Only a matter of time

Yesterday’s vivisection of a profligate doctor on this site, complete with blood, guts and goo was, yes, an extreme example. Many people wondered how a $500,000-per-year couple could have stuff, but no money. Others understood it completely. What the doc/yoga lady gave us was a vivid reminder of how screwed up society’s priorities have become. Big hat, no cattle.

But what about the rest of us? Average incomes are far south of a hundred grand. The typical house costs less than half a million and the jobless rate’s at a 43-year low. Surely most people, unlike those crazy 1%ers, have their heads screwed on right?

Not so fast. Let’s check the stats.

Last month the inflation rate was 2%. Not only did that mean all the money in your high-interest savings account is losing money, it’s also bad news for most families. They’re falling further behind in a country where incomes are moribund. Despite a tighter labour market, employers are cautious and stingy. The average annualized wage increase in December was a mere 1.49%. The month before, just as bad – 1.46%. In fact since peaking briefly in May (3.9%) incomes have eroded steadily, compared to the rising cost of living.

Debt? Going in the other direction. Household debt in total increased 3.5% last year, to more than $2 trillion. The debt-to-income ratio hit 178%, a record. In Vancouver it’s over 250%. Among people buying million-dollar houses in Toronto, it’s over 400%. Despite higher mortgage rates, several Bank of Canada increases and tighter lending regulations, we actually increased our overall borrowing. Incredible.

But here’s why.

House Prices relative to Incomes

Source: The Economist

If this doesn’t make you reflect on what’s coming, well, you’re thick. Or preoccupied. Or house horny. Despite the best job market in forty years, with tame inflation and low rates, families are so financially stressed they’re borrowing more just to get by. Incomes are too low to buy houses, or houses cost too much relative to wages. Either way, it’s unsustainable. So, houses have to deflate or salaries mushroom. Guess which is more likely?

This underlines the greatest financial risk in a nation where 70% of people have exposure to one asset class – usually constituting most or all of their net worth. In the five months between July and the end of November last year, while real estate markets wobbled in terms of sales and prices, Canadians added $17.1 billion to outstanding mortgage debt (to $1.54 trillion). This took place even as the pace of new mortgage borrowing at the banks cratered, showing the dramatic impact of house prices which have become detached from reality.

Face it. We’re buying what we cannot afford. So long as we keep at it, the danger grows. Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas. Certain postal codes in those cities (which experienced explosive price growth during the preceding boom) saw assessments plunge  70%. That’s extreme. But possible. And far more likely than a wealth-stealing plop by global equity markets.

We’ll say it again. The goal of life is not a house. Having one is cool, but there are options, like renting. You can live a fine existence without real estate, but not without income, especially when you get old. If properties cost three or four times a family’s annual income, we wouldn’t be having this discussion. But in most places, they don’t. Wives and husbands are financially gutting themselves to obtain one, which is clearly shown by the billions in new debt every single month, while incomes stagnate.

Did you see the new polls on Monday?

Two-thirds of Canadians fret over their financial futures. A third worry they’ll go further into debt this year. An equal number claim they may not be able to maintain monthly payments. And 14% believe recent mortgage increases are unaffordable. “If debt levels don’t come down,” says Credit Canada, “and people don’t start to get serious about paying off their debt, it’s only a matter of time before we’re in major trouble. You can only bury your head in the sand for so long.” Meanwhile MNP has found that almost half of us (46%) are $200 or less away from financial insolvency at the end of each month. Over 50% report higher interest rates are hurting them. “Many have so little wiggle room that any increase in living costs or interest payments an tip them over the edge,” the company says. “That’s what we’re seeing happen right now.”

But most people will never heed this message. They won’t change. They don’t come here. They never heard of me, or this blog. The Trivago guy’s more popular.

But you’re here. And you know what’s coming.

148 comments ↓

#1 LL on 01.21.19 at 3:33 pm

Inflation 2%? Not sure about it.
Each year it is 2%!!

Last month = 2%. – Garth

#2 waiting on the westcoast on 01.21.19 at 3:40 pm

Until people wake up to how much debt they are acquiring rather than the payment they need to make, the shift will be delayed.

I have friends making 6 figures who are renting a site, taking in students as boarders, etc to keep their chins above water.

#3 islander on 01.21.19 at 3:45 pm

Thanks Garth. Can’t say you haven’t been trying to warn us!
On a cheerier note…how about writing a letter (plus $25) – you might win a 3800-square-foot house in Millarville, Alta.
https://globalnews.ca/news/4869177/millarville-win-house-contest/

#4 Shane Gallant on 01.21.19 at 3:46 pm

the government won’t change there spending habits as well..

#5 thebarold on 01.21.19 at 3:48 pm

I remember graduating from uni with a bit of debt. Not insurmountable but I realized from that experience that it set me back. Where friends who graduated without debt were buying condos and cars, I was dutifully paying off that debt. I paused my current consumption then to ensure that I could have freedom and flexibility in the future. Debt (even so-called good debt) hangs over you and prevents you from moving forward. The sooner people learn this the better.

#6 Islandgirl on 01.21.19 at 4:04 pm

We’ve seen the house beside us get price reductions several times now. It started at 400 and now it’s $59K below assessment ($369k), as if that makes it a great deal. It’s still listed $90K more than when we bought (it was listed back then too by the same owners) and we thought it was overpriced then (at $279). This will not end well. Owners have since moved across country and borrowed against their equity to buy elsewhere.

