Kids

Lalanah is a mother of three who loves her kids. How much? Enough to hand over a big wad of money to assist her son, Taras, to buy a home for his family in an insane real estate market.

“I said to him that I could lend him the money for the property and he could pay me back,” she later said. “I expected that he would do the right thing, and pay in five or seven years.” But the kid had other plans. He took the $500,000 when in his twenties, bought a property, then flipped it and later – when be became an architect – used the inflated proceeds to build a luxury, five-bedroom home. More than a decade later, he had no intention of repaying the Bank of Mom.

“There was no loan,” Taras insists. “No discussion of payments.”

So she sued him. And won. Judge Ted Woodward ruled there has been “serious allegations of dishonesty and fraud” and ordered the ungrateful spawn to pony up the better part of $300,000, plus interest and legal costs.

You didn’t read about this in the MSM because the case was tried in Melbourne, where house prices have been as insane as those in Vancouver and Toronto. And in Oz this seems to be getting more common – two judgments handed down in favour of parents in dispute with adult children in the past two months. The kids say they were gifted the cash. The wrinklies insist it was a loan. It’s the stuff that can tear a family apart. The children crave a house and expect generosity. The parents want to retire and assume respect.

In Canada BoM lending has been massive – estimated to play a role in financing at least a third of all transactions. So pervasive was the “gifting” of down payments to children without their own money so they could qualify for conventional mortgages that the federal bank regulator brought in the B20 universal stress test. Family cash was circumventing rules put in place to ensure real estate buyers had the means to afford the properties they were closing on. Suddenly bank mortgage portfolios filled with loans to high-risk borrowers who skirted CMHC insurance. So as a result everyone has to prove their ability to carry a mortgage, regardless of where they got the deposit. Ironically, the Bank of Mom ended up making home ownership less attainable.

Meanwhile the demographic weirdness builds. The nation’s basements are brimming with clingy adult children unwilling to venture forth into a scary, expensive world. In the past 15 years the number has jumped 13% while the total of young adults living with a spouse has plunged 15%. In 2014, for the first time in 130 years, more adult kids lived at home than on their own. Four in ten university or college grads end up with their parents. It is a phenomenon of modern life that has a potentially debilitating impact on family finances and the retirement plans to millions of parents.

The handing over of real estate down payments not only puts those plans at risk, but also help perpetuate a bubble real estate market – especially when the old geezers dip into their own house equity to come up with the cash. Prices continue to rise as the money flows, instead of meeting a natural resistance as newbie buyers are priced out. Once again, the Bank of Mom just makes things worse. Ironically, however, a recent bank poll found almost 80% of parents are willing to do exactly that – which might show how desperate many of them are to get the squirts gone.

Well, if you fork over bags of cash to Junior, know the implications.

Yes, you can gift money without tax consequences. No deduction to you. No tax payable by them. If you borrow against your home on a HELOC to get the cash, the interest is not tax-deductible, unlike borrowing to invest in your retirement portfolio (then it’s 100% deductible).

If this is a loan, have your lawyer draft a legal agreement with repayment terms, default conditions and security for the borrowing. If it’s a gift, you’ll need to document that, spelling out that it need not be repaid. Mortgage lenders require that document as proof the money has become the property of the kids before financing will be extended.

No, don’t gift your adult children securities, real estate or other assets. That is seen as an in-kind transaction, which is a taxable event – a ‘deemed disposition.’ It’s the equivalent of a sale, so capital gains taxes will apply.

And don’t co-sign or guarantee a mortgage unless you truly know the risks. In this instance you’re 100% responsible for anything that goes wrong. Missed payments. Marriage breakup. Job loss. Or if your daughter vanishes to Katmandu to find herself. Whatever. Then it’s your mortgage to pay even if you don’t have clear title and cannot sell the property.

Finally, remember this: money changes everything.

It took me a long time to know that. What a discovery.

216 comments ↓

#1 Grey Dog on 03.18.18 at 2:56 pm

Supposedly X Ontario Provincial Conservative Leader could afford his 2.5M$ Home due to Bank of Mom. Supposedly Patrick Brown’s personal finances are being reviewed by an integrity commissioner. If so called leader needs Family financing to live…really what kind of adult are you?

#2 akashic record on 03.18.18 at 3:01 pm

Is in-kind RRSP contribution of securities from a regular trading account to a RRSP account also a taxable event?

#3 Leo Trollstoy on 03.18.18 at 3:04 pm

Yup thats a millenial for ya

Ungrateful

Lol

#4 Andrewski on 03.18.18 at 3:09 pm

There’s a story that a retired parent lent/gifted their early 30’s son money for a home, which he bought. Mom moved in to the basement to be close to the grand-kids. Son decides to sell the home, but first he kicks his Mom out, so it’s easier for him to sell the home with no tenant! Wow, that’s bad karma.

#5 El Joko on 03.18.18 at 3:11 pm

I do so hate to sound like a broken record, but Melbourne, Sydney, Vancouver, and so many other decent cities reside on the Chinese Rim. You know, the coasts of the ocean of allegedly non-existent foreign dudes.

#6 Whatcha Minnie on 03.18.18 at 3:14 pm

Made some awesome french toast dressed with banana slices, light cinnamon, and syrup with some salted avocado and crispy bacon on the side. Made it all while having my yearly viewing of Mulan.

Now gonna make some deviled eggs. Just got into cooking last week after years of barely knowing how to boil water. So much fun.

#7 Entrepreneur on 03.18.18 at 3:17 pm

Hope I am not first and many, many more blogs GT, a style of reeling us in.

I think gifting your kids money for a down payment is similar to the idea kicking your kids out of the basement (high rent), getting screwed no matter what.

Here is a couple of chants for protesters: “Oil kills cycle of life, oceans and land ecosystems” and for the Americans “1791 right to bear arms, for protection, change the rules to protect again.”

We should all slow down on reaping the benefits from land and oceans, show respect.

#8 The Lesser Fool on 03.18.18 at 3:19 pm

When you transfer shares to your RRSP, you are
considered to have sold them at their fair market
value for tax purposes.

#9 PEOPLE LEAVING VICTORIA IN DROVES on 03.18.18 at 3:19 pm

I have a realtor friend in Victoria who says people are leaving now because they can’t find a doctor. It’s a very very serious situation. Let that be a warning to anybody thinking of moving to Victoria. If you’re healthy fine but if you’re not you’re going to have trouble big big trouble. And what a coincidence there’s an article in the Times Colonist today about it. Here is the link
http://www.timescolonist.com/growing-shortage-of-family-doctors-a-crisis-1.2238283

#10 DZH on 03.18.18 at 3:21 pm

I’ve been talking my parents out of lending me / gifting me money for housing for 5 years. This is partially because I do not want to be dependent, and partially because I don’t want to put all my eggs in the GTA RE basket. Having lived in other places, I’m not drinking the Koolaid on this place. I know I’ve missed out financially in the near term, but wealth or happiness now versus AUC wealth / happiness over time are very different metrics of success, and I favor the latter.

#11 Duke on 03.18.18 at 3:28 pm

It seems that the first tile of a domino just got knocked down.

#12 Jason Sensation on 03.18.18 at 3:28 pm

One thing that is common in South Asian families is that sons and daughters will live with mom and dad and usually grandparents too, until they get married and often after. They will then care for the parents and they get free childcare from mom, dad, and grandparents. In return, the parents never go off to a nursing home and often 1 or 2 or even 3 brothers will stay close by even if they buy their own home. The household runs off a mix of income (often 4 incomes and 2 pensions). Perhaps this is the way of the future?

#13 PEOPLE LEAVING VICTORIA IN DROVES on 03.18.18 at 3:32 pm

Updated video on Victoria doctor shortage
https://www.ctvnews.ca/video?clipId=833411

#14 conan on 03.18.18 at 3:34 pm

A “No Katmandu” clause should be standard in MA-PA loans. The book stores still sell the proper forms. Or, use a lawyer and draft your own agreement.

https://www.youtube.com/watch?v=fkR9KCABpW0

#15 Fake News Again on 03.18.18 at 3:38 pm

Whatcha Minnie on 03.18.18 at 3:14 pm
Made some awesome french toast dressed with banana slices, light cinnamon, and syrup with some salted avocado and crispy bacon on the side. Made it all while having my yearly viewing of Mulan.

Now gonna make some deviled eggs. Just got into cooking last week after years of barely knowing how to boil water. So much fun.

______

This is Greater Fool….not Facebook.

#16 Mark on 03.18.18 at 3:41 pm

“I’ve been talking my parents out of lending me / gifting me money for housing for 5 years.”

Good for you! Have you ever proposed taking such money, and using it to buy a balanced portfolio with an overweighting towards assets that haven’t performed that well in the past decade, but are likely, as a matter of mean reversion, to perform better in the next decade?

As I’ve written here many times, in the early 1990s, a mere 25% housing downpayment was good enough, invested in the stock market (TSE/TSX or US S&P500 or some mix of both), to buy Toronto RE outright in cash at the end of the decade.

Plus, as a younger investor, you have a much longer period of time to benefit from deferring capital gains than an older person.

So sad to hear of so many families giving their young the rope with which to hang themselves, ie: a housing downpayment in this epically overvalued RE market.

#17 Cici on 03.18.18 at 3:46 pm

Taras is a leach and should feed off the scum of the Earth instead of screwing over his own mother.

GF advisory warning: it looks like SCM has morphed into Watcha Minnie…in an ongoing quest to hold his/her/its?title as the world’s most annoying person.

#18 Mind Your Own Business on 03.18.18 at 3:54 pm

Every one would be happier if parents minded their own business, lived their own lives and planned for retirement. Enabling healthy adult children to continue living at home makes you a poor parent what ever your motivation. Successful parenting produces adults who are proud to stand on their own two feet.

#19 DON on 03.18.18 at 4:12 pm

#9 PEOPLE LEAVING VICTORIA IN DROVES on 03.18.18 at 3:19 pm

I have a realtor friend in Victoria who says people are leaving now because they can’t find a doctor. It’s a very very serious situation. Let that be a warning to anybody thinking of moving to Victoria. If you’re healthy fine but if you’re not you’re going to have trouble big big trouble. And what a coincidence there’s an article in the Times Colonist today about it. Here is the link
http://www.timescolonist.com/growing-shortage-of-family-doctors-a-crisis-1.2238283
*******************

Tell me about…you have to be seriously ill to get a family doctor in these parts. Still not sure why we don’t admit more candidates to med school. Had a friend, mature, good grades and he golfed…no admission for him. Did I mention he already new how to play golf??

I know two couples that recently moved back to Calgary for cheaper housing, couldn’t afford the prices or should I say were not stupid enough to in debt themselves for 30 + years.

#20 crowdedelevatorfartz on 03.18.18 at 4:13 pm

@#9 Victoria
“they can’t find a doctor….”
++++++

Welcome to Canada and “free medicare”.

#21 Andrew Woburn on 03.18.18 at 4:15 pm

Kevin on 03.17.18 at 3:27 pm
Thank you, Ryan. I agree.

Regarding the US, at what point does the political nonsense going on impact the economy and stock market? Any insights on this?
===================

I would pick Nov 7 as the likely pivot point, the day after the US midterm congressional elections although the rapid downward spiral could trigger an earlier reaction.

It is now extremely hard to predict US voting patterns, and the Democrats are perfectly capable of blowing it, but the trends suggest a highly energized turnout of younger Democrats and horrified independents will deliver enough House seats to take control from the GOP. If so, the incoming members will probably trend more progressive. I expect this will frighten US investors for many reasons.

The major battleground will be the suburbs. To me the big issue is the response of Republican women who are almost all white. It is hard to imagine they like or respect the Donald but they voted for him in 2016. My suspicion is that they have been trained from birth to fear black men and saw Trump as a revolting but necessary defender of white virtue (who would, of course, become presidential in office). Now the question is how many can overcome their gag reflex to actually show up at the polls.

#22 Kilt on 03.18.18 at 4:15 pm

More kids staying at home is also a bit of a cultural adjustment. With my family’s culture it is not uncommon to have 2 or 3 generations under one roof. Other cultures will have multiple income earners with the focus to pay off the mortgage asap. Once one is paid off, you buy another home and one set of kids moves in. Or the grandparents move in and rent out the basement. Personally I would urge my kids to move out. Mainly because there are far better opportunities working overseas.
Kilt

#23 Debtslavecreator on 03.18.18 at 4:30 pm

Many younger people are resentful due to the easy debt fuelled wealth the boomers accumulated
Boomers paid nothing for their educations , houses and stocks
Boomers also elected corrupt politicians who consistently made promises and borrowed hundreds of billions of dollars which will destroy those now under 50
It’s a crooked / rigged system and it’s about to get much much worse
The interest will consume more than 50% of the tax revenues and the average wage will continue to fall in real terms as automation eliminates up to 25 % of all low and mid skilled jobs over the next 10 years
Meanwhile the valve for this terrible economic predicament will be accelerating decline in currency
Most of the millenials have been brainwashed by radical left wing university professors and believe in collectivist garbage which means we are likely to swing even more left over the next 10-15 years with maybe one conservative govt on the way to a hard core NDP majority which will finish off whatever remains of the wealthy
I strongly suggest reading The Mandibles which in my view reasonably and accurately predicts the general path we are on
Also McKinsey Ms Harris , their top macro forecasted , indicates their research points to a world that appears to rhyme with the Mandibles
Just read the UN Agenda 2030 and you can see the general path these idiots are putting us on
That said no millenial deserves any help or handout
They will try
But to be fair the boomers better not expect us younger folks to have all our money stolen to pay for their pensions and “free” healthcare
Ain’t gonna happen old farts

You are such worthy successors. – Garth

#24 Fuzzy Camel on 03.18.18 at 4:32 pm

Canadians are broke, the economy just hasn’t caught up to that fact yet.

People are borrowing against their houses for basic house maintenance. It’s insane how broke most people are. Furnace breaks, borrow against equity to pay for it. Car breaks, same deal. New windows, same.

#25 FATLADY on 03.18.18 at 4:35 pm

I now for sure one thing…

I raised my kids to be independent and I’m a DAMN B SURE to hold them to it.

18 and out…..Get a job and pay your own way.

I did it and I turned out just fine.

#26 Linda on 03.18.18 at 4:36 pm

Prior to the 1960’s it used to be that adult children would live at home until they 1) left to attend college/university or 2) got married. In not a few cases the newlyweds continued to live with parents/in laws until they were able to afford a place of their own; it was also not overly unusual for the newlyweds to remain living with the parents, with child care being provided if the young couple both worked & elder care being provided in return later on in life. The usual deal in those cases was that the couple inherited upon the death of the grandparents.

As more workers moved from agricultural (rural) to industrial (urban) based work the number of multigenerational homes decreased. As companies expanded the expectation that ambitious career workers would be willing to move ‘away from home’ helped to foster the societal change. An indicator of adult success was how soon one could live on one’s own without parental aid. The only acceptable reason to continue to live at home was if the parents required assistance/care.

The main issue with the ‘new’ multigenerational home that I see is that many of the situations are not mutually beneficial. Often one party bears a disproportionate share of the expenses & responsibility for maintaining the living space. So if someone is living at home, just make sure you are a contributor & not a user.

#27 A NATION OF SUCKERS on 03.18.18 at 4:48 pm

Well….what did u expect?

We build a nation of SUCKERS thinking that RE was going up in a straight line forever.

Then again appeared those same suckers that figured since RE is going up forever we’ll just pull money out the house to finance the kids needs’.

Thankfully we have a rich educated class in society who can PROFIT off all these suckers.

#28 Niagara Region on 03.18.18 at 4:53 pm

TOPIC: UNDERFUNDED EDUCATION AND HEALTHCARE IN ONTARIO

re: #9 People leaving Victoria in Droves
re: #19 Don

I live in the Niagara Region, and it took me several years to find a doctor (i.e., primary care physician) in this part of Ontario. I had to go to crappy clinics with huge lines for years. Hence, as you say about Victoria, if a person has poor health, the Niagara Region might not be a good area to move to.

Several of my family members are in medical professions and report that former premier Mike Harris took a big ax to health-care funding in Ontario when he was in office; and funding levels were never restored. The same is true of Mike Harris’s dramatically decreased funding for post-secondary education in Ontario, which receives the lowest governmental funding per capita of any post-secondary system in any province in Canada or any state in the U.S. (Sources for claim re: education “No Growth for Ontario Universities,” Toronto Star [Nov. 14, 2011]; and Indhu Rajagopal, introduction to book “Hidden Academics: Contract Faculty in Canadian Universities.”)

#29 Paul on 03.18.18 at 4:54 pm

“Live in retirement rather than exist” – Garth Turner

Of course I’m paraphrasing Mr. Turner here but there was a blog post or maybe a reply in the comment section that was along those lines a few year ago.

I’m a millennial from the maritimes now living far from home and that has resonated with me.

With the recent post about Alzheimer’s/ Dementia and the cost of care in their Golden Years I’m taking steps now to ensure my parents will have a great retirement, and I will okay too.

I’ll have to take care of them as age sets in but it’s doable. F this idea of down payments from relatives. If my parents had the money and offered it to me I’d tell them to spend a few months in Europe instead.

