Losing it

LOST IT MODIFIED

As this lamentable blog predicted months ago, the contribution limit for TFSAs will soon be doubled. The announcement will come shortly after 4 pm two weeks from today, on April 21. That means a husband and wife will be able to shelter $22,000 per year from tax. The change will be effective on January 1st, 2016 for that calendar year and beyond. If the budget passes (and it will), then even if the Harper government is defeated in October, the change stands. Unless Prime Minister Mulcair reverses it. But then we’ll have a lot more to worry about.

The TFSA change is a political winner, for so many reasons. It’ll be the headline item, cleverly diverting attention from a withering economy. It’s red meat for the Conservative base (71% of people making max contributions are over 55. Only 5% are under 34. Shocking.). And it costs the government nothing – at least for a few years. It also continues to lead people astray, by encouraging saving when they should be investing.

Check out these sentences from a letter Joe Owe sent his caucus buddies telegraphing the change: “In 2009, my predecessor Jim Flaherty introduced TFSAs to help Canadians to save for a down payment on a mortgage, their kids’ education and retirement. Today, nearly 11 million Canadians enjoy earning interest-free income in their TFSA account.”

Weird, huh? Nobody makes “a down payment on a mortgage” but rather a down payment on a house. And TFSAs do not let people “enjoy interest-free income,” but rather tax-free returns. As for educating the screamers, there’s already a sweeter tax shelter for that, called the RESP. It’s beyond alarming when a finance minister has no idea what he’s talking about. Besides, positioning the TFSA primarily as a vehicle leading to home ownership, which involves the swallowing of historic debt at a time we have epic levels of it, tells you a lot about the feds. They’ve lost it.

Now, what matters more?

Hard to know where to start, as the limping Canadian economy has so much wrong with it.

“Thought you might be interested to know that if anything, the media is understating what’s happening in Calgary with layoffs and contracts,” Wendy writes me. “Many of us fortunate enough to be hanging on to jobs working as consultants on contract for various oil companies are looking at immediate reductions of 15% to 20% on our billable rate (this is on existing contracts that were already signed and negotiated with higher rates just a few months ago).”

Well, as you know, the Bank of Canada is trying to warn us of what’s coming. “Signs of spillovers to other sectors and regions are emerging,” it said this week, pointing to a sharp drop in hiring intentions across the country. Of course we know about the oil patch – only 100 rigs were operating last week, down about 60% from this time last year. Calgary house sales so far in April are off 51%. More than three-quarters of the empty office space in Canada is in Calgary, where the vacancy rate is hovering at 12% and rents are down 8% in the past few months.

An Ernst & Young survey has found that 90% of our big oil and gas companies have no real plans in place to cope with an extended low oil price. And yet that seems exactly where we are headed. An EY spokesguy calls it the ‘valley of despair’, saying this will have a bigger impact on things than the 2008 bust.

Of course, oil is a major export of Canada, bringing in much-needed revenue. So, this is not an Alberta thing. Expect our job numbers in coming months to be piteous. The Canadian economy was surely in reverse in the first quarter of 2015. Maybe the boys running Target and Future Shop weren’t so dumb after all.

Well, against this fraying tapestry is a citizenry diverted by cheap money and illusory housing gains. On Tuesday realtors in Toronto were the latest to prime the pump, announcing a boffo March with sales up 11% and prices ahead 10%. The average SFH in 416, they say, is 15% more expensive than last year, at $1.04 million. In Vancouver, worse. The average urban property, claims the local board, is now $1.9 million. The house pimps at Vancity have just announced it will be $4.4 million in 2030.

Incomes aren’t going up. Layoffs are. As I mentioned above, the only people really saving are over the age of 55, and not buying houses. Family debt was bad even before the central bank dropped its rate. Now it’s swelling again. Properties have never cost so much because money’s never been so cheap. Our major export commodity is fading. The biggest ‘have’ province is in economic crisis.

So many people are busy chasing expectations they can’t see the risk. And now, more TFSA eye candy.

Don’t get me wrong. I’m looking forward to Dorothy and I moving $22,000 a year, every year, from our taxable investments to our taxless accounts. It’s a windfall. A gift. Our capital gains rate will go to zero.

But I’m sad for my nation.

GLOBE

307 comments ↓

#1 Leroy Washington on 04.07.15 at 5:41 pm

In 2010, David Min wrote this paper called “True North: The Facts About the Canadian Mortgage Banking System” – http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2093609 – in which he concluded that “Canada did not become enthralled with the laissez faire ideology that dominated U.S. economic policy making in the 2000s, and thus did not allow major gaps in its regulation of housing finance to develop.”

He had better revisit this, and soon!

Canada is SCREWED!!!!

AmeriCUH!!! Woop woop! We have Las Vegas! The Big Apple! Florida beaches! Google! Amazon! Facebook! Hollywood! The NFL! An appreciating greenback!

Canada has Winnipeg, Regina, Surrey, Etobicoke, Edmonton, a soon-too-implode housing bubble, the CFL, Stephen Harper, rain, snow, wrinkled British people on your plastic money, rain, blandness, sadness and Yellowknife.

U.S.A.!!! U.S.A.!!! Gold medal all the way, baby!!!

#2 Mark on 04.07.15 at 5:48 pm

A good rule of thumb is that when the media starts printing articles only predicting upwards movement for an asset class, the bubble is either at its peak, or has actually been slowly deflating for a while.

On the topic of the Canadian economy, pretty obvious that we’re in for another round of BoC policy cuts next week. I personally don’t think they’ll do anything more than 25bp per meeting, but a 50bp cut would be quite shock-and-awe-ish.

#3 Squirrel Meat on 04.07.15 at 5:51 pm

#1 Leroy Washington on 04.07.15 at 5:41 pm

What a silly troll you are.

#4 zedgt87 on 04.07.15 at 5:55 pm

Anyone see the article about increasing premiums on those who have mortgage equity ratios of less than 10%? So basically the most vulnerable and risky loans are having their effective interest rate increase.

Is that not the same thing as sub prime in the USA where the risky loans had their effective rates increase? Say that to anyone in Canada though and you get the obligatory “there is no sub-prime here”

#5 Get back Loretta on 04.07.15 at 5:57 pm

Well, it’s a good idea on paper to raise the TFSA limit. But if Mr and Mrs Joe Canada aren’t already saving money in their TFSA towards the future, which apparently their not, then doubling the limit will only mean that we’ll have a bigger gap in what we ‘could’ have saved for the future.

Except for the rich, of course.

#6 Ray Skunk on 04.07.15 at 6:02 pm

Makes sense that JO wants to paint the TFSA as a means to saving a down payment. They want the illusion of giving you a helping hand, but don’t want you to use it to its true potential and miss out on all that revenue.

Surprised he didn’t go so far as to suggest the full $11k should be saved in a 1% “high” interest account.

#7 TFSA Room going up! on 04.07.15 at 6:03 pm

It’s great the TFSA room is going up, but I fear I will never take the money out, why would I? It grows tax free! Such a great political move how can the other parties beat it?

#8 Van Doom on 04.07.15 at 6:04 pm

OK, so you’re getting what you’re worth, and some people are getting more than they’re worth. As long as you’re getting what you’re worth, aren’t you just being petty, begrudging others a windfall, much like being jealous of a lottery ticket winner?

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

If it’s private money fine do what you want. But when its billions and billions of pissed away TAX DOLLARS – My Money – then yes….I and every private sector worker has the right to complain. Stop making shit up and trying to make people feel bad for wanting to keep more of THEIR OWN MONEY Ralph……

#9 Ardy on 04.07.15 at 6:07 pm

Well thanks Garth, for highlighting that with every sentence he wrote, our Finance Minister hasn’t got a clue.

We can all sleep better at night knowing we are in such capable hands.

#10 Dual Citizen In Canada on 04.07.15 at 6:07 pm

Boo, no TFSA for me, being a dual citizen and all. Uncle Sam will want their cut. We need to get TFSA in the Canada/US Tax treaty.

#11 Goldie on 04.07.15 at 6:09 pm

Nice pic. I love Rottweilers.

As for Vancouver: It was great when I was a kid, but I can’t wait to get out of here now.

#12 saskatoon on 04.07.15 at 6:17 pm

the bottom line is this:

most canadians are CRAZY DUMB.

canadian citizens (in part, i would imagine due to a wide array of socialist health care policies) are some of the most highly medicated people on the planet.

prozac-type drugs numb their minds–eliminating anxiety.

unfortunately, this anxiety is a necessary and normal part of evaluating risk/reward scenarios.

millions of canadians (psychologically) are heavily medicated…unable to process information correctly, or see things clearly–especially their own financial matters.

as the debt-load spirals out of control…the more prozac-type substances are doled out through government subsidies.

soma for the masses.

(p.s. with a touch of NaF)

#13 rawdiswar on 04.07.15 at 6:18 pm

My prediction, many of the Canadian population decry the move as “elitist” and “only helping the already wealthy”.

It’s a gift from the Cons, so shut up and take it. $22K a year per couple to stuff in a tax shelter should be incentive enough to save, if you aren’t already. This pretty much makes the RRSP obsolete, like a palm pilot.

#14 james on 04.07.15 at 6:19 pm

ah, the TFSA. It is the ONLY thing I miss about Canada. Had to turf mine when I crossed the border. My TD Ameritrade account is not nearly a substitute for tax free returns.

“Maybe the boys running Target and Future Shop weren’t so dumb after all.”

No, they were dumb. Target at least. They entered Canada at a time when personal debt levels were astronomical, big box stores were pulling out, retail sales during holiday seasons were dismal, etc etc. I remember the gf and I touring malls in Guelph and Waterloo at Christmas in 2012 and 2013. They were dead zones, and the staff spoke of dismal sales. The stats bore that out.

Target’s entry was basically as smart as the British light cavalry charging Russian cannon emplacements head on.

#15 Bob on 04.07.15 at 6:20 pm

You know, Garth, if you were to run for office again I just might vote for you.

#16 Mark on 04.07.15 at 6:29 pm

“Is that not the same thing as sub prime in the USA where the risky loans had their effective rates increase? Say that to anyone in Canada though and you get the obligatory “there is no sub-prime here””

Yup, quite a delusional bunch we are in Canada, aren’t we? When an arm of the government itself, clearly involved in the sub-prime loan business, the CMHC, runs around denying the existence of subprime. And in doing so, misleads the public. Quite like that famous Iraqi “Minister of Information” did during the fall of Baghdad.

“Surprised he didn’t go so far as to suggest the full $11k should be saved in a 1% “high” interest account.”

That’s my concern with the TFSA. It may actually be acting not as a tax shelter for people who really don’t need a tax shelter (see Garth’s comments about his personal finances), but rather, as a sort of scheme to drive even more cash into the banks to fund RE loans at low cost. After all, as Garth tells us constantly, that’s basically what the TFSA has been used for by most. As a cash “savings” account.

#17 Smoking Man on 04.07.15 at 6:34 pm

We live in strange times indeed.

More to come. Just touching up chapter 3. Promised the fans.

4.4 million in 15 years …hum.

I’m going with the end of days.

#18 Financial Freedom at 40 on 04.07.15 at 6:34 pm

#1
—-
Darn, living in between Smoking Man and Rob Ford means I’ve made Leroy’s list.

#19 mark on 04.07.15 at 6:36 pm

The RBA in Australia has now snookered themselves. With the economy in the pooper, they couldn’t pull the trigger on a rate cut yesterday because their previous rate cuts did nothing but send Sydney and Melboune real estate through the roof because there’s no controls on mortgage lending.

Sound familiar?

#20 JustMe on 04.07.15 at 6:39 pm

This American reporter agrees with most Canadians who think our housing will go up forever because we’re smarter. I guess he never heard of CMHC.

The Next Bubble
John Stossel | April 1, 2015

“Canada doesn’t have a Fannie, Freddie or FHA. Canada didn’t have the trauma of a housing bubble. In Canada, lenders and homeowners risk their own money.”

“Does that mean Canadians cannot afford homes? No! Without all that government help, Canada’s homeownership rate is higher than ours.”

http://reason.com/archives/2015/04/01/the-next-bubble

#21 Bro-ham on 04.07.15 at 6:40 pm

You should write about good old Kelowna. Here is a video from some agents in k town
http://youtu.be/ksgM6w8AR-M

#22 Danforth on 04.07.15 at 6:44 pm

I’m really happy for the TFSA bump for myself, since I will max it out immediately. I’m fortunate enough in that I already invest 5500 in TFSA a year, and some amount higher than 5500 in unregistered – so I’ll simply re-allocate come January next year if this all goes through.

The vast majority simply will not take advantage of it, only a select slice slice of society has money over 5500 a year to invest.

Its clearly an advantage for the wealthy, and we can wax poetic for hours how those who earn more should shoulder more of society’s burden than those who earn less. This is a move in a direction away from that.

For myself, I’m happy. But governments need to raise money to do what they do, and that can be a variety of methods. The debate is in how they raise that money, and how they distribute the tax load.

In the long term, I’m curious how the math stacks up.
X number of people seeing more tax-free growth, which would see some tax burden if in RSP or Unregistered. It will cost tax revenue, the question is how much.

#23 Toronto_CA on 04.07.15 at 6:44 pm

I saw the “earning interest-free income” quoted this morning and felt very, very sad for Canada.

Toronto and Vancouver are insane, I speak to young people all the time who have no idea what an ETF is but think residential real estate is the only way to become wealthy. Sigh.

#24 Ralph Cramdown on 04.07.15 at 6:46 pm

So I did the math for a trust fund brat.

Starting at 18 years old, our intrepid taxpayer deposits the limit, which will start at $11,000. The limit grows with CPI, but only at $500 intervals — I hope I got the formula right. If CPI stays at a constant 2%, she makes a nominal 7% and she spends her whole life in the 50% tax bracket:

By the time she’s 85, the annual limit will be $41,500. She will have contributed a total of $1,565,500. Her TFSA will be worth $21,024,480. She will have avoided $10,465,347 in tax.

By the time she’s 95, the annual limit will be $50,500. She will have contributed a total of $2,028,500. Her TFSA will be worth $41,991,190. She will have avoided $21,451,036 in tax, including $1,469,692 in the most recent year.

Of course, there will be a probate fee of 1.5% (Ontario, lower elsewhere) if nothing changes, and her heirs will have to pay tax on the income this lump will generate for them.

The savin’ fer Vegas crowd and the 65 year old GIC shoppers will welcome this, of course, because the average person doesn’t understand compound interest. For my personal situation, I’m thrilled as well.

#25 Vancity604 on 04.07.15 at 6:46 pm

Interesting about Calgary but doesn’t really matter to van not a lot of rig pigs sipping lattes on main, in fact demand for office space is high here with many tech companies and start ups pushing into eastvan, the future is bright here with many different career opportunities in any field , okay now bring on the ignorant comments how van is a sht hole with no jobs.

#26 One last kick to the junk on the way out on 04.07.15 at 6:52 pm

Doubling the TFSA will insure we’ll witness a decline in essential government services over the next few decades. I mean, we are currently right in the middle of a decline that extends back to the 1980s, but this will have the effect of throwing gas on the entire mess and lighting a match.

If you can’t manage to max your retirement accounts every year, just know that you will be paying through decreased service and amenities so your fat and porkly rich neighbour can rut in the sun for that much longer.

It’s a clever – and cynical – play that has the effect of cutting to shreds our medicare system, infrastructure, public pensions, and safety net without ever having the straight forward discussion and battle about it. Steve and crew don’t care about young people, so instead we’ll just wreck the place before the Boomers reach their closing time.

See you at the bottom!

#27 Mark on 04.07.15 at 6:53 pm

“Boo, no TFSA for me, being a dual citizen and all. Uncle Sam will want their cut. We need to get TFSA in the Canada/US Tax treaty.”

Just out of curiosity, what’s the Canadian tax treatment of a US Roth IRA?

#28 Ralph Cramdown on 04.07.15 at 6:54 pm

#8 Van Doom — “If it’s private money fine do what you want. But when its billions and billions of pissed away TAX DOLLARS – My Money – then yes….I and every private sector worker has the right to complain. Stop making shit up and trying to make people feel bad for wanting to keep more of THEIR OWN MONEY Ralph……”

So you’re getting what you’re worth, pre-tax, but not after tax? And some government workers are getting more than what they’re worth?

In another post, you said we don’t need unions. It seems like the unionized people are doing better than you. What’s the solution?

#29 Gregor Samsa on 04.07.15 at 6:55 pm

The only families who have an extra $22K lying around each year with nothing better to do but invest it are the families that LEAST require a tax break. The wealthy will use the TFSA to shelter high risk investments reaping windfalls that will eventually cost the Canadian treasury billions a year.

Meanwhile, average working families will never have that kind of cash, and if they do, they are not wealthy enough to afford private accountants and financial advisers to mange their meager portfolios, and they are too financially illiterate to invest on their own.

And who will pay for the service cuts required by the lack of funds coming into the government? That’s right, average working families.

Prime Minister Mulcair sounds a hell of a lot better to me than what we have now. I’ll even take a Prime Minister Trudeau.

#30 Ed on 04.07.15 at 6:56 pm

It sucks that an elected majority government actually does what we voted them in to do. Who knew!

#31 Linda on 04.07.15 at 6:57 pm

The fact most people who contribute ‘the max’ are over 55 may be shocking, but explainable. Most people do not have ‘disposable’ income to set aside until they are well into their (late) 40’s or early 50’s. Why? Because the money prior to that point goes to pay for the mortgage, the children, buying stuff in general. Any or all three will take up the extra cash & then some. Most people by the time they hit 50 have purchased all the stuff they need or want; have paid off the mortgage & unless they started way late (like 40 plus) have the children graduated (or so one hopes) from high school & maybe even college/university. Thus the big money items are now off the board & one can FINALLY get around to putting cash away for ‘the future’.

Yes, absolutely one should have taken care of ‘the future’ long since. Even just setting aside $20 per week, per year ($1,040 per year in total) since say age 25 would have presumably generated some assets towards ‘the future’. But out of all the people who might have been able to do this, maybe 10% have done so. The rest are just now getting started, always presuming they HAVE paid off the mortgage, the children are out of school & hopefully on their own & the stuff has been paid for too.

With luck, some of the people who now have disposable cash will be able to take advantage of the TFSA, even if it doesn’t double up as predicted. If it does, then stuff that puppy with dividend paying assets asap. You may have to work to 65 or even 70, but at least if you stuff the money away you might be able to afford premium & not name brand cat food upon retirement.

#32 BG on 04.07.15 at 6:57 pm

I used to like Mulchair, until he overblew and twisted Harper’s very clumsy comment on Niqab.

He had the occasion to be the greater man and give Harper the benefit of the doubt.
Instead he chose to twist Harper’s comment into an anti-Muslim one.
Demagogy.

#33 HogtownIndebted on 04.07.15 at 6:58 pm

Coincidentally, a study by BMO today shows how little most Canadians are saving.

So, soon the 1% in Canada will own not merely 50% of all the wealth, but maybe closer to 80-90%.

We should not be jaded or naïve, or both, as some profess to be in these times.

People will not be lulled to sleep by distractions from this, nor will the surveillance state prevent them from action.

I see dark clouds ahead for our society.