#7 islander on 01.21.19 at 4:06 pm

https://www.macleans.ca/news/canada/drowning-in-debt-is-the-new-normal-in-canada/

‘old’ posting – totally relevant….from a ‘licensed insolvency trustee firm’..

“ the most troubling trend we see now is the flood of regular Canadians facing financial crisis. Households and individuals who are employed, have decent incomes, own homes and have done everything they feel they ‘should’ be doing now find themselves facing serious, if not insurmountable, debt problems. They are having to file insolvencies now, or will in the next few years.”

#8 Mike on 01.21.19 at 4:07 pm

Garth: “Face it. We’re buying what we cannot afford. So long as we keep at it, the danger grows. Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas. ”

—You got the above wrong Garth—–This is Canuck Land. People will do anything to buy RE.

We’re buying what we cannot afford –> Nope. People do afford. Payments go on time. How, doesnt matter to them. They are on time.

So long as we keep at it, the danger grows. –> RE goes up and up on 1-2yr basis, so debt is giving a good/excellent return to those who took it to buy homes

Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas. –> Its Las ;). Sorry, never going to happen. RE in Canuckistan up and up, bit down and then again up and up. Canuckistan people got the money(even if it is from money launderers)

#9 NotLegalAdvice on 01.21.19 at 4:13 pm

If Real Estate prices fell to even 2014 levels, I’d pick up a property to live in tomorrow.

#10 waiting on the westcoast on 01.21.19 at 4:33 pm

Last month = 2%. – Garth

3% in Vancouver… Cost of living is rising fast here

#11 espressobob on 01.21.19 at 4:36 pm

The above vid suggest distracted drivers? Any wonder?

#12 patty twinkle toes on 01.21.19 at 4:52 pm

The “House Prices relative to Incomes” graph almost made me throw up…..no need for concern there….good luck GTA, YVR

#13 btcnut on 01.21.19 at 5:01 pm

Hope this is not true

https://www.cbc.ca/news/canada/calgary/200-financial-insolvency-2019-1.4986586

#14 The Wet One on 01.21.19 at 5:08 pm

Just for the record, I would have crashed my bike too.

:-)

#15 Drill Baby Drill on 01.21.19 at 5:09 pm

Yes that bike accident was embarrassing. I lost my chance with that babe, I had to cut a check to the car owner, cut a check to the cops for driving without due care and when I slid down the hood the hood ornament tore off what remains of my manhood. My grandkids told me to grow up!!

#16 PastThePeak on 01.21.19 at 5:13 pm

2019 might be the year of at least a Canadian recession (likely not a US or world recession…this year). The last BoC forecast was for 1.7% GDP growth. But that was before we see China’s GDP going off the deep end in the last few months of 2018 (lowest in a decade or more – and that is just the ever popular, fake Chinese gov’t statistics).

Debt as Garth notes is at ever higher levels. And this is when things are, at the broad level, OK to good (growth, unemployment). It might not take much to push things over the edge and start the “great unwind”.

Will the carbon tax be what tips things over? A falling loonie raising prices? Lower oil prices? Even slower global economy than forecast due to US/China and Brexit? Chinese blowback on Canada?

I disagree with Garth on one thing – I don’t believe a Canadian recession will be short or shallow. USA maybe. That chart above about housing relative to income says it all.

#17 My Gawd ... on 01.21.19 at 5:13 pm

Is there a dog in there somewhere? This is more like it.

#18 Fish on 01.21.19 at 5:15 pm

46% of Canadians $200 or less away from financial insolvency: poll

According to a recent survey of Canadians, 45 per cent of respondents say they will need to go further into debt to pay their living and family expenses. (Shutterstock / Stefan Malloch)

More than half of respondents say they’re feeling the pinch of higher interest rates

CBC News · Posted: Jan 21, 2019 11:07 AM MT | Last Updated: an hour ago

https://www.cbc.ca/news/canada/calgary/200-financial-insolvency-2019-1.4986586

#19 Penny Henny on 01.21.19 at 5:15 pm

Just like the photos of years past.
;)

#20 yycnotretired on 01.21.19 at 5:20 pm

I’ve learned more about finances, risk and investing from a free blog than I did in school, from my bank, or my family.

THANK YOU GARTH keep doing what you are doing

#21 Kona on 01.21.19 at 5:25 pm

Five years ago nearly everyone I knew felt interest rates were so low that it was practically free money. And borrow they did. It’s why house prices went nuts and why the number one selling luxury vehicle in Canada is a pickup truck.

We all know that we live in dangerous times when a $1 million home in some areas are tear downs, Ford sells $90,000 pickups and phones cost $2000.

#22 Lawnboy on 01.21.19 at 5:27 pm

I had a bike like that…got me into trouble every time there was a sight to see.

#23 Joe Schmoe on 01.21.19 at 5:32 pm

We have to teach people to save first.

I threatened to fire several employees if they didn’t contribute to the company RRSP plan….they put in 3% we put in 3%…scaled up to 6/6% if you worked there 5 years.

3+3= 6%, 6+6= 12%

Pretty easy to hit a 8% savings rate in most occupations if you take advantage of the opportunities we are given.