Thanks Garth for the wise words and the snarky responses to comments. Always look forward to the next blog update.

#30 Ronaldo on 03.18.18 at 5:03 pm

#23 Debtslavecreator on 03.18.18 at 4:30 pm

Ain’t gonna happen old farts

You are such worthy successors. – Garth
—————————————————————–
Another failed millennial. You give successful hard working millennials a bad name.

#31 Mark on 03.18.18 at 5:10 pm

“People are borrowing against their houses for basic house maintenance. It’s insane how broke most people are. Furnace breaks, borrow against equity to pay for it. Car breaks, same deal. New windows, same.”

If Canadians are so broke, where are the lenders getting the money from to lend?

I think those (ie: Stan Brooks in particular) are too fixated on just one side of the equation, that is, the borrowers. The lenders are doing just fine, and are, fortunately for the borrowers, in a position to keep lending. If ever that were to be disrupted, there would be a world of problems that most assuredly would be far more severe in nature for the borrowers than for the lenders (who have already proven their abilities at thrift!).

#32 Bill Grable on 03.18.18 at 5:16 pm

#24 Fuzzy Camel sums it up, to a ‘t”.

“Canadians are broke, the economy just hasn’t caught up to that fact yet.

People are borrowing against their houses for basic house maintenance. It’s insane how broke most people are. Furnace breaks, borrow against equity to pay for it. Car breaks, same deal. New windows, same”.

> One of my Doctors says that he is being swamped with stressed out people, who complain of being dead, flat broke.
In the USA – 40% of the folks take in the latest AP Poll – admit they couldn’t come up with $400.00, in an emergency – even given a week – without borrowing more, or selling something.

Mr. Turner has been very patient with us rabble, as he has tried for the better part of a decade WARNING you, and now it’s started.

#33 James Macdonnell on 03.18.18 at 5:30 pm

It is common in BC, the GVRD, for this type of scenario. My most recent case Raven v. Rose demonstrates the same outcome as the Oz case.

#34 espressobob on 03.18.18 at 5:38 pm

Sometimes it seems that the lack of money is the root of many of our evils. That’s not always the case.

Being a minimalist has advantages. Achieving certain personal goals is far more rewarding.

Talking to so many of my affluent clients who never seem happy proves a point? How much wealth is enough for some? They’re never content.

It’s a bitch when you can no longer enjoy the fruits of your labor. Age ,illness whatever.

Something to ponder.

#35 Andrew Woburn on 03.18.18 at 5:42 pm

Debtslavecreator on 03.18.18 at 4:30 pm
Boomers paid nothing for their educations , houses and stocks.
=====================

Apparently the highly educated young don’t grasp the effect of inflation over time. The “nothing” I paid for my education took ten years to pay off. My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.

If you measure what boomers paid in terms of their actual annual income, it sure wasn’t nothing despite the apparent low nominal amount in today’s dollars.

Where Boomers did win was in the deflation of debt relative to the inflating value of leveraged assets especially on principal residences and especially in the last decade. However a lot of tax was paid on nominal phantom gains in assets and we are about to find out how solid those still-unrealized gains in real estate and other assets will be as interest rates ratchet up.

I agree with concerns about the wanton borrowing of billions but the average Boomer had as much control over this as millennials do over Twinklesocks. Roughly zero.

#36 Lost...but not leased on 03.18.18 at 5:56 pm

True Story: “You CAN go home again”

Friend of ours in Metro Vancouver did a “Joint Venture” home..

They built a new home partnering with parents and 2 siblings. NOTE: They tore down the old family home… a rancher, ie already owned the lot.

The 2 storey SFH is effectively (4) separate living units.

(i)The Upper floor was for our friend and their 2 children

(ii) The parents unit is 1/2 the ground floor
(iii) Their other sibling has the other 1/2 of ground floor(not married..no kids)
(iv) 3rd sibling has a unit built into the garage.(not married,no kids)

This was all done with permits.

#37 crossbordershopper on 03.18.18 at 5:57 pm

there are millions of Canadians of various ethnic groups for a variety of reasons would do anything for their children. History is History, You may have an ungreatful kid if you give him a house or not.
But, hey its your kid, you probably only have one or two of them, what are you going to do with your money anyway?
give to Trudeau, gift to your local hospital, sure, but most would simply give the cash to their kid, ungreatfull and all.
the theory is well historically that the kids will look after the parents, cycle of life and all.
leap of faith, sure, but its been going on since time started, you have kids for immortality purposes so the kid getting a house is what it is another try at success in life. You cant honestly hold out your kid from starting his life because you are some stingy old guy who doesnt want to hand it over to his own kid.
so is my money mine, i guess, but my dads money is mine and my daughter i am sure thinks that my money is hers. and well, it is.
why people buy real estate etc, well Canada is cold and govt policy with no taxation and huge leverage ratio, like try going to bank and look for even a small loan, good luck with that, but hey mortgage sure, 4x your income no problem. its all weird real estate math.
our society is real estate based primarily due to goverment policy, millions of ethnics who value real estate because in their country they didnt have the opportunity, with banks lending in large amounts relative to anything else.
so its a perfect storm, coupled with reduced development land, you get jacked up pricing. but it creates a lousy life, you end up with the 800K house paid for in the end, and live poorly all your working life, i see it everyday. they dont have 20 bucks, but sure they own a house.
go to america, good income, low taxes, better weather, better opportunity, us $, and lower real estate costs.

#38 Big Kahuna on 03.18.18 at 6:03 pm

#21Andrew-I wouldn’t buy everything the MSM tells you on this one-here are the latest 2020 POTUS odds-the longest odds on Trump are 1.9 to 1, the next favorites are at least 16 to 1-at this point the guy is a HEAVY favorite to be re-elected-that doesn’t mean the Repubs can’t do lousy in 2018, but it does mean that it won’t be because of Trump at all https://www.oddschecker.com/politics/us-politics/us-presidential-election-2020/winner

#39 Samson Nights on 03.18.18 at 6:05 pm

Holy arrogant, misleading generalization, Batman.

Ironically, the nation’s shelters are also brimming with clingy adult homeless unwilling to venture forth into a scary, expensive world (insert sarcasm).

Remember the last time when millennials crashed the entire world’s financial system, wiping out trillions in middle working class equity, taking millions in executive bonuses and bank bailouts, later landing influential, plum patronage jobs around a self-indulgent, serial-lying draft dodger intent on draining, not swamps, but social safety nets?

Me neither.

#40 Spock on 03.18.18 at 6:05 pm

Taxable event. Considered as a deemed disposition.

—————
#2 akashic record on 03.18.18 at 3:01 pm
Is in-kind RRSP contribution of securities from a regular trading account to a RRSP account also a taxable event?

Yup. – Garth

#41 Lost...but not leased on 03.18.18 at 6:08 pm

Re MD’s

Do you actually need MD?

A few years ago, I went to my family MD who diagnosed a condition as “X”.

A follow up was intriguing, as my family MD was recovering from an injury and had another MD on locum…who had a different opinion on what ailed me aka diagnosis “Y”.

The icing on the cake was my next appointment..my regular MD was still off work..and a 3rd MD had yet a different diagnosis “Z”.

Lesson?….you figure it out.

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

PS..a while back, one MD was interviewed on health care costs..and stated that, per patient, over 80% of the costs to the health care system occur during the last 2 years of life.

#42 Big Kahuna on 03.18.18 at 6:09 pm

#21Andrew-I agree-Crooked Hillary is not POTUS because, as you state,” white women have been trained from birth to fear black men”-it all makes sense now.

#43 -=jwk=- on 03.18.18 at 6:11 pm

My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.

This is hilarious – you were being sarcastic, right? Millenials can’t imagine the sheer joy you must have felt owing only one year of salary on your loan…

#44 unbalanced on 03.18.18 at 6:12 pm

Is Watcha Minnie from the puzzle factory?

#45 Niagara Region on 03.18.18 at 6:20 pm

RE: THE UNIVERSITY TUITION ISSUE

#23 Debtslaver
#35 Andrew Woburn

While Debtslaver may have a tendency toward hyperbole, he does have a point about the dramatic spike in tuition fees. According to the Huff Post and numerous (perhaps better respected) sources, university tuition in Canada has roughly tripled over the past 20 years (adjusted for inflation):
http://www.huffingtonpost.ca/2015/09/09/ccpa-canadian-tuition-fees-increase_n_8112118.html

The reason for the spike in tuition is because both federal and provincial financial support for universities has plummeted over the past two decades–true in Canada and the U.S both. Hence, universities have increased tuition primarily to make up for the lost governmental revenue. The result is that many (especially working-class and lower-middle-class) students are saddled with heavy debtloads when they graduate from university.

To return to the discussion about living in parents’ basements, the dramatic increase in tuition fees has likely been one factor keeping young adults at home; namely, it is more financially difficult to pursue a university education while having to pay for an apartment/room in residence. The percentage of Canadians pursuing university educations is much larger now than 20-30 years ago, also one reason why children would now be living at home to older ages.

#46 crowdedelevatorfartz on 03.18.18 at 6:43 pm

@CalgaryCarGuy

Premier Jason Kenny turning off the oil taps?
Pffft.
Our own elected Dippers will do us in first.

Gas in the Lower Bainland Sunday afternoon March 18th….
$154.9 per liter

The most expensive in North America by far.
Brought to us by our own stupidity.
So dont worry about the BC vs Alta scuffle.

Just smile everytime the pumpjacks in Wild Rose Country suck it out of the ground and then your refineries send that oil West in the existing pipeline…..

Economists are predicting $1.70/liter here by mid summer…..
Add rising interest rates and falling housing prices ………can you say recession?

#47 ImGonnaBeSick on 03.18.18 at 6:46 pm

#28 Niagara Region – there is nothing more frustrating that people bringing up Mike Harris like he’s some sort of evil mastermind. He hasn’t been premier for 15 years… When he was though, he increased government revenues by 25%, decreased the debt by $20billion, reduced welfare by 500,000 people, cut income taxes by 30%… And on and on. Whatever problems you think he created, you can thank the idiot Liberals for not fixing it over the 15 years these crooks have been in power. Hopefully that’s fixed June 7th.

#48 Michael Brnadic on 03.18.18 at 6:51 pm

Garth Do you follow SEDI insider sales? Do you know where the summarized version could be found?

Something along these lines

http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1d9082n-Feb23Sells.png

#49 Zapstrap on 03.18.18 at 6:53 pm

#6 Whatcha Minnie on 03.18.18 at 3:14 p

Now gonna make some deviled eggs. Just got into cooking last week after years of barely knowing how to boil water. So much fun.

What temperature do you boil your water at?

#50 Big Kahuna on 03.18.18 at 6:58 pm

#45Niagara-the basic structure of universities in North America hasn’t changed in over 100 years-and you want even more taxpayer money thrown into this bottomless pit? With the advent of the internet, there is zero justification for the absurd expense of a university education-it has never been this inexpensive to provide quality information.

#51 Bobby on 03.18.18 at 7:16 pm

#45 Niagra Region

Having put three children through university in the last number of years I can attest that university costs are still very reasonable. I compare these costs to what paid in the late 70’s.
The real costs that add up are the cost of living. Rent, food, cell phone, gas, these are costs that really add up. Interestingly summer jobs still don’t pay that much more after all these years.
What contributes to these costs are the myriad of taxes and fees piled on everything by every level of government. Somebody actually pays. With gas at $1.50 a litre in Vancouver, .49 of each litre being tax, it is expensive to live.

#52 Darryl on 03.18.18 at 7:21 pm

#25 FATLADY on 03.18.18 at 4:35 pm
I now for sure one thing…
I raised my kids to be independent and I’m a DAMN B SURE to hold them to it.
18 and out…..Get a job and pay your own way.
I did it and I turned out just fine.
———————————————————————–
I left home at 18 as well and did quite well . However these are very different time for the younger generation . To many differences to list in a short post but the differences are numerous and obvious.

Don’t caudle the lazy but you sure as hell shouldn’t think that your kids these days will be able to leave at 18 and prosper .

#53 Nonplused on 03.18.18 at 7:22 pm

#8 The Lesser Fool – “When you transfer shares to your RRSP, you are considered to have sold them at their fair market value for tax purposes.”

But wouldn’t you also get a deduction for the RRSP contribution? So if we are talking about shares, you’d pay 50% of your marginal rate on capital gains but get 100% of your marginal rate on the RRSP credit. Not as much bang for the buck as putting cash into the RRSP but might be worth it if you don’t have any cash. Also if the shares were purchased recently the capital gains might be inconsequential compared to the RRSP deduction.

#31 Mark on 03.18.18 at 5:10 pm
“People are borrowing against their houses for basic house maintenance. It’s insane how broke most people are. Furnace breaks, borrow against equity to pay for it. Car breaks, same deal. New windows, same.”

If Canadians are so broke, where are the lenders getting the money from to lend?”

It’s a fractional reserve banking system, which means as long as the banks have assets under their control via contract (ie a mortgage or HELOC) they can literally create the money from thin air. They only need to keep enough liquidity on hand to meet daily operations and loan loss provisions. It’s called “monetization”:

https://en.wikipedia.org/wiki/Monetization

So what happens, literally, when you borrow money against your house, is that the house becomes the bank’s asset and it can literally print electronic money against it, which it then puts in your account to spend on repairs or whatever. It’s a little more complicated than that but the idea that the banks have on deposit all the money they lend out went out the window in 1913 and the system has been working ever since. They only have a fractional reserve. So long as they do their “stress tests” and what have you correctly the system seems to work.

The whole system evolved quite organically, when goldsmiths, who became the first bankers, realized that if they used paper claims they could lend out far more gold than they had on deposit because most people didn’t withdraw it. But the excess lending had to be backed by assets (like a house or a car or a business) because in the event a loan went bad they had to recover the property for resale or they would go broke.

I’m not sure the system is all that much of a cheat, after all if gold can be an asset you can borrow against, why not your house? Anything physical really. It’s all stuff and the money is just accounting.

In addition to stress tests, minimum down payments or for HELOCs equity levels are an important part of keeping the system safe, because in addition to the fractional reserve the banks keep on hand (which they wish to minimize because loans pay better), the equity represents a significant cushion in the event a loan goes bad. That’s why CMHC was created, banks simply would not lend at 5% down otherwise. Not enough cushion. Even if they printed the money for the loan up, they are still on the hook for the money so if the loan goes bad they are in trouble. There has to be an asset behind the money. And yes it can be your house. Your car. You motorcycle. Anything that can be seized.

A major exception to this is unsecured debt like credit cards, but that is why the interest on them is so damn high. Everybody instinctively knows the bank isn’t going to bother taking back your TV if you default on your credit card, it’s not worth the bother, so the bank charges a higher rate of interest in an effort to get the principle back faster and also to compensate for the additional risk. This is why in a world where prime is 2% credit cards still carry 18% without consumer watchdogs going mad. They know if they lowered the credit card rates to 2% the banks would simply say “not worth the risk” and stop lending that way. It’s also why if you pay off your credit card every month you don’t pay any interest. They consider you “low risk” and just want the transaction fees.

#54 Yuus bin Haad on 03.18.18 at 7:29 pm

Seventy-seven days of naiveté and counting …

#55 Grey Dog on 03.18.18 at 7:30 pm

28 Niagara Region
I absolutely agree with you that Mike Harris really did ruin Health Care and Education while premier of Ontario…that is why I’m so afraid of voting for Ford. I would not have had similar reservations had Christine Elliott won though.

Another point I’d like to make about those that sold in Unionville a year or so ago, leaving all the amenities of hospitals, and other health care accoutrements to build their dream house up in cottage country, (chandeliers over bathtubs even) just to find there is no support when a serious health issue arises.

#56 SimplyPut7 on 03.18.18 at 7:34 pm

#48 Michael Brnadic on 03.18.18 at 6:51 pm

Does this help?

https://www.sedi.ca/sedi/SVTReportsAccessController?menukey=15.03.00&locale=en_CA&gx_session=0

#57 Leo Trollstoy on 03.18.18 at 7:37 pm

#53 Nonplused on 03.18.18 at 7:22 pm

Chris was:

[ ] not rekt
[x] rekt
[x] really rekt
[x] tyrannosaurus rekt
[x] parks and rekt
[x] star trekt
[x] school of rekt
[x] catcher in the rekt
[x] great rektspectations
[x] rekt it ralph
[x] the shawshank rektemption
[x] forrekt gump
[x] finding rekt
[x] rektal exam
[x] shrekt
[x] rektium for a dream
[x] The Mummy Rekturns
[x] Pride and Prektudice
[x] erektile dysfunction
[x] rektroom
[x] continental brektfast
[x] Brektzit
[x] rektipe for success

#58 TalkingPie on 03.18.18 at 7:37 pm

Wow, amazing that kids can be so ungrateful to their own parents, especially when presented with such a generous loan.

My girlfriend and I are in the middle of shopping for our first house and my parents generously offered to finance the whole mortgage through them instead of through a bank. The idea was that the girlfriend and I pay a lower mortgage rate, and that my parents – in their 70s with mortgage paid off long ago

#59 akashic record on 03.18.18 at 7:46 pm

#40 Spock on 03.18.18 at 6:05 pm

Taxable event. Considered as a deemed disposition.