#34 TriangleRocka on 04.07.15 at 6:59 pm

The article claiming a house like that could be worth 4.4 million reminds me of articles during the dot com boom moments before it blew up. Where did they get the .4 million from is my question…

#35 Rexx Rock on 04.07.15 at 6:59 pm

Like I said before,Vancouver and Toronto homeowners will be so rich when they retire.Victoria bidding wars are happening again.A Gorden Head house went over $50,000 asking price.Garth is right only a few places in Canada will continue to see strong growth which is great for homeowners retirement.Its sad that first time homeowners are so indebted thanks to our goverment policies.

#36 Babblemaster on 04.07.15 at 7:00 pm

“Unless Prime Minister Mulcair reverses it. But then we’ll have a lot more to worry about.” – Garth

—————————————————

Why? Because Harper has done such a great job managing the economy?

#37 Sigmund Fraud on 04.07.15 at 7:05 pm

RE #1 Leroy Washington

It’s pretty obvious that you’re a Canadian just trying to get everyone cranked up . Most Americans don’t know or care who Steven Harper is let alone Surrrey and Etobicoke. Time to take your idle banter elsewhere , we are here to be educated.

#38 Don't H8 the TFSA on 04.07.15 at 7:05 pm

@Gregor #16

It also encourages the wealthy to invest more money in TFSAs, That investment supports business that creates jobs. Can that be true as well?

Savers and investors should have vehicles to invest like this. Keeping track of investments in a taxable account is an incredible hassle. Much easier and saves a lot more time when in a TFSA.

Working families who have not an extra $22k to invest each year, I bet a few of them are mortgage holders and have decided to invest their money there instead of rent and own investments to supplement their income.

#39 cd on 04.07.15 at 7:05 pm

hey garth, can you do some type of in kind transfer into a tfsa? thanks

Yes. — Garth

#40 Obvious Truth on 04.07.15 at 7:11 pm

The message is …..

You’re on you own.

#41 Smartalox on 04.07.15 at 7:11 pm

I’m another one asking why this government has been unable to negotiate a tax treaty that would see TFSAs held by US / Canadian dual citizens treated as equivalent to Roth Investment Retirement Accounts.

I mean, why shouldn’t my family take advantage of income splitting and doubling of the TFSA limit?

At least we know that this government’s incompetence goes straight to the TOP.

#42 Interstellar Old Yeller on 04.07.15 at 7:14 pm

I am selfishly happy that the TFSA limit will rise next year. I’m no big fish but I like the idea I’ll be rewarded for saving and investing. There *should* be a reward for the ant in a land of grasshoppers.

#43 cd on 04.07.15 at 7:15 pm

also I saw this today…
Canada’s Key Lending Rate Headed To Zero, Ex-BoC Adviser Says

http://www.huffingtonpost.ca/2015/04/07/canada-interest-rate-zero_n_7020450.html

#44 Van Isle Renter on 04.07.15 at 7:16 pm

“Prime Minister Mulcair” ….. That has Nightmare On Elm Street beat all to hell.

I can just imagine the limp necked Mulcair chasing around the world trying to outdo Obama in proving that Canada, NOT the USA is the most pathetically useless and self-destructive country on the planet.

Mulcair will sign Canada up to more dumb-ass eco and international treaties that it will guarantee that my kids will be paying for the private jets of despotic leaders of third world. And the despots will only want MOAR!!!! And Mulcair, like Obama, will turn himself inside out to try to satisfy the insatiable. And we all get the bill. Lovely….

Ayn Rand warned us decades ago about the dangers of “the greater good” and “moral obligations” as being the pathway to power for the “looter and rotters”. In Rand’s world unless it was objective and logical it was worthless.

With Prime Minister Mulcair we’ll have the victory of Rand’s “looters and rotters”. And all we need to do is ask the former USSR how that all worked out for them.

#45 Daisy Mae on 04.07.15 at 7:17 pm

“Unless Prime Minister Mulcair reverses it….”

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

Good grief….BITE YOUR TONGUE!

#46 TRT on 04.07.15 at 7:17 pm

TFSA means no GIS in addition to your OAS. Make sure you take it out by age 65.

#47 Obvious Truth on 04.07.15 at 7:18 pm

I’m seeing a debate on tfsa limits.

How can anyone be against savings with tax free growth.

This is actually a debate going on. Shouldn’t everyone be cheering.

#48 TRT on 04.07.15 at 7:20 pm

How come Calgary prices haven’t come down?

#49 Daisy Mae on 04.07.15 at 7:24 pm

“It’s red meat for the Conservative base (71% of people making max contributions are over 55….”

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

I recall one BC party — can’t remember which, maybe NDP — promised us CHEAP BEER if elected! Yea! But the party did not win in spite of this promise. Goes to show you how little respect governments have for the electorate, however.

#50 TS on 04.07.15 at 7:24 pm

Gregor –

“Meanwhile, average working families will never have that kind of cash, and if they do, they are not wealthy enough to afford private accountants and financial advisers to mange their meager portfolios, and they are too financially illiterate to invest on their own. ”

You mean the average Canadian family that is buying houses for over $430,000?

You mean the average Canadian family in Toronto that are fighting over 17 foot row houses in Leslieville beside the biggest Shit Plant in Canada?

Spare me the bunk about the Average Canadian Family.

The Average Canadian Family are idiots.

Like Garth said “it’s all about taxing stupid”

#51 Panhead on 04.07.15 at 7:28 pm

But I’m sad for my nation.

______________________________________________
I love my nation and all it stands for. But politicians ….

#52 screwed on 04.07.15 at 7:28 pm

Harpo said allot today.

Most important thing he said was that he rules out any form of STIMULUS.

That’s bad for Canadians up to their eyeballs in debt.

Who cares about TFSAs. Most Canadians think this is some new product at Timmy’s. Double TFSA is that like the new double double?

Canadians need jobs and they need jobs that can pay their bills – badly. TFSAs are a luxury.

But please…. Keep entertaining the idea that hypothetically Canadians could save interest on the high yielding investment products they can theoretically could dump money in … if they had any.

This economy is going down and all the PMs in the lands know this.

#53 Daisy Mae on 04.07.15 at 7:30 pm

Joe Owe: “In 2009, my predecessor Jim Flaherty introduced TFSAs….”

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

I find this so unfair. TFSAs were Garths’ idea — not Flahertys’. But Flaherty continues to receive the credit.

F introduced them. I merely suggested the idea. — Garth

#54 Ken Nash on 04.07.15 at 7:31 pm

Really great blog Garth Turner. I’ve always like patriotism with economics. As a loyal blog dog I’ll be tossing dinner buns in the air tonight!

I’m ready for a true change. Maybe enough people will be in the grips of the debt paradox, come election time, to be voting emotionally. Give the NDP a chance. Why not?

How’s Norway’s 5 million socialist loving residents doing after their oil exploits? Pretty good you told us. That sovereign fund is knocking on a trillion dollar door.

Maybe it’s time to come out of closet Garth. Mulcair would benefit having and an experienced finance minister

#55 Ken Nash on 04.07.15 at 7:33 pm

I’m so serious I “double dog dare you to” lol

#56 ShawnG in TO on 04.07.15 at 7:34 pm

why is doubling TFSA limit bad?

it’s not bad for everyone. it’s obvious it’s good for the rich (and blog dogs here) who have the money to contribute.

but it will decrease gov income. so the gov must either raise taxes, or cut services.

if it raise the tax in a progressive way (only high income, or increase in sales tax) then it’s not so bad. but harpers’s gov unlikely to do that, instead raise rate across the board, or a sneaky way to do it to the poor.

if it cuts services (more likely option for harper) then it will hurt the poor more than the rich.

so, take that extra 5500$ and invest well, because you know it comes at a cost to everyone.

#57 ShawnG in TO on 04.07.15 at 7:37 pm

off topic here.

but why do we call it a balanced budget when we have too sell GM shares and dip into emergency fund to make the numbers?

if i have to use my savings to pay my bills, i can’t call my budget balanced.

another example of harper-nomics?

#58 saskatoon on 04.07.15 at 7:37 pm

T.F.S.A. = THEFT FREE SAVINGS ACCOUNT

#59 Gregor Samsa on 04.07.15 at 7:38 pm

#45 Obvious Truth

There is a (dwindling) segment of our society that cares about more than just about themselves, their own petty lives, and me, myself, and I.

If one cared to consider the broader societal implications of allowing large investment tax shelters to exist, the obvious conclusion would be that their impact to society is negative (regardless of what your own personal situation may be).

If we extended your “logic” that all tax cuts are good, then there should be no taxes at all, no government at all, and everyone should just fend for themselves. Imagine how fat your TFSA would be then!

#60 Rob on 04.07.15 at 7:40 pm

Leroy, I find it to be a minor “statistical miracle” to see your “legend-in-your-mind” comments appearing so often in the #1 comment position. Care to tell us how much that you had to bribe our esteemed blogger host for the privilege? :-)

#61 Daisy Mae on 04.07.15 at 7:41 pm

“Maybe the boys running Target and Future Shop weren’t so dumb after all.”

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

Don’t know about Future Shop. But Target was surely dumb ‘from the get go…’ as we all know.

#62 Daisy Mae on 04.07.15 at 7:43 pm

Garth, you are too kind! Raise hell when it’s warranted. Don’t be shy. ;-)

#63 Suede on 04.07.15 at 7:45 pm

All those Cowtown people laid off.

I’m looking for qualified project managers here in Vancouver. Get Garth to send you my email and send me a resume. Utility experience preferred like. No Richard pics pls.

Blog dogs helping blog dogs

#64 Victoria Real Eatate Update on 04.07.15 at 7:45 pm

Sales of single family homes so far in 2015 are well below Victoria’s long-term average.

Victoria’s SFH average price had been running under last year’s average price. (3-month average).

Lower prices and weak sales amid the lowest interest rates Canada has had spells a lot of future problems for Victoria’s troubled housing market.

With record-low interest rates we should be seeing record-high SFH sales.

With record-low interest rates we should be seeing skyrocketing SFH prices.

Canada has had emergency interest rates since 2009. Prices in Victoria peaked in 2010 and have declined 12 to 15% since then. Prices should have made strong year-over-year gains since 2010, not yearly declines.

If emergency interest rates can’t stop Victoria’s proce decline, what will?

I will be posting more charts soon.

Until next time – Cheers!

#65 Bobs ur uncle on 04.07.15 at 7:49 pm

“71% of people making max contributions are over 55”

These be the olds who vote. Average Joe below 55 will probably forget about this in a day or two, if they pay it any mind at all. So it’s smart politics (if not delivered by a smart politician). I will benefit, but it think it’s overdone. The only people who have that much to set aside can afford the tax hit. And I’m not alone in that assessment. I fear a future government, strapped for cash, will see a sizeable booty worthy of plunder. No guarantees.

#66 gut check on 04.07.15 at 7:50 pm

#38 Don’t H8 the TFSA on 04.07.15 at 7:05 pm
@Gregor #16

It also encourages the wealthy to invest more money in TFSAs, That investment supports business that creates jobs. Can that be true as well?
———————————————————–

evidence of this job creation, please.

#67 Unknown Marketer on 04.07.15 at 7:51 pm

TFSA Limits Up.. Bring It On! A tax break for the rich..you bet. They learned the secret to wealth – spend less than you make.

It’s a platform that offers Canada to be a nation of savers!

The gains that are so far greater than than the downside.

–Oh ya second secret to wealth… is never take financial advice from someone who is more broke than you.

$ 22,000.00 hmmmmmm chewy!

#68 Nemesis on 04.07.15 at 7:52 pm

#”TheShipIsOurs!”,Or… #EverBeenToSea,Johnny?… #WeKnowWhatHappensToMutineers… #Don’tWe.

“Unless Prime Minister Mulcair reverses it.” – HonGT

It’s a Beard thang, right? Right?

https://youtu.be/szUEkiRPQwQ

#69 Leo Trollstoy on 04.07.15 at 7:52 pm

That’s my concern with the TFSA. It may actually be acting not as a tax shelter for people who really don’t need a tax shelter (see Garth’s comments about his personal finances), but rather, as a sort of scheme to drive even more cash into the banks to fund RE loans at low cost. After all, as Garth tells us constantly, that’s basically what the TFSA has been used for by most. As a cash “savings” account

As Garth also said, the vast majority of individuals maxing out these accounts are 55+, and they’re not the ones buying RE.

#70 Daisy Mae on 04.07.15 at 7:55 pm

#11 Goldie: “…As for Vancouver: It was great when I was a kid, but I can’t wait to get out of here now.”

*********************8

I was born/raised in Vancouver. Couldn’t afford to move back. I recall my parents had built for them a new house back in ’39. Cost? Less than $3000. Now probably ‘worth’ a trillion. LOL

#71 Thanks Smoking Man on 04.07.15 at 7:56 pm

# Smoking Man – yesterday

You really want this. Fx thing.
Wait for bollanger bands to compresse, look for a strong move on one min chart, while looking at 60 min gage make sure RSI are going in same direction , hit it hard, make it to first base then out.

If you don’t get any parts of what I said, don’t do it..

In fact 99% of people , rookies who try this get wipped out.

My advantage , I have BBG terminal , and some very smart bloody people all around me..

Sure I kick there ass on the long term predictions, but short daily shit they rock.

So if you want to play, demo account only.

———-

This and now TFSA limit lift… Christmas comes early… Now I am craving a bloomy…

#72 Cj on 04.07.15 at 7:58 pm

Garth where do you find information on rental rates decreasing in Calgary? I have an upcoming discussion with my landlord!!

Commercial rents down 8.3%. — Garth

#73 Mark on 04.07.15 at 8:00 pm

“As Garth also said, the vast majority of individuals maxing out these accounts are 55+, and they’re not the ones buying RE.”

Of course they’re not buying RE, but they are buying the GICs that fund the RE bubble. The other side of the debt equation.

Policy makers should be trying to figure out how to get people to take risk in the economy. Not providing a vehicle which actually encourages people, especially boomers, to be taking less risk. In this aspect, the TFSA, in practice, is actually counter-productive as few are using it for the purpose of taking risk.

#74 Realtor007 on 04.07.15 at 8:07 pm

Every time I hear someone make a statement like ‘ the TFSA is for the rich’ I have to burst out laughing.

When I was making $40k a year ( 2006) I was paying for my mortgage, bills, food etc and saving between $7-10k a year. It’s doable if you get your priorities straight, don’t buy a $700k shack in Oakville with a cash advance from your CC as a DP., just a starter tip…more to come so stay tuned.

#75 MSM-free Zone on 04.07.15 at 8:07 pm

“…..It’s beyond alarming when a finance minister has no idea what he’s talking about……”
________________________

It’s even more alarming when the finance minister’s majority government depends upon a voter base who rarely have any idea what the government is talking about.

#76 Entrepreneur on 04.07.15 at 8:07 pm

Rottweiler dogs are beautiful animals.

I think Leroy Washington is Canadian. Hard to resist that low interest rate which make dreams come true. Government and banks know this and boosted the “false” economy. They did not know about small business and how important they play in the role of the economy or do not want to know.

Dyslexia…my partner has it and so many other people Our son had it but taught him certain things to overcome it. I was not impressed with the school so had to do it on my own. Luckily I was taught by an excellent teacher with methods beyond the usual which I applied (these methods are knowledgeable teachers are spread throughout the universities areas which I think are Rosicrucian.)

Houses are overvalued for our Canadian youth.

#77 Obvious Truth on 04.07.15 at 8:08 pm

My family was poor. Savings was a priority. Maybe that’s why we lived poor.

A few thousand a year is not a rich persons game.

Besides, Rich people don’t have to save. They have already saved. That’s why they are rich.

And in order to contribute they have likely paid double the tax of someone who makes less to begin with.

Those that want to be rich can now do it more easily than any of their rich predecessors.

#78 Dresden McApplegate on 04.07.15 at 8:08 pm

@ Gregor Samsa

The problem isn’t about the TFSA, it’s about financial literacy. People are free to learn and act. Not many “freer” countries than this one. It’s about voting. All young people are free to vote if they wish. No matter if you are rich or poor in this country..it’s what you spend that matters more than what you make.

@Garth

Saying this I am kinda surprised they would outright DOUBLE the TFSA. Why not increase it by 20%? Why 100% in a year or will the 100% be phased in? Guess it is “sexier” to just outright double it.

#79 mr.pleasant on 04.07.15 at 8:10 pm

Just to be clear on the rules of this blog. You’re a mindless doomer if you think the US economy is going down, but a free thinking, sound minded contrarian if you think the Canadian economy is going down.

Right, got it!

Memo: they are different economies. — Garth

#80 Daisy Mae on 04.07.15 at 8:11 pm

#15 Bob: “You know, Garth, if you were to run for office again I just might vote for you.”

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

He’s the only one who makes any sense. And that’s why he was turfed. We cannot have a renegade who makes rational decisions, don’t you know? Our government MUST continue to follow blindly. It’s just easier that way….

#81 By any other name... on 04.07.15 at 8:12 pm

Not sure I understand the negative reaction to the TFSA limit increase.

If I am a homeowner and I “invest” my money in a home (however good/bad an investment that might be) I get tax free gains if the house increases in value and I lose money if it decreases – and can’t claim the loss. As a renter, I am able to “invest” some of my capital into a TFSA and if the TFSA increases in value I get a tax free gain and if it decreases in value I can’t claim the loss. Seems to me that the two are very similar – so why should a renter be penalized for investing his/her money by being required to pay tax on gains (assuming they can’t be properly sheltered – Garth has been very clear on the pitfalls of RRSPs) while a home owner is able to crystalize arbitrarily large tax free gains.

Now, if we were to make gains on homes taxable at something like the CG rate, after expenses of course, then there is more difficulty in justifying an increase in the TFSA limits – at least when the tool is being used by renters to shelter gains in a similar fashion to homeowners.

As we are presently taxing renters disproportionately compared to home owners in this sense, if increasing the TFSA limit is rejected as a bad idea because of the potential/reality of lost revenue (as suggested by many of the posts), then we should also be looking at the gains being made on houses as a new source of that much needed revenue – and at the same time introducing a measure of equality between renters and homeowners.

The side effect might just be to bring the price of houses back down to a more realistic plane.

#82 Thanks Garth Turner on 04.07.15 at 8:14 pm

I find this so unfair. TFSAs were Garths’ idea — not Flahertys’. But Flaherty continues to receive the credit.

F introduced them. I merely suggested the idea. — Garth

=====

Thank you Garth!

#83 Ralph Cramdown on 04.07.15 at 8:16 pm

#65 Bobs ur uncle — “I fear a future government, strapped for cash, will see a sizeable booty worthy of plunder. No guarantees.”

That’s the diabolical beauty of it. Unless the dippers get in (fat chance, Ontario still remembers Bob Rae* and Alberta is intransigent), there’s very little chance that a Federal party’s supporters (they who write cheques and attend fundraisers) would support raiding TFSAs AT ALL. Once it’s in, it’s likely in for a long, long time.

* – Poor Bob. Got stuck with big pre-existing deficits and a VERY bad economy. Took the boots to the civil service with a wage freeze and forced unpaid days off. Got no credit.

#84 ShawnG in TO on 04.07.15 at 8:19 pm

#15 Bob: “You know, Garth, if you were to run for office again I just might vote for you.”

here’s an idea — there will be an opening in the senate soon. interested Mr T?

oh, harper is still in. i guess we’ll just have to wait.

#85 Ponzius Pilatus on 04.07.15 at 8:20 pm

Five dog pictures in a row.
It’s official, this blog has gone to the dogs.