These were mostly young fellas with gorgeous truck nuts and smoking habits…finding the 3% would have been pretty easy.

#24 jess on 01.21.19 at 5:34 pm

“how screwed up society’s priorities have become.”

Finkelstein and Birnbaum’s electoral masterpiece was created in Hungary, and would have implications around the world.

The Unbelievable Story Of The Plot Against George Soros
worth reading on buzzfeed

and look what that fake news fed!
In October 2018, a Trump supporter sent a parcel bomb to Soros. Five days later a gunman entered a synagogue in Pittsburgh, killing 11 people. The attacker saw himself as part of a fight against a Jewish conspiracy, which he believed was funding mass migration, and talked about the caravan and Soros on social media.

#25 NotLegalAdvice on 01.21.19 at 5:34 pm

What ya’ll think of this article talking about a 29 year old short seller shorting out canadian banks ??

https://business.financialpost.com/news/fp-street/a-top-performing-hedge-fund-is-shorting-canada-banks-on-housing

He crazy or pure genius?

#26 yorkville renter on 01.21.19 at 5:38 pm

Now the game is getting the wife to hold off on house horniness until after the crash is in full bloom… I’m running out of runway- Spring 2020 is about as far as she’ll go!

#27 tccontrarian on 01.21.19 at 5:43 pm

“Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas. Certain postal codes in those cities (which experienced explosive price growth during the preceding boom) saw assessments plunge 70%. That’s extreme. But possible.” – GT
—————————————————-
When I suggested a likely 60-70% plunge in the most over-valued markets, I was ‘crazy’. In a couple of years, several of my ‘friends’, who were certain I was quite insane to sell my house “to play in the financial markets”, will find out otherwise. Some of them levered up to buy ‘more house’ – cuz RE is a ‘safe’ investment, of course!

“Be Right, Sit Tight”! Still, one of my favourite phrases;

Along with a few other ‘gems’:

– “it’s not different this time”
– “buy when there’s blood in the streets, even if some of it is your own”
– “either you’re a contrarian, or a victim”

TCC

#28 Doc on 01.21.19 at 5:44 pm

Here in Lake Country BC its 1 degree C but sunny. No snow left–it melted. I enjoyed my usual 5 mile morning hike with my Airedale terrier and lovely polish wife of some decades. There are at least a 100 birds hanging around the many ponderosa pines on our property– mostly robins, cedar wax wings and jays intermittently swooping out of the protection of the pines to gorge themselves on our huge mountain ash’s bright red berrys. They come every year at this time. They are very vocal –I love their joyful songs, and quite spectacularly flighty when the eagles fly by over the lake about a 100 yards away.

I picked some Kale from the garden today, collected and then washed the eggs from the nesting boxes in the chicken coop, had a lovely brunch with hunnybunny-poached eggs and toast, an avocado and cucumber salad, mashed potatoes made with Kale and bacon, and now I’m considering whether to read my new Grisham novel or just have my usual siesta.There is actually life after medicine or other demanding careers, but you may need to save more, simplify/downsize, or get more rural. Contentment and time for contemplation doesn’t have to be expensive but it is priceless.

#29 CHERRY BLOSSOM on 01.21.19 at 5:59 pm

The Banks are going to have to allow 100 year amortizations on Millenium Mortgages Ha Ha Ha… The only way out of this.

#30 Homeowner Arrowtech on 01.21.19 at 6:14 pm

Today’s GIF – I don’t get it

#31 The real Kip (Ret) on 01.21.19 at 6:16 pm

As long as interest rates are ridiculously low as they are now, people will continue borrowing. As long as Canadians are working there will be no US style 2008 housing collapse in Canada. Defaults are still very low.

#32 Dries on 01.21.19 at 6:17 pm

Just one thing – Thanks Garth!

#33 Mike in cow town on 01.21.19 at 6:20 pm

I have lost count of all the stories about how Canadians are on the brink of bankruptcy if the central bank raises one more time.

How about we start talking about all the damage low rates have done to those who decided to save and didn’t want to roll the dice in the equity markets.

Why is it fine the banks pay zip on savings accounts (less than zip net of tax and inflation)? They loan $9 for every $1 rotting in a savings account.

#34 Inflation on 01.21.19 at 6:28 pm

The stats are determined by what is in the basket, but my basket of what counts tells me its much higher, and growing faster than a speeding bullet. Its all a shell game in the end.

#35 MicroGX on 01.21.19 at 6:30 pm

Wow, these stats always amaze and scare…. Interesting times.

#36 Debtslavecreator on 01.21.19 at 6:30 pm

I don’t work non commission but have over the lady 3-4 years lost about 2-3 M in business per year due to being honest with borrowers and pre approvals
I tell them diplomatically but clearly about the risks and what happens and to account for non mortgage expenses
What happens is these stupid people simply find a corrupt broker and/or bank mobile rep and almost always get the mortgage
I have NO sympathy and I unfortunately the most likely path ahead is fairly easy to see: weak economy and slipping in and out of recession for the next 10-15 years with tax revenues falling far short of exploding health care and interest costs
These dumb idiots who chose to gamble on an illiquid asset trading at multi decade highs (putting themselves in astronomical debt to help finance their friends grandparents / parents cushy retirement ) will elect politicians who will eventually tax , print and outright confiscate the Net worth of the good number of diligent savers
Because it’s not fair that they bought a house and lost money and it’s not fair the savers have “big” RRSPs or god forbid TFSA s
What’s coming folks will shock most of you good, honest people who are living within your means and salting away money
Just study the financial / monetary crisis over the last few hundred years and ALL of them since 1913
Those who do the right thing eventually get financially destroyed
Don’t leave most of your assets / savings in brokerage or bank accounts
More than a few greedy reckless boomers and the many dumb Marxist millenial kids of theirs are going to help themselves to your “unfair” savings

#37 Bob Dog on 01.21.19 at 6:33 pm

It seems responsible lending is no longer a part of the banking industry in Canada. Its always the fault of the borrower. The banks know our corrupt puppet government will make them whole through CMHC. Why would they care if anyone can pay back their loan.