—-

What’s the point of doing it then?

#60 Mark on 03.18.18 at 7:56 pm

“It’s a fractional reserve banking system, which means as long as the banks have assets under their control via contract (ie a mortgage or HELOC) they can literally create the money from thin air.”

Sigh, that nonsense again? Commercial banks do not create money, they have to borrow it from various sources in order to lend it out. So for every borrower, there is someone, somewhere who had to save and has an asset to their name, that was responsible for the lending.

The monetary system and banking is just a unit of account anyways. Money is nothing but pieces of paper with things printed on them, or the electronic equivalent in a ledger. Those who allege that Canadians are systemically broke are also alleging that Canadians aren’t able to produce the output that is required in order make a currency worthwhile. And that is complete and unadulterated nonsense. There are many significantly productive Canadians who, through their hard work, make all the borrowing possible. And as Garth constantly argues, and I agree, heaven forbid, if they ever are disincented enough to stop working, to stop saving, the problems of the borrowers will be far greater than the problems of the savers.

Even those fraudulent fractional reserve gold schemes you write of were only sustainable so long as people believed in them and were willing to contribute to them. They only unwound once the people noticed that the bankers were living lifestyles far beyond the value implied through their safekeeping and lending of gold. There may be a lesson here for contemporary bankers, that the savers, the sources of funds to their institutions may turn on them if they appear personally to be too opulent.

Stan Brooks constantly argues (paraphrased) that we are going to face high inflation in the coming years, yet the BoC will hold down interest rates for severely negative real returns to cash savers. The problem I have with his argument is that the banking system will have been drained of funds long before this ever happens, hence interest rates will self-correct. There’s ample historical evidence to indicate that this is almost always the case.

#61 TalkingPie on 03.18.18 at 7:57 pm

Wow, amazing that kids can be so ungrateful to their own parents, especially when presented with such a generous loan.

My girlfriend and I are in the middle of shopping for our first house. My parents generously offered to finance the whole mortgage through them instead of through a bank. The idea was that the girlfriend and I pay a lower mortgage rate than the banks, and that my parents – in their 70s with mortgage paid off decades ago – would have a stable income from the monthly payments. (Obviously this was a thinly-veiled attempt on the part of my parents to help me out.) All parties insisted from the get-go that if we were to do this, there’d be a notarized written agreement.

In the end I decided that as much as I appreciate the gesture, at ~3%, all parties would be better served if my parents invest their cash elsewhere and girlfriend and I take our 20% cash down and finance through the bank.

The only rub is that girlfriend is recently self-employed, so her income doesn’t count towards a mortgage pre-approval. Even so, and even with the stress test, my middling income was still enough to qualify for a mortgage at the limit of what we feel is reasonable to spend on our combined incomes. The mortgage broker told is that he feels the stress test is “ridiculous.” Girlfriend and I feel it’s ridiculous how generous the banks still are with letting people take on debt.

#62 Smoking Man on 03.18.18 at 8:02 pm

Life, planning, chaos. Question everyone needs to ask themselves do you have the mental tools to deal with life when the universe decides to take a dump on you.

A couple of gold bars and a fully stocked liqueur cabinet will just about do it.

Religion Too.

#63 New West on 03.18.18 at 8:03 pm

#52 Darryl on 03.18.18 at 7:21 pm

“Don’t caudle the lazy but you sure as hell shouldn’t think that your kids these days will be able to leave at 18 and prosper.”

Mine left at 18 and all three of them have prospered – an entrepreneur, a social worker, and a lawyer, all in their early 20s. Last kid will have his student loans paid off 12 months after he graduated and that’s it for debt. I helped with tuition, but it’s all their hard work. All renting, no desire to own a house as they see the utility in being free to take advantage of the many opportunities that will come up. Excellent career specific resumes. And no, we do not come from money.

Doesn’t matter what the economic situation is. If you work hard, surround yourself with good people, have a goal but are flexible around how you will achieve it, and think things through, you will be fine.

#64 -=jwk=- on 03.18.18 at 8:13 pm

#40 Spock on 03.18.18 at 6:05 pm

Taxable event. Considered as a deemed disposition.

—-

What’s the point of doing it then?
——-

the same reason you put anything in an RRSP – future gains are tax free until withdrawn

#65 Flat Earth Society on 03.18.18 at 8:22 pm

It is a shame that there is not a test or a course you have to take before you become a parent. So, unfortunately, we live in a world where the best ideas we have about parenting were whatever our parents taught us and that example probably wasn’t all that great. Oh well good enough I suppose we’re still here for now.

What is truly surprising in this case is that someone who could “lend” but wouldn’t “give” their child $500,000 ever came up with the money in the first place. Where did they get it? If they were rich, why did they want the money back? So bad they would sue?Kid is going to inherit it anyway.

If I won the lottery, not the $1,000,000 one but something substantial, all my kids would get $500,000 towards a house. But if I need the money for retirement or had to borrow it then sorry no. I wouldn’t even co-sign a mortgage because at my age employment is pretty sketchy. Corporations love to package off all the senior managers and they won’t hire them, there are too many young folks chomping at the bit for a lot less money. So what would my co-sign be worth? We could all be on the street as soon as my package runs out.

Another question I have for the BOM (Bank of Mom) is if a regular bank won’t lend to junior because it’s too risky, what makes you think you can bear the risk? And what happens if you have more than one child? If you pony up $500,000 for one, you have to pony up $500,000 for all of them or Christmas will be quite lonely. This is “never see your grand-kids” type stuff. You just can’t do it. It borders on being immoral. Playing favorites with your kids, no matter the “need” (unless disabled) is child abused and the adult children will likely put a stop to it at your displeasure. Even if you have a favorite child, you can’t act like it or you are evil. Bad parent. Sit. Stay. If you want to get along well in life, the only person that should clearly be your favorite is your spouse. “Best friends” is childish unless all your friends are your “best friends”. And that is even if you know you have one.

I have a friend who’s parents favor musical talent over education and thus supported a talented musician child but not the equally talented mathematician who went to university. The results were disastrous. So now they have a musician living in their basement and a a mathematician who doesn’t come home for Christmas.

Somebody needs to explain the Pareto distribution to these people. Everyone in the whole world would like to be a famous musician, but unfortunately even if you have the talent it works much like wealth distribution. Only a few rise to the top. Sure, there are a few musicians and artists that rise to the top and make millions (artists usually after they are dead), but the average take home for a musician is pretty low. Since the rich ones are included in the average, that means the majority of musicians barely make anything. So, if you are a musician and don’t have a hit single, I suggest getting a B-Ed after, at least as a band teacher you will have a good salary.

#66 IHCTD9 on 03.18.18 at 8:23 pm

#46 crowdedelevatorfartz on 03.18.18 at 6:43 pm

Gas in the Lower Bainland Sunday afternoon March 18th….

$154.9 per liter

—————

That is insane.

That is higher than gasoline was here in Ontariowe when WTI was $140.00/bbl.

WTI is $62.00/bbl right now.

Total rip – is that all taxes?

#67 What is equality ?? on 03.18.18 at 8:24 pm

Hello mr.turner, first time poster
I very much enjoy reading ur blog and some comments:)
I live in BC, west kelowna. I’m 36 and female. I currently own my own home and started investing when I was 26, thx for all the tips. I was at a party last nite and everyone was bitching about the ndp government in bc.
All we get shoved down our throats is equality etc.. can u define that? I own 50% of a condo with my sister in Victoria and we only use it 5-8x per year. So now we’re being punished for saving our money. Should we sell it and put it all in etf’s etc… or will the ndp come after our portfolios next? Or what? Thanks kassie W

#68 Stone on 03.18.18 at 8:29 pm

#43 -=jwk=- on 03.18.18 at 6:11 pm
My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.

This is hilarious – you were being sarcastic, right? Millenials can’t imagine the sheer joy you must have felt owing only one year of salary on your loan…

———-

Don’t know what all the crying is about. I finished school without any debt. How did I do such a thing? I worked throughout my whole time at school. I made the decision to not borrow. Oh yeah. I also got my employer to pay for part of it.

First world problems sweety. First world problems. No sympathy here. If you owe more than one year of salary for school, you were taken. Don’t believe the BS they’re feeding you in school. The post secondary system is set up to vacuum your money to feed its own self interests, not yours. If you went along with it thinking you were smarter, you were naively mistaken.

#69 Sydneysider on 03.18.18 at 8:31 pm

It is only the Anglo-Saxon sub-culture of North America that tries to kick kids out ASAP. In the rest of the world, the parents like to have them around.

#70 Ron on 03.18.18 at 8:34 pm

#23 Debtslavecreator on 03.18.18 at 4:30 pm
Many younger people are resentful due to the easy debt fuelled wealth the boomers accumulated
Boomers paid nothing for their educations , houses and stocks

————————————————–

Don’t forget about the soaring inflation in the sexual market place as well. In the old days, a man with a good job who took reasonable care of himself would not have had much trouble pairing up with a woman of equal or lesser attractiveness/status (assortative mating). Today, women can receive effortless ego validation through social media (akin to cheap credit in the financial markets) which inflates their self-perception of value. As a result, most women now hold out for only the highest status men, even if they have to share him with other women.

The cafeteria lady at my office remarked to me recently that most men order healthy meals while women order junk food. I explained that men have to work twice as hard to attract a woman of roughly equal status/attractiveness.

Oh and don’t forget disappearing corporate pensions either.

#71 Andrew Woburn on 03.18.18 at 8:34 pm

Niagara Region on 03.18.18 at 6:20 pm
RE: THE UNIVERSITY TUITION ISSUE

The reason for the spike in tuition is because both federal and provincial financial support for universities has plummeted over the past two decades–true in Canada and the U.S both. Hence, universities have increased tuition primarily to make up for the lost governmental revenue.
=================

My issue with Debtslayer was the implication that Boomers got everything for free which is flat out wrong. I do agree that tuition costs today are crippling and all too often wasted.

Your point about the plunge in public support for tuition is well made and it is difficult to justify this policy if actually want educated citizens as we claim. It is also extremely unfair to bright children from lower income families.

The policies in effect when I was a student made it relatively easy for anyone with ability to earn a degree regardless of their economic class especially since the lack of automation meant there were plenty of reasonably well paying part time jobs available to help pay the bills. In some ways it was easier to justify greater government support in those days. A far smaller proportion of kids went to college and almost everyone who graduated got a pretty good job. Canada was in rapid expansion mode. Government got a pretty quick income tax payback on investment.

Today we have far more grads as a proportion of the population. There are far more grads than good jobs to be filled. There are many more students in courses which, however spiritually rewarding, offer little in economic benefits to themselves or society. It also appears to me that the costs of running universities has risen exorbitantly. I don’t think we had many university presidents earning the equivalent of $500k a year when I was a student nor was there a lot of admin overhead. We simply cannot afford to generally subsidize current university programs at prior levels.

In my view, we should subsidize a high proportion of university tuition for those students who are grads of subjects that will benefit their fellow citizens. That doesn’t mean only STEM subjects. We would need to support a budgeted number of arts and social science students to maintain a well rounded academic base. I would provide support by forgiving a greater or lesser portion of student debt after graduation. Students would have to enroll at their own risk which should cut down on overly optimistic expectations.

#72 Nonplused on 03.18.18 at 8:37 pm

#60 Mark

That is patently untrue. Banks create money under the supervision of the central bank, but must back it with assets. That is why they are there.

The idea that there is one dollar of “loaned” money for every dollar of “borrowed” money is only true if you count the assets held by the banks, including mortgages, bonds, and HELOCs. Where the heck do you think the money came from? Who made it? The banks did. But don’t get bent out of shape that is what they are there for, and it works. The purpose of the modern banking system is to monetize assets for the purpose of commerce, and they do quite a good job of it.

But the idea that for every dollar in loans there is someone who lent a dollar is simply stupid. There isn’t that much money in the world even of the printed kind. There is no person holding the US debt of $20 trillion (had to spell it can’t figure out how to type it). That level of money has never and can never be printed. The bonds underlie the asset and that is what there is. The federal reserve will never print $20 trillion to buy the US debt because that sort of money printing would lead to Venezuelan type hyper inflation. The money doesn’t exist, the loan does. Without the loan, the money is worthless.

Most, so much most that you could say all, money, in the current monetary system is borrowed into existence. It seems like it couldn’t be that way because it suggests that you can get something from nothing but that is not what is happening, there is an asset behind the loan. Your house for example, which they will take and sell if you don’t pay your mortgage.

And chartered banks under the supervision of the central bank do have the power to do this. It’s what they are for.

#73 alsa on 03.18.18 at 8:41 pm

A rise in white American suicides leads two Princeton economists to believe that we are rapidly approaching a crisis of American capitalism. Watch the full Moving Upstream series: http://on.wsj.com/2GBMXQs

#74 IHCTD9 on 03.18.18 at 8:42 pm

#61 TalkingPie on 03.18.18 at 7:57 pm

All parties insisted from the get-go that if we were to do this, there’d be a notarized written agreement.

———

Most important thing right there. You all need a great lawyer with experience in deals like this. These kinds of arrangements always give me the heebie jeebies..

#75 Samson Nights on 03.18.18 at 8:46 pm

#66 IHCTD9 on 03.18.18 at 8:23 pm
———————————————-

“….The rest of B.C. doesn’t pay nearly as much tax as those in the Lower Mainland because of the 17-cent transit tax imposed in Metro Vancouver….”

https://globalnews.ca/news/2712837/vancouver-pays-second-highest-gas-taxes-in-the-country/

#76 the Jaguar on 03.18.18 at 8:49 pm

Reading #19 Don’s comment. It reminded me of being in Co-op 16th ave n.e. location a couple of years ago. (this is a grocery store chain) and talking to a woman in the checkout from Quebec who now lived in Calgary. Jim Prentice was in the store picking up something from the produce section which initiated our discussion. He was dressed in khaki shorts, red golf shirt and flip flops. A stand up guy. Can’t remember how the subject of people retiring to areas like Parksville, etc came up, but she said many made the move only to regret it. Unfortunately it was not always easy to undo that decision financially. I would caution people to really do their research when contemplating a move to another part of the country in retirement. Turn over every rock, and don’t listen to the local real estate cartel. Consider the location in all seasons, not just the summer months. The Jaguar was tempted in this way, but realized that Alberta is in my DNA. It’s like asking Captain Kirk to give up command of the StarShip Enterprise. Alberta is my ship. My compass. My country.

#77 ben on 03.18.18 at 8:53 pm

Bad for a kid to take 500k off his parents, but fine for many boomers to get 500k gainz for zero work, which are paid for by the next generation?

Not sure that balances on my moral scale!

#78 Entrepreneur on 03.18.18 at 8:55 pm

I agree with Nonplused and what I have been hearing is that most people when they need money now they use their house. My friend that died of cancer, well, she and her husband used their house when they needed money for pills, doctor appointments in other towns, their kids need money and the list goes on. And when they died the debt was about what the house was worth.

The same here in BC #47 I’mGonnaBESick when the Liberals took over 16 years ago they didn’t fix or correct anything; in fact, they made it worse.

Made up a joke, simple one, but watching the news and it just came: “When the Liberals fart, and no matter how much it stinks, people will keep on voting for them.” Is this call generational thing or stupidity or both. Can put any group organization in like the Conservatives, not much an opposition, about the same.

Laughed at #49 Zapstrap on “What temperature do you boil your water at? I say ask a Liberal as they can twist words around to make it sound so right and people will take it as is.

#79 ben on 03.18.18 at 8:56 pm

Today’s FT:

“Nearly a decade later, market prices suggest that traders overwhelmingly expect a policy tightening when the Fed meets on March 21, which would mark the sixth quarter percentage point shift higher in the overnight borrowing rate in the current cycle.”

Poloz won’t come out the bathroom. He can’t stay in there forever.

It’s going to be amusing watching Poloz, but it’s nothing compared you the legend Carney at the BoE, which still at 0.5%. Poor Carnage doesn’t like raising rates.

#80 FATLADY on 03.18.18 at 8:56 pm

TO #52 DARRYL

SUCKER!!!!!!

Here you are….I new we would have at least one.

I’ll get the EXCUSE violin going for you.

And I’ll send a few more 18 year olds your way.

Since this time is different.

#81 SoggyShorts on 03.18.18 at 8:56 pm

#65 Flat Earth Society on 03.18.18 at 8:22 pm
What is truly surprising in this case is that someone who could “lend” but wouldn’t “give” their child $500,000 ever came up with the money in the first place. Where did they get it? If they were rich, why did they want the money back? So bad they would sue?Kid is going to inherit it anyway.
******************
I always assume BoM loans are HELOCS. I don’t have any real basis for that other than doubting that the average person has 500K cash that they think is better off in a house.

It makes sense that the type of person who would thinks that their offspring who doesn’t qualify for a house should have a house anyways, is the same person who would take out a massive HELOC to do it.

If they had a 500K+ in a balanced and diversified portfolio, I don’t see them being that person.