#86 RayofLight on 04.07.15 at 8:20 pm

RE #1 Leroy Washington
It’s pretty obvious that you’re a Canadian just trying to get everyone cranked up . Most Americans don’t know or care who Steven Harper is let alone Surrrey and Etobicoke. Time to take your idle banter elsewhere , we are here to be educated
———————————————————————————————–.
On one of the episodes of “The Daily Show” with Jon Stewart, Jon Stewart was asked “What do Americans think about Canada?” His answer….. ”They don’t!”

#87 blogdog on 04.07.15 at 8:21 pm

#56 ShawnG in TO on 04.07.15 at 7:34 pm
why is doubling TFSA limit bad?

“but it will decrease gov income. so the gov must either raise taxes, or cut services.”

It will decrease FUTURE gov income but increase CURRENT gov income by getting people to invest more AFTER tax income into TFSA rather than RRSP.

#88 Daisy Mae on 04.07.15 at 8:22 pm

#29 Gregor: “The only families who have an extra $22K lying around each year with nothing better to do but invest it are the families that LEAST require a tax break. The wealthy will use the TFSA to shelter high risk investments…”

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

Yes. This was a very safe bet for the feds. And they’re hoping in translates into a re-election. Let’s use our brains this time around and don’t be duped, okay?

#89 Daisy Mae on 04.07.15 at 8:25 pm

#30 Ed: “It sucks that an elected majority government actually does what we voted them in to do. Who knew!”

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

And with a whopping 38% ‘majority’ yet!

#90 Ponzius Pilatus on 04.07.15 at 8:26 pm

#24 Cramdown

By the time she’s 85, the annual limit will be $41,500. She will have contributed a total of $1,565,500. Her TFSA will be worth $21,024,480. She will have avoided $10,465,347 in tax.

By the time she’s 95, the annual limit will be $50,500. She will have contributed a total of $2,028,500. Her TFSA will be worth $41,991,190. She will have avoided $21,451,036 in tax, including $1,469,692 in the most recent year.
————–
Keep on going. It just gets better and better, for the heirs.

#91 Leo Trollstoy on 04.07.15 at 8:27 pm


“Unless Prime Minister Mulcair reverses it. But then we’ll have a lot more to worry about.” – Garth

Whoo hoo! Mulcair!

PS: why does my autocorrect try to change ‘Mulcair’ to ‘Mulch it’? Haha

#92 BlackDog on 04.07.15 at 8:28 pm

@DualCitizenInCanada #10 re: ” Boo, no TFSA for me, being a dual citizen and all. Uncle Sam will want their cut. We need to get TFSA in the Canada/US Tax treaty.”

No, USA needs to get in sync with the rest of the world, and stop trying to control the financial lives of people who neither live, not earn in the USA.

#93 Daisy Mae on 04.07.15 at 8:32 pm

“F introduced them. I merely suggested the idea. — Garth”

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

Re TFSAs –The IDEA is all that matters. Damn, this makes me angry.

#94 Ed the Slough on 04.07.15 at 8:33 pm

When is your next book coming out?

When I stop spending my time on this pathetic blog. — Garth

#95 BlackDog on 04.07.15 at 8:36 pm

@Smartalox #41 re: “I’m another one asking why this government has been unable to negotiate a tax treaty that would see TFSAs held by US / Canadian dual citizens treated as equivalent to Roth Investment Retirement Accounts.

I mean, why shouldn’t my family take advantage of income splitting and doubling of the TFSA limit?

At least we know that this government’s incompetence goes straight to the TOP. ”

Add RESPs and RDSPs to the list too. Neither of these are included in the US-Canada tax treaty either. The gains and grants in each are taxable by the US government – yes Canadian taxpayers provide the funds to pay grants to RESPs and RDSPs which in turn are treated as taxable income by the USA. Good scam for the US eh?

#96 Retired Boomer - WI on 04.07.15 at 8:39 pm

What a WONDERFUL investing gift, the doubling of the TFSA limit.

TFSA like our ROTH accounts are funded with effectively after-tax money. They then grow TAX FREE forever is the promise.

The smart will still use their RRSP if they are getting “free” matching dough from their employer -up to the match point, AND try to fund the TFSA to the MAX as well.

We used both our 401-K acts. (america’s RRSP) as well as our ROTH accounts (our TFSA) to save towards retirement. (Emergency fund savings were separate too).

Just don’t put this into a GIC, or savings account!!
Broad Diversified ETF’s like the total stock market (stocks) and Total Bond Market (bonds) 60/40% then bake it for 20-30 years remove when “retirement happens.”

We just spent a little less, bought a little less to be able to fund what WE thought was important. You live the way you want to live. Just never ignore the final years.

Well, we just got home from a night in Madison. A friends retirement party, and the Badger game too!! What a fun 2 days! Yeah, wish the game had turned out different, but they weren’t playing well, and lost. Such is life, at least they played for the top spot, and lost it fairly. Still a good time for Mr. & Mrs. Retired Boomer.

#97 Binder Dundat on 04.07.15 at 8:39 pm

@ Rob,

“Leroy, I find it to be a minor “statistical miracle” to see your “legend-in-your-mind” comments appearing so often in the #1 comment position.”

Agreed! I, however, don’t think any bribes are involved.
Anything is better than the inanity of the Firsters. Even Leroy!

#98 Ralph Cramdown on 04.07.15 at 8:41 pm

#41 Smartalox — “I’m another one asking why this government has been unable to negotiate a tax treaty that would see TFSAs held by US / Canadian dual citizens treated as equivalent to Roth Investment Retirement Accounts.”

You’re penalized when you withdraw from a Roth IRA if you’re too young — it’s a retirement account. The TFSA isn’t so limited, so no tax treaty protection. This isn’t just a Canada/US thing. Many bilateral tax treaties treat retirement income favourably.

#99 Marquis de Sale on 04.07.15 at 8:50 pm

Maybe Joe Owe will drop the clawback threshold on OAS to $30,000 to offset the doubling of the TFSA. Why give out “wealthy welfare” when they can build their own tax free gift? We have not seen the whole budget yet.

#100 Freedom First on 04.07.15 at 8:51 pm

Today’s picture says it all. Whether a person/couple goes into unfathomable debt for a house, any consumer items, whatever, quite often the end result is despair. I have seen proof of this in Canada and world wide my whole life.

The TFSA increase is a gift for the people who use it properly. This knowledge is up to the individual to learn, as we live in a consumerist and materialistic message giving society from the top down, which only wants us to spend and consume. Only the wise invest, everyone else is unaware of the truth of what is going on, and are often hostile if truth is placed at their feet. Look at what is going on in Canada right now, and it has just begun. Early election is very possible I believe. Garth mentioned sad. Yes, it is.

#101 olderthanaboomer on 04.07.15 at 8:54 pm

This dawg is 70 this day. Congrats please.

The thing about $11000 limits is… we are not making new money at this point, so contributions will be limited to RIF withdrawals from here on in. Did TFSA
cause me to vote Con? No it did not.
Will cash them all out, (thanks ponzius#90) to the “heirs” before I pop me clogs.

#102 Rexx Rock on 04.07.15 at 8:55 pm

I’ll never vote again,all Canadians should boycott voting.Most of the politicians are lying self serving crooks anyway. So whats the point of it all,to give them a job and a golden pension that they don’t deserve?

#103 betamax on 04.07.15 at 8:56 pm

“house pimps at Vancity have just announced it will be $4.4 million in 2030”

And, in related story, trees will grow to the sky.

Where did we hear this before? Oh yah, in the USA circa 2005.

#104 Obvious Truth on 04.07.15 at 8:57 pm

#59. George Samsa

The opposite of what you say is true George.

Savings is the best thing a society can have. That can’t be debated. What we have in canada is a debt and policy problem. Not a general revenue problem for government or people.

Regardless of that, in general the more money that actually exists the more there is to draw from and be invested for more growth. The money eventually gets spent to be taxed again. Or passed on to become taxed many times over again. See. It actually creates more tax dollars.

And wealthier people actually have time and resources to do good for society.

This is all from a poor guys personal experience. Without the money being made and grown in our society a poor guy like me would not have had the opportunity I did. I am appreciative of that.

Debt can’t be taxed George. And the corporate wealthy already have enormous tax benefits. The tfsa is for the little guy.

#105 Condo Minion on 04.07.15 at 8:58 pm

So Greece is doubling down, and now playing the Hitler card. Who knew!?

Greece says Germany owes it $382 Billion in war reparations, which just about covers its current $431 Billion debt. A sweet calculation.

Why don’t we all do this?

Jim Prentice, and especially you, Stephen Harper, this approach has your bombastic vitriol written all over it.

This may not bode well for what is about to happen to Europe, however…….

http://www.thestar.com

#106 Smoking Man on 04.07.15 at 9:01 pm

Hey BLACK DOG

have a heck of a time trying to figure out how to get you in my book as promised.

Boom , it hits me

He is your bit. Enjoy..lyrics are a bit messed up. Will be fixed by publishing time.

At that moment, our room door is knocked down with a battering ram. Crazed cops who watched too many Bruce Willis movies as kids charged at us with weapons drawn.

We’re all safe and comfortable in our orange plasma balls, one of the cops, the shortest of the lot is the first to fire his machine gun. Then they all join in. We just float in the safety of our plasma flyers watching them put in clip after clip, laughing our heads off, cracking jokes at the various kill faces they display as they squeeze down hard on the triggers of their guns. The funniest is the fat one whose skin is experiencing an epileptic seizure, his tongue hanging out of his mouth like one of those things you hung from the ceiling in the seventies to catch flies.

Finally, they all run out of bullets. Smoke, the smell of spent gunpowder fills the room.

They’re stunned, don’t know what to do, usually at this point in a killing they call the paramedics and huddle together to get their stories straight.

They lower their weapons and look at each other,then at us, then each other, dazed, confused,they look at me again. I change the shape of my round plazma flyer into the shape of a hand, I extend the middle finger then back into a perfectly round ball.

They’re eyes and mouths are wide open, in a fitting Nectonite exit tradition, I blast it in from all directions, an exit song, I choose Black Dog, by Lead Zepplin, “hey hey momma see the way I move, gonna make you scream going to make you groove. On the drum roll the four of us blast out of the window making an immediate left, flying south on Las Vegas Boulevard and dive bomb the Bellagio water show, Then we buzz the control tower at the Las Vegas airport on our way to blast Area 69 to smithereens.

#107 Rupert Pupkin on 04.07.15 at 9:02 pm

#37 Sigmund Fraud on 04.07.15 at 7:05 pm
RE #1 Leroy Washington

It’s pretty obvious that you’re a Canadian just trying to get everyone cranked up . Most Americans don’t know or care who Steven Harper is let alone Surrrey and Etobicoke. Time to take your idle banter elsewhere , we are here to be educated.

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

You got it.
Probably lives in Vancouver pissing at himself for missing the greatest real estate opportunity on the planet.
What a sad dweeb indeed.

#108 Andrew Woburn on 04.07.15 at 9:02 pm

“Nanaimo property sales were strong, and especially for sellers with listing in higher price ranges.

The latest housing monthly report from Vancouver Island Real Estate Board shows 420 units sold north of the Malahat last month, a 19 per cent increase from a year ago.”

This agrees with what I am seeing in our neighbourhood. Properties in Nanaimo over $500K are moving well compared to average homes at $350K. I can only assume that retirees are cashing out of the Vancouver area because few people here (or anywhere) can afford $750K.

Those of us who fled YVR with our equity intact often burn small pieces of ham in front of golden idols in grateful prayer.

http://www.nanaimodailynews.com/news/nanaimo-region/property-sales-remain-strong-1.1814078#sthash.qXXRnXLv.dpuf

#109 Randy Randerson on 04.07.15 at 9:04 pm

Bring on the doubling of TFSA!

#110 John on 04.07.15 at 9:05 pm

Just a little comparison:
Seattle: Average price of a house: less than 1/3 of those in Vancouver. 1.9 million in Seattle buys a house that looks like it should cost 1.9 million.
Job creators in Seattle:
Boeing, Microsoft, Amazon, Holland America, Ebay, Starbucks.
Vancouver job creators: ????

#111 Dual Citizen In Canada on 04.07.15 at 9:07 pm

#27 Mark on 04.07.15 at 6:53 pm
Just out of curiosity, what’s the Canadian tax treatment of a US Roth IRA?

http://tinyurl.com/ocqb2cn

#112 Mark on 04.07.15 at 9:07 pm

“Nanaimo property sales were strong, and especially for sellers with listing in higher price ranges.”

The shifting sales mix at work (take note Leo Troll)!

What separates the honest RE boards (ie: the Regina one that came out and acknowledged such) and the dishonest, is their willingness to be candid and tell the truth. Rather than the sort of nonsense, especially seen in Vancouver/Toronto, where prices are quite clearly stagnant, if not falling, but the industry carries on in the media as though nothing has changed.

#113 Wussmode on 04.07.15 at 9:11 pm

@mr.pleasant

I get the same feeling on this blog; that the US can do no wrong despite massive debt and a sputtering economy without QE.

Garth seems to ignore the flood of bad economic US news and only look at them through rose coloured glasses. Yes we have different economies, but they have serious economic structural issues, just like us right now. But I guess this blog isn’t about the US, it’s about Canadian RE, and I am a fan of #TurnerNation.

When I want to hear about American gloom, no better guy than Peter Schiff – YouTube him! Btw Garth, you should start a YouTube vlog. You know, next to a fireplace with a scotch in hand. Would be great :)

#114 Rupert Pupkin on 04.07.15 at 9:11 pm

The house pimps at Vancity have just announced it will be $4.4 million in 2030.

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

The message is clear……Buy now or buy never!!!!!
And the party continues…….
What a strange country has canada become.

#115 Hot Albertan Money on 04.07.15 at 9:12 pm

Since I am nowhere near maxing out my TFSA and since I don’t plan on having more kids/backpacking around Europe/Buying my first home, etc… Should I forget about my RRSP and go all out on my TFSA until it’s maxed?

#116 Underhoused on 04.07.15 at 9:16 pm

Curious if any blog dogs have experience with being US persons and having a TFSA.

Despite all the mess and hassle, because my Canadian tax rate is higher than my US tax rate, and because I have cross border tax credit room, it looks like I would nonetheless come out ahead — even if slightly — with a TFSA over where I would be with a non-registered account in Canada. Since I am experienced in doing my own US taxes (and not just the most basic forms), I’m not likely to incur huge bills for US tax prep on the TFSA — at worst a one time fee for a consultation.

I’ve run trial IRS paper work on an imaginary account (have thought about what would go into such an account to maximize returns/minimize the tax paperwork) and it looks like it should work. No huge gains, but slightly more advantageous than having the same money in a non-registered account on either side of the border. This is because a non-registered US-based account would have a CRA tax obligation, and a non-registered account would have both CRA and IRS tax obligations.

Do any US person blog dogs do this? Curious to know if it is worth the hassle. Thanks!

#117 Drill Baby Drill on 04.07.15 at 9:18 pm

Dear Pathetic Blog;
is it a coincidence that the federal budget was postponed because they were waiting for the right time to sell their General Motors shares ?

#118 will on 04.07.15 at 9:19 pm

Yup. I’ll take the doubling. But I still wish we had a conservative government in power.

#119 Don on 04.07.15 at 9:24 pm

49 Daisy Mae on 04.07.15 at 7:24 pm

“It’s red meat for the Conservative base (71% of people making max contributions are over 55….”

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

I recall one BC party — can’t remember which, maybe NDP — promised us CHEAP BEER if elected! Yea! But the party did not win in spite of this promise. Goes to show you how little respect governments have for the electorate, however

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

Sorry Daisy – I am googled for the NDP version and this is what I found – http://thetyee.ca/Opinion/2014/11/25/BC-Libs-Liquor-Law-Will-Cost/

BC Liberals’ Liquor ‘Modernization’ Will Cost You – and the BC liberals are associated with the Federal Reform/Conservatives.

I don’t care for any Parties at the moment – but we need the truth.

#120 Drill Baby Drill on 04.07.15 at 9:28 pm

#48 TRT
How come Calgary Housing has not come down ?
That is a very good question. The reason is because those who have been layed off in downtown Cowtown have not spent their buy-outs as yet and when they do they will apply for E.I. and then realize that they can’t afford their mortgage and then will panic and try and sell. The Calgary home sell off will really hit home in Q3 2015.

#121 Losing it | Realties.ca on 04.07.15 at 9:32 pm

[…] Source: http://www.greaterfool.ca/2015/04/07/losing-it-3/ […]

#122 Shawn Allen on 04.07.15 at 9:33 pm

The TFSA is for Savings ?

If the Tax Free SAVINGS Plan leads people to think it is for savings and not for equity investing, why is the same not true of the Registered Retirement SAVINGS Plan?

Everyone seems to know what exactly RRSPs are for (I speak, of course, of GICs and mutual funds)

#123 JimH on 04.07.15 at 9:36 pm

#95 BlackDog
Re: Canadian retirement accounts:
“Good scam for the US eh?”
===============================
Here’s a story for you, Sir!
I worked as a Canadian Resident Alien in the USA while holding Canadian RRSP’s with Scotia McLeod.

I declared their existance every year to the IRS with the request that any and all gains be viewed as if they were IRA’s. My requests were always granted and the IRS treated the accounts as if they were IRA’s.

When I moved the money from Canada to my IRA accounts in the US, there were no problems from the IRS. The Canadian Government, however, goosed me for 29% of the cash value of the accounts at the time of the transfer.

My OAS is also cut by 25% of my ‘entitled’ benefit because I reside in the USA.

Overall, I would suggest that this is a “pretty good scam for Canada, eh?”

#124 JimH on 04.07.15 at 9:37 pm

#95 BlackDog
you might find this enlightening, also!
http://www.irs.gov/uac/Newsroom/IRS-Simplifies-Procedures-for-Favorable-Tax-Treatment-on-Canadian-Retirement-Plans-and-Annual-Reporting-Requirements

#125 Smoking Man on 04.07.15 at 9:39 pm

#117 Drill Baby Drill on 04.07.15 at 9:18 pm
Dear Pathetic Blog;
is it a coincidence that the federal budget was postponed because they were waiting for the right time to sell their General Motors shares ?
……..

God damn tin foiler, you have a future , nice observation.

#126 Squirrel Meat on 04.07.15 at 9:40 pm

Way to go Harpo!!

http://www.theglobeandmail.com/report-on-business/canadian-taxpayers-lose-35-billion-on-2009-bailout-of-auto-firms/article23828543/

#127 Don on 04.07.15 at 9:41 pm

Why not give Thomas M a shot – Harper has proven very little other than being the dictator of the Harper Government and has provided little leadership to Canadians.

I also think the 55 + vote should read up on the issues and vote accordingly – not blindly. Of course I am generalizing here – I am sure some have a degree of commonsense. Best Gov is a minority gov.

To vote for the same gov is simply insane.

And to the point of increasing the TFSA limit. I thought less and less Canadians were saving/investing in terms of the current TFSA levels – so why would they start now and with debt levels at an all time high – can they.

#128 Marco on 04.07.15 at 9:46 pm

Vancity604

“okay now bring on the ignorant comments how van is a sht hole with no jobs.”

Here it comes… Sure Vancouver has a bit to offer but compared to Seattle, where median house prices are cheaper and disposable income higher. Boeing, Microsoft, Amazon etc… Do you not think our prices should be at least more in line with Seattle? If not cheaper? Go figure.

Cheers.