Who controls the currency controls the country. Canadians gave up control of Canadian currency they the bank of Canada was forbidden form making loans.

Canadian politicians are just puppets to the banking cartel.

I ran into Peter Schiff in downtown Vancouver today. He’s back warning of housing bubble 2.0. Prepare for the storm and don’t think for a moment your government has your best interests in mind.

#38 Reximus on 01.21.19 at 6:34 pm

#26 yorkville renter on 01.21.19 at 5:38 pm

Now the game is getting the wife to hold off on house horniness until after the crash is in full bloom… I’m running out of runway- Spring 2020 is about as far as she’ll go!

===

The ‘Crash”?…in Toronto? You’ll pay as much or more, I’d bet

#39 dakkie on 01.21.19 at 6:34 pm

Canada’s Majestic Housing Bubble Deflates, Media Hype U-Turns

https://www.investmentwatchblog.com/canadas-majestic-housing-bubble-deflates-media-hype-u-turns/

#40 Timmy on 01.21.19 at 6:36 pm

You can cite all of these stats but you still can’t even buy a 2 bedroom condo in Vancouver for less than $600K, so average consumer debt levels are almost meaningless.

#41 bellend on 01.21.19 at 6:38 pm

default…..foreclosure…. wealth effect?? poofff to 0

#42 Damifino on 01.21.19 at 6:38 pm

#33 Mike

Why is it fine the banks pay zip on savings accounts (less than zip net of tax and inflation)? They loan $9 for every $1 rotting in a savings account.
——————————–

It’s just a case of supply and demand. We’re in an era where there’s much more money seeking borrowers than there used to be, say, 35 years ago. Consequently, money is now worth considerably less.

Organizations or individuals with money to lend are in fierce competition. They must lend as much as possible. Fortunately, plenty of takers are willing to overextend themselves for stuff now and consequences later.

Meanwhile, lenders wait. Time is on their side.

#43 young & foolish on 01.21.19 at 6:38 pm

People everywhere like to talk about the “great credit unwind” …. but what if debt is actually what is fuelling the growth?

Somebody please explain this phenomenon!

#44 Ryan Harris on 01.21.19 at 6:41 pm

#22 The real Kip (Ret) on 01.21.19 at 6:16 pm
—————————————————-
Dude I think you missed the point..defaults are still low BECAUSE people are still borrowing more!! Despite the OSFI and to a lesser degree the banks trying to slow borrowing down..it still went up..what does that tell you?

Im reminded of the book freakonomics. They tried to figure out why crack cocaine use went down by 70% in a very short period of time. There was a bunch of potential reasons attributed, one of the main factors though was that the younger people just didn’t use it period. When a sample of said group was asked why there was one consistent result “I saw what it did to the older people and I said no thanks”.

Heres what is gonna happen..and frankly already is. Anyone that doesn’t own RE, will not under almost any circumstance buy into this overpriced circleJ. Instead they will rent, move, live 8 to a house, whatever. Anyone that missed out on the absurd ride up is beyond tired of hearing about “hard earned equity” and “it always goes up”.

Public sentiment is barely starting to turn, it will pickup very quickly. FOMO to FOGO.
So enjoy those 2-3 spec homes and your investment condo. Hopefully you didn’t use up all your equity and you can still look at those paper gains, too bad if you did though, there is no one left to bail you out.

#45 Ben Able on 01.21.19 at 6:43 pm

Garth, why would investors hold the Canadian Banks with this scary blog post? Time to fade the Maple ETFs and add to the world etfs?

#46 the Jaguar on 01.21.19 at 6:43 pm

Overpriced, oversized homes are a big part of the madness, but it doesn’t end there. Every driveway has two massive SUV’s ( one likely a massive Ford F150 Crew Cab in my province). That’s another 100,000 dollars of household debt spent on depreciating assets. The vacations get put on high interest credit cards with all the other items that people convince themselves they ‘deserve’ in an attempt to live the reality tv lifestyle of their favourite celebrity. The pressure to keep up with every latest trend or whim is easily solved with plastic or lines of credit lenders are only too happy to hand out with little or no scrutiny of the recipients.
The number of people living on the financial edge of a knife would blow most peoples minds if they had an open window to it everyday. Garth is correct. The real luxury is time. You can never get it back.

#47 Penny Henny on 01.21.19 at 6:45 pm

#27 tccontrarian on 01.21.19 at 5:43 pm
When I suggested a likely 60-70% plunge in the most over-valued markets, I was ‘crazy’.