#82 IHCTD9 on 03.18.18 at 9:01 pm

#70 Ron on 03.18.18 at 8:34 pm
#23 Debtslavecreator on 03.18.18 at 4:30 pm
Many younger people are resentful due to the easy debt fuelled wealth the boomers accumulated
Boomers paid nothing for their educations , houses and stocks

————————————————–

Don’t forget about the soaring inflation in the sexual market place as well. In the old days, a man with a good job who took reasonable care of himself would not have had much trouble pairing up with a woman of equal or lesser attractiveness/status (assortative mating). Today, women can receive effortless ego validation through social media (akin to cheap credit in the financial markets) which inflates their self-perception of value. As a result, most women now hold out for only the highest status men, even if they have to share him with other women.

The cafeteria lady at my office remarked to me recently that most men order healthy meals while women order junk food. I explained that men have to work twice as hard to attract a woman of roughly equal status/attractiveness.
—————

This is largely an urban phenomenon.

All a Man has to do to undercut this trend is live well, and bide his time. No rush at all for Men. Not so for Women.

#83 SunShowers on 03.18.18 at 9:04 pm

“Wow, I don’t understand how my kids are such failures that they can’t afford to move out of my basement. Why can’t they be successful like me?” a parent thinks as they peruse their stock portfolio which is packed with companies that are immensely profitable because they don’t pay their rank-and-file employees enough to be able to afford to move out of their parent’s basements.

#84 Mark on 03.18.18 at 9:05 pm

“There is no person holding the US debt of $20 trillion (had to spell it can’t figure out how to type it).”

Of course there is. Its held by individuals as investments in their portfolios. Its held by national governments which are conspiracies of large numbers of individuals on behalf of a geographic area. Its held by pension plans and insurance funds which are in turn trustees for the investments of individuals. US Treasury debt was bought in trust by Social Security in trust for hundreds of millions of US citizens who save using the Social Security schema. Etc.

Every cent borrowed, is also an asset on someone’s balance sheet somewhere. That’s why its called a balance sheet, it has to balance. In order for a loan to be made, someone has to, by definition, somewhere, make an investment. With savings.

So my point stands, it is impossible for Canadians to be systemically broke because a lot of Canadians are in some serious debt (~170% of household income is the average apparently of those who are indebted). Whenever you hear such claim, you should be thinking of an incredibly prosperous economy which has enough productivity and lending power to actually have that much savings to lend.

When people stop saving and lending thus stops for lack of available funds, well, that’s when you get hyperinflation. Interest rates shoot to the moon. Banks collapse. That doesn’t describe Canada. At all. And probably never will.

All we get shoved down our throats is equality etc.. can u define that? I own 50% of a condo with my sister in Victoria and we only use it 5-8x per year. So now we’re being punished for saving our money. Should we sell it and put it all in etf’s etc… or will the ndp come after our portfolios next?

Yeah, definitely look towards an exit of that arrangement, and buy a balanced portfolio. 6-8% annually on that principal sum and avoided operating costs and depreciation probably could get you a month or two a year one of the nicest hotels in Victoria. Or practically anywhere else in the world you desire. A no-brainer, IMHO.

#85 Ron on 03.18.18 at 9:09 pm

#68 Stone on 03.18.18 at 8:29 pm
#43 -=jwk=- on 03.18.18 at 6:11 pm
My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.

This is hilarious – you were being sarcastic, right? Millenials can’t imagine the sheer joy you must have felt owing only one year of salary on your loan…

———-

Don’t know what all the crying is about. I finished school without any debt. How did I do such a thing? I worked throughout my whole time at school. I made the decision to not borrow. Oh yeah. I also got my employer to pay for part of it.

First world problems sweety. First world problems. No sympathy here. If you owe more than one year of salary for school, you were taken. Don’t believe the BS they’re feeding you in school. The post secondary system is set up to vacuum your money to feed its own self interests, not yours. If you went along with it thinking you were smarter, you were naively mistaken.

——————————————–

Yes, kids are naive and they trust their parents and teachers. What’s your point? It’s not reasonable to expect even an intelligent 18-22 year old to call BS on the entire system they were raised to believe in.

#86 IHCTD9 on 03.18.18 at 9:10 pm

#75 Samson Nights on 03.18.18 at 8:46 pm
#66 IHCTD9 on 03.18.18 at 8:23 pm
———————————————-

“….The rest of B.C. doesn’t pay nearly as much tax as those in the Lower Mainland because of the 17-cent transit tax imposed in Metro Vancouver….”

https://globalnews.ca/news/2712837/vancouver-pays-second-highest-gas-taxes-in-the-country/

————

That is nuts. Good grief, Vancouverites better pray Oil never ever gets near 140.00 again. Plus bridge tolls too, on top!? What the hell is going on over there?

#87 What I think I know on 03.18.18 at 9:12 pm

“I have a realtor friend in Victoria who says people are leaving now because they can’t find a doctor.” – Poster

——————————————————

Blah, blah. It’s laughable. Over the years, on this blog, I’ve read so very many, asinine, negative RE comments based on anecdotal evidence. What nonsense! Canadian RE will do just fine in the long run. In 10 years, time all Canadian RE will be worth a lot more than it is today. The only thing that will stop that is a massive global financial collapse or a stoppage of the massive immigration. Neither of those is likely to happen.

#88 Damifino on 03.18.18 at 9:16 pm

#20 crowdedelevatorfartz

Welcome to Canada and “free medicare”.
—————————

While I grant you the BC family doctor shortage is very grim these days (and not just in Victoria) medical care is almost free in this province.

Within the last seven years, the BC cancer agency has cured three of my close friends and another just had quadruple bypass surgery. None of them are facing the prospect of remortgaging their houses for a $200K bill.

For my BIL, who’s lived in the USA for over 30 years, the story is different. He’s considering returning to Canada now that their health care system wants to charge him significant $$$ to care for those less wealthy (he’d say less ambitious) than himself. He used to claim we were socialists here. Now he’s getting older and his body doesn’t work as well as it once did.

BTW, my doctor in YVR just left his practice last summer. (It took me months to find another one, quite a bit further away). He tried for a year and couldn’t even give his practice away. It’s not a great job and the Feds didn’t help by painting GP’s as crooks.

The big money is in specialities. Perhaps there needs to be more incentives before the family doctor is replaced by an artificially intelligent machine that sees you as just another piece of obsolete wetware.

#89 Wrk.dover on 03.18.18 at 9:17 pm

#79 ben on 03.18.18 at 8:56 pm
It’s going to be amusing watching Poloz, but it’s nothing compared you the legend Carney at the BoE, which still at 0.5%. Poor Carnage doesn’t like raising rates.

——————————

Cdn $ down 8 cents against pound since October

#90 Leo Trollstoy on 03.18.18 at 9:24 pm

DELETED

#91 Ian on 03.18.18 at 9:33 pm

Atlanta Fed now estimating Q1 GDP at 1.9%.

They were at 5.6, then 2.5, now 1.9. That’s not a very rapidly growing economy.

I can see a scenario where, much like Yellen helping Hillary in 2016 by not raising rates, Powell helps Trump by not raising this year. These downward GDP revisions will give him the excuse.

#92 Long Branch Apprentice on 03.18.18 at 9:36 pm

#55 Grey Dog

Ontario pays $12 billion a year in interest on the provincial debt. It’s the single fastest growing item in the budget. Something needs to be done, soon and drastically.

How do you propose the situation is rectified without substantial cuts to provincial spending?

I’m a 33 yr old new dad whose family has zero debts. As soon as I can land a job out of province we’re gone.

#93 Pulp Faction on 03.18.18 at 9:45 pm

Money changes everything, and you can’t trust anybody to do the right thing anymore.

#94 Ret on 03.18.18 at 9:47 pm

Lots of Liberal trolls out tonight doing a revisionist history of Mike Harris. Seriously, Mike Harris? Is that all you’ve got to scare us about Doug Ford? Perhaps you can explain why McGuinty and Wynne didn’t make it all better in 15 years.

—————————————————————-
Universities and colleges pretend to be public institutions but they are really big, self-serving businesses the answer to no one.

Employees are represented by Unifor and have pay/pension benefits that extent into retirement that the rest of us could only dream of. Employees at McMaster regularly get bumped to higher pay levels for the most trivial reasons.

Universities never back down when Unifor shows up because they know that all of the other universities will be given the same list of contract demands and also cave in. Kinda like what happened in the grocery trade in the 70’s.

Students are just there to hand over their Canada Student Loans to keep the unions and the university staff happy and extremely very well paid.

No one really cares how much debt the student racks up or about the financial pressures put on families. Courses are dummied down to keep students happy. Clearly many of the courses have great sounding titles and course descriptions, but in reality, lead nowhere.

Students often flip from one course to another and many get into grad school. It keeps the tuition money rolling in and suddenly the student is $50,000 in debt. Loans are backed by the taxpayer so who cares?

Wynne’s free tuition has encouraged a number of students who have dropped in for the university experience but who seem to have little interest in attending classes, studying or turning in papers.

#95 Tom from Mississauga on 03.18.18 at 9:47 pm

Hey Garth
Funny thing on filling in my taxes this year. They asked me on Turbotax to put the address I rented and name of my landlord. Looks like they’re going after junior landlords this year.

#96 arfmoocat on 03.18.18 at 9:49 pm

DELETED

#97 Mountain_Camper on 03.18.18 at 9:50 pm

The situation:
Location: Red Deer, AB
Me and wife – both 44 years. Family income 200K.Good probability of this continuing.
Mortgage left 260K- recently (last fall) renewed for 5 years fixed at 2.5 %. A car loan of 27K.No other debt.
40K in cash. TFSA at 125K.Not much RRSP. About 25k invested in a foreign fast-growing economy, however for long term, so not very liquid. DC plan at 155K.
Kid1 in 1st year of University. RESP covers 50% of cost,30% by kid working part time, remaining by me.
Kid2 in middle school.
Now I want to buy RRSP and recover some income tax. What is a better option – a HELOC or borrowing? As mentioned in the blog, HELOC interest is not deductible while it is if I borrow. What are the typical rates if I borrow?
If not RRSP – what is other option to grow assets without going in for much borrowing? Is a rental property good option?

#98 ben on 03.18.18 at 9:51 pm

Gbp/cad wasn’t my point. Both are screwed thanks to people like Carney, who ramp real-estate for the quick “win”.

#99 Reality is stark on 03.18.18 at 9:52 pm

Student debt was and will be paid off when the house is sold in the divorce. If you take someone on with a $50,000 student debt subsequently get them pregnant and then they divorce you when times get tough you end up paying that debt. Hopefully you bought your house a while back so that you can cover the $50,000 burden. You don’t know how lovely Canada really is until you get to family court.

#100 arfmoocat on 03.18.18 at 9:55 pm

#96 arfmoocat on 03.18.18 at 9:49 pm
DELETED
………………………………………………………………………..

Sorry, but it’s coming right from the mouths of 75 year old Vancouverites.

Not on this blog it isn’t. – Garth

#101 SimplyPut7 on 03.18.18 at 10:03 pm

#9 PEOPLE LEAVING VICTORIA IN DROVES on 03.18.18 at 3:19 pm
#19 DON on 03.18.18 at 4:12 pm

While I do think medical schools in Canada should increase admission to students who want to be family doctors versus students who want to specialize in areas of medicine that have harder times finding placement in Canada after graduation. The shortage of doctors would probably still persist in places like Victoria that have very expensive housing.

After spending thousands of hours studying, finally getting into med school and then going into debt of 100k or more, who wants to live like a pauper when you have many other options in BC and outside of the province?

Highly skilled in-demand workers who make a lot of money, want affordable decent size detached homes or large condos with great amenities to enjoy with their friends and family. If they lived in Victoria they would have to find 100k – 200k downpayment to be able to afford a small house or condo that is geared towards lower-middle-class families.

Canada is a big and beautiful country, they have many other places to choose to live and work that will supply them with the luxury homes and condos they are looking for at a great price.

It was only a matter of time before Victoria’s housing bubble was going to cause people to leave the city and not encourage new companies or much needed skilled workers to move there.

#102 PastThePeak on 03.18.18 at 10:04 pm

It is amazing the number of people who read, and comment, on a financially focused blog, that have absolutely no clue about finance, investing, economics, inflation, or demographics.

But they all have an opinion and can vote (and breed)…

#103 John on 03.18.18 at 10:15 pm

Question for the author, or anyone with knowledge on the subject – is the gifting of a principal residence by a parent to a child seen as a taxable event given that the parent would be tax exempt on a sale, and could simply bridge a loan to their child to effect the same transaction by way of a purchase (transfer taxes and fees of course would need to be paid).

Thanks

Not taxable unless the child already has a PR. Then it is a tax event. – Garth

#104 Mark on 03.18.18 at 10:21 pm

What nonsense! Canadian RE will do just fine in the long run. In 10 years, time all Canadian RE will be worth a lot more than it is today.

Why will it be worth more in 10 years? Would you have said the same thing in 1990, when RE prices didn’t actually grow over the decade?

And even then, if RE stagnates or even minorly goes up over the next 10 years, what will the stock market do? Given that the stock market is priced at least 3X cheaper than Canadian RE if you work out the math on an equivalent after-tax P/E basis?

I always get a kick out of Realtors, hyping up Canadian RE based on, amongst other factors, immigration, low interest rates, expanding wealth and prosperity, etc., but then stubbornly refuse to admit that all of those factors should also eventually apply to the stock market.

#105 Gregor Samsa on 03.18.18 at 10:24 pm

#70 Ron
>Don’t forget about the soaring inflation in the sexual market place as well.

This is a very interesting phenomenon, but also very true. Modern women are increasingly going after men based on their looks – the tall (over 6 feet), handsome, and athletic man who looks like a model is in extremely high demand. Of course he has to have a good job too. Women are all seeking the top and not settling, because they no longer have to. The rise of apps like Tinder is the result of this, and I can say from first hand experience that the vast majority of single women are on Tinder (I would guess over 80%). And the rest are using Instagram, Facebook, online dating, or some other platform for a similar form of validation.

I’m starting to see lots of white men with foreign/immigrant wives and girlfriends, but absolutely not the opposite. Interesting times…

#106 Andrew Woburn on 03.18.18 at 10:25 pm

Big Kahuna on 03.18.18 at 6:03 pm
#21Andrew-I wouldn’t buy everything the MSM tells you on this one-here are the latest 2020 POTUS odds-the longest odds on Trump are 1.9 to 1, the next favorites are at least 16 to 1-at this point the guy is a HEAVY favorite to be re-elected
=====================

I hear you and there are informed commentators who would agree, not all of whom are Republicans.

However the chaos train is accelerating. Trump is firing the adults and has just parachuted a Fox News cutie into a very senior position at the State Department. He is building a cabinet of TV talking heads who will exercise no restraint. If John Kelly goes, things get really interesting.

The Democrats have yet to put a viable player on the board. It won’t be Bernie, Biden, Oprah or Warren so the current odds are unrealistic.

The real danger to Trump’s return is in being primaried out by an adult Republican who has the confidence of Wall Street and the oligarchs. After the Donald has cost them a lot of money with his tariffs, they will not be pleased.

#107 Interstellar Old Yeller on 03.18.18 at 10:29 pm

#65 Flat Earth Society on 03.18.18 at 8:22 pm

It remains to be seen what my children will be like (both still in diapers) but I’m planning to err on the side of equal monetary gifts (if we give any at all!) just to avoid all the headaches of not doing so.

I already tell them DH is my favourite. :)

#108 millmech on 03.18.18 at 10:32 pm

#77 Ben
I suppose if a boomer discounted a house to you by the 500k profit, that you would in all your kindness pay that favour forward and do the same thing for the next purchaser of said house when time came to sell it. Probably not, you would most likely take the buyers to the cleaners so to speak if you could and then gloat about your financial acumen in making the best financial purchase of a lifetime.
Me, I rent and invest and would not touch housing with a ten foot pole at these valuations, only a greater fool buys at these prices and let them. No one has forced anyone to buy at these prices, totally self inflicted financial wounds, common sense is a super power it seems because so few people have it. Caveat Emptor should be the saying for real estate now.

#109 MF on 03.18.18 at 10:34 pm

#3 Leo Trollstoy on 03.18.18 at 3:04 pm
Yup thats a millenial for ya

Ungrateful

Lol

-Cause other generations like the boomers never screwed over their parents?

Delusional.

Lol.

MF

#110 Fake News Again on 03.18.18 at 10:39 pm

Andrew Woburn on 03.18.18 at 4:15 pm
Kevin on 03.17.18 at 3:27 pm
Thank you, Ryan. I agree.

Regarding the US, at what point does the political nonsense going on impact the economy and stock market? Any insights on this?
===================

I would pick Nov 7 as the likely pivot point, the day after the US midterm congressional elections although the rapid downward spiral could trigger an earlier reaction.

It is now extremely hard to predict US voting patterns, and the Democrats are perfectly capable of blowing it, but the trends suggest a highly energized turnout of younger Democrats and horrified independents will deliver enough House seats to take control from the GOP. If so, the incoming members will probably trend more progressive. I expect this will frighten US investors for many reasons.

The major battleground will be the suburbs.

To me the big issue is the response of Republican women who are almost all white.