#129 Fiendish Thingy on 04.07.15 at 9:46 pm

Great news on the TFSA Garth; now can you please use your considerable prestige and influence to convince the U.S. to treat them the same as RRSP’s, instead of making US citizens in Canada fill out onerous Foriegn Trust forms and treating us like we’re hedge fund billionaires with Swiss bank accounts?

Once I become a Canadian citizen (hopefully next year), this issues makes renouncing my US citizenship very tempting.

#130 Willy H on 04.07.15 at 9:54 pm

As much as I like the TFSA the increase from $5.5K to $11K will only turn the wealth divide between haves and have-nots into a chasm over the mid-term. This is a gift to the upper middle class but little more than a dream for the disintegrating middle class and the working poor who can’t put anything meaningful aside.

In the short-term it’s a political winner, in the long-term this has the potential to push the tax base to lower middle class and working poor. In other words we are headed for a more regressive tax system. There is little doubt.

Not sure how this government or future governments are going to attack our national debt?

We may well get our TFSA increase but don’t be fooled. Sooner or later either the GST, PST or income taxes (or all three) will have to increase to cover off the government inflows lost to TFSA’s in order to pay for the services we demand. This government already increased tariff’s on goods from developing countries like China by 3% in one of their dreaded omnibus bills. Why? Because the GST cuts were more than the treasury could bear and they realized they were going to have a difficult time balancing the books without another inflow. A tariff increase is brilliant politically, no fall-out and you don’t qualify for a penny GST rebate because your paying a hidden tax! After all, the Reformicons have always known they are dealing with us Sheeple. Get ready to have a great deal of wool pulled over your eye’s this fall.

#131 Last of the Baby Boomers on 04.07.15 at 9:54 pm

@Gregor Samsa on 04.07.15 at 6:55 pm
The only families who have an extra $22K lying around each year with nothing better to do but invest it are the families that LEAST require a tax break. The wealthy will use the TFSA to shelter high risk investments reaping windfalls that will eventually cost the Canadian treasury billions a year.

Meanwhile, average working families will never have that kind of cash, and if they do, they are not wealthy enough to afford private accountants and financial advisers to manage their meager portfolios, and they are too financially illiterate to invest on their own.
_____________________

Sold the house in 2012. The family is renting. Am maxing out the TFSA every year. My daughter turns 18 this year and given she has done everything within her power to contribute to this family, has never been given an allowance, works every moment of her spare time when she is not studying, and spent every other moment she has not been working, applying for scholarships (hoping for success). I will max out her TFSA for her as well, starting 2016. She has arranged for a two part financial literacy seminar to be conducted at her her high school for her school mates and their parents (first one begins next week).

We are savers, and investors, not spenders. Starbucks once only every 3 years; dinner out once a month at our favourite economical restaurant; drive a Honda as our family vehicle; kids walk to school, to the library, to the waterfront and to the mall; shop at “CostKo” and “No Phrills”. Probably helped growing up with parent who fled war and suffered the great depression; (Hungry 30’s my mom called it). We can all do it if we try. It does not mean that you deprive yourself of luxuries, but not all day every day. Be frugal; savour the treats.

@ Vanecdotal – yesterdays posts.

We used to live in the same small town (bought a house there in 1993, sold in 2012 and have now moved to the big city with the every increasing property prices. We probably know each other). I wrote a year and a half ago to the Finance Minister, local MLA and joined the petition circulated here the other day; but will join your cause and do so again. Am renting in West Vancouver ($2400/month – but not for long as the landlady wants her house back come summer). Have been watching the absolute chaos in the neighbourhood where we live. 3 houses across the street all sold, 2 torn down and rebuilt; went to the open houses last week on rebuilds. They look identical and are listed at $3.1 and $3.3 million. Another one across to the right of us has a property development sign up in front and is being torn down as we speak. I know foreign money from Iran and China definitely have an influence here as I speak to the families at school functions (mothers with children who live and attend school here alone; fathers live and work in their home country); however, there is another influence which one of the writers eluded to a few weeks ago. I think developers, many foreign and a few domestic have a significant influence in the property prices. One of my friend who stages houses for a living has provided anecdotal information on this. I wonder what part Residential REIT’s play in the elevated property values. My suspicions are that it is a combination of most of these factors which are causing the problem. Does Garth have any opinion on the influence of residential property REIT’s and property development firms, on the cost of housing in Vancouver.

#132 Sheane Wallace on 04.07.15 at 9:54 pm

I said that the olive has dementia. Here is the proof.

#133 Don on 04.07.15 at 10:02 pm

#108 Andrew Woburn on 04.07.15 at 9:02 pm

“Nanaimo property sales were strong, and especially for sellers with listing in higher price ranges.

The latest housing monthly report from Vancouver Island Real Estate Board shows 420 units sold north of the Malahat last month, a 19 per cent increase from a year ago.”

This agrees with what I am seeing in our neighbourhood. Properties in Nanaimo over $500K are moving well compared to average homes at $350K. I can only assume that retirees are cashing out of the Vancouver area because few people here (or anywhere) can afford $750K.

Those of us who fled YVR with our equity intact often burn small pieces of ham in front of golden idols in grateful prayer.

http://www.nanaimodailynews.com/news/nanaimo-region/property-sales-remain-strong-1.1814078#sthash.qXXRnXLv.dpuf

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

Yes – maybe but we must remember that the daily news is dependent on real estate ad revenue. They provide lots of real estate advertising.

Also – Sooner or later you run out of retirees with money and then it hits, there are limited young people that can afford those prices in Nanaimo. Really it’s just a matter of time – traditional prices were in the 100k- 300k range. Already the over flow parking lots at the Nanaimo Airport are emptying as the fly in fly outs are being laid off. These are the people that will bring down the prices as they bought too much house.

You can now see deals coming up in Qualicum and Parksville as nobody can replace the vast amounts of retirees that bought in the early 2000’s. It is only a matter of time before the tap runs dry.

But eh…living on the island is golden if you are older and can take the dampness, it is truly bone chilling (my MIL says it is colder than Toronto). And the fact that it is the drug hub on the island – big problem there – especially in certain parts. I worked and lived in Nanaimo and will never live there again. Better than east van but not my first or second choice would rather drive an hour to get to work.

May be a good time to get a cheap condo, invest your equity and enjoy. I wish you all the best in life. I enjoy your comments. Take care!

#134 Leo Trollstoy on 04.07.15 at 10:03 pm

#254 David Lee on 04.07.15 at 5:41 pm
@ Mark & Leo Trollstoy, re: #250

Unfortunately, one claim is as good as the other without the data.

The sales-mix-masking-declines argument that Mark espouses makes sense to me (yes, I understand the statistical math) but without the data, it could just be wishful thinking.

Spot on David. There is no such data.

Despite the complete absurdity of it, price of Toronto real estate across entire sales mix is rising.

No data exists that shows otherwise.

Some people just like to make up a story where there isn’t one. Like the Zero guy. It’s the only way they can find meaning. Poor guys :(

#135 BlackDog on 04.07.15 at 10:21 pm

@Underhoused @116 re: “Do any US person blog dogs do this? Curious to know if it is worth the hassle. Thanks!”

Not me. I’ve no intention of telling those bastards about my TFSA. Too fascinated by watching their frustrated attempts at shooting me while within the safe confines of my orange plasma ball.

#136 Yuus bin Haad on 04.07.15 at 10:21 pm

Sadder than how the content of the “confidential” letter reflects on Joe is the media’s reporting thereof – no critical thought whatsoever. But then again, this has been going on for years.

#137 Marco on 04.07.15 at 10:25 pm

@Rexx Rock

“Garth is right only a few places in Canada will continue to see strong growth which is great for homeowners retirement. Its sad that first time homeowners are so indebted thanks to our goverment policies.”

Which one do you favour?
A good retirement for boomers by over inflating the housing market by letting in unsuspecting virgin buyers, with the backing of the Gov and Banks?
Thus pushing up house prices fuelled by cheap debt.
Or are you are genuinely upset for the younger generations going into extreme debt because of these policies?

You can’t have one without the other.

Cheers.

#138 bvild on 04.07.15 at 10:27 pm

Garth

What do you make of the Feds holding stakes in private companies…..

http://www.cbc.ca/news/politics/general-motors-shares-conservative-government-sells-remaining-stake-in-automaker-1.3022822

wouldn’t it be better to be diversified, or do your investing rules not apply to ginormous behemoths

#139 Mark on 04.07.15 at 10:30 pm

“Spot on David. There is no such data. “

There’s plenty of data. Of course, you have to be rather savvy about interpreting it instead of being spoonfed by Realtors.


Despite the complete absurdity of it, price of Toronto real estate across entire sales mix is rising.

Not true.

If the Tax Free SAVINGS Plan leads people to think it is for savings and not for equity investing, why is the same not true of the Registered Retirement SAVINGS Plan?

I think you’ll find that an overwhelming of DIY RRSP “investors” make the same mistake in their RRSPs.

The past 35 years in Canada has been characterized by an almost non-existent equity risk premium, so the DIY investors who are heavily into fixed income haven’t really suffered meaningful impairment to their long-term retirement accumulations on account of being heavily over-weighted fixed income.

However, going forward, if the next 35-years is an environment of a strong equity risk premium, there’s definitely going to be a world of hurt for those who didn’t properly educate themselves on the importance of balanced portfolios, asset allocation, and the need to take equity risk in order to generate superior returns.

#140 BlackDog on 04.07.15 at 10:31 pm

@SM #106 Weirdly, I almost get this. Wondering though, who the other two people are who blast out the window re: “On the drum roll the four of us blast out of the window making an immediate left, flying south on Las Vegas Boulevard and dive bomb the Bellagio water show, Then we buzz the control tower at the Las Vegas airport on our way to blast Area 69 to smithereens. “

#141 omg the original on 04.07.15 at 10:31 pm

Weird, huh? Nobody makes “a down payment on a mortgage” but rather a down payment on a house. And TFSAs do not let people “enjoy interest-free income,” but rather tax-free returns. As for educating the screamers, there’s already a sweeter tax shelter for that, called the RESP. It’s beyond alarming when a finance minister has no idea what he’s talking about.
——————-

Now Garth, you know that was written by some cute, young Communications Assistant with a degree in journalism.

How would she know what the TFSA actually does?

They don’t let the people that actually know the policy anywhere near the public.

#142 Washed Up Lawyer on 04.07.15 at 10:32 pm

Garth:

Your blog is not lamentable. What is lamentable and a sad commentary on the economic development of this country is the very negative and coast to coast effect on the nation’s economy from the swoon in oil prices. How did it come to that?

We are now firing on two cylinders. Real estate at Trutch/West 12th Avenue and in Long Branch.

We are but a few acres of snow. Time for some Ian and Sylvia recorded live at the Horseshoe Tavern.

#143 omg the original on 04.07.15 at 10:42 pm

In Vancouver, worse. The average urban property, claims the local board, is now $1.9 million. The house pimps at Vancity have just announced it will be $4.4 million in 2030.
———————–

That reminds me so much of 2000 and the dot.com bubble – complete disconnect with reality.

So at $4.4 million the annual mortgages payments would be about $250K/year at 5% interest with 25% down.

So the average Vancouver home buyer will need to be making about $1/2 million/yr just to scrape by.

What a bunch of scaremongers.

#144 Retired Boomer - WI on 04.07.15 at 10:46 pm

Some stories from the past day…..

My friends retirement party. Known Dan & Judy for the better part of 20 years. They are debt free, drive older cars,and have almost a million invested in equities and bonds. They will live well.
Our friend Cindy lost her hubby on super bowl sunday age 52 heart attack while shoveling the neighbors driveway. They have no kids but, his sudden departure was covered with a mere $10,000 in life insurance…sucks
Another friend 62 forced into early retirement by disability has pension, and social security, and is contemplating filing bankruptcy. Zip for retirement funding (and he made more than I did much of his life??).
One final one she’s 75 still working full time, he died 2 years ago. They decided they didn’t “need” the medicare part B insurance that cover’s the 20% of medical bills not covered by medicare (other than the hospital itself which is covered). By not getting this they “saved” about $160 a month. Diagnosed with cancer the uncovered bills $40 GRAND and a mortgage besides. OOPS!! Now you know WHY she’s 75 and still slaving it. Will never retire until she croaks.

Different country yes, different spending habits not so much. Beware the onset of old age if you are broke!

#145 hazmatter on 04.07.15 at 10:53 pm

Garth

Any chance this nuclear contamination will impact Vancouver Island real estate prices

http://www.japantoday.com/category/national/view/radiation-from-fukushima-disaster-detected-off-canadas-coast

#146 Bottoms_Up on 04.07.15 at 10:59 pm

#230 Van Doom on 04.07.15 at 2:30 pm
————————————————
You write sentences full of words yet you still provide no proof.

#147 4 AM Sunrise on 04.07.15 at 11:00 pm

As Garth also said, the vast majority of individuals maxing out these accounts are 55+, and they’re not the ones buying RE.

No, but their children are…with their money.

#148 Victor V on 04.07.15 at 11:02 pm

EDITORIAL: Doubling TFSA limits: Targeted politics, targeted benefits

http://www.theglobeandmail.com/globe-debate/editorials/doubling-tfsa-limits-targeted-politics-targeted-benefits/article23828078/

#149 Victor V on 04.07.15 at 11:02 pm

ROB CARRICK: What an $11,000 TFSA limit means for your retirement

http://www.theglobeandmail.com/globe-investor/personal-finance/what-an-11000-tfsa-limit-means-for-your-retirement/article23828722/

#150 Metro Van Observer on 04.07.15 at 11:02 pm

Garth, or anyone, notice Preferred share ETFs being down? Example, ticker CPD, has been in freefall lately it seems. I thought these would be steady in this low rate environment. Anyone have an idea?

#151 Dee on 04.07.15 at 11:05 pm

@#116 I absolutely do this. I have yet to pay a cent of US tax on my TFSA. In the future, that may change (when said TFSA gets big enough) but so far, no.

In short, between the differences in tax rates, and then my personal exemption eating anything left over, it’s come out to zero on the 1040 each year.

Get yourself a good cross-border accountant, though, and have them run your numbers. Seriously, mine’s saved me so many times on things like this–and then the CRA gives me almost half his fee back in the tax deduction :)

#152 Scully on 04.07.15 at 11:05 pm

#131, I think this spring madness started with competing building developers. Anecdotally speaking they are paying stupid prices competing for tear downs. But low interest rates have added to this feeding frenzy, and now everyone is trying to get in on the RE ride. Don’t know if they are funded by residential reits. All I know is not one person I talk to thinks you can invest within a TSFA and they all think RE is the only way to invest. But then I don’t know many Stainless Steel ETFs, granite bonds, or designer balanced portfolios that boast “Lifestyle.” Maybe if we marketed them that way there would be hope for the herd. We are so screwed.

#153 Bottoms_Up on 04.07.15 at 11:05 pm

#138 bvild on 04.07.15 at 10:27 pm
———————————————
They needed to bail out GM during the financial crisis. The government is not in the business of trading stocks. However, selling the shares now is timely in order to make up for the drop in oil price and revenue.

#154 OttawaMike on 04.07.15 at 11:05 pm

#106 Smoking Man on 04.07.15 at 9:01 pm

Read Kurt Vonnegut, Slaughterhouse 5. Your ideas are similar to what he wrote 45 years ago.

#155 Bottoms_Up on 04.07.15 at 11:09 pm

#144 Retired Boomer – WI on 04.07.15 at 10:46 pm
————————————————————
I sat on the plane once beside a medical doctor, born a Canadian, but who spent his career as a doctor in Denver. However, he was sure to meet the minimum requirements for retaining his OHIP coverage (medical care in Ontario).

#156 Lobster Man on 04.07.15 at 11:20 pm

On January 1, 1972 Canada introduced the capital gains tax. Before that, any investment gains were tax-free. And there were no write-offs for losses either. It was a level-playing field, as there were no special treatments for “Principal Residence” etc. Also, up until the mid-80s, every Canadian tax payer can earn up to $1,000 interests tax-free.

The doubling of the TFSA contributing limits is a small step back to where we were.

I call that progress.

#157 Show Me The Money on 04.07.15 at 11:20 pm

Love the Victoria real estate updates, keep up the good work.

#158 4 AM Sunrise on 04.07.15 at 11:20 pm

#131 Last of the Baby Boomers on 04.07.15 at 9:54 pm

You’re a good parent and your daughter is a good egg who will turn out just fine. You’re also one of the few families I know of who doesn’t give an allowance to their kids. I grew up without one. My parents say that the problem with weekly, unpoliced allowances is that it encourages the kid to blow their money in anticipation of next week’s allotment. It’s like training a kid to live paycheque to paycheque! They also balk at the argument that it’s supposed to teach kids how to “spend money” – “kids don’t need to be taught how to spend!” I didn’t get to make my own purchases until I was 16. The cashier at the Flying Wedge must have thought I was a stunned weirdo, marvelling at the exchange of dough for pie. I also rent in West Vancouver (not in your neighbourhood) and your frugality is refreshing compared to the materialism I see.

#159 Ed on 04.07.15 at 11:24 pm

http://internationalbanker.com/banking/how-are-canadian-banks-being-affected-by-the-slump-in-oil-prices/

#160 peddleme on 04.07.15 at 11:32 pm

Sad irony when this eco-friendly city loses its eco-appeal…
http://www.theprovince.com/news/vancouver/Zealand+cyclist+farewell+letter+Vancouver+what+hoped/10952412/story.html

otoh, am guessing that the real estate hounds wouldn’t be “pedaling” land to this type of guy anyway…after all he isn’t driving a Mercedes!

#161 cramar on 04.07.15 at 11:34 pm

As I read what the Owe wrote, I thought ‘We are REALLY screwed when the Finance Minister of Canada writes “interest free” when it should be “tax free”.’ (Same as GT mentioned later.)

We are REALLY SCREWED in Canada now!

#162 4 AM Sunrise on 04.07.15 at 11:34 pm

#152 Scully on 04.07.15 at 11:05 pm

I heard a radio ad where two women were chatting about financial planning for retirement. My heart soared with hope until it turned into an ad for a new condo development in Surrey, BC where your $93,000 bachelor condo is supposed to generate $850/month in rent. I don’t know where they got the $850 figure from. The average rate on Craigslist is about $600.

#163 DisgustMadeMePost on 04.07.15 at 11:36 pm

Certainly isn’t comforting reading your comments tonight, Garth.

It’s clear you don’t agree with what’s going on in Ottawa and your tone shows the lack of faith you have in the latest installment of these morons.

Have to say, that caught my attention.

#164 4 AM Sunrise on 04.07.15 at 11:37 pm

My contribution to the blah-blah about government jobs:

I applied to be a passport officer. They gave me 60 minutes to complete a written aptitude test. I finished it in 20. I didn’t get the job. My best friend says it’s because I didn’t stop halfway to take a 40-minute coffee break.

#165 Hawk on 04.07.15 at 11:38 pm

#59 Gregor Samsa on 04.07.15 at 7:38 pm

If you did an empirical study of societies that are closer to the free market as opposed to socialist/communist ones, you would realize that every country that has more freedom, lower taxes and less government intervention is doing way better than every one that has the reverse.

On a broad spectrum the closer a country moves to the marketplace the more it prospers, the closer it mover to Government, the more of a basket case it becomes.

