1.4T (70%).

US Federal debt is very high at 20T, but the state & municipal debts (outside of California) are very little in comparison (3T) . So while US total debt-to-gdp is over 100%, Canada as a whole is getting up there, while our overall taxes are much higher already.

The more immediate problem in Canada is the consumer debt. The US already went through their deleveraging process starting back in 2008, but have yet to start.

Hardly a libertarian to believe you should spend less than you take in, but socialists like you have never been good at math.

#248 Voting System must be changed on 02.28.18 at 2:05 pm

I agree with No. 13 who suggested intellectual capacity tests for political candidates.

To preclude such an incompetent people like T2 or Obama become leaders, the way democracy works must be changed or we doomed to mediocrity.

Here are some circulating ideas:
• Voting system should be similar to the tax system.
• One vote credit is guaranteed to every citizen.
• One more voting credit get everyone who pay taxes.
• People with more formal education have more vote credits, i.e. say B.Sc. has one more vote, M.Sc. 2 more votes; PHD – three more.
• People who do not have formal education beyond the high school may get more vote credits by successfully passing knowledge learning on related subjects like Canada History, Canada Law Basics, Humankind History, World Wars History, Economics Basics, etc. The learning course should be free, but only once. If you failed the test and want to repeat the course – you pay for this.
• IQ tests may be also considered for incorporation into the voting system.
• Politicians who are candidates for the elected job and high level bureaucrats must have minimum pre-determined number of vote credits to be eligible for consideration. In order to eliminate the incompetent populists like T2, the threshold should be rather high possibly equivalent to the citizen who pay taxes and who has PHD degree.

This is just a sketch which can form a basis for further detalization.

#249 PastThePeak on 02.28.18 at 2:14 pm

#237 IHCTD9 on 02.28.18 at 1:01 pm

Modern Canadian Politics = politicians fearing accusations, loss of power, social media flame fests, etc… Same deal, all parties.

Whatever quivering fear stricken suckers that remain will spend the rest of their mandate avoiding questions and acting as benign and non-controversial as possible while getting nothing done.
+++++++++++++++++++++++++++++++++++

Yep. The population’s views are drifting left, and so no party that promises to correct the economic ship will get voted in. Scheer would have to sell his conservative soul to win.

Look at the Ontario PC’s platform, such as it was prior to the Brown Blowup. Basically keeping all the Liberal policies + new spending of his own. The next PC leader will need to do similar to get elected. People feel they are entitled to their entitlements.

Without a personal sexual misconduct scandal involving T2 himself, the Liberals will win the next election, or possibly a Lib minority with NDP. So we have 6 more years. Throw a recession in there sometime, and should be enough to rack up another $100M in debt at the fed level, and perhaps another with the provinces.

Nothing really will get done – lots of virtue signalling – but that nothing is going to cost an awful lot.

#250 morrey on 02.28.18 at 2:18 pm

Chateau Kid

Line of the Month!

#251 Howard on 02.28.18 at 2:22 pm

#242 crowdedelevatorfartz on 02.28.18 at 1:20 pm

Report him and his wife to the CRA anonymously.

#252 n1tro on 02.28.18 at 2:25 pm

#246 Tater on 02.28.18 at 1:46 pm
#229 Guy in Calgary on 02.28.18 at 12:01 pm
Just got notice that the FI I work at will no longer allow our credit card customers to purchase crypto. Free country my arse.
—————————————————————-
So in your definition of a free country, a company can be forced to process transactions it doesn’t want to? Using a network they built themselves?
—————–
In a free country, INDIVIDUALS should not be forced to make or not make transactions that a company deems is in their own best interests. Especially if that company is in the business of making money from individuals making transactions. What’s next? Individuals will not be allowed to use credit cards to fund porn accounts, betting sites, hello kitty dolls?

Companies can do what they want but dont be delusional to think their wont be consequences as consumers find alternatives.