It is hard to imagine they like or respect the Donald but they voted for him in 2016. My suspicion is that they have been trained from birth to fear black men and saw Trump as a revolting but necessary defender of white virtue (who would, of course, become presidential in office). Now the question is how many can overcome their gag reflex to actually show up at the polls.

__________

Clearly you have ZERO IDEA why President Trump won……

#111 MF on 03.18.18 at 10:50 pm

The situation described in today’s post can also be seen as an example of bad parenting more than anything else?

Don’t parents pass down family values anymore?

Anyways,

Here in Toronto, all my friends who gladly used the help from BoM made a killing on Toronto RE, leveraged their gains, and are now on their third or fourth house.

Everyone else, who did the “right” thing, didn’t go into debt, rejected the help from BoM, and rented, is comparatively behind.

Honestly, when my parents offered me a loan in 2012 for a GTA condo I declined. I should have taken it.

MF

#112 MF on 03.18.18 at 10:55 pm

#89 Wrk.dover on 03.18.18 at 9:17 pm

B.b.b.b.b.but Brexit was SO bad.

How can the pound be up?

Did someone lie to me?

MF

#113 salted on 03.18.18 at 10:59 pm

#82 IHCTD9

But I enjoy my effortless virtual ego validation.. It props up my inflated sense of self-worth nicely and solicits romping weekend dates with Socal high-ballers, first-class flights included. Why marry ’em when you can date ’em? Revel in all that delicious alpha-male pleasure with none of the laundry, step-kids et al. And I’m happy to share.. it keeps him keen.

Surely you must be kin to Freedom First; perhaps the wittier twin?

#114 MF on 03.18.18 at 10:59 pm

#82 IHCTD9 on 03.18.18 at 9:01 pm

“This is largely an urban phenomenon.

All a Man has to do to undercut this trend is live well, and bide his time. No rush at all for Men. Not so for Women.”

-Men and women are exactly the same didn’t you know?

Shh IH

Keep this little secret on the down low. Women do not like to hear it (reality and biology)…even though they all are well aware of this biological fact.

MF

#115 PastThePeak on 03.18.18 at 11:02 pm

#28 Niagara Region on 03.18.18 at 4:53 pm
#94 Ret on 03.18.18 at 9:47 pm
Lots of Liberal trolls out tonight doing a revisionist history of Mike Harris. Seriously, Mike Harris? Is that all you’ve got to scare us about Doug Ford? Perhaps you can explain why McGuinty and Wynne didn’t make it all better in 15 years.
+++++++++++++++++++++++++++++++++++

Actually, Mike Harris hasn’t been Premier for 16 years. A few facts for our knowledge challenged Mills and Liberals.
– Harris followed the horrendous Bob Rae NDP govt, which left the province in such bad shape that even all of the civil servants and unions hated him (re: Rae days for you kiddies)
– In the mid-to-late 90s, all provinces had to deal with the cost downloading from the federal gov’t. That’s right little Mill children – the Canadian debt crisis from the 90s wasn’t just fixed by Chretien and Martin waving their Liberal magic wand – much of the burden was on the provinces with costs downloaded from feds.
– Harris did indeed cut taxes and balance the budget during that time.
– No one (sane) would claim that Harris was perfect, but he provided leadership to Ontario during some tough (provincial) times, had a vision, and delivered on it. The PCs have never had any real leadership since.
– Believe it or not, when times are not good, sometimes services have to be cut. A lesson about to be repeated.

But sure, Harris is the problem with Ontario today.

#116 PastThePeak on 03.18.18 at 11:06 pm

#77 ben on 03.18.18 at 8:53 pm
Bad for a kid to take 500k off his parents, but fine for many boomers to get 500k gainz for zero work, which are paid for by the next generation?

Not sure that balances on my moral scale!
++++++++++++++++++++++++++++

Are you delusional?

#117 MF on 03.18.18 at 11:11 pm

#70 Ron on 03.18.18 at 8:34 pm

“Don’t forget about the soaring inflation in the sexual market place as well. In the old days, a man with a good job who took reasonable care of himself would not have had much trouble pairing up with a woman of equal or lesser attractiveness/status (assortative mating).”

-Patently untrue, but a massive misconception.

Let me explain:

What we have now is actually sexual deflation. Third wave feminism has told women that they are the same as men, and can act as such.

Women now don’t value traditional masculine traits such as integrity, strength, ambition, and drive.

As a result, you will see tons of attractive girls with low quality men: drug addicts, low earners, fat, out of shape, no social skills etc. Bonus points for trashy tattoos.

The average guy today should actually strive to be more of a screw up to be successful for women, especially younger ones.

MF

#118 PastThePeak on 03.18.18 at 11:13 pm

#98 ben on 03.18.18 at 9:51 pm
Gbp/cad wasn’t my point. Both are screwed thanks to people like Carney, who ramp real-estate for the quick “win”.
+++++++++++++++++++++++++++++++++++

While it is true that BoC governors bear some (not insignificant) responsibility for the RE bubbles, it is the same as in the US. It is due to their focus being entirely on inflation (or in US case also growth), and completely ignoring the effect of low interest rates on asset prices. It is quite myopic, when it seems many others can see it.

However, there is no evidence that they deliberately did so to “pump” RE prices to screw you over. If you truly think so, they you are not nearly as smart as you think.

#119 salted on 03.18.18 at 11:14 pm

DELETED

#120 PastThePeak on 03.18.18 at 11:24 pm

#24 Fuzzy Camel on 03.18.18 at 4:32 pm
Canadians are broke, the economy just hasn’t caught up to that fact yet.

People are borrowing against their houses for basic house maintenance. It’s insane how broke most people are. Furnace breaks, borrow against equity to pay for it. Car breaks, same deal. New windows, same.
++++++++++++++++++++++++++++++++

And all during a time (last couple of years) which had the official best GDP growth for Canada since 2008/9. So during the best economic times in last decade, personal debt continues to escalate, many people can’t afford $200 increase in costs, and all levels of government are in deficit???!!!!

In response to this, the gov’ts at the fed level and in many provinces are focused on diversity/inclusion & climate virtue signaling, wealth redistribution, and class warfare.

The next recession isn’t too far away (likely less than 2 years, given US policies, interest rates, and local factors). It will have a YUGE (yep, that’s right) impact on Canada – far more than US or Europe – given the extremely high consumer debt & gov’t policies which inhibit investment.

Canada is looking at a lost decade.

#121 millmech on 03.18.18 at 11:27 pm

My realtor in the Okanagan has sent me a whack of listings for houses under 400k, now includes houses from Kelowna. Her advice is to hold off as the new taxes take effect, she believes that prices could come down over 40%, being that there is over 1000 places for sale in Kelowna right now. That number could easily double by the number of inquiries she is getting from concerned out of province owners who may try to unload in the near future.
She also said if the projects that are stalled do not carry on will also cause more units to come up for sale as the tradesmen start to bail on their own homes before the SHTF.

#122 Our pal val on 03.18.18 at 11:27 pm

Here’s the solution let the Federal Reserve jump a half a percent on the next move that will fix everybody’s ass ,correct Garth???

#123 SoggyShorts on 03.18.18 at 11:29 pm

#77 ben on 03.18.18 at 8:53 pm
Bad for a kid to take 500k off his parents, but fine for many boomers to get 500k gainz for zero work, which are paid for by the next generation?

Not sure that balances on my moral scale!
*******************************
First of all, unless those boomers sell their home, these “gainz” aren’t real, but a loan is instantly real.
Secondly, did those boomers also get a massive loan from their parents? Hint: most did not.

The business I started got in a bit of a pinch early on and I had to borrow a grand from my boomer parents, and it was all I thought about until I could pay it off.
I can’t imagine burdening them with a half million dollar heloc, or depriving them of 500K that they could be investing towards their retirement.

You’ve lost any right you may have had to be offended when people call yours the entitlement generation.

M38AB

#124 PastThePeak on 03.18.18 at 11:35 pm

#45 Niagara Region on 03.18.18 at 6:20 pm
RE: THE UNIVERSITY TUITION ISSUE

#23 Debtslaver
#35 Andrew Woburn

While Debtslaver may have a tendency toward hyperbole, he does have a point about the dramatic spike in tuition fees. According to the Huff Post and numerous (perhaps better respected) sources, university tuition in Canada has roughly tripled over the past 20 years (adjusted for inflation):
http://www.huffingtonpost.ca/2015/09/09/ccpa-canadian-tuition-fees-increase_n_8112118.html
….
The result is that many (especially working-class and lower-middle-class) students are saddled with heavy debtloads when they graduate from university.
++++++++++++++++++++++++++++

So in Ontario, our very socialist and progressive premier has enacted policies so that any resident of Ontario who’s parents make less than $50K (combined) can attend an Ontario university for no charge tuition. The amount to pay is the indexed above that.

All she had to do was eliminate the tax deduction for tuition – meaning that anyone who saved for their child’s education was further shafted.

#125 Steve on 03.18.18 at 11:44 pm

In the interests of fairness…my 19 year old has left home. He’s an apprentice mechanic. We had to convince our 17 year old to finish his college course for mechanics before he leaves home. His peers are still languishing in high school. They are both ferociously independent. So those are the millennials my wife and I raised. They both started working at the local mill at 12 and 10 years old cleaning machinery. Other wise they had a pair of shovels and wheel barrow. They did snow and rubbish removal for years. My boys have gnarled calluses on their hands, they repair their own vehicles like a 1964 fury and a 1965 f100 high boy. Both daily drivers. They listen to Hank Snow, Jerry Reed, and Patsy Cline. The 17 year old baby boy has size fifteen feet and hands the size of my back. You call that kid a lazy millennial and he’s quite capable of dislocating your shoulders. I weigh 240 lbs and he can pick me up and throw me like a baby in the air sixteen times or more. I raised those boys to be MEN. And that’s what they are becoming. Real men. They’re mannerly, work like animals, and pray to God every night like we taught them. If parents today want to raise up decent people, they definitely can. If you let the world raise your kids for you, you’ll get what you get.

#126 Linda on 03.18.18 at 11:55 pm

#88 ‘Dam’ – you raise an interesting point about finding & keeping a doctor. Lots of folks talk about moving to another locale upon retirement, but what one rarely hears about is whether those folks will have access to a doctor. I know people who fly back into town just to see their GP, dentist etc. as they have not been able to secure services where they moved to. Small town living has its charms, but may be lacking in medical services. For those whose health isn’t what it used to be, that can make a real difference to quality (& length!) of life.

#127 salted on 03.18.18 at 11:56 pm

It’s not validation we want, Boys. It’s power and it’s nice to have.

C’mon Garth.. that was tame (no libel, slander etc) compared to the usual we endure here. And it’s true.. it’s a social observation as a function of finance. In dating, powerful men enjoy the luxury of pain and their counterpart brethren, the skint basement-dwelling divorceers are blander than paste.

You’ll allow broad sweeping statements like, “Women are biological ticking time bombs who crave male validation, and mediocre [white] men can only get immigrants now,” but a sweet hot little whipping strikes censorship.

We get a voice.. and then it’s silenced.. Don’t be that guy Garth. It doesn’t look good on you.

xo

#128 Bob Dog on 03.19.18 at 12:28 am

Let’s just forget about asset madness for a minute. The universe may indeed be a multiverse. Just chill for a bit and enjoy some MC Hawking

https://youtu.be/qvOEFr03ea8

#129 The International on 03.19.18 at 12:36 am

Ok
No more movie recommendationa from Ryan anyore.
After 11m of The International: unbelievably bad.

#130 Ron on 03.19.18 at 12:46 am

#117 MF on 03.18.18 at 11:11 pm
#70 Ron on 03.18.18 at 8:34 pm

What we have now is actually sexual deflation.

—————

If sex has gotten so cheap then every dumb schmuck would be rolling in it, but that’s not the case.

What you seem to be saying is that sex has been re-denominated into a new currency. One that some men are born with a surplus of, and other men don’t even understand how to get a hold of.

Yet another category of men are still accumulating the old currency, which they may realize is rapidly depreciating, but hope that if they get enough of, they can then exchange for a bit of the new one.

#131 Oft deleted much maligned stock.picker on 03.19.18 at 12:46 am

Children are sponges, they suck up all the nformation you spew out at dinner, the drunken BBQ, the month end screaming match at bill time, the socialist CBC that bawls all week long at breakfast. Parents who whine and moan about “fairness ” and capitalist envy end up with kids who are exactly the same….whiny, envious, greedy, unmotivated, leftist, nut job freaks voting for the likes of Trudeau and Wynne because they’re wanting free stuff from government ( even while taxed go up to support such assine behaviour) and with the freebies they go out and lease another care they think makes them look more important.

I was always self employed…never whined….had an office not a lunch box….showd my kids the way to prosperity was had work and a continued academic path. I created an environment vthat showed the kids what success looked like……never had CBC droning in the background….never got drunk and complained that anything was the fault of capitalism .

My kids kids moved out to attend university….and we’re entrepreneurial all through school. They had their own place and a budding career before the graduated….zero student debt. Bottom line….show your kids how to win and they’ll be winners…..show your kids what a loser you are and they’ll end up just like you…..lying on their backs howling about life being so unfair.

Although my son isn’t a financial professional he trades his acct profitably….pays no fees ….and follows Seeking alpha instead of CBC……and gets a way better return than a balanced portfolio offers. And…..is laughing at his friends who bought real estate and lose equity everyday while his stocks pay dividends monthly, quarterly, semi annually and annually.

So….if you’ve got babies in the house make yourself a good self and remember that your bad examples are their future. Teach them to understand that voting Trudeau is like smearing used TP on your face.

#132 frinjourtd on 03.19.18 at 12:53 am

#12 Jason Sensation on 03.18.18 at 3:28 pm

One thing that is common in South Asian families is that sons and daughters will live with mom and dad and usually grandparents too, until they get married and often after. They will then care for the parents and they get free childcare from mom, dad, and grandparents. In return, the parents never go off to a nursing home and often 1 or 2 or even 3 brothers will stay close by even if they buy their own home. The household runs off a mix of income (often 4 incomes and 2 pensions). Perhaps this is the way of the future?”

I think T2 is a couple of steps ahead of you with his recent cultural dress up foray to South Asia. Canadians will soon be in costume like up like him, which is kind of cool. Think a cross between Austin Powers and the Love Guru. Groovy baby, yeah!

#133 Mark on 03.19.18 at 12:58 am

“While it is true that BoC governors bear some (not insignificant) responsibility for the RE bubbles, it is the same as in the US. It is due to their focus being entirely on inflation (or in US case also growth), “

I’d suggest that house pumping policies of government have been far more influential than low interest rates. Low interest rates have been a rational policy response to a very slow economy which has left large numbers of people unemployed or underemployed, even highly skilled workers.

Ordinarily the cheaper credit would permeate throughout the economy and inflate all asset classes. But due to housing-pumping policy, such as Freddie Mac/Fannie Mae, and in Canada, the CMHC’s subprime mortgage insurance program, a lot of the new credit enabled by low rates went directly to housing.

Now, some investment in housing is perfectly rational as incomes and prosperity rises in Canada. But there’s no good reason why investment returns were mostly confined to housing. Owners of Canada’s large publicly traded businesses have received historically unusually minimal returns over the past decade. The labour market ex-FIRE has performed terribly with very large numbers of talented Canadians unable to find meaningful and quality employment in the private sector. The excess capital misallocation to housing has clearly been at the significant expense of those not involved with housing. The snapback to such artificial government intervention is likely to be quite vicious including a re-vesting of proper and more historically usual returns to those who participate in the economy outside of the RE correlated sectors.

#134 frinjourtd on 03.19.18 at 1:00 am

#17 Cici on 03.18.18 at 3:46 pm

Taras is a leach and should feed off the scum of the Earth instead of screwing over his own mother”

Those names sound Greek, many of which Melbourne is the proud home to. I fear Taras may have a few clay plates broken on his head by Mom as she dances with a table between her teeth between downing shots of Ouzo. As Telly Savalas would say, hooopppppaaaaa, who loves ya baby?

#135 frinjourtd on 03.19.18 at 1:03 am

#19 DON on 03.18.18 at 4:12 pm
Had a friend, mature, good grades and he golfed…no admission for him. Did I mention he already new how to play golf??”

What was his handicap….maybe didn’t make the grade. He should add mixed curling to the resume to score the feminine administrators sympathy vote.

#136 frinjourtd on 03.19.18 at 1:07 am

#36 Lost…but not leased on 03.18.18 at 5:56 pm

True Story: “You CAN go home again”

Friend of ours in Metro Vancouver did a “Joint Venture” home..

They built a new home partnering with parents and 2 siblings. NOTE: They tore down the old family home… a rancher, ie already owned the lot.

This was all done with permits.”

Were those gun permits??? Sounds like a WW3 scenario just waiting to happen!

#137 Big Kahuna on 03.19.18 at 1:14 am

#106Andrew-Trump is already talking about phase 2 of tax cuts-if the guy wins in 2020 you can bet your bottom dollar the corporate rate will get slashed even further-Jamie Dimon hasn’t learned to hate Trump yet-I think Wall Street is smart enough to realize they are lucky to have Trump-they just have to accept his goal is to grow the USA economy, not gut it like Obozo did.