Compare Switzerland, Singapore, Hong Kong, South Korea, Monaco, ……………with Cuba, Belarus, Venezuela (oil rich), North Korea, etc.

#166 Lorne on 04.07.15 at 11:39 pm

#30 Ed
It sucks that an elected majority government actually does what we voted them in to do. Who knew!
……….
Yes, for those 38% of the voters who actually voted for Harper, they should be happy…as they undoubtedly are as they are the majority of people who can take advantage of this. Too bad about the other 62% of the voters!

#167 Mark on 04.07.15 at 11:41 pm

“Garth, or anyone, notice Preferred share ETFs being down? Example, ticker CPD, has been in freefall lately it seems. I thought these would be steady in this low rate environment. Anyone have an idea?”

A significant chunk of the Canadian preferred share issuance contains embedded options in favour of the issuers. Hence, it appears that in response to the likelihood that many of those issues will be forcibly and prematurely redeemed with minimal compensation, the fund is reverting to valuations more closely resembling par on the underlying.

Since the 2011 apex in the Canadian stock market, asset classes such as preferreds, REITs, etc., have become quite overheated as people sought refuge from common stocks. There was an article in one of the publications targeted towards the Canadian investment advisory community, a few months back, that lamented the fact that relatively “conservative” investments like REITs, preferreds, bonds, have solidly trounced the performance risky investments like stocks which “should” have higher performance on account of higher volatility.

Perhaps what we’re now seeing in preferreds, and soon enough, REITs, is an unwinding of such excess prior returns, and the popping of the (mini, and in the case of REITs, not-so-mini) bubbles in those asset classes.

#168 macroman on 04.07.15 at 11:42 pm

Dang, I was hoping Smoking Man would put his butt out in the ocean…

Guess I’ll have to wait

#169 Underhoused on 04.07.15 at 11:44 pm

#135 BlackDog on 04.07.15 at 10:21 pm

Thanks to my obedience certificate, I tend to comply with US law. Not happy about how FATCA reporting has changed from Dept. of the Treasury to the “Financial Crimes Enforcement Network” since I haven’t committed any financial crimes. But I’d prefer not to start committing them now.

#151 Dee on 04.07.15 at 11:05 pm

Thanks for letting me know how you manage your TFSA against US tax obligations! VERY helpful. So many people, even qualified tax professionals, advise against US persons holding TFSAs but their advice hasn’t made sense with my numbers.

Thanks, too, for the suggestion to use a cross-border accountant. I’ll probably stick to doing my own US taxes using a US-based consultant, not because of the money, but because doing US taxes can be a bit like managing your own money — you’ve got a greater interest in the best outcome than many (though certainly not all) of the people you could hire.

#170 Mark on 04.07.15 at 11:45 pm

“Any chance this nuclear contamination will impact Vancouver Island real estate prices”

I wouldn’t put it past the RE industry to ‘blame’ as many external and extraneous factors as possible for RE’s on-going demise (instead of the obvious, that prices are simply too high for what RE actually is!), but, no, the radionuclides detected in trace amounts are completely irrelevant. The granite counter-tops installed in many higher-end houses these days may very well emit more harmful radiation than the minor traces that wash ashore from Japan.

#171 Mark on 04.07.15 at 11:55 pm

“Maybe if we marketed them that way there would be hope for the herd. We are so screwed.”

No point in complaining about the stupidity of the masses, especially when it comes to investing. Lots of opportunities out there to trade against the herd and make a lot of money.

The bubble in houses has left stocks cheap. The bubble in bonds has left precious metals cheap. The bubble in the US has left the emerging markets cheap. The bubble in REITs has made renting cheap. Understand the correlations, what is inversely correlated, invest accordingly, and over time, a lot of wealth can accumulate to your name without a lot of effort other than patience.

#172 meslippery on 04.08.15 at 12:01 am

Ed the Slough on 04.07.15 at 8:33 pm

When is your next book coming out?

When I stop spending my time on this pathetic blog. — Garth
————————————————————–
Rumor has it when smokey done his book Garth lined
him up to ghost write it.

#173 Don on 04.08.15 at 12:02 am

#128 Marco on 04.07.15 at 9:46 pm

Vancity604

“okay now bring on the ignorant comments how van is a sht hole with no jobs.”

Here it comes… Sure Vancouver has a bit to offer but compared to Seattle, where median house prices are cheaper and disposable income higher. Boeing, Microsoft, Amazon etc… Do you not think our prices should be at least more in line with Seattle? If not cheaper? Go figure.

Cheers.
***********************

I loved Vancouver at one point, great place in your 20’s and early 30’s – or for those with or without children who still want the lifestyle. Traffic is horrendous every time you want to go somewhere especially out of town.

For families not so great – only so much time in the day and sitting in traffic with kids is not an option most of the time.

Vancouver needs to attract more head offices, more manufacturing, wood products would be a good start – Jobs are Jobs.

What is insane about Vancouver is the mantra – I know it is hard to ignore because it is trendy and everyone believes, well at least those who aren’t aware. Even still hard to go against the grain. It is somewhat veiwed as success. The retirees sell and move to away with money in the bank. The younger or older who can’t move for lack of options, stay in the game. My out of town friends used to call Vancouver “The Show”.

It is all about the appearance!

AND

the monsoons season can last 9-10 months on average I think about 9. Doesn’t mean the remainder is sunny. But hey when it is sunny it is somewhat beautiful, but then there is the traffic and lately gangs etc. It was nice place back in the 90’s – something happened though and road racing and road rage became commonplace.

I do like parts of Vancouver and it is spectacular on a warm summer night with a beer in hand and a party to go to.

Real estate is crack there – no doubt about it.

#174 Karma on 04.08.15 at 12:07 am

#25 Vancity604 on 04.07.15 at 6:46 pm
“…the future is bright here with many different career opportunities in any field , okay now bring on the ignorant comments how van is a sht hole with no jobs.”

As a Vancouverite living elsewhere, I can confidently say the average Vancouverite is just as ignorant of other places as the people who piss on Vancouver. Also, everyone knows Vancouver has jobs… Just not high paying jobs. I can name at least 30 millennials (from high school and SFU) who’ve moved to other cities because of lack of opportunities in Vancouver (and just boredom). Probably more if I tried. The Brain Drain is in full force, and it won’t be getting better any time soon.

#175 Van Doom on 04.08.15 at 12:11 am

#146 Bottoms_Up on 04.07.15 at 10:59 pm
#230 Van Doom on 04.07.15 at 2:30 pm
————————————————
You write sentences full of words yet you still provide no proof.

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

Then you don’t read every post.

#176 Van Doom on 04.08.15 at 12:12 am

http://www.huffingtonpost.ca/dan-kelly/public-sector-workers_b_7012920.html

Now the govt trolls will poke holes……

#177 Nagraj on 04.08.15 at 12:13 am

An Ernst&Young survey has found that 90% (!) of the B-I-G oil&gas outfits have NO REAL plans in place to cope with anything. We, at Ernst&Young, see a VALLEY OF DESPAIR. A VALE OF TEARS. WRECK OF THE HESPERUS. (And your Joe Lazarus O misspeaketh too.) This will have a bigger impact – on THINGS – than the last stupid bust. No more schnitzel and noodle and crisp maple strudel. We, at Ernst&Young, deem it appropriate to invoke Eugene’s greatest play, MOURNING BECOMES ALBERTA, and we close with the suicidal heroine’s imperative last line, “Throw all the flowers out!”

O Cry The Unbeloved Country!
So very gang agley.
Oh Captains My Captains of industry! Ye never had laid (sic ?) any plans in the first place. My oh my, oh my oh, why did you ever leave Ohio? If Wall Str lays an egg too that’ll be some breakfast, eh?

We, at Ernst&Fritz, didn’t bother surveying the lil oil&gas moneygrubbers because they’re all dead. These Mesdames Bovary hysterically stuffed their holes with toxic junk mistaking it for spinach.

Bay Str is but serenely popeyed. Watching a NY court send two bits Connacher to the frying chair made Bay Str finally understand that fear of broke is the beginning of wisdom. Fer sure.

Ever notice how churchly banks are? So quiet. People whisper. Speak in hushed tones. The staff is so properly dressed.

Oh bury yerselves on the lone Prairee.

#178 BG on 04.08.15 at 12:14 am

A lot of the new trendy condos have no paint on the ceiling. It’s plain concrete.

So basically the dude saves on the paint and you’re supposed to pay more because it’s trendy.
What’s wrong with people these days.

#179 Cariboo Girl on 04.08.15 at 12:14 am

To #46 – TRT – you said “TFSA means no GIS in addition to your OAS. Make sure you take it out by age 65”.

This is not true – TFSA is exempt and withdrawals will not count as income for government programs such as GIS.

#180 The American on 04.08.15 at 12:16 am

Marco, Vancouver is a nice city… For Canada. Truth is, Vancouver only makes lists because it is in Canada, force-ranked a giants other cities within Canada. It’s nice, but certainly not world class, and there is no real viable economy there. In general, it’s a pleasant enough, but boring experience in Vancouver. Even the airport,YVR, is in dire need of some thorough updating. Nothing feels as sophisticated or authentic as it does in Seattle. So, Vancouver is not a shit hole. It’s just not that great, but maybe so for Canada. Personally, I think Toronto is a much nicer city, with a HELL of a lot more going for it than Vancouver. Vancouver has mountains that meet the water… Big fuc$in’ deal. So does Seattle, Los Angeles, San Diego, San Francisco, Honolulu. It’s a sad argument to justify prices for a sub -par city.

#181 Karma on 04.08.15 at 12:21 am

“F introduced them. I merely suggested the idea. — Garth”

Good job, Garth. This reminds me of a quote: “You can achieve anything, as long as you don’t mind who gets the credit”. Without the idea, there is no execution.

#182 Van Doom on 04.08.15 at 12:27 am

#126 Squirrel Meat on 04.07.15 at 9:40 pm
Way to go Harpo!!

http://www.theglobeandmail.com/report-on-business/canadian-taxpayers-lose-35-billion-on-2009-bailout-of-auto-firms/article23828543/

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

That’s like $1000 per person. Yet Govt Worker after Govt Worker continues to defend their position. Amazing.

#183 kommykim on 04.08.15 at 12:29 am

RE: #145 hazmatter on 04.07.15 at 10:53 pm
Any chance this nuclear contamination will impact Vancouver Island real estate prices

Nope. The radiation levels detected in the sea water are 1000 times LOWER than the levels allowed by health Canada for drinking water.

#184 Karma on 04.08.15 at 12:31 am

#102 Rexx Rock on 04.07.15 at 8:55 pm
“I’ll never vote again,all Canadians should boycott voting.Most of the politicians are lying self serving crooks anyway. So whats the point of it all,to give them a job and a golden pension that they don’t deserve?”

Considering the Harperites pledged doubling of the TFSA in 2011, how is this “lying”?

Politicians lie, for sure, but not on this one…

Self-serving – Of course.

Is the problem fixed by boycotting voting? Nope. What’s needed is an engaged populace to hold lying politicians accountable. However, most people aren’t engaged and don’t even look up party policies prior to voting (if they even do vote).

Moral of the story: democracy isn’t perfect, but it’s better than everything that has come before it. (Particularly China, where the Communist Party has circa 85 million+ members, but only 1 guy truly in charge of 1.3 billion+ people).

#185 kommykim on 04.08.15 at 12:38 am

RE: #13 rawdiswar on 04.07.15 at 6:18 pm
My prediction, many of the Canadian population decry the move as “elitist” and “only helping the already wealthy”.

If the opposition parties play this the right way, the TFSA limit increase could seriously hurt the CONs. Since the majority of Canadians are pickled in debt and saving very little for retirement, it will be very easy to point the finger at the CONs and accuse them of favouring the “rich”. So if the LIBs and NDP can get traction on this, it could be one more nail in the coffin for the CONs.

#186 Karma on 04.08.15 at 12:45 am

#123 JimH on 04.07.15 at 9:36 pm

“My OAS is also cut by 25% of my ‘entitled’ benefit because I reside in the USA.

Overall, I would suggest that this is a “pretty good scam for Canada, eh?””
———————————–

Not exactly a scam. You avoided paying taxes initially on the RRSP contributions. When you moved it, you didn’t get ‘goosed’, you paid the lawful amount owed in taxes. That’s how it works…

As for the OAS, non-residents shouldn’t be ‘entitled’ to any of it. CPP, sure, because you contributed to it. But OAS, I believe, comes from General Revenue.

Hopefully, TFSA’s long-term legacy is the ending of the OAS and GIS programs. With the TFSA and RRSP, if Canadians can’t save for their retirement, they deserve to lie in the bed they have made…

#187 HJD on 04.08.15 at 12:49 am

“If the budget passes (and it will), then even if the Harper government is defeated in October, the change stands. Unless Prime Minister Mulcair reverses it. But then we’ll have a lot more to worry about.” Garth

Damn right you’ll have a lot more to worry about. Mulcair will start by rewriting laws and regulations that favour those with wealth. It’s time we had a prime minister who will stand up for the majority of Canadians. Face it, the shameful and inequitable distribution of wealth in this country has been produced by wealthy politicians acting at the behest of their wealthy supporters. And this situation will only change if average folks realize how foolish it is to vote for the Conservatives or Liberals. Garth appears to have it in for Mulcair. I wonder why?

#188 Vanecdotal on 04.08.15 at 12:54 am

#25 Vancity604

“Interesting about Calgary but doesn’t really matter to van not a lot of rig pigs sipping lattes on main”

I suspect you’re either employed in the FIRE sector, or young (and incredibly naive). Maybe both.

Google “recency bias” for a primer on the overall economy / where we are likely right now in the market cycle.

Next: ponder how much money flows – er – flowed straight from oilpatch into the LOCAL economy, directly and indirectly right through Van and the rest of BC.

For starters, fly-in- fly out workers with homes & families here, all over Van city, suburbs and BC: rig pigs / camp staff / on-site support service workers, easily 1000’s or more) in Greater Van alone. As these recently laid of workers run out of credit and stop buying all but the necessities locally, service / hospitality industry and retail suffer further decline, but there is always a lag before the ripples become apparent in the broader economy. the “lag” is occurring now. Q1 – Q2 2016 (or earlier, or bit later) likely much more readily apparent effects locally. (The federal election is a wildcard in the near – mid term). Regardless, after that expect accelerating deterioration in the local economy.

Local businesses directly and indirectly impacted:

– Engineering / machining industry

– Engineering / design industry

– Logistics / transport (trucking) industry

– Food services / institutional food supply industry

– Rail transport

– The Ports (Deltaport, Fraser Docks, Van Term, etc.)

Then… Retail: Vehicles, retail, clothing, sporting goods, hospitality industry etc. get hit a bit later. Any business plying a good or service that’s not a necessity suffers.

I could go on… bottom line, I love Van, it’s beautiful, I grew up here, but there are limited opportunities for significant career and income growth locally. Yes there is always opportunity for some, but the overarching theme is a city in general economic decline once you strip out the FIRE and O & G sector. It does not even register to an actual world-class city, with matching incomes and career opportunities.

This is also corroborated by recent difficulties many local co.’s are having attracting top-notch talent, as even in the > 6-figure income bracket they can’t PAY enough to keep the potential recruits in the lifestyle they’re accustomed too elsewhere, the cost of living here is too high even for high-net worth professionals!

It has become long term unsustainable to grow one’s career to retirement age here for a large segment of Gen X & Y. The smartest kidults take there experience / trade / degree and get the ‘el out of dodge. This trend will continue to accelerate if recent provincial out-migration numbers are an indicator. It’s not “different” here except that we’ve smugly watched the same policy mistakes that created this economic environment made elsewhere and still believe we are immune.

Definition of insanity: “Making the same mistakes over and over yet expecting a different outcome.” or “Vancouver”.

#189 Funcouver on 04.08.15 at 12:55 am

Go to school. Become a professional. Marry a professional. Make your marriage a success. Work hard. Get paid. Invest $75k per year. $5 mil by the time you are 55. Like I care if my $1,900,000 house 13 blocks from the beach drops 50 percent in value. I’ll just move on up, like George and Weezy.

#190 Leo Trollstoy on 04.08.15 at 12:56 am

There’s plenty of data. Of course, you have to be rather savvy about interpreting it instead of being spoonfed by Realtors.

Deflected. As I predicted here:

#251 Leo Trollstoy on 04.07.15 at 5:14 pm

20 years. Trend is up. Across all sales mix.

Unless you have a source link that says otherwise?

I didn’t think so.

Feel free to ignore or deflect or refer to heresay ;)

#191 Leo Trollstoy on 04.08.15 at 12:57 am

So easy to spot frauds like Mark. Ask for source links. And they have none. Deflect deflect deflect. Too easy.

#192 Bottoms_Up on 04.08.15 at 1:04 am

#1 Leroy Washington on 04.07.15 at 5:41 pm
——————————————————-
You’re wrong. Canadian lenders actually check and checked mortgagees ability to pay their mortgage, based on having current employment. The USA banks were not even checking for employment. So, you’re wrong.

#193 Vanecdotal on 04.08.15 at 1:31 am

… or maybe to put it simply: What a Deflationary Recession Looks Like to Average Peeps:

1) Laid off oil patch (directly or indirectly employed) worker flies home to YVR.

2) Halts superfluous retail purchasing, starts selling off any trucks, boats, quads, bikes, toys, etc.

3) Dealerships / retailers that sell shiny new things, clothes, shoes, work wear, etc. see business decline.

4) They start laying off management / retail staff

5) Corporate divisions merge / consolidate to cut costs, money – losing branches close = more lay offs in middle management, shipping, distribution, logistics, transport.

5) These recently unemployed stop dining out, and stop spending in broader economy, (hair salon, spa, pet grooming, kids extra-curricular services, etc.)

6) Restaurants / coffee shops / pubs / night clubs lay off their staff as patronage declines, some will fail.

= a “sudden” noticeable dearth of impeccably-manscaped-$180-nut-hugging-jeans-wearing SoMa hipsters dosing on the daily $6 latte… and a lot of newly available retail space.

The end game however, is when some (all?) of the above, IF they own a home here, are now all thinking, at roughly the same time, maybe we should / need to sell it. This is when it really shows up in the FIRE sector.

= less borrowing, lower margins, fewer home sales, fewer corporate leases signed, more company closures / consolidations aaaand… more layoffs.

This is why the Feds appear to be absolutely deer-in-the-headlights terrified presently. (Dude, Where’s My Budget?!) Deflationary spirals can be multi-generational in scope. Long, painful, expensive, and protracted to climb out of.

#194 pwn3d on 04.08.15 at 1:34 am

Lol at someone bringing up Nicole Foss yesterday. She said Canadian housing was going to drop 90% in 2012.

As for me, I’m almost embarrassed to calculate how much I made in housing and investments the last year. Way more on housing because of the amounts invested, but % gains both did amazingly well. Sure beats working for a living. Doomers should be pissed at missing out on this.

As for Mark still claiming housing has gone down in Toronto, get help, you’re barking mad.

#195 markymark on 04.08.15 at 1:35 am

Bring on the TFSA double………..

Shock and awe……..

#196 Setting the Record Straight on 04.08.15 at 2:41 am

@77
My family was poor. Savings was a priority. Maybe that’s why we lived poor.

A few thousand a year is not a rich persons game.

Besides, Rich people don’t have to save. They have already saved. That’s why they are rich.

And in order to contribute they have likely paid double the tax of someone who makes less to begin with.