#253 Laurentide is on its side on 02.28.18 at 2:31 pm

Zee boss, I am certain he say doo-doo diligence! Oui?

http://www.cbc.ca/news/business/laurentian-bank-1.4555286

#254 Mark on 02.28.18 at 2:33 pm

“#71 Mark: yes, people with cash will be able to buy properties. The point is whether they would want to purchase the property in the first place. “

I recall a lot of people heavily invested in the bubbly asset of the time, Nortel stock (and stock/options of companies in similar industries), in the late 1990s buying housing in the GTA.

This time around, especially in Vancouver, it might be those who participate in the precious metals industry who are doing the buying with their massive portfolio gains. Working in precious metals for the past few decades has been mostly a frustrating exercise in living frugually and eating Krap Dinner relative to those working in most other sectors.

Of course, existing “landlord families” will probably have to exile themselves for a few years as they’ll be bankrupt several times over with the amount of credit most of them have used to acquire RE, but there will almost certainly be a new crop to arise, especially at much lower prices and attractive ROI’s.

#255 Smoking Man on 02.28.18 at 2:36 pm

#234 James on 02.28.18 at 12:53 pm
#217 Smoking Man on 02.28.18 at 10:37 am

Dumb. Dicks sporting goods to not sell Ar-15.

Know your customers.

A Starbucks philosopher is never going to buy a gun. Altho moraly it’s probably the right thing to do. Feel good rush. But when you let emotion dictate business models your going to lose market share Every time
_______________________________________
BTW Little Smoking twit your osmosis with Donald J Trump is beginning to show. By staring your lecture with an demoralizing word. “Dumb”
Oops, your osmosis is contagious, Little Smoking twit.No
……

I see you’re off your meds again. I’m just trying to point out that picking sides in a divided and polarized culture is bad for business.

What triggered your rant and insults. No idea. But it looks like you should never own a gun. Your a bit unhinged and out of control.

#256 AGuyInVancouver on 02.28.18 at 2:39 pm

#243 ubul on 02.28.18 at 1:22 pm

Care to share who’s order Trump is following, who’s puppet is he?
_ _ _
Hint: Putin isn’t a Quebecois delicacy with fries and cheese curds.

#257 45north on 02.28.18 at 2:55 pm

Shared Services: Morneau’s financial commitment pushes the agency’s annual budget to roughly $1.85 billion in fiscal 2019 — up about seven per cent from the current year.

http://ottawacitizen.com/news/local-news/budget-2018-shared-services-nabs-2-1-billion-in-multi-year-financing

Shared Services was supposed to save money. It was going to consolidate e-mail servers and allow bigger purchases which would give the government more leverage with suppliers. Instead it has spent way more than forecast and demoralized the IT divisions of the departments. It now has a budget of $1.85 billion a year.

After 40 years of working in IT in the Federal Government, I saw that you don’t have to be that smart to propose a bigger organization. It’s the senior civil service which proposed and sponsored Shared Services. They’re not that smart.

#258 mike from mtl on 02.28.18 at 2:59 pm

#196 etf’s on 02.28.18 at 8:45 am
////////////////////

And your point is? Who cares about maple equity and would be so stupid to gauge 100% weighting?

Also YTD is mostly useless (only Feb).

#259 Stan Brooks on 02.28.18 at 3:00 pm

#249 PastThePeak on 02.28.18 at 2:14 pm

Nothing really will get done – lots of virtue signalling – but that nothing is going to cost an awful lot.

———————————-

I think they will strip off productive people from their underwear .

Will we see forced labour to pay off the debt?

It will be forced through credit/incentive to work/ and inflation/remove benefits from the work/

Geniuses! better than slavery, you need at least to feed the slaves.