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

It is my perception that you were considered ‘crazy’ because your prediction was for this 60-70% drop to happen by Dec 2018. Care to change that at all?

#48 expat on 01.21.19 at 6:47 pm

#24

Jess you do relaize Buzzfeed is a fake news site right?
Mueller actually came out this weekend to correct their garbage fake article on Trump and his lawyer Cohen.

Go elsewhere for your news. Or at least get some balance from your Alt Left news sites
Soros is not your friend.

#49 will on 01.21.19 at 6:48 pm

read the MNP story earlier today. makes me wonder when i am at work or having my pint after work and look about me and wonder which of the people around me are in the 46% and swimming naked.

#50 Glengarry Girl on 01.21.19 at 6:48 pm

#28 Doc

Sounds Wonderful, a great example to the readers of this blog what financial freedom can buy…priceless

#51 Adrian on 01.21.19 at 6:49 pm

Index of Real House Prises in Canada. the US and Japan

https://www.dropbox.com/s/fuc1o43v6pmmk3t/Index%20of%20Real%20House%20Prises%20in%20Canada.%20the%20US%20and%20Japan.jpg?dl=0

#52 Adrian on 01.21.19 at 6:52 pm

Compare City SFD Price Increase to Provincial Employment Earnings increase over last 10 years

http://www.chpc.biz/uploads/9/7/9/5/9795010/chart-sfd-earnings-compare_131_orig.jpg?fbclid=IwAR1vssO8UufAwIauBK9ehmFVRewy8utzaY6OSBlvS8EsilOOyxJeOi-JRg0

#53 expat on 01.21.19 at 6:55 pm

Bankruptcy and insolvency typically is a process not an event.

They simply wake up one day and say enough….
Its called the boiling frog syndrone in my circles…
They don’t even realize they are dying until they do..

I’m curious

How mnay of you have been through a 40-6-% real estate correction?

I’ve been through 2

Lost everyhting the first one
Sold before the 2nd one as the bubble burst cause I could smell it..

This is now my 3rd. It has barely started in my opinion.

Another 40-60% to go.

We sold everything not nailed down 4 years ago and left Canada… to tax jurisdiction favorable to wealth creators.

Canada hates success, or at least tries to destroy it,

BC being a perfect example of how communist governments hate wealth.

Trudeau being another.

No one will be immune to the damage this crash will cause.

Remember as banks unload properties, your assessments and value drops too….

food for thought

#54 M on 01.21.19 at 6:59 pm

Yeah baby ! Keep on it. Tza babe that is.
I walk bipeds. Wouf wouf …of no interest to me
:)

#55 Subtitles on 01.21.19 at 7:02 pm

#30 Homeowner Arrowtech on 01.21.19 at 6:14 pm
Today’s GIF – I don’t get it
—-
The ‘accident’ is waiting to happen for an obvious reason. It’s just matter of time.

#56 Catalyst on 01.21.19 at 7:03 pm

Common, 46% within a cell phone bill of insolvency is pure fear mongering and blatant lies. In this fake data world, this one doesnt pass the smell test.

#57 Dolce Vita on 01.21.19 at 7:10 pm

Reading Comments from some today reminds me of July 1981:

Head, bury in sand.

Difference today is that we are far more indebted, to the gills. Jobs being created that can’t afford the rent let alone a home. An unhealthy portion of GDP devoted to RE. A populace that is crushed financially by a couple % of interest and have stopped buying homes.

That makes 2019 worse than pre-crash early 80’s Canada.

You can keep lying to yourselves how ever you want but the economy is on the brink of a recession, early 80’s style. Same dung, different pile except “this time” worse.

It’s starting now from psychology alone (those doom & gloom surveys indicate the STATE OF MIND of Cdn’s and they are SCARED). We won’t know the full extent of it until 2nd Qtr as StatCan and Gov do all they can to manipulate the truth – hoping for a miracle that never comes.

Rough times ahead. I agree with Garth (as in Garth the timid for not having the cojones to come and just say it).

#58 Arto on 01.21.19 at 7:15 pm

Garth, as much as I like dogs, let’s go with this direction for a while

#59 Long-Time Lurker on 01.21.19 at 7:20 pm

Trevor sure got the stuffing beat out of him yesterday. I told you, Sinan.

#79 Mark on 01.20.19 at 9:08 pm
Garth or anybody else,

I just turned 34 and have a DC pension that is at about 100k with an average return of 7%.

Also have about 15k in TFSA. I temporarily suspended my TFSA and ESP(company stocks…I do 6% and they do 2%) contributions to pay off a couple other obligations but plan on resuming in a year or less. My DC pension is 10% a year so about 8500(I do 4%, company 6%).

House has 150k left on the mortgage and the “value” would be around 400 now. Thankfully only paid 200 for it…

Being single income and all I’m definitely concerned as to if I am saving enough. Given what my pension contributions currently are, how much should I attempt to save in addition??

Thanks!

>Go talk to a financial advisor. That’s a complex question. What are your goals and time-frame to achieve them? I’m not going to answer that for you. Go look for some on-line tools to help you.

https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html

https://www.canada.ca/en/treasury-board-secretariat/services/pension-plan/pension-tools/basic-pension-calculator.html

#60 JohhnyAB on 01.21.19 at 7:21 pm

I dont’ get it. You say: If properties cost three or four times a family’s annual income, we wouldn’t be having this discussion.
But before you said that people have debt more than 450% of their income, and that’s huge!. Isn’t three or four times a family’s annual income the same as 300-400% of their income? What’s the difference then?