Those that want to be rich can now do it more easily than any of their rich predecessors.
********

+1

#197 Setting the Record Straight on 04.08.15 at 2:47 am

@73
“As Garth also said, the vast majority of individuals maxing out these accounts are 55+, and they’re not the ones buying RE.”

Of course they’re not buying RE, but they are buying the GICs that fund the RE bubble. The other side of the debt equation.

Policy makers should be trying to figure out how to get people to take risk in the economy. Not providing a vehicle which actually encourages people, especially boomers, to be taking less risk. In this aspect, the TFSA, in practice, is actually counter-productive as few are using it for the purpose of taking risk.

*********

What Collectivist nonsense. Perhaps you should dissolve the people and elect a new one.

The road to economic collapse is paved with government interventions.

#198 Setting the Record Straight on 04.08.15 at 2:51 am

TFSA
Gimme Shelter!
I thought shelter was one of the requirements for survival in Hierarchy of Needs.

And people are objecting?
Sigh!

#199 Nagraj on 04.08.15 at 3:15 am

question for #2 Mark

Shedlock did an excellent job of posting magazine covers touting an ever onwards and upwards RE mkt in ’07, and had a lot of fun doing so. As you know there’s such a thing as a Magazine Cover and Movie Poster “Index” to gauge public mood; was it Prechter who wrote about this? That the media are always short of the turn in any asset class trend is a given.

Which gets us to Elliott Waves. You know those YOU ARE HERE maps just past the front door of the shopping mall? Well, my take on E Wave theory is that I read YOU ARE PROBABLY HERE. (I haven’t the ability or inclination to do minute counts.) Nonetheless I read Jason Haver very often.

So many people don’t get the basic premise: that the wave count predicts the news. Some years ago I handed a copy of Frost&Prechter to my (late) magna cum laude math wife, she looked it over and told me in which cupboard the tin foil was. [My Harvard son was more diplomatic.]

But Fibonacci retracements are very popular.

You often take a very long term view. The order of turns in asset classes over the business cycle has been deftly handled by J. Murphy in his Intermarket Technical Analysis – still my mkt Bible.

Any thoughts? Particularly re the Canadian economy which I think is headed for Recession, and worse.

#200 Tommy C on 04.08.15 at 3:29 am

I work for a large telco, today an email was sent out to all of our customer service team members reminding them of the number of layoffs and job cutbacks and to say they are expecting people to begin to call to try and reduce costs.
The economy in Alberta isn’t doing well at all.

#201 Vanecdotal on 04.08.15 at 4:02 am

#131 Last of the Baby Boomers

“I think developers, many foreign and a few domestic have a significant influence in the property prices.”

I agree. Anecdotally there appears to be a significant impact on the market from the spec builders. Same type of buying & building is also happening in White Rock. I hadn’t really considered a possible REIT connection to the developers, but that IS an interesting angle… GT any thoughts? Seems plausible.

The information vacuum the average consumer is forced to operate in regarding the entire RE industry here is utterly ridiculous.

#202 Vanecdotal on 04.08.15 at 4:06 am

@ Last of the Baby Boomers

Btw re: squeaking the govn’t wheel on these issues, nice to hear you also have taken some positive action, appreciate the follow through. Many locals are concerned, yet only a small percentage will take steps to do something about it to effect change, although hopefully this will also change with increasing awareness.

#203 Mike L on 04.08.15 at 5:26 am

We are moving back to Calgary.

As Garth said, rents are down, in fact, it’s a renters market in Calgary. Many landlords and their agents told us units are sitting for 3-4 months before someone is interested. Everyone is negotiable to get a renter in.

We negotiated $200/mo off (from $2000 to $1800) for a sub-penthouse condo downtown.

#204 West Coast Woman on 04.08.15 at 5:27 am

The main reason prices for SFH in Vancouver are getting so high is because virtually every older house that has been sold on Vancouver’s west side in the past 5-6 years has been torn down and replaced with a luxury “mansion” targeted towards the mainland Chinese market.

This started happening after the City massively increased the maximum square footage allowed to be built on single family lots. It spawned a whole new industry of “mom and pop” flippers when people realized they could make at least $500,000 on each new build. Many of these people use their principal residence exemption to shelter the gains even if they’ve never lived in either the old house or the new house during the time they’ve owned the property. Also, many of these flips are taking 4-5 years to complete (for the purchase/rebuild/sell) so as not to attract the attention of the CRA.

There is also the possibility that Vancouver real estate is being used in this way to launder money:

http://www.biv.com/article/2015/4/property-sales-spike-sparks-money-laundering-fears/

#205 Vanecdotal on 04.08.15 at 5:35 am

#102 Rexx Rock

“I’ll never vote again,all Canadians should boycott voting”

That’s a great idea, Harper will be thrilled! Then the incumbent oligarch can stay in power unchallenged forever and ever… and ever…

You do understand that in a democracy, if you don’t like the status quo, you have to actually VOTE it out first?

Think all politicians are crooks and liars? Run for office. Hate the current party choices? Run as an Independent or start a new one.

Gee-zus, Democracy 101. Remedial version.

#206 slick on 04.08.15 at 6:37 am

#26 ‘essential government services’
kinda an oxymoron???
I’m hoping the tax deficiency will force gov’t to trim the fat.
I doubt it will, but sure hope so.
slick

#207 Londoner on 04.08.15 at 6:41 am

“Don’t get me wrong. I’m looking forward to Dorothy and I moving $22,000 a year, every year, from our taxable investments to our taxless accounts. It’s a windfall.”

Yesterday, I transferred £30,480 (£15,240 each for me and my wife) into our ISAs, which are the UK equivalent of TFSAs. In Canadian dollars, that’s over twice the proposed 2016 TFSA limit. Maybe Joe should give that some consideration.

#208 juno on 04.08.15 at 6:42 am

5:

You got that right. Only the rich can sock their money away. Forget about most of the homeowners. They are living from paycheck to paycheck and will not be able to benefit.

You got to max out, it keeps your dollars working for you without having to face the tax burden. How cool is that.

Rad

#209 CalgaryRocks on 04.08.15 at 7:36 am

#203 Mike L on 04.08.15 at 5:26 am
We are moving back to Calgary.

We negotiated $200/mo off (from $2000 to $1800) for a sub-penthouse condo downtown.

I think you’re too early. When we moved there in 2004 we paid 1000$/month for a house.

And then when we bought in 05, our mortgage was ~980$/month on a SFH house in a NW with 5% down. (Huge lot, on a hill with a view)

In those days, paying rent was a sucker’s game because it would continuously go up as the market went up.

Our little mortgage stayed the same or went down with interest rates for 8 years. We had so much disposable cash left over that we literally didn’t know what to do with it. The best of times.

Ah, miss those days. Not quite the same since we moved to NYC.

#210 The R on 04.08.15 at 7:52 am

Re: # 164 – 4 AM Sunrise

it really doesn’t matter how long it takes to write the test but rather how many questions you answered correct.

Maybe next time read the question , spend a a few seconds 2 think about it , and then respond…

#211 The American on 04.08.15 at 8:04 am

At #192: Bottoms Up, ARE YOU KIDDING ME? Canada doesn’t have liar loans? HAHAHAHAHAHAHAHAHA! Canadian banks certainly not only have liar loans (referred to as no-doc-closing), but your banks are pushing them and advertising them BIG TIME. They’ve been doing it for years. Is this just a matter of differences in semantics from one nation to the next? Is this why in Canada, you all also believe you do not have “sub-prime” loans either? Hell, your basic form of lending on variable rate mortgages for 5 years is and was our very term for “sub-prime” lending.

http://howestreet.com/2012/02/canadian-subprime/

#212 maxx on 04.08.15 at 8:06 am

“But I’m sad for my nation.”

Me too.

In the highly erroneous process of cheapening money, savers have been hit with huge losses on their wealth, investors have been served up a huge dish of volatility along with opaque and questionable valuations.

To add insult to injury, purchasing power (which would go a huge way to reviving and maintaining the real economy), has been reduced and inverted to the point where debt is the elephant, and there is no room left.

It is essential to study what resulting fiscal liabilities will likely be advanced by all levels of government.

Sad too, that we are squarely at the point of needing to hedge for unfair official decisions as tax bills will undoubtedly inflate.

Save more, find ways to save even more and invest wisely.

#213 Retired Boomer - WI on 04.08.15 at 8:26 am

#142 Washed Up Lawyer

Ian and Sylvia the best musical reference of the day!

Yes, tougher times brings out the folkie in everybody.

#214 Smoking Man on 04.08.15 at 8:41 am

Jokes on me, my crafty little wife got me good this morning.

As you bugger’s all know I have issues with, following the crowd.

I lay my clothes out the night before , so I can dress quickly and not desterb the wife and dogs.

I had my favorite blue shirt ready to go today subliminal my lip service to Pink Shirt Day .

Ha, at some point in the middle of the night, wifey-poo swaps my blue shirt for a light colored shirt with thin pink stripes. It looks pink.

While On the train, she sends me a text, Happy Pink Shirt Day…

I think nothing of it until I spilt a few drops of coffee on it. Now I get it… The bitch.

Pink Shirt day make a mockery of the lessons the great Johnny Cash gave us.

Anyone remember the classic , A boy named Sue.

Bullies make us strong.

Usually I tide stick away coffee stains..

Not today..

#215 Shawn Allen on 04.08.15 at 9:09 am

Capital Gains and the Level Playing Field

#156 Lobster Man on 04.07.15 at 11:20 pm
On January 1, 1972 Canada introduced the capital gains tax. Before that, any investment gains were tax-free. And there were no write-offs for losses either. It was a level-playing field, as there were no special treatments for “Principal Residence” etc.

*****************************************
Ah, yes, Valuation Day. January 1, 1972. I was 11 but I remember it well.

Before that income was taxed and capital gains were not. That does not exactly sound like a level playing field to me.

The crime though was that much of the so-called capital gains in the 70’s and 80’s were just due to inflation. You could make a loss in real dollars and yet be taxed on the “gain”.

Today inflation is much lower.

But, in principal, after correcting for inflation, capital gains should be taxed. It was not exactly a level playing field to tax workers and let investors make tax-free capital gains.

As it is, unrealized capital gains are not taxed. That is a sweet deal in itself.

As for the capital gains exemption on the principal residence, perhaps a more reasonable approach would be to allow those gains tax free until death and then tax the estate on the gain. Why should that wealth pass tax-free to the next generation?

#216 Bottoms_Up on 04.08.15 at 9:14 am

#211 The American on 04.08.15 at 8:04 am
——————————————————–
I’ve posted this before, years past, where 2 of the big 5 banks in Canada turned me down (in 2007-2008) for a very modest mortgage (we’re talking in the $200k territory). Great credit score, no debt, 5% down, great future employment prospects, BUT, they would not give me the mortgage because I didn’t have stable employment at the time.

So, you can post random links to fake ‘canadian subprime’ articles, or you can choose to see that canadian banks were and are more prudent than most.

In terms of your variable rate argument, since 2006 (the peak of our ‘subprime’ lending with 0% down, 40 yr amortization), the variable rate has only gone down (over 9 years). So, you can’t really call current lending at the variable rate a ‘subprime’ practise. This lending is stress tested at the POSTED 5-yr fixed rates. There is nothing subprime about that.

#217 Holy Crap Wheres The Tylenol on 04.08.15 at 9:18 am

#154 OttawaMike on 04.07.15 at 11:05 pm
#106 Smoking Man on 04.07.15 at 9:01 pm
Read Kurt Vonnegut, Slaughterhouse 5. Your ideas are similar to what he wrote 45 years ago.
____________________________________________
Schlachthof-fünf
Read the book and saw the movie, both excellent. I’m not sure Smoking Man would get it! Kurt Vonnegut’s Slaughterhouse-Five is considered a modern literary masterpiece. Now that I think about it billy Pilgrim does sound a lot like Smoking Man. Montana Wildhack and Tralfamadore are quite a long way from here. Holy shit this is Smoking Mans book, sorry Smoking Man its already been done. Better recalibrate the Literary techniques and point of view.

#218 Bottoms_Up on 04.08.15 at 9:21 am

#176 Van Doom on 04.08.15 at 12:12 am
————————————————-
It’s easy to poke holes in Swiss cheese.

The fact is that an apples-to-apples comparison of jobs between private and public sectors shows that compensation is comparable.

And, there is this nastiness in the private sector:

“…the report also finds widespread wage discrimination in the private sector towards women, visible minorities and aboriginal workers – a discrimination that is mitigated in the public sector only due to equity laws and the fact that a far higher percentage of public sector employees are unionized.”

http://www.pipsc.ca/portal/page/portal/website/news/newsreleases/news/10302014

#219 Squirrel meat on 04.08.15 at 9:24 am

Way to go boomers!

Since when did Gen X extend from 34-54

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/boomers-drive-real-estate-market-for-luxury-housing/article23828532/

#220 BlackDog on 04.08.15 at 9:33 am

OK, I get it now. DaisyMae is a Double D. Your secret is safe with me Garth. I owe you one, anyway. ;)

#221 Victor V on 04.08.15 at 9:41 am

https://ca.finance.yahoo.com/news/canadas-oliver-announce-balanced-budget-law-report-121353886–business.html

TORONTO (Reuters) – Canadian Finance Minister Joe Oliver will announce legislation on Wednesday committing the government to keeping a balanced budget except under “extraordinary circumstances”, a government source said.

The source, who spoke on condition of anonymity, confirmed a National Post story that said Oliver would announce the new bill. The finance minister is scheduled to speak at a Toronto event.

The ruling Conservatives had previously said they would introduce balanced budget legislation. A balanced budget bill looks certain to pass given the Conservatives hold a majority in parliament.

#222 FF on 04.08.15 at 9:44 am

I want to follow your advice on a balanced portfolio.
Can I just use ETFs (horizons, ishares..etc) for all the instruments that you recommend?

ie for $100k (as per your breakdown)

$30k worth of a specific Bond ETF
$30k worth of a specific Preferred Shares ETF
$20k worth of Dow ETF / or SP ETF
$10k worth of a TSX ETF
$10k keep in $Cash$

is this too simple?? too general?
should i mix in some commodity ETF or other type of ETF??

have an amazing day!!

#223 Holy Crap Wheres The Tylenol on 04.08.15 at 9:45 am

#205 Vanecdotal on 04.08.15 at 5:35 am
#102 Rexx Rock
“I’ll never vote again,all Canadians should boycott voting”
……………………………………………………………………
That’s a great idea, Harper will be thrilled! Then the incumbent oligarch can stay in power unchallenged forever and ever… and ever…
You do understand that in a democracy, if you don’t like the status quo, you have to actually VOTE it out first?
Think all politicians are crooks and liars? Run for office. Hate the current party choices? Run as an Independent or start a new one.
Gee-zus, Democracy 101. Remedial version.
_____________________________________________
Vanecdotal you have it right. People need to stand up and vote, get involved and become part of the process. So stand up or shut up! That’s the way it works people!

#224 Broke Dick on 04.08.15 at 9:51 am

A wise man told me “not to worry, 2008 is never going to happen again in my lifetime”. Then I read this-
An EY spokesguy calls it the ‘valley of despair’, saying this will have a bigger impact on things than the 2008 bust. -Garth’s blog

A 2008-like impact on one industry is not the same as a 2008 rerun for the entire economy. Maybe I should use crayons. — Garth

#225 Mark on 04.08.15 at 9:55 am

“So easy to spot frauds like Mark. Ask for source links. And they have none. ”

I’ve provided a vast number of sources for most of what I’ve written. And at some level, there is the element of reverse onus as well — the Realtors who are convinced that there’s been no shift to the sales mix — why are they so reluctant to allow a full public release of the data for analysis?

If you want to know if the sales mix is shifting, its pretty easy — is the median changing at a different rate than the mean? If so, then you have a shifting sales mix. By definition.

Any thoughts? Particularly re the Canadian economy which I think is headed for Recession, and worse.

Canadian deflation will create a class of incredibly rich people in Canada, namely those who avoided, and even traded against the housing bubble. I don’t see it as doom and gloom any more so than the 1930s was gloomy for those over-concentrated in certain asset classes. Diversity in skills, income sources, and in thought wins the race.

“As for the capital gains exemption on the principal residence, perhaps a more reasonable approach would be to allow those gains tax free until death and then tax the estate on the gain. Why should that wealth pass tax-free to the next generation?”

I personally believe the RRSP, TFSA, RESPs, RPP’s and the principal residence exemption should be scrapped in favour of a cumulative capital gains exemption that works much like the TFSA.

Under my ‘proposal’, for every year a person is alive going forward, they “get” a $10k capital gains exemption (indexed to inflation) added to their account at the CRA for them to claim at their leisure.

#226 RH on 04.08.15 at 10:05 am

Metro. @150
FWIW re prefs: Bought 1500 total, of 7 issues, 2 years ago. Their market value is now up 8% and the dividends average just under 5%/ year. At this point I estimate the MV gains amount to almost 2 years of dividends in hand, and I am considering selling due to the possible general interest increase (thus incurring a capital gain) however if I look at the dividend income received the future ACB is significantly lower than an expected drop in value, in which case I will probably hang in and enjoy the dividends. This could go on for a long time to the point of having an asset with an ACB (or market value) much lower, in which case selling them or having them redeemed will not trigger a capital gain.
Any thoughts?

#227 BlackDog on 04.08.15 at 10:05 am

Ha ha! Thanks Garth. Delete two out of three comments, so now no one knows what I was referring too. If they show back up, I will know that I am the one “Losing it”.

My apologies. I did not understand at the time that this blog is all about you. — Garth

#228 Mac on 04.08.15 at 10:05 am

I’m so tired of hearing all the whining about how increasing the TFSA amount is only for the wealthy. Wha fckn wah. It’s about choices and people have made a lot of stupid choices that prevent them from maxing out their TFSA’s. My TFSA is maxed. Why is it maxed? Because I don’t own a house that takes up 60% of my income (I rent). I don’t have a massive line of credit that has funded a new kitchen for said house. Because I don’t have a car payment (I own that sucker). Because I didn’t buy the motorcycle I wanted to buy. Because I don’t blow my money on useless consumer crap. Bring on the doubling…I am so giddy about being able to sock away even more money and keep the growth out of the government’s hands. I don’t earn a six figure income either.

#229 Ralph Cramdown on 04.08.15 at 10:08 am

Hot on the heels of its popular announcement of a Ramen Noodles Grant for students, the Harper Government today announces that it will, once again, pretend that it can bind future parliaments without changing the constitution (see fixed election date law).

The Keeping Canadians Safe from Gazebos in Muskoka Act will require future governments to balance their budgets.

The opposition is expected to introduce a number of amendments, including:
– Requiring the Finance Minister to actually table a budget prior to the start of the fiscal year
– Requiring him (or her) to do it IN PARLIAMENT, not at an auto parts plant or a garment factory

And remember, you can expect goofy announcements like this every day that the Mike Duffy dog-and-baloney [camembert? — ed.] show is in session.

#230 gladiator on 04.08.15 at 10:09 am

Don’t put too much hope in a good outcome from elections. There is a good quote circulating on LinkedIn:

“The best argument against democracy is a five-minute conversation with the average voter.” W. Churchill

Good that we have the MSM with its zombifying effect to “help” the voters decide who to vote for.

#231 David Hawke on 04.08.15 at 10:23 am

Prime Minister Justin Trudeau will be to do the reversing (of multiple Boo-Boos), us Kia driving expats that Herr Harper tried to disenfranchise, will see to that, eh!