#138 Big Kahuna on 03.19.18 at 1:17 am

#117-unless the governments move fast to stop the advances in robotics this entire discussion will be moot-the ingenuity of man is bringing competition to the game.

#139 OnlyTheBankersLaugh on 03.19.18 at 1:18 am

Garth said: ”Bank of Mom just makes things worse. Ironically, however, a recent bank poll found almost 80% of parents are willing to do exactly that – which might show how desperate many of them are to get the squirts gone.”

Does a bank poll not seem just a little biased in this age of rampant sales”humankind”ship at banks? They just want to keep lending. But, it only perpetuates this growing debt disaster and reliance on a real estate economy paying 4-8x really good USA cities prices. What is wrong with us collectively? Entrepreneurs cannot get anywhere but house flippers are given every opportunity. Nuts!

#140 Rupinder D on 03.19.18 at 1:25 am

My cultural friends and families have no problem paying our homes off because we pool our finances and have upwards of 6 incomes going towards paying off the home.

Once it is paid off, another one is purchased or built.

My Caucasian friends can’t seem to understand this process and they pay allot of interest needlessly to the bank.

#141 Spock on 03.19.18 at 1:39 am

If you do not want to dispose off the security and buy it again you will transfer in kind into the registered account.

Be careful of transfers in kind. You have to pay tax on the gain when you transfer from non registered to registered account (taxable deemed disposition) but you CANNOT claim the loss when you transfer in kind securities (which are in loss) from non registered into registered account.

CRA makes the rules and most times they are not in your best interest.

——————————–

#59 akashic record on 03.18.18 at 7:46 pm
#40 Spock on 03.18.18 at 6:05 pm

Taxable event. Considered as a deemed disposition.

—-

What’s the point of doing it then?

#142 Smoking Man on 03.19.18 at 2:05 am

Drinking and sharing is so under rated these days.

I’m pretty sure the Smoking Man and Gartho bomance is over.

Nice work Oakville Sucks. James and those other Brown shirts.
You win.

Venezuela, memorize your future.

#143 Cdn Mom on 03.19.18 at 2:19 am

#95 Tom from Mississauga on 03.18.18 at 9:47 pm
Hey Garth
Funny thing on filling in my taxes this year. They asked me on Turbotax to put the address I rented and name of my landlord. Looks like they’re going after junior landlords this year.
…………………..

Hey Tom,

New to doing your income tax return? That landlord information has been requested on tax forms in Ontario since at least the mid 80s, to determine Ontario tax credits. It’s the same spot homeowners claim their property taxes paid (and municipality the tax is paid to).

Any Ontario tenant that hasn’t completed that section in the last 30+ years either lost out on a tax credit, or knew they made too much money to get the credit. I’ve always thought that information was more so Ontario knew where to expect to see rental income reported, and less to provide a tax credit. Unlike BC, where it sounds as though there is no provincial way to find that rental income.

#144 Smoking Man on 03.19.18 at 2:23 am

Prediction.

Trump goes after 911 insiders. Muller cut your losses and flee.

#145 Smoking Man on 03.19.18 at 2:44 am

https://m.youtube.com/watch?v=qpmpzXPymos

SCM dont kill me.

#146 jane24 on 03.19.18 at 3:13 am

Well after years of dissing parents who gift their kids down payments we are now in this position. Shoe massively on other foot. Kid one is far wealthier than us so no worries there, kid two has left the country and is building a warm, happy and cheap life in Asia. Kid three is the problem. All their money goes on rent which in our area is more expensive than owning so we may as well help them along with a starter home. We can afford it. Note that in Britain the house occupier pays the property tax, owner or tenant, it is whoever is gaining from the local services.

Although the other two won’t squawk we are calling it a loan for family peace but we don’t want the funds back. We do childcare two days a week for this family so need them close for our own convenience. So a 1000 apologies to everyone that I criticized in the past on this matter. Sometimes one just has to suck it up.

Mark Carney the esteemed (?) Governor of the Bank of England has till June 2019 on his contract which won’t be renewed so Canada you can get him back. Put in a bid.

#147 Al on 03.19.18 at 3:14 am

“This is hilarious – you were being sarcastic, right? Millenials can’t imagine the sheer joy you must have felt owing only one year of salary on your loan…”

University tuition is 8-13k a year in Ottawa. So 32-52k in four years. Minimum wage is 30k. If you paid 52k for your education I hope youre making more then minimum after graduation. 4 months in the summer to work (10k working full time minimum wage), 40k over four years. Pick up some shifts during the school year to cover your day to day expenses. Wheres the hardship to avoid high debts, or even all debts during school ? College is even cheaper.

Oh yeah, if youre low income, you get huge grants, in some cases tuition is free. One third of full time college and university students get free tuition in Ontario https://www.thestar.com/news/queenspark/2017/09/11/one-third-of-ontario-college-and-university-students-receive-free-tuition.html.

Wish I was a student today…

#148 Dolce Vita on 03.19.18 at 4:19 am

Still not as bad economically for Cdns. as many post here (including myself).

Scott Terrio a Consumer Insolvency guy gaining some MSM notoriety as of late (and of course pumping his new employer) says so far in 2018 and in recent years, if anything Homeowner Bankruptcies have been going down (his new employers uses an index to show this) and that most insolvencies are from bottom quartile wage earners with high unsecured debt (imagine that).

Homeowner Bankruptcy Index

https://www.hoyes.com/press/homeowner-bankruptcy-index/

The Bankrupt or Consumer Proposal Profile (scroll to the bottom of the page for the profile):

https://www.hoyes.com/press/joe-debtor/

However and RECENTLY, in the first 3 months of 2018, they are starting to see more people denied for debt consolidation due to the new B20 mortgage rules.

What “more people” is relative to prior years, they do not say (listening to their Podcast, it sounds like a trickle more to me):

https://www.hoyes.com/blog/3-types-of-bankruptcies-we-expect-in-2018/

My take. We are not there yet when it comes to the full effect of B20 on RE prices and peoples finances from RE equity.

We will know after March 1 the full effect of B20 on the RE market (after your typical 120 day late 2017 pre-approved mortgage expires).

They also report few reports of where banks reassessed the RE value of HELOC holders.

Mixed bag. Canadians not so broke as many would think, including me.

Wait and see post March 1, coincident with the peak sales season of RE.

#149 Shane Simmons on 03.19.18 at 4:27 am

Poloz is a currency manipulator. Can’t wait for the big man down south to point this out. Probably will happen in the next few months as Poloz keeps rates artificially low to try and protect the massively indebted house losers.

#150 Dolce Vita on 03.19.18 at 4:40 am

#104 Mark

I agree, rare, but you are correct from my point of view.

Unfortunately, after reading the Blog today, the BoM does not think so, up, up, up, their RE Adeste Fideles rallying cry to Junior.

I still believe RE prices are headed South in 2018 and all these self congratulatory genius multi-property Millennial investors and their equally genius parents “gifting” them money to do so will be stuck with diminished asset values when the correction occurs.

A correction, at least, seems destined to happen thanks to B20 and an aggressive Big G trying to make housing affordable by fattening their tax vaults, purloined from the foreign, domestic and ET (and yes Garth, also purloined from you, your Clients and co-workers, save perhaps the new apprentice your hired, a.k.a., the “rich”).

Let alone the effect on RE prices of the much anticipated interest rate hikes of 2018, yet to materialize, but likely to occur (after all, the BoC does have an inflation target to maintain).

When the correction hits the low end RE market as it has SFH prices, people will retrench consumer spending. 60% of the Cdn. economy is just that.

Worse yet, if they try to sell their properties to get out of underwater mortgages, it does not take a high percentage of sales to lower RE market values (witness the US 2007/2008 RE debacle, max. 15% sub prime loans).

And the hurt, historically, lasts from 7 to 10 years as you correctly point out.

I will add, the first 2 years represent the bulk of the RE price drop and milder RE price drops after that (you need only look at 2017 RE price drops in Toronto as evidence of the speed RE prices can drop in a short period of time, no soft landing there).

#151 Howard on 03.19.18 at 5:33 am

First Poloz wades into social policy, telling us that taxpayers should publicly fund the raising of everyone’s children.

Now another ostensibly neutral public servant blurts out more Liberal propaganda : giving children the right to vote.

http://www.cbc.ca/news/politics/chief-electoral-officer-voting-age-16-1.4579051?cmp=rss

Elections chief says lowering voting age to 16 is an idea ‘worth considering’

#152 under the radar on 03.19.18 at 5:39 am

I advise every parent who wants to help their kids with a sum of money towards a property to hold a mortgage on the property. I also insist the mortgage contains payment provisions , such as payments of principal or interest and that the parent collects that money. (payments can be nominal) The point is to prevent a divorcing spouse from claiming the loan was a gift. If structured properly , courts will not interfere with a mortgage registered on title where money passes and payments are made and of course, you can enforce the mortgage if your offspring goes crazy or winds up broke. if a spouse or fiance is involved at
the time the loan is being made they get separate legal advice. By the way, any lawyer who knows that a parent is going to lend their kids money or, anyone else for that matter , who does not recommend a mortgage as security is negligent.

#153 Howard on 03.19.18 at 5:56 am

#70 Ron on 03.18.18 at 8:34 pm

#23 Debtslavecreator on 03.18.18 at 4:30 pm
Many younger people are resentful due to the easy debt fuelled wealth the boomers accumulated
Boomers paid nothing for their educations , houses and stocks

————————————————–

Don’t forget about the soaring inflation in the sexual market place as well. In the old days, a man with a good job who took reasonable care of himself would not have had much trouble pairing up with a woman of equal or lesser attractiveness/status (assortative mating). Today, women can receive effortless ego validation through social media (akin to cheap credit in the financial markets) which inflates their self-perception of value. As a result, most women now hold out for only the highest status men, even if they have to share him with other women.

The cafeteria lady at my office remarked to me recently that most men order healthy meals while women order junk food. I explained that men have to work twice as hard to attract a woman of roughly equal status/attractiveness.

Oh and don’t forget disappearing corporate pensions either.

—————————————–

A friend of mine from graduate school once confided in me that she would never consider dating a man who earns less than she does. She’s a very smart, very accomplished woman who earns over $100K/year (by my estimation). Very attractive too, so she had her pick. She got married recently, to a well-off man 15 years her senior.

With Canadian women under 40 now out-earning men under 40, some may wish to drop the princess complex if they seek a

#154 Howard on 03.19.18 at 5:59 am

#122 Howard on 03.19.18 at 5:56 am

Sorry, hit Enter by mistake.

Last line, “….seek a longterm relationship”.

#155 Gravy Train on 03.19.18 at 6:08 am

Recent Tweets
“When the full extent of your venality, moral turpitude, and political corruption becomes known, you [Donald Trump] will take your rightful place as a disgraced demagogue in the dustbin of history. You may scapegoat Andy McCabe, but you will not destroy America…. America will triumph over you.”
— Former CIA Director John O. Brennan

“We will not be responding to each childish, defamatory, disgusting & false tweet by the President. The whole truth will come out in due course. But the tweets confirm that he has corrupted the entire process that led to Mr. McCabe’s termination and has rendered it illegitimate.”
— Former FBI Deputy Director Andrew McCabe’s lawyer Michael R. Bromwich

Recent Quote
“As I said before, if [Trump] tried to [fire special counsel Robert Mueller], that would be the beginning of the end of his presidency … I pledge to the American people, as a Republican, to make sure that Mr. Mueller can continue to do his job without any interference.”
— Republican Senator Lindsey Graham

#156 theoryAndPractice on 03.19.18 at 7:26 am

#48 Michael Brnadic on 03.18.18 at 6:51 pm
“Garth Do you follow SEDI insider sales? Do you know where the summarized version could be found?”
——————————————————-
It is a coincidence I was looking at insider trading yesterday, for US :

Here is very tidy output to the point , put the trade symbol and see it nicely formatted output since 2005.

https://www.insider-monitor.com/search.html

Example output for AMZN dated back from 2005 to 2018
https://www.insider-monitor.com/trading/cik1018724.html

for Canadian ,
http://www.sedi.ca but the website is a * JOKE *. it is designed for information * NOT * to be found !

last 6 months try this one for example BMO;
https://www.canadianinsider.com/node/7?menu_tickersearch=bmo

#157 Wrk.dover on 03.19.18 at 7:40 am

#112 MF on 03.18.18 at 10:55 pm
#89 Wrk.dover on 03.18.18 at 9:17 pm

B.b.b.b.b.but Brexit was SO bad.

How can the pound be up?

Did someone lie to me?

MF

———————–

Fake news agenda lied to all of us

I hope you don’t believe the drivel you write. That would be disappointing. – Garth

#158 Howard on 03.19.18 at 8:00 am

#147 Al on 03.19.18 at 3:14 am

Youth unemployment rate in Ontario is on the order of 16-17%. Boomers were able to walk into any gas station or convenient store down the street, be hired instantly, and make decent coin. And how many of them had even heard of unpaid internships in their day?

I agree though that student debt isn’t really that big of a deal in Canada, certainly not at the undergrad level. Medical, law, or business school fees have soared, but then those graduates have high earning potential provided T2 doesn’t steal it all.

#159 Down And Out on 03.19.18 at 8:28 am

http://windsorstar.com/news/local-news/windsor-area-experiences-10-per-cent-increase-in-financial-insolvencies First generation results of New math schooling

#160 crowdedelevatorfartz on 03.19.18 at 8:32 am

@#66 IHCTD9

“Is that all taxes?”
++++++

No no no no. Never call govt fees taxes!
Transit Levy, Carbon levy, on and on and on.
Probably 30% to 40% of the extra charges.

@#88 Damfino

Treatment AFTER you have been diagnosed is still “free”.
The trouble is finding a doctor to give you the diagnosis.
Seems like most new doctors are opting to work in clinics these days. Better hours, shared staff, no hospital visits to see patients.
The way of the future I suppose.

@#146 Jane24

Re Mark Carney.
Nah, you can keep him. He’s done enough damage here. You can also have Trudeau if you so desire. Put a little pizzazz in the British Parliamentary wardrobe dept.?

#161 Darryl on 03.19.18 at 9:03 am

#47 ImGonnaBeSick on 03.18.18 at 6:46 pm
#28 Niagara Region – there is nothing more frustrating that people bringing up Mike Harris like he’s some sort of evil mastermind. He hasn’t been premier for 15 years… When he was though, he increased government revenues by 25%, decreased the debt by $20billion, reduced welfare by 500,000 people, cut income taxes by 30%… And on and on. Whatever problems you think he created, you can thank the idiot Liberals for not fixing it over the 15 years these crooks have been in power. Hopefully that’s fixed June 7th.
—————————————————————
100 percent right on . My exact thoughts that I was to lazy to post.
Thanks Sicky

#162 dharma bum on 03.19.18 at 9:09 am

Keep this in mind:

Handing money over to your kids is a one way street.

There is no such thing as a “loan”.

OK, so mom sues her prick son and gets back $300 grand.

Great. I’m sure she has a wonderful family relationship now, and is really happy. Yah, right.

Once you give your kids money, loan or gift, forget about it.

#163 Tater on 03.19.18 at 9:20 am

#35 Andrew Woburn on 03.18.18 at 5:42 pm
Debtslavecreator on 03.18.18 at 4:30 pm
Boomers paid nothing for their educations , houses and stocks.
=====================

Apparently the highly educated young don’t grasp the effect of inflation over time. The “nothing” I paid for my education took ten years to pay off. My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.
—————————————————————–

Perhaps you should look up the growth rate of tuition cost vs income growth over the last 30 years before you lecture others on not understanding inflation.

#164 sistah sludge on 03.19.18 at 9:30 am

#84 Mark on 03.18.18 at 9:05 pm

Of course there is. Its held by individuals as investments in their portfolios. Its held by national governments which are conspiracies of large numbers of individuals on behalf of a geographic area. Its held by pension plans and insurance funds which are in turn trustees for the investments of individuals. US Treasury debt was bought in trust by Social Security in trust for hundreds of millions of US citizens who save using the Social Security schema. Etc.

Every cent borrowed, is also an asset on someone’s balance sheet somewhere. That’s why its called a balance sheet, it has to balance. In order for a loan to be made, someone has to, by definition, somewhere, make an investment. With savings. ”

Slow down Mark,…there are lots of hidden accounts where losses are transferred to, so that the balance sheet stays “balanced”. Just ask Nick leeson the rogue trader guy from singapore

#165 Howard on 03.19.18 at 9:31 am

T2 at 56% disapproval.
CPC up 10 points over Libs among decided voters.

Source : Angus Reid

http://angusreid.org/federal-issues-march2018/

I really wish the election weren’t 18 months away. These numbers can easily flip before then.

#166 sistah sludge on 03.19.18 at 9:34 am

#84 Mark on 03.18.18 at 9:05 pm

Yeah, definitely look towards an exit of that arrangement, and buy a balanced portfolio. 6-8% annually on that principal sum and avoided operating costs and depreciation probably could get you a month or two a year one of the nicest hotels in Victoria. Or practically anywhere else in the world you desire. A no-brainer, IMHO.”