#61 PastThePeak on 01.21.19 at 7:27 pm

#55 Catalyst on 01.21.19 at 7:03 pm
Common, 46% within a cell phone bill of insolvency is pure fear mongering and blatant lies. In this fake data world, this one doesnt pass the smell test.
+++++++++++++++++++++++++++++++

My take on it is that the people have about $200 in their bank account at the end of every month, and that’s what they base this response on. It likely doesn’t take into account that they could cut spending on other areas if something were to happen. Still an important data point though.

#62 Okie on 01.21.19 at 7:29 pm

Here in America we would call the 2% an annual rate. 2% inflation per year divided by 12 months.

In Canada I guess the annual inflation rate would be 24%. 2% X 12 = 24.

Great blog. Bad things will happen and you have been telling everyone who will listen.

The monthly inflation stat is always an annualized one. – Garth

#63 Bill Grable on 01.21.19 at 7:31 pm

Mr. Turner – inflation in Vancouver, has to be more like 3.0-4.0% range…as food prices have gone UP, fuel – services – the lousy CAD, and add in stagnant wages…a huge cost of housing increase….and Vancouverites are feeling it.

Angst has really ramped up, in the last few years – it is palpable.

#64 Robert Ash on 01.21.19 at 7:39 pm

One course in Money and Banking in the 70’s taught the importance of a Domestic Money supply. Then along came Greenspan, and his cult like following… And he was wrong and foolish, to eliminate the Time Value of money on the savings side of the equation. Counterintutive really since the cost of debt in retail terms remained so high, and of course this was a US Policy decision, to promote Home Ownership.. the American dream… Evidently Canada’s obsession. Then the Financial Meltdown of Collateralized Residential Debt…. the World in Peril, based on the US Currency status… Then we have a Genius Central Banker… that is correct Poloz, who rinses and repeats…. another Policy decision, to take from one Group, to reward the other financially challenged group with more Candy in the form of Debt, to further fuel the problem.. albeit kicking it down the road, a little.. but potentially more invasive since Canada’s resource base is experiencing poor market conditions, Globally. What I don’t get is the Stupidity, of not normalizing rates, to effect a proper balance.. No reason for it .. except Poor Governance… but the Government, won’t help, with the the unintended consequences of thier actions.. They certainly can’t lead by example… Don’t think it can happen.. A condo, in a great location in Florida, in 2006 two appraisals, and the price suggested for divestment… $240K, after the 2008 crash, expected Selling price of $ 98K, and ten years later sold for $ 164K … never recovered and the market price of $ 240K.. gone for ever… Real estate is not a liquid asset.

#65 Vision on 01.21.19 at 7:46 pm

Excellent post!

#66 crowdedelevatorfartz on 01.21.19 at 7:46 pm

@#56 Italian Stallion
“Reading Comments from some today reminds me of July 1981:
Head, bury in sand….”
++++
Yep.
I remember the house I was renting cost the landlord $240k in Spring 81.
It was sold for $80k in Summer 83

#67 High Park Ranger on 01.21.19 at 7:48 pm

Serious question about the graph: the Y-axis is “100 = long-run average”. So, what is it exactly?

3 yearly incomes? 4? or 5? This would go a long way towards establishing what’s sane and what’s not.

#68 TRUMP 2020 on 01.21.19 at 7:55 pm

Distractions will burn you everytime.

STAY FOCUSED….

Keep your eye on the prize.

Keep your rear and side view mirrors clean and use them all the time.

#69 yorkville renter on 01.21.19 at 7:56 pm

#38 – what is currently listed in west-end Toronto is sitting… or has a few relistings before it does sell. The quick-sale properties are few and far between.

I have just 1 friend who has made a purchase in the past year and he bought after $150k+ of price reductions. Change is in the air…

Let’s see what the Spring market brings.

#70 Deplorable Dude on 01.21.19 at 7:58 pm

#47 Expat…”#24

Jess you do relaize Buzzfeed is a fake news site right?
Mueller actually came out this weekend to correct their garbage fake article on Trump and his lawyer Cohen.”

————

I think the Fake News media pretty much hit rock bottom the last few days. Salivating over a potential Trump impeachment based on zero evidence (CNN mentioned it over 200 times), only to have Mueller pulled the rug out from under them..

And then even worse what is basically a lynch mob against these Catholic School boys for a story the lying MSN got completely backwards.

If I wasn’t so sceptical i’d think the Catholic angle was deliberate by the liberal pressitutes. They know Ruth Ginsberg is on her last legs and her likely replacement is a catholic. Lets tee up negative press in advance of god knows what Amy Barret will have to go through for her confirmation, given what they did to Kavanaugh.

#71 joblo on 01.21.19 at 8:11 pm

T2 speaks da truth,
It’s all Harpers fault.

#72 JSS on 01.21.19 at 8:12 pm

One day the indebted Canadian will wake up in the morning, and his back will be hurting. He will contemplate quitting, but knows he cannot, as the $500K mortgage needs to be paid.

Years and years will go by, and he will still be toiling in the same cubicle, same pay. By age 75, he will finally retire. As he steps out of his cubicle one last time and grabs his jacket, he will collapse on the floor. And die.