#260 Compromised on 02.28.18 at 3:10 pm

#252 n1tro on 02.28.18 at 2:25 pm
#246 Tater on 02.28.18 at 1:46 pm
#229 Guy in Calgary on 02.28.18 at 12:01 pm
Just got notice that the FI I work at will no longer allow our credit card customers to purchase crypto. Free country my arse.
—————————————————————-
So in your definition of a free country, a company can be forced to process transactions it doesn’t want to? Using a network they built themselves?
—————–
In a free country, INDIVIDUALS should not be forced to make or not make transactions that a company deems is in their own best interests. Especially if that company is in the business of making money from individuals making transactions. What’s next? Individuals will not be allowed to use credit cards to fund porn accounts, betting sites, hello kitty dolls?
Companies can do what they want but dont be delusional to think their wont be consequences as consumers find alternatives.
—————–

Remember when there were no credit cards and bananas were 7 cents a pound ? Me neither, but I do remember when you could use one to buy booze but not groceries. A credit card can be a tool or a noose, and my hacked one is a nuisance. I don’t know what alternatives there are other than Paypal, which many merchants do not accept, and I refuse to use Interac Online. Bitcoin is only for retards so please don’t suggest that.

#261 LivinLarge on 02.28.18 at 3:23 pm

“So, it was a great day for the 1%ers who swarm here nightly. As for the rest of you…” now that truly cracks me up Fearless Leader. Real, honest to goodness 1%ers???. Or did you mean “wannabe 1%ers’.

If there are actually 2 real 1%ers visiting here with any regularity then you have 1 for company.

#262 Capt. Serious on 02.28.18 at 3:35 pm

SMH, actual conversation I had with a younger (20 something) co-worker today indicates that new Indian immigrants are buying multiple houses “because house prices always go up”. Like literally because prices are high they assume they’ll go higher. “$450k this year, 600k next year” was an actual quote.
This is in Ottawa.
When I explained house prices could go down and borrowing costs can go up (and have been going up over the past year), she was surprised. As in, that was brand new information.
We are so screwed.

#263 louise on 02.28.18 at 3:36 pm

Bill Gates predicts a crash ???https://finance.yahoo.com/news/bill-gates-says-apos-apos-142700880.html

#264 crowdedelevatorfartz on 02.28.18 at 3:40 pm

@#251 Howard

Nah.
I’d rather watch them melt slowly.
And who’s to say CRA wont come aknockin anyway.
They renoflipped about 8 places in the last 8 years.
If CRA cant see whats going on out here everywhere with thousands of “homeowners” ……

#265 Capt. Serious on 02.28.18 at 3:43 pm

#233 Howard on 02.28.18 at 12:51 pm
You already have all the credit cards you need, and acquire more of them with the latest possible expiry date.

You do realize that all the credit cards in the world will not help you if you have them pre bankruptcy. The card issuer can cancel your card if your credit rating is destroyed by bankruptcy. It is a credit card. They are extending credit to you. They can revoke said credit.

#266 Stan Brooks on 02.28.18 at 4:12 pm

And as the esteemed honorable finance minister presents his budget, that is focused on long term growth and investment and is pretty crappy in short term,

My question to him is:

What does he think of Canadians household debt increasing by 5.6 % PER YEAR! (and as it sits at over 100 % of GDP already, that translates to increase of household debt when compared to GDP by over 5.6 % per year)

https://credit.bankofcanada.ca/householdcredit

when IMF states that:

The IMF says a five percentage-point increase in household debt over a three-year period is associated with a hit to GDP growth of 1.25 percentage points three years down the road. The historical record suggests that large debts lead to a short-term economic boost but long-term struggles, as a greater share of the economy’s resources go to servicing the spending binge associated with high debts. The IMF also finds rising household debts are associated with greater risks of banking crashes and financial crisis.

We are over 3 times that rate!

Looking forward to the finance minister response, what is he going to do about the above absolutely idiotic rise in household debt during his tenure as a finance minister?