Not picking on you bro’, but who in their right mind would want to spend 1 or 2 months (or even days) in a hotel in Victoria…..what would they do when they leave the rooms. Surely, Paris, London, Tokyo, Bangkok, or at least a thousand other world class cities would be better

#167 sistah sludge on 03.19.18 at 9:40 am

#125 Steve on 03.18.18 at 11:44 pm

In the interests of fairness…my 19 year old has left home. He’s an apprentice mechanic. We had to convince our 17 year old to finish his college course for mechanics before he leaves home. His peers are still languishing in high school. They are both ferociously independent. So those are the millennials my wife and I raised. They both started working at the local mill at 12 and 10 years old cleaning machinery. Other wise they had a pair of shovels and wheel barrow. They did snow and rubbish removal for years. My boys have gnarled calluses on their hands, they repair their own vehicles like a 1964 fury and a 1965 f100 high boy. Both daily drivers. They listen to Hank Snow, Jerry Reed, and Patsy Cline. ”

Sounds like they need a bit of ACDC!

#168 IHCTD9 on 03.19.18 at 9:48 am

#153 Howard on 03.19.18 at 5:56 am

A friend of mine from graduate school once confided in me that she would never consider dating a man who earns less than she does. She’s a very smart, very accomplished woman who earns over $100K/year (by my estimation). Very attractive too, so she had her pick. She got married recently, to a well-off man 15 years her senior.

With Canadian women under 40 now out-earning men under 40, some may wish to drop the princess complex if they seek a seek a long term relationship.
______________

It’s 100% guaranteed that there are not NEARLY enough wealthy, accomplished Western Males to satisfy the demand by well educated Western Women – and the supply is getting smaller every year.

Sad to say it, but the current trend will likely continue: Young, physically attractive Men and Women hooking up via various apps for “short term relationships” with no plans for a future, while Women at the top of the heap compete with each other for the ever dwindling supply of wealthy Western Men.

To throw gas on this second point – there also appears to be a trend developing that these top end Western Men who essentially have it all are less and less interested in settling down. Makes sense too. They’ve just got too much to lose. Hollywood is producing more and more Men like this.

I was at the Toronto Zoo yesterday, and I was paying attention to the young couples walking around. Many were interracial couples – the ultra vast majority of those consisting of a white Male with a non white female.

This I think, is the answer for Western Men. It’s been increasing for over a decade now. The ubiquitous WMAF being more contentious than ever. 15% of all marriages in the USA are now inter racial. The interracial couples out here in the hinterland are probably 3-4X higher per capita as the GTA again. Probably even higher.

It will be interesting to see how this all plays out in 20-30 years.

#169 IHCTD9 on 03.19.18 at 9:59 am

#125 Steve on 03.18.18 at 11:44 pm
In the interests of fairness…my 19 year old has left home. He’s an apprentice mechanic. We had to convince our 17 year old to finish his college course for mechanics before he leaves home. His peers are still languishing in high school. They are both ferociously independent. So those are the millennials my wife and I raised. They both started working at the local mill at 12 and 10 years old cleaning machinery. Other wise they had a pair of shovels and wheel barrow. They did snow and rubbish removal for years. My boys have gnarled calluses on their hands, they repair their own vehicles like a 1964 fury and a 1965 f100 high boy. Both daily drivers. They listen to Hank Snow, Jerry Reed, and Patsy Cline. The 17 year old baby boy has size fifteen feet and hands the size of my back. You call that kid a lazy millennial and he’s quite capable of dislocating your shoulders. I weigh 240 lbs and he can pick me up and throw me like a baby in the air sixteen times or more. I raised those boys to be MEN. And that’s what they are becoming. Real men. They’re mannerly, work like animals, and pray to God every night like we taught them. If parents today want to raise up decent people, they definitely can. If you let the world raise your kids for you, you’ll get what you get.
___________________

Excellent!

#170 ben on 03.19.18 at 10:03 am

> However, there is no evidence that they deliberately did so to “pump” RE prices to screw you over. If you truly think so, they you are not nearly as smart as you think.

Central banks are the government. They are “the goverbankment”. And it’s well understood by them that lowering rates hands money to boomers who decide who wins elections.

Here is the former UK chancellor speaking about providing loose credit (exactly the same as lowering rates):

https://www.newstatesman.com/politics/2013/10/osborne-reveals-true-aim-help-buy-inflate-house-prices

Here is what he said:

“Hopefully we will get a little housing boom and everyone will be happy as property values go up.”

They do it for votes. The circle of trust is (was):

* banks extract wages via usury
* politicians get to claim “growth” and get jobs after they leave office
* boomers get their cut via high asset prices

Now as someone noted boomers don’t understand that because the demographics are inverted they cannot all cash out and it will crash.

—–

Also sad to see yet another boomer anecdote. Yes you had a business and whatever. On average there has been a huge transfer of surplus value from young to old via high house prices. For decades. And they loved it.

And also great to see some more boomers who think the 1970s high interest rates were *a bad thing*. Christ on a bike. They inflated away your debts. Come on guys.

#171 Smoking Man on 03.19.18 at 10:09 am

You think?
https://m.youtube.com/watch?v=qpmpzXPymos

#172 IHCTD9 on 03.19.18 at 10:10 am

#113 salted on 03.18.18 at 10:59 pm

But I enjoy my effortless virtual ego validation.. It props up my inflated sense of self-worth nicely and solicits romping weekend dates with Socal high-ballers, first-class flights included. Why marry ’em when you can date ’em? Revel in all that delicious alpha-male pleasure with none of the laundry, step-kids et al. And I’m happy to share.. it keeps him keen.
______

Yuck!

#173 IHCTD9 on 03.19.18 at 10:27 am

#162 dharma bum on 03.19.18 at 9:09 am
Keep this in mind:

Handing money over to your kids is a one way street.

There is no such thing as a “loan”.

OK, so mom sues her prick son and gets back $300 grand.

Great. I’m sure she has a wonderful family relationship now, and is really happy. Yah, right.

Once you give your kids money, loan or gift, forget about it.
_______

It can be done: Gift only, and all kids get the same regardless of their individual circumstances.

I wouldn’t “loan” money to any family ever – you’re just asking for it. Gift or nothing.

#174 Howard on 03.19.18 at 10:32 am

#170 ben on 03.19.18 at 10:03 am

Also sad to see yet another boomer anecdote. Yes you had a business and whatever. On average there has been a huge transfer of surplus value from young to old via high house prices. For decades. And they loved it.

And also great to see some more boomers who think the 1970s high interest rates were *a bad thing*. Christ on a bike. They inflated away your debts. Come on guys.

—————————————–

They also conveniently forget that those high mortgage rates were matched with high interest on savings AND yearly wage growth that easily kept up with inflation. In real terms the negative effects of high interest rates on ordinary people in the 70s and 80s were minimal.

That was funny. Rates killed the economy, created a lasting recession and tanked real estate by over 30% pushing many people underwater for more than a decade. I was there. You were not. – Garth

#175 Ron on 03.19.18 at 10:34 am

#170 ben on 03.19.18 at 10:03 am

—–

Also sad to see yet another boomer anecdote. Yes you had a business and whatever. On average there has been a huge transfer of surplus value from young to old via high house prices. For decades. And they loved it.

And also great to see some more boomers who think the 1970s high interest rates were *a bad thing*. Christ on a bike. They inflated away your debts. Come on guys.

———————

No kidding. My dad bought a flat in Israel, late 70’s before hyper-inflation hit the shekel. Couple of years later the mortgage payment was the same as a pack of smokes and shortly after the bank didn’t even bother collecting it anymore.

#176 IHCTD9 on 03.19.18 at 11:01 am

#69 Sydneysider on 03.18.18 at 8:31 pm

It is only the Anglo-Saxon sub-culture of North America that tries to kick kids out ASAP. In the rest of the world, the parents like to have them around.
____________

More like the entire Western World sends the kids out of the house to sink or swim.

It is pretty much only poor 3rd world countries that keep the kids around – but it is for purely practical purposes.

The immigrants from poor countries that I know who had kids here, had 1 or 2. They can’t wait to move ’em on out. 1 generation, and the kids are Westernized 100% provided they did not grow up deep in an ethnic enclave.

#177 Wrk.dover on 03.19.18 at 11:45 am

I hope you don’t believe the drivel you write. That would be disappointing. – Garth

——————

I believe I was told Brexit would be a crash and burn.

I see the lowering of CDN to UK. pound monthly.

There are a multitude of reasons for currency fluctuations. – Garth

#178 Stan Brooks on 03.19.18 at 11:48 am

#31 Mark on 03.18.18 at 5:10 pm

You have very little understanding of how the banking system actually works.

On banks and the loonie:

1. The assumption that every loan is covered by deposits is wrong.

Read BoE’s description on the topic/google it on how money is created by loaning out in a fractional reserve banking system.

Canadian bans have no deposit reserve requirements so their ability to leverage is greater.

2. Through securitizaion – MBS, Canada backed mortgage securities banks can and did get money to loan to sheeple from international markets.

No risk from depositors run there, just need to generate constant stream in income in order to pay bond holders.

3. Inflation will come from weakening currency with no ability to raise meaningful rates further.

4. Current Account balance is bad, very bad. Bad for currency.

5. We will be running deficits at any level – bad for currency.

6. Just watch when the things go south on how fast rates will dive into negative territory.
I still expect our QE in some form or shape.
Trying to exit record credit expansion with tax hikes and tightening is insane.

Inflation has been here for a while – in assets, goods, services. Around 8 % as measured by M2 annual increases.

7. Getting loans from abroad through Canada backed mortgage bonds requires to borrow in Euro/USD and then sell to purchase CAD, which props CAD.

Now we need to service these loans which requires to sell CAD in order to buy Euro and USD to pay back the loans.

So downward pressure on CAD.

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

#66 IHCTD9 on 03.18.18 at 8:23 pm
#46 crowdedelevatorfartz on 03.18.18 at 6:43 pm

Gas in the Lower Bainland Sunday afternoon March 18th….

$154.9 per liter

—————

That is insane.

That is higher than gasoline was here in Ontariowe when WTI was $140.00/bbl.

WTI is $62.00/bbl right now.

Total rip – is that all taxes?

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

Mark’s deflation in action.

9 years later gas is worth 2.5 times more in loonies when compared to WTI market prices prices in USD.

Higher price in loonie for gas at USD 1/62 of WTI compared to USD at 1/140 WTI at the time.

#179 classic on 03.19.18 at 11:56 am

Whatcha Minnie on 03.18.18 at 3:14 pm

Whoops. try your other tab. the one that says “Pinterest”

#180 Justine Turdeau on 03.19.18 at 12:03 pm

“Yes, you can gift money without tax consequences. No deduction to you. No tax payable by them.”

“No, don’t gift your adult children securities, real estate or other assets. That is seen as an in-kind transaction, which is a taxable event – a ‘deemed disposition.’ It’s the equivalent of a sale, so capital gains taxes will apply.”

So which is it, are gifts taxable or not?

How is that not clear? – Garth

#181 Ian on 03.19.18 at 12:37 pm

Smoky…it would NOT be a good idea if Trump fires Muller. Not a good plan.

#182 Steven Rowlandson on 03.19.18 at 12:54 pm

Never allow home prices to get high enough to get in the way of paying a loan or living properly.

#183 Stan Brooks on 03.19.18 at 12:54 pm

#176 IHCTD9 on 03.19.18 at 11:01 am
#69 Sydneysider on 03.18.18 at 8:31 pm

It is only the Anglo-Saxon sub-culture of North America that tries to kick kids out ASAP. In the rest of the world, the parents like to have them around.

____________

More like the entire Western World sends the kids out of the house to sink or swim.

It is pretty much only poor 3rd world countries that keep the kids around – but it is for purely practical purposes.

The immigrants from poor countries that I know who had kids here, had 1 or 2. They can’t wait to move ’em on out. 1 generation, and the kids are Westernized 100% provided they did not grow up deep in an ethnic enclave.

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

That is history.

In some western countries professionals could leave their home and live on their own, getting married and supporting families.

With demise of labour more and more young people stay at home even in traditional ‘Anglo Saxon’ countries, as they can not afford to live on their own – inflation of housing, rents but not of wages.

It is also a cultural thing, in many European countries or even Asian countries, kids stay at home even when grown up in order to save for home purchase and then leave. Or stay home and live with their parents even when married if the house is big.

I think this is becoming an increasingly relevant pattern, particularly for GTA.

Young people lose ability to be independent due to many reasons – outsourcing, automation, lack of jobs, monetary policies which effectively reduce the cost of labour in competitive markets by currency devaluation.

We need to get used to that ‘thing in the basement’.

#184 Dead Cat Bounce on 03.19.18 at 1:01 pm

Same old story in Vancouver
http://www.burnabynow.com/real-estate/twas-ever-thus-metro-vancouver-real-estate-headlines-30-years-ago-1.23199143

#185 AlMac on 03.19.18 at 1:01 pm

#6 Watcha Minnie

Yesterday, had a 10 foot putt for the win. Not much in it; centre left. It was a perfect roll but hit a spike mark 1 foot from the hole and lipped out. Bummer.

On another note, thanks Garth for this blog. My two 20s sons have started investing with solid etf portfolios, and rent.

Number two son won the game.

#186 Leo Trollstoy on 03.19.18 at 1:15 pm

Might be time to stock up on $US

$C not looking good!

#187 Stan Brooks on 03.19.18 at 1:19 pm

#170 ben on 03.19.18 at 10:03 am
> However, there is no evidence that they deliberately did so to “pump” RE prices to screw you over. If you truly think so, they you are not nearly as smart as you think.

Central banks are the government. They are “the goverbankment”. And it’s well understood by them that lowering rates hands money to boomers who decide who wins elections.

Here is the former UK chancellor speaking about providing loose credit (exactly the same as lowering rates):

https://www.newstatesman.com/politics/2013/10/osborne-reveals-true-aim-help-buy-inflate-house-prices

Here is what he said:

“Hopefully we will get a little housing boom and everyone will be happy as property values go up.”

They do it for votes. The circle of trust is (was):

* banks extract wages via usury
* politicians get to claim “growth” and get jobs after they leave office
* boomers get their cut via high asset prices

Now as someone noted boomers don’t understand that because the demographics are inverted they cannot all cash out and it will crash.

—–

Also sad to see yet another boomer anecdote. Yes you had a business and whatever. On average there has been a huge transfer of surplus value from young to old via high house prices. For decades. And they loved it.

And also great to see some more boomers who think the 1970s high interest rates were *a bad thing*. Christ on a bike. They inflated away your debts. Come on guys.

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

Nice post.

The biggest challenge though is that once you take away the young people’s perspective of decent life achieved by honest work as Canada did around 2004, the credit itself and the fake promises of future riches and fulfilling life only works to a certain point (far surpassed here, long time ago).

You need a carrot, the stick itself does not work.

At some point people will refuse to work more as everything they earn beyond certain point will be taken away for somebody else’s benefit.

The very thought that an young doctors couple with no kids can not afford a 2 mil shack in Vauhgan /Mississauga and will rent while an uneducated ‘lucky’ old fart will live in that house, counting on government including these doctors to support him/her is just that, INSANE.

And hey, according to our stupid tax laws the young doctor’s couple will be heavy taxed on income as rich (even qualify as 1 %-er) while the old fart will get subsidies. As assets are excluded from taxation.

This is how retarded the tax system is.

The moment you take away the perspective, people will effectively stop working. They will pretend. As the government is pretending that it gives them a chance.

First the qualified and competent, will leave then the remaining capable.

System that does not value contribution and skills contradicts the basic law of nature – survival of the fittest, replacing it with the survival of the ‘luckiest’.

The moment you discourage correct behavior and encourage bad behavior, all the trust in the system is gone.

I expect catastrophic failure of the society as result of this generational theft that unfolds gradually first as cracks develop and then an earthquake type of failure the like of which we have never seen at least here.

#188 Dave Ahem on 03.19.18 at 1:27 pm

In Canada this would never happen. To borrow the money from mom and dad and have the lender even consider it, the parents must sign a gift letter. No judge is going to say the parents expected repayment when the kid shows up with a signed bank letter stating the complete opposite. The parents would be admitting to credit fraud. Otherwise the down-payment is considered borrowed and the bank would not be interested. The bank will have this letter on file for at least seven years. Make a copy for yourself and keep it safe just in case.

#189 IHCTD9 on 03.19.18 at 1:31 pm

#183 Stan Brooks on 03.19.18 at 12:54 pm
_____

I agree, in the big cities as good jobs leave and wages go sideways – it’ll have to be the basement.

It’ll be interesting to see how the cities handle widespread multi generational households. It’s easy to see how having 10+ people in every house will tax the infrastructure to the max, and effectively reduce property tax revenues.