#73 Herb on 01.21.19 at 8:12 pm

With apologies to Garth and other conservative ideologues, here is a not-bad depiction of the microeconomic, one-pay-check-missed problem south of the border. It’s not much different here, with any health care and labour advantages balanced by a branch plant economy and a FIRE industry allowed to run amok. But of course the stokers will be blamed for the sinking of the “Titanic Finance”.

https://truthout.org/articles/shutdown-exposes-how-many-americans-live-paycheck-to-paycheck/

#74 Bank Fees on 01.21.19 at 8:17 pm

Did you receive your friendly letter yet of fees going higher? I was in my online bank the other day with a message that I have not raised my security higher. I gave it a go, and they wanted my email and telephone number that is unlisted. I filled it in and clicked. Then I needed the God Code so clicked, and the phone rang with a robot giving me a series of numbers to be entered, and clicked. Got a message successful. Two minutes later got an email saying I was good to go, and you will only be contacted in an emergency.

#75 Interstellar Old Yeller on 01.21.19 at 8:18 pm

#30 Homeowner Arrowtech on 01.21.19 at 6:14 pm
Today’s GIF – I don’t get it

That’s my excuse to keep watching it, too.

#76 Brian Ripley on 01.21.19 at 8:21 pm

If Real Estate prices fell to even 2014 levels, I’d pick up a property to live in tomorrow. #9 NotLegalAdvice

My Plunge-O-Meter http://www.chpc.biz/plunge-o-meter.html
has Calgary Single Family House prices at 2% below 2013 prices

But look at the housing chart http://www.chpc.biz/calgary-housing.html
SF houses don’t look like a buy

Now look at months of inventory http://www.chpc.biz/mar-moi.html
it’s approaching 6 months and rising since 2017

So Calgary housing prices may have may reached 2013 levels, (a one year positive margin for your 2014 price target), but the present negative trend has not been broken yet.

#77 robert james on 01.21.19 at 8:38 pm

“Tariffs are great”, says Trump, along with “we can win trade wars “.. American farmers were foolish enough to believe the idiot and voted for him.. I have a grain farm in SE Sask. , certified organic though.. Thanks Trump !! You arn`t totally useless.. https://www.castanet.net/news/Business/247123/Wheat-exports-to-China-soar

#78 8102 on 01.21.19 at 9:03 pm

Hi Mr.Turner,

I went through a divorce, lost the Mortgage Free House and a 6 figure RRSP Account, but I kept my Pension (Seems to be the way things go).

It really affected my pride having to rent (esp. When all my friends own).

But here I am 12 years later, Investments, Debt Free, Renting, giving my adopted dog the best life I can, and finally able to understand that maybe I am not a failure because I don’t “own”. It is still painful for me and it has not always been easy but I made all the decisions that brought me here.

I have followed you for years, sometimes I don’t agree with you, sometimes I feel your hitting a little close to home for me, but most of the time you provide good honest insight. I believe that you are a good and honest man.

My parents are healthy, my kids are doing well, and one of my biggest worries is how much of the bed my 9 pound dog hogs every night.

Maybe, just maybe, I am richer than I think…

#79 Stan Brooks on 01.21.19 at 9:11 pm

27 tccontrarian on 01.21.19 at 5:43 pm
“Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas. Certain postal codes in those cities (which experienced explosive price growth during the preceding boom) saw assessments plunge 70%. That’s extreme. But possible.” – GT
—————————————————-
When I suggested a likely 60-70% plunge in the most over-valued markets, I was ‘crazy’. In a couple of years, several of my ‘friends’, who were certain I was quite insane to sell my house “to play in the financial markets”, will find out otherwise. Some of them levered up to buy ‘more house’ – cuz RE is a ‘safe’ investment, of course!

When I predicted decline of 60-70 % from the top in Vancouver and GTA a few years ago I was laughed at, I was also called crazy, mad, hater, etc.

Now I predict 70-80 % decline in Vancouver and GTA as the super bubble inflated further in absolutely crazy ridiculous valuations and as the real exposure of Canadians and banks to debt becomes more clear.

How in hell would Canadians manage that mortgage with 178 % of income (and keeps rising…) in debt while US was around 130-ish at the peak of their bubble?

And how can the ‘economy’ based on consumption survive when half of the people acknowledge that they need to go further in debt in order just to survive?

Note: We are not talking about saving for retirement here, we are talking about making ends meet, not healthy eating, just putting some (GMO) calories on the table.

HELOC and TSX performance are the canary in the coal mine here, people borrow against ‘equity’ in their homes as they are broke and have no money to invest.

Keep in mind: we are not at just peak debt, we are at peak consumption based on debt. Which/the consumption determines the profits of the banks and utility and service companies.

You pay the debt, consumption decreases, economy shrinks. You don’t pay it, rates are reduced and loonie tanks, inflation skyrockets (see rents)

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

A note: this is not a normal recession situation. We are talking about depression like peak debt scenario which was possible only due to:

– major policy mistakes by questionably competent bureaucrats,

– due to the incredible gullibility of the sheeple feeling superior and confident as it was heading toward the slaughterhouse

and
– due to the incredible volume of disinformation (and scamming) disseminated by special interest groups who benefited from the bubble and continue to be extremely active and aggressive in protection of their fraudulent interests, including on this blog.