#267 James on 02.28.18 at 4:16 pm

#243 ubul on 02.28.18 at 1:22 pm

216 -=jwk=- on 02.28.18 at 10:29 am

The Chateau kid is no politician, but a follower as a Johnny come lately. He is well educated, but knows nothing, and suspect others have been paid to guide him through the business world. This man has really never sought out a job with a resume, or worked for a boss in his life. He worked for his daddy with parental promotions up the ladder, and married well. He has done a few good things in life nevertheless, but in the political arena he is following orders like a good puppet now, rather than a critical thinker.

Best description of Trump ever. Why you call him the Chateau kid though? Dont get the reference…

….

Care to share who’s order Trump is following, who’s puppet is he?
__________________________________________
He used to be Bannan’s bitch. Now it appears he’s under Kushner, Ivanka, McGahn, Walsh, Hagin, Pence, Shinkle, Sanders, Conway, Hicks, McFarland. His most important puppet-master is that little mouse on a wheel inside his empty cranial cavity.

BTW The chateau kid is the largest musculus sphincter in this country. He is something we should be proud of. Why should the USA be the only country with a large musculus sphincter.

#268 Stan Brooks on 02.28.18 at 4:31 pm

#257 45north on 02.28.18 at 2:55 pm
Shared Services: Morneau’s financial commitment pushes the agency’s annual budget to roughly $1.85 billion in fiscal 2019 — up about seven per cent from the current year.

http://ottawacitizen.com/news/local-news/budget-2018-shared-services-nabs-2-1-billion-in-multi-year-financing

Shared Services was supposed to save money. It was going to consolidate e-mail servers and allow bigger purchases which would give the government more leverage with suppliers. Instead it has spent way more than forecast and demoralized the IT divisions of the departments. It now has a budget of $1.85 billion a year.

After 40 years of working in IT in the Federal Government, I saw that you don’t have to be that smart to propose a bigger organization. It’s the senior civil service which proposed and sponsored Shared Services. They’re not that smart.

———————————

The chateau kid is not about improving government efficiency, he is about harassing small businesses so the rich elitists like him can profit.

It is ideological thing and has nothing to do with efficiency or competency.

He is entitled by birth, don’t expect him to get into the shoes of a doctor or a plumber.

===============
After 40 years of working in IT in the Federal Government,
===============

What an oxymoron, I thought all the work there is done by private contractors.

#269 JSquared on 02.28.18 at 4:36 pm

Dumb. Dicks sporting goods to not sell Ar-15.

Know your customers.

A Starbucks philosopher is never going to buy a gun. Altho moraly it’s probably the right thing to do. Feel good rush. But when you let emotion dictate business models your going to lose market share Every time.
________

I would rather see every corporation lose market share than have to watch one more parent go through the torture of losing a child. Stupid comment from an even stupider idiot – go crawl back under your rock.

#270 Karma on 02.28.18 at 4:39 pm

#46 FOUR FINGERS WATSON on 02.27.18 at 6:21 pm
“Four rate hikes of .25% , not really a big hairy deal…..if and when a 5 year mortgage reaches an ACTUAL 5-6 % is when we should start worrying.”

Boiling frog theory: things are only bad once the temperature is at a boil. But by the time it’s boiling, the frog’s dead.

#271 Howard on 02.28.18 at 4:43 pm

#265 Capt. Serious on 02.28.18 at 3:43 pm
#233 Howard on 02.28.18 at 12:51 pm

But to put it naively, how would they know one has filed bankruptcy?

Let’s say I acquire a credit card in 2013 through RBC with an expiry of 2021.

In 2015 I declare bankruptcy on a house I mortgaged through CIBC.

How would RBC know? Do the banks conduct regular and random credit checks of their existing customers?

I admit to knowing about this, hence the questions.

#272 Howard on 02.28.18 at 4:44 pm

I admit to knowing NOTHING about this, I meant…

#273 jess on 02.28.18 at 4:45 pm

speaking about the ‘streets ‘ and looking the other way

China’s Bailouts Won’t End With Anbang
Stability remains Beijing’s primary concern.