#190 Range Bound??? on 03.19.18 at 1:43 pm

#186 Leo Trollstoy on 03.19.18 at 1:15 pm
Might be time to stock up on $US

$C not looking good

—————————————————————–

Weren’t we in Leo’s eternal debt for his constant “Canadian dollar is range bound” rhetoric? Trading at $1.20 exchange just a few months ago and now $1.31 and sliding. That’s quite a spread ;)

#191 paul on 03.19.18 at 1:50 pm

188 Dave Ahem on 03.19.18 at 1:27 pm

In Canada this would never happen. To borrow the money from mom and dad and have the lender even consider it, the parents must sign a gift letter. No judge is going to say the parents expected repayment when the kid shows up with a signed bank letter stating the complete opposite. The parents would be admitting to credit fraud. Otherwise the down-payment is considered borrowed and the bank would not be interested. The bank will have this letter on file for at least seven years. Make a copy for yourself and keep it safe just in case.
—————————————————————–
The simple way is to register a second mortgage.

#192 jess on 03.19.18 at 1:53 pm

06 Andrew Woburn on 03.18.18 at 10:25 pm

my bet is impeachment

#193 jess on 03.19.18 at 1:57 pm

Oregon became the first state to implement automatic voter registration in 2016, with impressive results. More than 270,000 new voters were registered that way in 2016, and Oregon had the highest turnout increase of any state in the last presidential election. Registration among voters of color increased by 26 points. Currently, 1.3 million eligible voters in Washington—23 percent of the electorate—are not registered to vote. Voting rights advocates project that 90 percent of eligible vote”

read more on voting registration here;

https://www.motherjones.com/politics/2018/03/all-of-a-sudden-voting-rights-are-expanding-across-the-country/

#194 jess on 03.19.18 at 2:38 pm

The hunt for Toys R Us’ missing millions: Investigators probe a £580m loan moved to a tax haven just months before the store went bust

=

Canadian-based Phantom Secure made “tens of millions of dollars” selling the modified Blackberry devices for use by the likes of the Sinaloa Cartel, investigators said.

The charges marked the first time US authorities have targeted a company for knowingly making encrypted technology for criminals.

The Department of Justice arrested Vincent Ramos in Seattle last week. He was indicted on Thursday along with four associates.

The BBC has been unable to reach Phantom Secure.

They are charged with racketeering and conspiracy to aid the distribution of drugs. Both crimes have a maximum penalty of life in prison. Mr Ramos is the only one of the group currently in custody.

“This organisation Phantom Secure was designed to facilitate international drug trafficking all throughout the entire world,” US attorney Adam Braverman told the BBC.

“These traffickers, including members of the Sinaloa Cartel, would use these fully-encrypted devices to facilitate their drug trafficking activities in order to avoid law enforcement scrutiny.”

#195 jess on 03.19.18 at 2:41 pm

The international operation to arrest the company’s chief executive and seize Phantom Secure’s infrastructure involved cooperation and efforts by law enforcement authorities in the United States, Australia, Canada, with additional assistance from U.S. and foreign law enforcement in Panama, Hong Kong, and Thailand.

Over the past two weeks, in cooperation with Australian Federal Police and Royal Canadian Mounted Police, more than 250 agents around the globe conducted approximately 25 searches of houses and offices of Phantom Secure associates in Los Angeles, Las Vegas, Miami, and in Australia and Canada, seizing Phantom Secure devices, assets, and evidence of the charged crimes. The coordinated effort led to the seizure of servers, computers, cell phones, and Phantom Secure devices used to operate the Phantom Secure network, as well as drugs and weapons.

Ramos and the others – Kim Augustus Rodd, Younes Nasri, Michael Gamboa and Christopher Poquiz – are charged with participating in and aiding and abetting a racketeering enterprise and conspiring to import and distribute controlled substances around the world. The defendants have been charged with Conspiracy to Commit RICO in violation of 18 U.S.C. § 1962 and Conspiracy to Aid and Abet the Distribution of Controlled Substances in violation of 21 U.S.C. § 841 and 846.

Authorities have seized Phantom Secure’s property, including more than 150 domains and licenses which were being used by transnational criminal organizations to send and receive encrypted messages. Authorities also seized bank accounts and property in Los Angeles, California and Las Vegas, Nevada.

This case stems from an investigation in the Southern District of California of a Phantom Secure client who used Phantom devices to coordinate shipments of thousands of kilograms of cocaine and other drugs throughout the globe. According to court documents, there were an estimated 10,000 to 20,000 Phantom devices in use worldwide before the authorities dismantled the company. This coordinated action means Phantom Secure’s clients can no longer use these devices to commit crimes.

According to Timothy O’Connor, Executive Director of the Criminal Investigations Division New South Wales Crime Commission, “The disruption of the Phantom Secure platform has been one of the most significant blows to organized crime in Australia.”

#196 Linda on 03.19.18 at 2:46 pm

‘Boomers can walk into any gas or convenience store & be hired instantly’. Why is that? Because most Boomers know how to work. They tend to show up on time, not blow off work for other pursuits & are task oriented. Youth, on the other hand, is often distracted by social media, tend to blow off work for more exciting to them pursuits & frankly have an attitude of entitlement. Case in point: young coworker with multiple degrees, so has the education. However, despite repeated offers to be shown how to do the detail stuff, complained about how they had spent umpteen years learning & didn’t see why they should have to continue to learn as ‘it wasn’t fair’ & who basically did not take up offer to be shown stuff they needed to know & do. End result? When the pink slips arrived that coworker received one, despite the fact they had qualifications out the wazoo. Work ethic just not there & it had been noticed. Response when the slip arrived? ‘It isn’t fair!’.

Another case in point. Went to a restaurant with friends, asked wait staff for pitcher of milk instead of using the little cartons as I put lots of milk in my coffee. Told by staff that milk was on table. Used every single carton in the dish to get coffee the way I liked, then asked for a refill as I wanted more coffee. Same staff person was obviously upset by the customer request; brought a refill of the little cartons but ‘forgot’ to bring a refill of the coffee – in fact, made sure not to be anywhere near the table prior to presenting the bill. Attitude was clear; they were NOT going to be ‘made’ to do anything they didn’t want to – totally missing the point that their job was to provide service, not withhold it.

Of course, there are plenty of youth who ‘get it’ & do a fantastic job. I’d wager that those youth are the ones who are most successful at not only finding employment, but remaining as employees.

#197 meslippery on 03.19.18 at 2:53 pm

Blaine, WA
$3.19 US Dollars =$1.05 per litre CAD
https://www.gasbuddy.com/Station/6891

http://www.mississauga4sale.com/Gasoline-Conversion-Calculator-litres-gallons-us.htm

#198 Lobster Man on 03.19.18 at 3:07 pm

#95

TurboTax is preparing for two upcoming “changes”:

– NDP in BC will use that “landlord/tenant” data to provide an annual $400 grant to renters in the not-too-distant future.

– The data will also allow CRA to assess which “principal residence” may be subjected to capital gains tax (when there is a “substantial portion” of the said residence being used as a rental).

Yes “junior landlords”, you better watch out!

#199 chopstix on 03.19.18 at 3:14 pm

i just grind my teeth reading this stuff…can’t believe such scummy kids exist. sheesh anyone with an ounce of gratitute and moral backbone would be paying back the BOM with dinners and interest on top of the loan.

#200 LivinLarge on 03.19.18 at 3:29 pm

“So which is it, are gifts taxable or not?

How is that not clear? – Garth”…I’m guessing “Justine” just doesn’t understand what a capital gain or “deamed” distribution is.

#201 45north on 03.19.18 at 3:40 pm

PastThePeak: So during the best economic times, personal debt continues to rise, many people can’t afford a $200 increase in costs, and all levels of government are in deficit!

In response, the federal government and many provincial governments are focused on diversity/inclusion & climate virtue signalling, wealth redistribution, and class warfare.
The next recession isn’t too far away (likely less than two years). It will impact Canada more than the US or Europe because of the extremely high consumer debt and government policies which inhibit investment.

“The next recession isn’t too far away (likely less than two years) ”. There’s a big shock coming in two weeks. March 2018 sales will be down 25% from March 2017. The US Fed will raise interest rates again on March 21. This is the point that panic sets in.

Some people need to sell – my brother-in-law is one of them ( somewhere around Broadview and Danforth ). I’m guessing the best offer will be 10% off last year’s peak. A 10% drop in this neighbourhood would signal a 25% drop across the 905. From there, it’s pretty easy to get to a $100 billion drop across the GTA!

I cannot see a Liberal politician walking into a gym and start talking about gender equality.

#202 harpreet singh on 03.19.18 at 4:02 pm

Our parents brought us into the world and owe it to aid in our success. That is not too much to ask of them. If they have enough money to live comfortably that of course they should help their children out. That’s how each generation does better than the one before it. People seem to forget this.

#203 Penny Henny on 03.19.18 at 4:04 pm

The issue at hand is not just the entitled kids, equally responsible are the boomer parents who spoiled them rotten their whole lives.
I have two examples for you first is retired friend, mid 70’s wife still working but can’t yet because they have to help out their daughter. He brags that his paralegal daughter makes 120k/yr but he still has to make the payments for her cell phone bill and her Audi. I tell him he’s an idiot but he just shrugs. Meanwhile his daughter spends tons on everything.
Friend two, married with three kids complains when his wife takes the three teen girls with her to the spa, $1000 for an afternoon.

He Garth, are you writing ads for kijiji now? This one is hilarious! I think it is directed at an entitled millenial.

https://www.kijiji.ca/v-cars-trucks/st-catharines/2011-hyundai-accent-sport-w-sunroof-hatchback/1324432652?enableSearchNavigationFlag=true

#204 Johhnyboy on 03.19.18 at 4:14 pm

#110 Fake News Again on 03.18.18 at 10:39 pm

Andrew Woburn on 03.18.18 at 4:15 pm
Kevin on 03.17.18 at 3:27 pm
Thank you, Ryan. I agree.

Regarding the US, at what point does the political nonsense going on impact the economy and stock market? Any insights on this?
===================

I would pick Nov 7 as the likely pivot point, the day after the US midterm congressional elections although the rapid downward spiral could trigger an earlier reaction.

It is now extremely hard to predict US voting patterns, and the Democrats are perfectly capable of blowing it, but the trends suggest a highly energized turnout of younger Democrats and horrified independents will deliver enough House seats to take control from the GOP. If so, the incoming members will probably trend more progressive. I expect this will frighten US investors for many reasons.

The major battleground will be the suburbs.

To me the big issue is the response of Republican women who are almost all white.

It is hard to imagine they like or respect the Donald but they voted for him in 2016. My suspicion is that they have been trained from birth to fear black men and saw Trump as a revolting but necessary defender of white virtue (who would, of course, become presidential in office). Now the question is how many can overcome their gag reflex to actually show up at the polls.

__________

Clearly you have ZERO IDEA why President Trump won……
______________________________________
Ahhhhh, because American republican voters are easily duped?

#205 Johhnyboy on 03.19.18 at 4:17 pm

#197 meslippery on 03.19.18 at 2:53 pm

Blaine, WA
$3.19 US Dollars =$1.05 per litre CAD
https://www.gasbuddy.com/Station/6891

http://www.mississauga4sale.com/Gasoline-Conversion-Calculator-litres-gallons-us.htm
______________________________________
Ha,ha,ha please forward to Smoking Man, I remember a few years ago he was trying to wow us with his mathematical prowess at some gas stations near a Casino in New York.
Dam his explanations were hilarious.

#206 KLNR on 03.19.18 at 4:37 pm

@#161 Darryl on 03.19.18 at 9:03 am
#47 ImGonnaBeSick on 03.18.18 at 6:46 pm
#28 Niagara Region – there is nothing more frustrating that people bringing up Mike Harris like he’s some sort of evil mastermind. He hasn’t been premier for 15 years… When he was though, he increased government revenues by 25%, decreased the debt by $20billion, reduced welfare by 500,000 people, cut income taxes by 30%… And on and on. Whatever problems you think he created, you can thank the idiot Liberals for not fixing it over the 15 years these crooks have been in power. Hopefully that’s fixed June 7th.
—————————————————————
100 percent right on . My exact thoughts that I was to lazy to post.
Thanks Sicky

___

harris will always be known for selling off the 407 though.
You honestly think ford will do anything other than pump his own tires?

It’s amusing listening to all the pontificating on here.
historically there is very little difference between the cons and libs. Maybe the libs throw the peasants a few more crumbs.

#207 PastThePeak on 03.19.18 at 4:41 pm

#201 45north on 03.19.18 at 3:40 pm

“The next recession isn’t too far away (likely less than two years) ”. There’s a big shock coming in two weeks. March 2018 sales will be down 25% from March 2017. The US Fed will raise interest rates again on March 21. This is the point that panic sets in.

Some people need to sell – my brother-in-law is one of them ( somewhere around Broadview and Danforth ). I’m guessing the best offer will be 10% off last year’s peak. A 10% drop in this neighbourhood would signal a 25% drop across the 905. From there, it’s pretty easy to get to a $100 billion drop across the GTA!
+++++++++++++++++++++++++++++++++++

The reason I say “within 2 years” for a recession is that Can economy is still poking along, unemployment is low, and global economy is doing well (enough). I don’t believe an RE downturn in GTA and BC is going to trigger a national recession. It will be the first leg down though.

No one can say exactly when a recession will arrive, but the signs are getting stronger: US growth & inflationary policies (tax cuts, trade barriers) leading to higher rates, still increasing Cad debt, RE stalling, increased business costs and regulations… It could start this year, but seems more likely to be a 2019 event.

You do make a good point that many on this blog overlook – it isn’t possible for everyone to just “hunker down” and not sell. People have to sell for a variety of reasons all the time, and so prices can’t always be maintained.

It is in a recession with increasing unemployment, where it becomes impossible to make the payments for some, and the lower assessed equity values means that turning to HELOC is no longer the answer in some cases (buyers in more recent 3-5 years). Then the number of “must sells” rapidly increases, and the slow melt becomes a bit of a crash.

Maybe those who claim that RE will be higher in 10 years than now will be right, but that doesn’t make it a good investment. Who wants to sit on negative equity (which for many would be their entire worth) for 5+ years?

#208 jess on 03.19.18 at 4:44 pm

Washington (CNN)The Supreme Court has denied a request from Pennsylvania Republicans to block new congressional maps that could tilt several key races in Democrats’ favor from being used in the midterm elections.
The court issued one sentence to reject the request. There were no noted dissents.

https://www.cnn.com/2018/03/19/politics/pennsylvania-congressional-voting-map-new-ruling/index.html

#209 ben on 03.19.18 at 4:56 pm

harpreet singh – our parents should do their best but financial aid should not be *required*, yet that is what it has become as land prices have detached from wages.

If we move into a society where who your parents are matters more than who you are we end up with the substandard people doing the wrong jobs.

Exhibit A: Justin Trudeau.

#210 Big Kahuna on 03.19.18 at 4:56 pm

#204Johnny-you feel they are dopes-could be worse-imagine how this whacko feels getting up every morning
https://www.youtube.com/watch?v=YrO7KDMfx_0

#211 devore on 03.19.18 at 5:12 pm

#5 El Joko

I do so hate to sound like a broken record, but Melbourne, Sydney, Vancouver, and so many other decent cities reside on the Chinese Rim. You know, the coasts of the ocean of allegedly non-existent foreign dudes.

And?

#212 Gravy Train on 03.19.18 at 5:31 pm

#200 LivinLarge on 03.19.18 at 3:29 pm
“I’m guessing ‘Justine’ just doesn’t understand what a capital gain or ‘de[e]med’ distribution is.”

#180 Justine T[ru]deau on 03.19.18 at 12:03 pm
Yes, you can gift money without tax consequences. No deduction to you. No tax payable by them.

No, don’t gift your adult children securities, real estate or other assets. That is seen as an in-kind transaction, which is a taxable event – a ‘deemed disposition.’ It’s the equivalent of a sale, so capital gains taxes will apply.

“So which is it, are gifts taxable or not?”
How is that not clear? – Garth

It’s actually much simpler than that, LivinLarge. There is no capital gain on the disposition of cash! Think about it!

While it’s true that you lose purchasing power on cash via inflation, you can’t claim a capital loss. You do, in fact, get indexing of income tax brackets as compensation for inflation! I hope you know I’m toying with you, LivinLarge! :)

#213 LivinLarge on 03.19.18 at 5:53 pm

No worries Gravy.

#214 akashic record on 03.19.18 at 6:20 pm

#205 Johhnyboy

Clearly you have ZERO IDEA why President Trump won……
______________________________________
Ahhhhh, because American republican voters are easily duped?

Because they were not easily duped that “it’s her turn”?

#215 Gotta Get Out of Calgary on 03.19.18 at 10:54 pm

“So which is it, are gifts taxable or not?
How is that not clear? – Garth”…

Probably a lack of reading comprehension.

Mr. Turner’s vocabulary and syntax are completely correct and the semantics are very clear. “Justine Turdeau” either read carelessly and missed words or lacks comprehension of what was read.

#216 Overheardyou on 03.20.18 at 3:50 pm

#43 -=jwk=- on 03.18.18 at 6:11 pm
My student loan balance was about $5,000 when I graduated which admittedly is “nothing” today, but I was only earning $5,000 a YEAR when I started repaying it which is also “nothing”.

This is hilarious – you were being sarcastic, right? Millenials can’t imagine the sheer joy you must have felt owing only one year of salary on your loan…

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I take it you didn’t buy a car back then either? I paid back my OSAP loan in 1 year. How? I worked full time and studied full time. Graduated in 3.5 years in 2012.