#232 fiscally irresponsible conservative on 04.08.15 at 10:34 am

Harper is my hero. Like a typical irresponsible conservative he sells the GM shares for a loss to balance the budget . We cons invented selling public assets . usually we sell public assets for pennies on the dollar to our 1% friends. We cons did a number on Alberta. Sure Alberta should have a trillion dollars banked but conservatives are known to be the spend, waste and steal party. As a conservative I care about the 1% while squandering the 99% money. Vote conservative you fools and sink Canada further into debt while we sell parts of canada to our buddies for pennies on the dollar. Fools

#233 cramar on 04.08.15 at 10:34 am

“Don’t get me wrong. I’m looking forward to Dorothy and I moving $22,000 a year, every year, from our taxable investments to our taxless accounts. It’s a windfall. A gift. Our capital gains rate will go to zero.”

– Bearded Oracle

——————

I’m certainly looking forward to it too! But maybe The Olive Garden has method to his madness. Maybe he understands demographics in lieu of finance. Since most TFSA users are 55+ many TFSA investors will never reap the full reward.

We have been maxing out our TFSA by moving also. The problem with even $11k/person it will take us some 40 years to slowly move over everything (assuming contribution limits never increase again). We will be dead long before then, so can never reap the full potential of this program. Even if we were 55 we probably would not be able to do it.

The insanity of this program is that someone could have a million dollar portfolio generating tax-free income and have only minimum CPP & OAS income. They could even quality for GIS since the govmint says you are living in poverty.

Sad for the nation indeed!

#234 Call Mom and Dad! on 04.08.15 at 10:52 am

http://www.canadianrealestatemagazine.ca/news/daily-market-update-190086.aspx

First-time buyers turn to family for help

First-time buyers are increasingly getting help from parents to be able to buy a home. Genworth has unveiled the results of its survey of 1,800 first-timers in the 25-40 age group. It found that almost a third were able to get a mortgage thanks to parents helping with a down payment or acting as guarantors on the loan.

#235 Senta on 04.08.15 at 11:04 am

Jeez Garth, You are getting depressing.

#236 Daisy Mae on 04.08.15 at 11:13 am

#119 Don: “Sorry Daisy – I am googled for the NDP version and this is what I found – http://thetyee.ca/Opinion/2014/11/25/BC-Libs-Liquor-Law-Will-Cost/

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

Don’t be sorry. I was referring to ridiculous empty political promises before a pending election….

#237 Daisy Mae on 04.08.15 at 11:17 am

“F introduced them. I merely suggested the idea. — Garth”

#181: “Good job, Garth. This reminds me of a quote: “You can achieve anything, as long as you don’t mind who gets the credit”. Without the idea, there is no execution.”

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

Amen to that.

#238 Squirrel meat on 04.08.15 at 11:25 am

Oilberta better get used to lower oil

http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/saudi-arabi-boosts-oil-output-sharply-in-aggressive-strategy-switch/article23830609/

#239 Karma on 04.08.15 at 11:27 am

“Why the California Drought Will be Worse than Everyone Thinks”

http://www.marketwatch.com/story/why-the-california-drought-will-be-worse-than-everyone-thinks-2015-04-07

#240 Squirrel meat on 04.08.15 at 11:27 am

Way to go Ontario!

http://business.financialpost.com/fp-comment/ontarios-decades-of-debt-will-resonate-with-taxpayers-for-years-to-come

#241 Dup on 04.08.15 at 11:31 am

This TFSA increase is a free handout for everyone. I do not understand how can people complain about it. It is there, who wants to use it can. It is not a rich or poor thing. The rules apply the same for all. It is not the riches fault if the poor have no money to invest, because they bought expensive homes they could barely afford, or they bought vehicles that the Queen should be travelling in. Live within your means, do not show off. Make better financial decisions and maybe you will have more money to add to the TFSA. Do not blame the rich for your poor choices…

#242 Oceanside on 04.08.15 at 11:32 am

49 Daisy Mae on 04.07.15 at 7:24 pm
“It’s red meat for the Conservative base (71% of people making max contributions are over 55….”

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

I recall one BC party — can’t remember which, maybe NDP — promised us CHEAP BEER if elected! Yea! But the party did not win in spite of this promise. Goes to show you how little respect governments have for the electorate.

Bill Vander Zalm (Social Credit= Liberals here)

#243 Deadmonton on 04.08.15 at 11:46 am

The increase in TFSA limit is revealing the chasm between the savers and spenders on this pathetic blog. We’re a culture that has learned to live on credit in order to buy consumer goods in a never ending upwards slope of ‘More! More! More!’. Those of us who are contrarians and prioritize saving, like #228 Mac and others, are dancing with glee over the new TFSA limit. I can’t help but speculate that those who are bemoaning their lack of funds are those people who live with stainless steel and granite countertops, new cars loaded with all the latest tech, and have shiny iCrap. There are many financial planning tools and resources out there if you want to take charge of your finances (the Jar Lady, MMM, etc.) but most people are content just to whine and stick with their conviction that saving just isn’t possible. At the very least, get out and VOTE, people!

#244 Van Doom on 04.08.15 at 12:01 pm

Sure Alberta should have a trillion dollars banked but conservatives are known to be the spend, waste and steal party. As a conservative I care about the 1% while squandering the 99% money. Vote conservative you fools and sink Canada further into debt while we sell parts of canada to our buddies for pennies on the dollar. Fools

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

Don’t worry. The public sector is “unionized”. So they will turn around, be efficient and not piss away billions and billions of dollars “tomorrow”. “We are the Govt and We are here to help”.

#245 Joe2.0 on 04.08.15 at 12:01 pm

Canada Bank lending rates are going down again.
Eventually to 0.
Canadian peso.

#246 AfterTheHouseSold on 04.08.15 at 12:01 pm

#222 FF
“I want to follow your advice on a balanced portfolio.”

Check out Garths portfolio for millennials. He gives specific ETF examples of such a portfolio.
21 November 2014 “Trust”

Also take note of the 60/40 portfolio. The bonds and preferreds combined make up the 40% part.

#247 AfterTheHouseSold on 04.08.15 at 12:09 pm

#228 Mac
“It’s about choices and people have made a lot of stupid choices that prevent them from maxing out their TFSA’s.”

Well said!

#248 saskatoon on 04.08.15 at 12:19 pm

#214 Smoking Man

ironically, government is the biggest bully of them all.

#249 Broke Dick on 04.08.15 at 12:24 pm

#225 Mark on 04.08.15 at 9:55 am
“So easy to spot frauds like Mark. Ask for source links. And they have none. ”

If you want to know if the sales mix is shifting, its pretty easy — is the median changing at a different rate than the mean? If so, then you have a shifting sales mix. By definition.
++++++++++++++++++++++++++++
Even if the sales mix is changing (and I will agree it is changing slightly) there is still no evidence that prices in Toronto are dropping. And have been dropping for two years as you claim. That claim is just something you are imagining, and it is so very wrong.

#250 The American on 04.08.15 at 12:27 pm

At #216, Bottoms Up, then you all are doing just fine. You have it all figured out….until, that is, rates push up. And they will. If they don’t, its only testament to how lousy the Canadian economy really is doing. Either way, Canada looks very, very bad. IMF has real estate values overvalued for Canada as a whole of 30%. Break that down to specific markets, such as Vancouver and Toronto, and its even more. Sub-prime lending is indeed taking place in Canada. The banks know it, they’ve been warned, they’re still lending at ridiculously low rates against values they are aware are overvalued. Sound familiar? Yes. It’s called sub-prime lending. Also, it is predatory. And yes, lenders are advertising in full effect these liar loans in the form of “no-doc closings.” You’ll see.

#251 Mike in Toronto on 04.08.15 at 12:28 pm

#241 Dup

“… It is not the riches fault if the poor have no money to invest, because they bought expensive homes they could barely afford, or they bought vehicles that the Queen should be travelling in. …”

If only we lived in such a cruel world where kids are dropped off at school in Escalades, rather than our sunny reality where children go to school without breakfast.

The poor really have *no money*. Hard to imagine, I know. I mean, supplement your groceries with the foodbank, walk rather than taking a bus to save a token, stiff the landlord because your boss decided to give your Walmart shift to his buddy… that kind of no money.

Many people can’t imagine having money to stick in an account to invest. Their retirement plan is to live with their kids and their investment strategy is the occasional scratch-and-win ticket.

#252 Shawn Allen on 04.08.15 at 12:28 pm

TFSA increase is a free gift for all?

Dup on 04.08.15 at 11:31 am
This TFSA increase is a free handout for everyone. I do not understand how can people complain about it. It is there, who wants to use it can. It is not a rich or poor thing.

*****************************************
Let’s assume for the moment that the government needs a certain amount of revenue. Set aside debates about wasisting money for a moment.

In that case…

One man’s tax break is another man’s tax increase.

It may or may not be a good tax break for society but if YOU pay less tax and the same amount of revenue is needed then someone else is paying more tax.

The family with 3 kids and a total income under $100k (or pick a number) who is unable to use the TFSA because the budget is too tight will need to pay more in order to fund your tax savings. Or at least someone will. Who do you think deserves to subsidize you?

If all these tax breaks were eliminated and if the total revenue needed was unchanged then the tax rates on normal income could go down for everyone.

When it comes to tax breaks, it’s a zero sum game.

#253 Smoking Man on 04.08.15 at 12:28 pm

#217 Holy Crap Wheres The Tylenol on 04.08.15 at 9:18
……

I hate it when you guys do this too me, compare me to littarary greats.

Now I got to read the damn thing, shit, more delays ..

No more , please …

#254 Setting the Record Straight on 04.08.15 at 12:34 pm

@223
“_____________________________________________
Vanecdotal you have it right. People need to stand up and vote, get involved and become part of the process. So stand up or shut up! That’s the way it works people!”

Sorry but your logic is flawed. If you challenge someone to a boxing match, you can’t complain when he hits you.
If you don’t like the rules of the game, then you don’t play. If you play you have no right to complain about the outcome, you have agreed to the rules.

Its those who don’t vote who have the moral high ground when it comes to objecting.

To borrow a line, the rule is thou shall not steal. Its not thou shall not steal except by majority vote.

#255 Ralph Cramdown on 04.08.15 at 12:37 pm

#241 Dup — “This TFSA increase is a free handout for everyone. I do not understand how can people complain about it. It is there, who wants to use it can. It is not a rich or poor thing. The rules apply the same for all.”

Progressive tax rates. Let’s say you are a successful TFSA investor, and 1/3 of your ‘winnings’ are capital gains, 1/3 are eligible Canadian dividends, and 1/3 is interest. In Ontario, If you make $40k/year, you’d have been taxed 8% on that combination. If you make $70k/year, you’d have been taxed 20%. If you make $160k, you’d have been taxed at 33%.

So even for the exact same TFSA with the same investments, the rich guy benefits much more. Add that to the benefits of long term compounding, which I outlined in #24, both because the rich have funds to start taking advantage of tax sheltering earlier AND because they live longer, and it’s advantage rich guy all the way.

And it sure as hell ain’t a “free” handout. The revenue that the government forgoes won’t be spent. Since much of what the government does is income redistribution, the poor are likely to feel the loss much more than the rich. Since we have harmonized taxation, this lowers provincial tax revenues as well. If you’re OK with that, fine. I certainly stand to benefit. But it isn’t free and it isn’t of the same benefit to all.

#256 JacqueShellacque on 04.08.15 at 1:03 pm

TFSA MYTH ALERT:

“but it will decrease gov income. so the gov must either raise taxes, or cut services.”

Wrong. TFSA contributions come from after-tax income. You’re presumably referring to the hypothetical loss in gov’t revenue from (taxable) RRSP withdrawals that may come years and decades from now if TFSA contributions crowd out RRSP contributions. What proof is there that the existence of TFSAs results in a significant shift in saving strategy from RRSPs to TFSAs, and what cost projections have been put out?

#257 beefoot on 04.08.15 at 1:08 pm

Yes, indeed — TFSA of $22K per year interest free, I mean tax free is a windfall … maybe for now. One can only imagine what the income tax rate will go if a lot of people max up the TFSA contribution.

I always worry about RRSP withdrawal during my retirement. This move will reinforce my believe — income tax rates will go up.

#258 Broke Dick on 04.08.15 at 1:10 pm

I stole this from another board-
well, doubling the TFSA contribution amount is also a good way to effectively increase government tax revenue right now via personal income taxes, without raising them! If people put more $$ into TFSAs, the feds could significantly reduce the amount of tax refunds paid out for RRSP contributions. Then they just increase consumption taxes (GST) in the future, to get more of that TFSA cash back. LOL

#259 Mike on 04.08.15 at 1:26 pm

#48 TRT on 04.07.15 at 7:20 pm
How come Calgary prices haven’t come down?
*****************************

They are… Slowly, but surely. Not very scientific, but I track a bunch of #’s on MLS. From 2 months ago, prices seem to have dropped every so slightly (maybe 2-5%), but with inventories still increasing (about 4% month over month Mar 7 to Apr 7), the ‘hot’ spring buying season pretty much over, more layoffs happening daily, and $50 reallly starting to sink and settle in, personally I can’t see how prices can go anywhere but down.

Many of these people that own RE in Calgary might not be forced to sell right now, so they’ll probably look to rent it out, but a # of scenarios can happen with that… 1) With the downward rent pressure, it takes them months to find renters (if they can afford to sustain the extra mortgage payments assuming it’s an extra empty house they own)
2) The longer it sits empty, the more downward pressure on prices, the harder it is to rent, so they loosen up their screening process and get a “not ideal” renter in there (Say a couple of college dudes instead of a young family)
3) MANY new landlords will soon find out being a slumlord isn’t all it’s cracked up to be (I know from 1st hand experience) which leads to:
3a) Downward rent prices don’t cover all their expenses (especially when they have to renew in a couple yrs)
3b) Renters pay late or miss payments
3c) They realize their renters are a total PITA (causing damage, being needy, late payments, whatever) and they say “F this!” and after the year lease is up, decide to list the house again and this time around are much more willing to sell it and take whatever they can get (ie less greedy).

If $50 oil sustains (Remember when this all first started in late 2014 many predicted we’d already be back up to $70), things will get worse and worse and worse, not only in Alberta, but all over Canada since others are starting to see that there’s a lot of spill over effect from Alberta’s slowing economy.

I personally am in a very good position financially, but work for an oilsands supply company, and having witnessed several layoffs already in my company, I (along with everyone) am fearing I could be next… So what am I doing? Being much more frugal. Driving less, eating out less, buying online and waiting for products to ship instead of buying them now from brick and mortor stores, holding off on big purchases (I want to upgrade my 40″ TV, but don’t NEED to), I cancelled my cable and bought a digital antenna, etc… All of which unfortunately hurts the Alberta economy even more, but hey, I’m concerned with my well-being first and foremost. And I know i’m not the only one acting this way. We’re only 4 months in to this whole mess and there’s literally no end in site (US inventories keep rising, saudi’s output at record high, Iraq sitting on 30mill barrells which will eventually be released), so I’m buckling up because things will probably get more ugly around here.

#260 Holy Crap Wheres The Tylenol on 04.08.15 at 1:28 pm

#253 Smoking Man on 04.08.15 at 12:28 pm
#217 Holy Crap Wheres The Tylenol on 04.08.15 at 9:18
………………………………………………………………
I hate it when you guys do this too me, compare me to littarary greats.
Now I got to read the damn thing, shit, more delays ..
No more , please …
_____________________________________________
One more you need to enlighten your inner dog!
Carlos Castaneda, The Teachings of Don Juan: A Yaqui Way of Knowledge It documents the events that took place during an apprenticeship with a self-proclaimed Yaqui Indian Sorcerer, don Juan Matus from Sonora, Mexico between 1960 and 1965.
“In a world where death is the hunter, my friend, there is no time for regrets or doubts. There is only time for decisions.”
― Carlos Castaneda, Journey to Ixtlan

#261 Pre-Retiree on 04.08.15 at 1:31 pm

#1 Leroy
_____

Not really #1.
In any case, if you think we are so below you, why continue to bother with us.
You are correct, we are a lost case.
But..you still want to hang around. What’s the reason? You need someone to make you feel better about your life? You may have better luck somewhere else.

#262 Leo Trollstoy on 04.08.15 at 1:33 pm

I’ve provided a vast number of sources for most of what I’ve written.

None on sales mix showing declining RE prices in Toronto.

And at some level, there is the element of reverse onus as well — the Realtors who are convinced that there’s been no shift to the sales mix — why are they so reluctant to allow a full public release of the data for analysis?

No. Onus is on you. Nobody else is claiming a decline in Toronto RE prices when considering sales mix.

Deflect deflect deflect

Try again.

#263 Holy Crap Wheres The Tylenol on 04.08.15 at 1:34 pm

#180 The American on 04.08.15 at 12:16 am
Marco, Vancouver is a nice city… For Canada. Truth is, Vancouver only makes lists because it is in Canada, force-ranked a giants other cities within Canada. It’s nice, but certainly not world class, and there is no real viable economy there. In general, it’s a pleasant enough, but boring experience in Vancouver. Even the airport,YVR, is in dire need of some thorough updating. Nothing feels as sophisticated or authentic as it does in Seattle. So, Vancouver is not a shit hole. It’s just not that great, but maybe so for Canada. Personally, I think Toronto is a much nicer city, with a HELL of a lot more going for it than Vancouver. Vancouver has mountains that meet the water… Big fuc$in’ deal. So does Seattle, Los Angeles, San Diego, San Francisco, Honolulu. It’s a sad argument to justify prices for a sub -par city.
____________________________________________
Be careful Mi amigo el agua es lo más importante en este planeta! Your best friend to the north has 1/3 of the worlds potable type. America doesn’t have even close to that amount. Stay thirsty my friend!

http://www.marketwatch.com/story/why-the-california-drought-will-be-worse-than-everyone-thinks-2015-04-07

#264 Spaccone on 04.08.15 at 1:38 pm

I am not well-versed in economics but this crossed my mind thinking about European VATs that range from single digit % to 20%+ depending on the good or service.

::::#258 Broke Dick on 04.08.15 at 1:10 pm
::::I stole this from another board-
::::well, doubling the TFSA contribution amount is also a ::::good way to effectively increase government tax ::::revenue right now via personal income taxes, without ::::raising them! If people put more $$ into TFSAs, the ::::feds could significantly reduce the amount of tax ::::refunds paid out for RRSP contributions. Then they ::::just increase consumption taxes (GST) in the future, ::::to get more of that TFSA cash back. LOL

#265 Holy Crap Wheres The Tylenol on 04.08.15 at 1:38 pm

#259 Mike on 04.08.15 at 1:26 pm
______________________________________________

Here’s to hoping America overdoses on cheap fuel this summer. Bring on those RV’s, trailers, Hummers and Escalades, oh I can just hear the gas guzzlers sucking and gulping copious quantities of refined petroleum.

#266 lillooet, BC on 04.08.15 at 1:46 pm

#74 Realtor007 on 04.07.15 at 8:07 pm
Every time I hear someone make a statement like ‘ the TFSA is for the rich’ I have to burst out laughing.

When I was making $40k a year ( 2006) I was paying for my mortgage, bills, food etc and saving between $7-10k a year. It’s doable if you get your priorities straight, don’t buy a $700k shack in Oakville with a cash advance from your CC as a DP., just a starter tip…more to come so stay tuned.
*********************************
It is even easier by moving to lillooet,BC
You have a mansion and a maxed TSFA.