WEAK YUAN FUELS SURGE

China limits the amount of cash individuals can take out of China to $50,000 a year. Private bankers and insurance agents though said that Chinese high-net worth individuals have used Hong Kong insurance policies as a way raise cash offshore.

…”They buy life insurance policies and use them as collateral to borrow up to 80 percent of the premium in overseas currency offshore through partner banks or from the insurer itself. That money can then be used to buy safe-haven assets in markets such as the United States, Europe or Australia. ”
https://www.reuters.com/article/china-markets-outflows-insurance-update/update-2-hk-insurance-targeted-as-china-seeks-to-stem-outflows-idUSL3N15I18B

#274 SimplyPut7 on 02.28.18 at 4:45 pm

#262 Capt. Serious on 02.28.18 at 3:35 pm

It’s not just new immigrants, I find people who have never owned a home are financially illiterate when it comes to the relationship between interest rates, mortgage rates and home prices as well as the true cost of maintaining a home in the long run.

They also do not seem to have a concept of how much they should be paying for a new home versus an older home with the same amount of space, especially an older home in a good location. Or the finishes that should be expected in certain homes based on the price developers want for the home, compared to the quality of the finishes in an older home that has not been updated or an older home that has been renovated recently.

There are some new homes on the market in the GTA with knotty pine hardwood floors, cheap faucets, sinks and tiles not seen since the late 1990s, competing with older homes sometimes asking 25% – 30% less than the newer home with real hardwood floors, wider and more spacious layouts built near highways, shopping amenities and transit.

This obsession with new homes that new home buyers have is weird. It would be cheaper to renovate the bathrooms and kitchens in the older home for the price they are willing to pay for the newer home out in the middle of nowhere.

#275 I’m stupid on 02.28.18 at 4:48 pm

To all the Genx that chimed in saying they and their friends will be just fine:

When shit hits the fan it doesn’t cover the entire fan. Don’t let your personal situation blind you. I was referring to a large percentage of Canadians not all Canadians. I personally will be fine but that doesn’t mean everyone else will be.

#276 Victor V on 02.28.18 at 4:49 pm

For those who don’t get the ‘chateau kid’ reference:

http://www.cbc.ca/news/politics/morneau-company-france-ethics-1.4351933

#277 Jas on 02.28.18 at 5:24 pm

CAD $ is in significant slide over the last week+
Where do you think the bottom for this slide is.

#278 Penny Henny on 02.28.18 at 5:36 pm

Only 16 posts by Stan Brooks today.
Slow day

#279 n1tro on 02.28.18 at 6:41 pm

#260 Compromised on 02.28.18 at 3:10 pm

No alternatives to your cc that restrict what you can buy? Sure there are…

To buy regular stuff, there is cash, e-interact, and other credit cards! The point being made here is that as a consumer you shouldn’t just bend over when companies decide to put arbitrary rules on your freedoms. But I guess in this nanny state, people applaud more restrictions like trained seals.

#280 Reynolds531 on 02.28.18 at 6:42 pm

This is in my neighborhood. London is a bargain if you can find a job. I bought here five years ago for $207.

Late to the party, hopefully we don’t correct as much.

https://m.realtor.ca/Residential/Single-Family/19125934/543-OAK-PARK-DR-London-Ontario-N6H3N6

#281 morrey on 03.01.18 at 12:49 am

hey Flop
You have never posted link to the BC assessment BUT once.

But basically i just ignore your “news”

#282 Stock Picker on 03.01.18 at 11:03 am

DELETED

#283 BJA on 03.01.18 at 4:13 pm

Trump. Hate the person, love the policies.
Harper. Hated the person, loved the policies.
Justin. Hate the person, hate the policies.

We see through you, Mr. “I’m For the Little Guy”.