BTW, today’s temperature here is 22 C and – 5 in Toronto

#267 Prairieboy43 on 04.08.15 at 1:47 pm

Aloha!! Enjoying my holiday. Noticing few Yankee tourists. Probably 70% Asian (Chinese, Japanese, Taiwan ). Not sure about America economy recovering. Feel like I am stuck in the 70’s, and 80’s here.
Focus on surfing. Aloha!!

#268 VanRant on 04.08.15 at 1:49 pm

“By Lane’s estimate, 75% to 80% of new homebuyers in his market are from mainland China. “Another 10% are builders for the Chinese market. As little as 10% are local buyers.”
http://www.biv.com/article/2015/4/mad-money-squeezing-more-locals-out-real-estate-ma/

#269 Republic_of_Western_Canada on 04.08.15 at 2:01 pm

#238 Squirrel meat on 04.08.15 at 11:25 am

Oilberta better get used to lower oil

http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/saudi-arabi-boosts-oil-output-sharply-in-aggressive-strategy-switch/article23830609/

The insanity of current global overproduction for political and market reasons is amazing and sad.

Oil is a very valuable commodity which is never replenished. The easily exploited formations have long since been depleted. What’s left is mostly lower-grade product in difficult areas that requires huge amounts of advanced technology and capital to extract.

Even the Saudis couldn’t produce at present rates without injecting huge amounts of high-pressure filtered seawater into reservoir formations. They are also now pursuing non-conventional reserves such as shale oil, and are seeking experts for that purpose.

That means when the present short-term mindless glut works down, the whole world will slam into a wall of shortages and substantial unrecoverable price spikes. Dumping valuable limited resources simply for one-up-man-ship is a fool’s game which will have serious global impact sooner or later. Like 2 rich kids throwing gold coins into the ocean to see who will give up first.

The present situation is similar to the ‘dot-com’ bubble in 2000. At that time, massive amounts of venture capital was pumped into high-tech in an attempt to get any half-baked idea to market faster than the next guy – never mind that proper development of software and hardware systems and ideas takes time.

When the bone-heads pumping in the cash saw that they couldn’t really steer development times regardless of ‘burn rates’, and that all ideas are not created equal, they walked away from it all. Money dried up, most everything went broke because almost everyone was overextended, and economic shock waves ran across the globe. The triggered a series of knee-jerk government liquidity policies, causing several housing and stock market crashes since.

Overproduction ‘just because’ can only end badly. The good news is that it will present a fantastic profit vehicle when the next depletion crunch comes.

#270 Ralph Cramdown on 04.08.15 at 2:20 pm

#87 blogdog — “It will decrease FUTURE gov income but increase CURRENT gov income by getting people to invest more AFTER tax income into TFSA rather than RRSP.”

#258 Broke Dick — “If people put more $$ into TFSAs, the feds could significantly reduce the amount of tax refunds paid out for RRSP contributions.”

Interesting, and a valid point. But top earners (biggest RRSP tax refund) will likely contribute the max to both — my household does. The middle earners who will have to choose either/or wouldn’t have gotten as big an RRSP refund anyway.

#271 Blacksheep on 04.08.15 at 2:27 pm

Vanecdotal # 205,

“Think all politicians are crooks and liars? Run for office.”

“Hate the current party choices? Run as an Independent or start a new one.”
——————————————–
This ignorant (as in unknowing) statement is the standard go to, the last retort of those whom choose to delude them selves that our democracy is something more than a pacification for the masses.

Why are politico’s always voted out, vs in? Because once the ‘new hope’ seizes power, the liabilities of their ascension, catches up with them and of course, debts will be paid.

Prime ministers and presidents are chosen, not elected.

Systemic defenders will continue the public relations ruse as long as the Cattle remain naive enough to believe the gatekeepers are going to let an outsider in, to f-up multi decades of tweaking the ‘system’ that benefits their handlers.

Garth’s brief stint in public service, is evidence of the above.

This is nothing new, Pete and the boys realized it 40 years ago:

https://www.youtube.com/watch?v=Un5oEdfrm_A

Yes…I realize it critiques revolution, but nobodies advocating that kind of change.

#272 Ponzius Pilatus on 04.08.15 at 2:30 pm

Regarding Smocking Man and Slaughter House 5:
If his “book” ever get’s published, it will be slaughtered by the critics.

#273 cramar on 04.08.15 at 2:31 pm

#251 Mike in Toronto on 04.08.15 at 12:28 pm

If only we lived in such a cruel world where kids are dropped off at school in Escalades, rather than our sunny reality where children go to school without breakfast.

———

You are right about the appalling situation of the poor in a wealthy 1st-world country like Canada. However for the “middle class” they may not be dropping their little darlings off in Escalades, but dropping them off none the less!

When I was in public school in the early ’50s everybody walked. Nobody got driven to school! NOBODY!! Today at the two public schools side-by-side near me (one is French), the streets are clogged with mini-vans, SUVs, $50,000 pickup trucks with little darlings being driven or picked up. Our next-door neighbours always drive their kids—and it is 2 blocks away for pete sake!

No wonder kids grow up believing they are entitled via cheap credit to every material thing the world has to offer including a modern house. Their parents raised them that way!

#274 Lobster Man on 04.08.15 at 2:37 pm

#215 Shawn Allen on 04.08.15 at 9.09 am

Before 1972, it was a level-playing field amongst all investment gains: stocks, bonds, rental properties, principal residences etc. You got to keep all your gains, and you had your pockets picked when you lose. The risks were all yours.

After 1972, principal residences (amongst a few other things) are exempted from capital gains tax. That’s NOT a level-playing field anymore. Principal residence has been given a special “treat”, thus help to create an illusion/perception that residential real estate will always go up! And consequentially, we have bubbles in that very sector, time and again.

I was not comparing the demerits of taxing capital gains vs. the taxing of earned incomes. That’s a separate subject for another day.

#275 BlackDog on 04.08.15 at 2:39 pm

I hear you. Sorry. Adios.

#276 45north on 04.08.15 at 3:09 pm

50% drop in sales in Calgary. That’s serious. Spring is the time when sales shoot up.

Bob: You know, Garth, if you were to run for office again I just might vote for you.

I would too. But it’s up to Stephen Harper who is the leader of the party. I’m guessing there is a certain hierarchy within a political party and Garth Turner has dropped out. Still I like the idea.

TS: You mean the average Canadian family that is buying houses for over $430,000?

pretty funny

#277 John Mc on 04.08.15 at 3:19 pm

#262 LEO

Yawn….. you’re even more boring than Mark… actually if it wasn’t for him you would have nothing to say. I would encourage Mark to stop posting just for that.

#278 Ray vasquez on 04.08.15 at 3:36 pm

Garth, why are you not sad for Ontario and their government policies of more and more tax, spend, debt?

Also, if you want to compromise and give back then let’s make the first $11,000 of capital gains for each individual that qualifies for TFSA’s fully 100% taxable income.

#279 Blacksheep on 04.08.15 at 3:39 pm

Shawn # 252,

“Let’s assume for the moment that the government needs a certain amount of revenue.”

“the same amount of revenue is needed”

“if the total revenue needed was unchanged”
———————————————-
You didn’t respond to my critique of your comment, in my post # 148 yesterday, explaining why over payment to the public sector occurs, or my suggestion on one plan to correct it?
And today it would seem the “revenue needed” gets repeated thrice, as to be written in stone. No possibility of saving revenue spent on labour?

Reduce gov wages 25% and cut 10% of all staff (including sock puppet dept) other than medical. Give a tax break up to 150K gross income.

Sound reasonable Shawn?

#280 JunkieMan on 04.08.15 at 3:49 pm

#219 Squirrel meat
Surprisingly generations age, Gen X turns 50: Nicholas Cage, Lenny Kravitz, Courteney Cox, Sandra Bullock, Matt Dillon

#281 Smoking Man on 04.08.15 at 4:08 pm

#217 Holy Crap Wheres The Tylenol on 04.08.15 at 9:18 am
#154 OttawaMike on 04.07.15 at 11:05 pm
#106 Smoking Man on 04.07.15 at 9:01 pm
Read Kurt Vonnegut, Slaughterhouse 5. Your ideas are similar to what he wrote 45 years ago.
……

Ha , just read first two chapters, its very good and definitely see the similarity.

But mine is way better, action , action , action !!!!!

My characters are much more defind, I use a lot more dialog in there inter actions to bring it out..

All the same, Slaughterhouse Five is amazing.

How did you find this guy..I never heard of him before.

#282 Holy Crap Wheres The Tylenol on 04.08.15 at 4:28 pm

#266 lillooet, BC on 04.08.15 at 1:46 pm
#74 Realtor007 on 04.07.15 at 8:07 pm
Every time I hear someone make a statement like ‘ the TFSA is for the rich’ I have to burst out laughing.
When I was making $40k a year ( 2006) I was paying for my mortgage, bills, food etc and saving between $7-10k a year. It’s doable if you get your priorities straight, don’t buy a $700k shack in Oakville with a cash advance from your CC as a DP., just a starter tip…more to come so stay tuned.
*********************************
It is even easier by moving to lillooet,BC
You have a mansion and a maxed TSFA.
BTW, today’s temperature here is 22 C and – 5 in Toronto
_____________________________________________
Ha $700K will not buy a shack in Oakville. Your always off on your weather forecast.

https://weather.gc.ca/city/pages/bc-28_metric_e.html

#283 Vamanos Pest on 04.08.15 at 4:39 pm

Some discussion of the value of the TFSA limit increase above. I think about it a little differently. Think of the government as using taxation policy to shape behaviour.

Examples of this line of thinking that already exist could be:
-tax credit for sports for children to improve the fitness of children
-tax advantages of investment income, but not for interest, to encourage productive investment
-heavy taxes on booze and tobacco, to discourage the use of harmful products

So this move could be seen as trying to encourage a behaviour (saving) that is in decline over the last few decades.

…or I could just be rationalizing a tax change that’s going to benefit me greatly

#284 Broke Dick on 04.08.15 at 4:46 pm

#270 Ralph Cramdown on 04.08.15 at 2:20 pm
But top earners (biggest RRSP tax refund) will likely contribute the max to both — my household does.

+++++++++++++++++++++++++++++++++++
Oh Ralphie, you get me so hot when you talk like that

#285 Abu Dhabi Expat on 04.08.15 at 5:00 pm

To #46:
Why do you say that: TFSA means no GIS in addition to your OAS. Make sure you take it out by age 65.
GIS is based on income. I understood that when you withdraw from TSFA its not considered income and is not taxable. Can someone clarify?

#286 Dan*!* on 04.08.15 at 5:23 pm

Unlike RRSP, funds going into TFSAs are not deductible and funds coming out have no tax impact either. Income, dividends and capital gains are all sheltered inside the TSFA

#287 cramar on 04.08.15 at 5:35 pm

#281 Smoking Man on 04.08.15 at 4:08 pm

How did you find this guy..I never heard of him before.

—————

He went to school and had a great teacher!

#288 The American on 04.08.15 at 5:37 pm

At #263: Holy Crap Where’s The Tylonol, yes, water is important. No doubt about it. As for the California drought (which does not encompass the U.S.), only areas of California have this phenomenon right now. Come to Washington State, or Oregon State, or Texas, or, New York, or hell, take your pick. Again, cities such as Seattle with very similar topography and geographic location, but with a clearly better economic outlay than places like Vancouver, only solidify prices in Vancouver are way out of whack with reality and they will be coming way down. Let’s not be so myopic in our approach to these arguments. Mountains meeting the ocean do not warrant prices in Vancouver. REAL ECONOMIES warrant higher prices. Do you know what else is important? Energy. And the U.S. has plenty of it. Oh yes, in fact it is the world’s largest producer of natural gas, and soon to be the world’s largest producer of oil. http://www.eia.gov/todayinenergy/detail.cfm?id=20692

#289 Smoking Man on 04.08.15 at 5:51 pm

#272 Ponzius Pilatus on 04.08.15 at 2:30 pm
Regarding Smocking Man and Slaughter House 5:
If his “book” ever get’s published, it will be slaughtered by the critics.
……

Bully , pink shirt day you pick to thrust a verbal knife to my heart.

I’m the only critic that counts. I’m writing for me. The enjoyment of getting an idea and writing it down, then laughing at myself when I realize my lips move with the thouughts but no sound comes out.

Some people collect stamps.

#290 Smoking Man on 04.08.15 at 5:54 pm

#287 cramar on 04.08.15 at 5:35 pm
#281 Smoking Man on 04.08.15 at 4:08 pm
How did you find this guy..I never heard of him before.
—————
He went to school and had a great teacher….
…….

Teacher must have sucked, he is a content consumer, content creation is where its at.

#291 Mark on 04.08.15 at 5:57 pm

“GIS is based on income. I understood that when you withdraw from TSFA its not considered income and is not taxable. Can someone clarify?”

That’s correct. I believe the previous poster is arguing that eventually governments will modify GIS such that there is an asset test associated with it. Not really sure, personally, how the mechanics of accumulating a really big TFSA, but having no other income really works in practice or in theory, but I guess its a scenario that might be worthy of cursory discussion.

#292 The American on 04.08.15 at 6:01 pm

At #263: Holy Crap Where’s The Tylenol, I’m not sure what they’re spewing on the government-owned news channels in Canada to have everyone so snowed, but as for renewable water supplies go, Canada has less than a 10% variance more than the U.S.
http://www.mapsofworld.com/world-top-ten/world-top-ten-fresh-water-supply-map.html

#293 Mike T. on 04.08.15 at 6:06 pm

I think the next episode of ‘Calgary Death Watch’ will be the one where the patient goes into a coma, with a disease that no one has found a cure for.
What is worse than FINISHED?

#294 Bottoms_Up on 04.08.15 at 6:21 pm

#279 Blacksheep on 04.08.15 at 3:39 pm
———————————————————
Actually, a study has shown that overpayment to the public sector does NOT happen. What happens is that there is wage discrimination in the private sector, where women and minorities earn less than they should. The public system pays fairly, the private does not.

Comprender?

http://www.pipsc.ca/portal/page/portal/website/news/newsreleases/news/10302014

#295 Vancity604 on 04.08.15 at 6:21 pm

#188 Vanecdotal on 04.08.15 at 12:54 am
#25 Vancity604

“Interesting about Calgary but doesn’t really matter to van not a lot of rig pigs sipping lattes on main”

I suspect you’re either employed in the FIRE sector, or young (and incredibly naive). Maybe both.

Google “recency bias” for a primer on the overall economy / where we are likely right now in the market cycle.

————
I suspect ur a douche, yes there are some jobs affected by o and g, if you think it has an significant impact on the economy as a whole in vancouver your lost bud, what are you talking about outflows? The city grows by 40000 every year. Give ur head a shake oil is not a player in van. Yes f.i.r.e is the main driver here but o and g is not the silver bullet that is going to take it down

#296 Shawn Allen on 04.08.15 at 6:33 pm

Cut Government wages by 25%

Reduce gov wages 25% and cut 10% of all staff (including sock puppet dept) other than medical. Give a tax break up to 150K gross income.

Sound reasonable Shawn?

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

Yes, okay by me… If people start leaving then we have gone too far. Until then cut until workers vote with their feet. Use the savings to lower tax rates across the board.

#297 Leo Trollstoy on 04.08.15 at 6:35 pm

Yawn….. you’re even more boring than Mark… actually if it wasn’t for him you would have nothing to say. I would encourage Mark to stop posting just for that.

Neither you nor Marky can help but respond to me. I mean, common, look at my name.

#298 Shawn Allen on 04.08.15 at 6:40 pm

Principle Residence gain exemption

Lobster Man at responded to me thusly:

After 1972, principal residences (amongst a few other things) are exempted from capital gains tax. That’s NOT a level-playing field anymore. Principal residence has been given a special “treat”, thus help to create an illusion/perception that residential real estate will always go up! And consequentially, we have bubbles in that very sector, time and again.

**************************************
Agreed let’s get of the exemption on the capital gain on houses. Even so, it would only be taxed at half the rate for income.

It might tend to suppress house prices. The unintended consequence of the exemption was to push house prices higher than otherwise.

Be gone with the exemption… good idea.

Is there also an exemption for lobster licenses?

#299 Holy Crap Wheres The Tylenol on 04.08.15 at 6:41 pm

Smoking Man his book was a top seller in 69 and we had nothing to do at the AFB waiting for our flights to helll. Kurt Vonnegut Slaughterhouse 5 was just one of te great books we read back in the day.
Cheers

#300 GBayBoater on 04.08.15 at 6:46 pm

OK, you finally made me look it up.

Lillooet. Beautiful scenery, but I can imagine the cultural amenities.

#301 Squirrel meat on 04.08.15 at 6:50 pm

The road coming down into Lillooet is crazy! Might want to actually pave it soon! And then heading out you have to stop and wait at the single pass wooden bridges!

#302 Washed Up Lawyer on 04.08.15 at 6:57 pm

If Senator Duffy bought a dog while in Peterburro visiting Del Mastro, the Crown Prosecutor, as agent for Her Majesty, should be duty bound to seek a stay of all charges.

What has happened to our justice system???

#303 Tired of pinkos on 04.08.15 at 8:22 pm

On TFSAs…

#29

“And who will pay for the service cuts required by the lack of funds coming into the government? That’s right, average working families.

Prime Minister Mulcair sounds a hell of a lot better to me than what we have now. I’ll even take a Prime Minister Trudeau.”

Right now the vast portion of income taxes are paid by the top income earners. The top 1% alone pay in excess of 21% of all income taxes collected, while the bottom 40% in total pay less than 7%!

This is not likely to change, regardless of what happens to TFSA limits. If that sounds fair to you, then go ahead and vote for Mulcair or Trudeau lite. But don’t make up some bs about how this will affect poor “average working families”.

#304 maxx on 04.08.15 at 8:36 pm

#58 saskatoon on 04.07.15 at 7:37 pm

“T.F.S.A. = THEFT FREE SAVINGS ACCOUNT”

I needed the guffaw- thanks! ;-D
ROFL!!

#305 Vicpaul on 04.09.15 at 12:28 am

#225 Mark
Another example of your lucid, well-written viewpoints on various nuances of personal fiscal management and contrarian thinking. Thank you for sharing your intellect.
I’m very impressed with your ability to say what you believe – especially in the face of the noise of a few differing opinions. Style.

Leo – you’re obviously a bright guy – stay in the debate, stop badgering.
(Sorry, Retired Boomer WI)

#306 waiting on the westcoast on 04.09.15 at 7:00 am

#214 smoking man – “bullying makes you stronger…”

As someone who grew up with a girl’s name, I can attribute that it made me stronger. 6 fights in grade one. That said, I had a lot of support at home with people affirming how great and powerful I was/am. That gave me the confidence to always fight back.

But, there are numerous examples that bullying actually causes the victim to have lower testosterone and actually physically promotes omega behavior. Vice versa for the person doing the bullying… They get a jolt of testosterone which promotes ongoing dominant behavior. In general, most people’s reactions to bullying is to become progressively weaker. I would advocate its cessation.

Watch pack animals (I have chickens). Taught me a lot about human behavior. We are not as far removed as we would like to see ourselves.

#307 Adriano on 04.09.15 at 7:19 pm

You can use the TSFA to invest and earn capital gains tax-free.