First they laugh at you, then they fight you, then you win.

Once the storm hits and the scam artists (selling ‘lifestyle’) disappear we would be left holding the bag:
– underwater house owners
– destroyed savings and retirement plans for all.
– damaged economy and currency
– taxpayers
– lack of jobs for the young.

Yesterday there was a good post by:
#174 Steven Rowlandson on 01.21.19 at 1:36 pm
outlining the desperation by the normal people from the economic situation;
it did not get any attention, of course, we still continue to be confident in our (increasingly proven baseless) superiority as individuals and society.

Fake confidence is the major factor and driving force in all bubbles and as it seems it has already disappeared.

We are now at the desperation phase, so now it is a safe bet what comes next, media is already preparing us for the inevitable.

Shacks in Mississauga and Vaughan for 1.5 – 2 mil. Really? What a mess.

#80 Sail away on 01.21.19 at 9:15 pm

#25- I think the fund manager is taking a flyer and hoping. He’s not the first to short Canadian banks. What happened to the others, you ask? Well… the banks didn’t crash.

This person was 19 during the 2008 US housing debacle. Maybe he was starting his financial studies at a highly impressionable time of life and happened to read The Big Short.

The signs are not yet there for a short position on the banks. Things fall apart slowly, then quickly. We’re not into the slowly yet, and the situation is different anyway. A great Charlie Munger saying: “It’s remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

I suspect this person is an outlier trying to be smarter than an ordinary person. My money would be elsewhere.

#81 not 1st on 01.21.19 at 9:24 pm

Maybe Garth doesn’t shop for groceries or have to buy essentials of life for a family. Stealth inflation is rocking to the tune of 8% in this country and about to go higher with carbon tax insanity. Not even your equity investments are keeping pace.

#82 akashic record on 01.21.19 at 9:28 pm

#HeToo survivor on the bike? :/

#83 Stan Brooks on 01.21.19 at 9:36 pm

#36 Debtslavecreator on 01.21.19 at 6:30 pm

Absolutely.

They will come after the savings and investments one way or another, sooner or later. For the ‘better of and fairness to all Canadians.’.

Numbered corporations, trust funds and french oversee villas will be of course safe.

I give it a few years, for sure after the coming elections.

I asked recently the question: Do you own the securities in your brokerage account or you just have a claim on it along with all the creditors and I got no answer.

#84 The real Kip (Ret) on 01.21.19 at 9:54 pm

“#43 Ryan Harris on 01.21.19 at 6:41 pm
#22 The real Kip (Ret) on 01.21.19 at 6:16 pm
—————————————————-
Dude I think you missed the point..”
—————————————————-

Ryan dude, I always miss the point. That’s the point!

#85 acdel on 01.21.19 at 10:04 pm

Hey never mind the $7 cauliflower, last week I saw a head of iceberg lettuce going for $4 and tomatoes so high that I could not stomach it and just walked away to the canned section.

Today some gas stations went from 83.9 to 102.9; 2% is non existent; we all know the truth; we do what we can to get around this; meanwhile our tax funded bureaucrats ??????

#86 BobC on 01.21.19 at 10:11 pm

But in reality there’s only 2 truths.
1. Trump and his thinking is bad.
2. Keep voting for socialism.
Everything will get better.

#87 AM in MN on 01.21.19 at 10:12 pm

10 more years to go to hit bottom.

Chatting to an agent friend in the YVR suburbs. He’s suggesting a 15% pullback since Nov. 2018, to say nothing of 2 years ago.

Nothing is moving, no more foreign buyers, which were 59 out of 60 of his high end sales in 2016. The downstream effects will take a while. Much of the robust job growth is still in construction, especially condos, but that’s just a time lag.

Like in the US, many cash-rich bottom feeders will end up owning a lot of rental housing, and a lot of people will work themselves to near death for 8 more years trying to hang on, and then become renters with a modest lifestyle anyway.

In the US suburbs, there is no FOMO, and very few underwater owners anymore, but the student loan domino is now falling.

Back to the future…real work, family, modest living, you’ll be fine. (church on Sunday helps with the last 2)

#88 WIN not lose on 01.21.19 at 10:13 pm

Garth,
Good column once again. Real estate in Abbotsford is flat… and decreasing.
The horror, … the horror!
Can you format that gif a little better – greater width.
We need to see her in all her fullsome glory.
The image is squeezed too narrow.

#89 BobC on 01.21.19 at 10:15 pm

#76 Robert James

Give it time. Do you people ever feel embarrassed when proven wrong time after time?

https://www.marketwatch.com/story/china-has-offered-to-ramp-up-us-import-purchases-to-1-trillion-per-year-report-2019-01-18

#90 Snapdginger on 01.21.19 at 10:18 pm

Expat,
Where did you go?

#91 45north on 01.21.19 at 10:25 pm

Face it. We’re buying what we cannot afford. So long as we keep at it, the danger grows. Just imagine the devastation that would take place in, say, Vancouver if prices toppled as they did in Phoenix or Los Vegas.

http://www.thehousingbubbleblog.com described the devastation in the US as its housing bubble burst. I thought that the Canadian housing bubble was about to burst. I was wrong.

I think there were a couple of reasons:

In Canada the debt levels were not as high as in the US.

the US lowered its interest rate to cushion the bust, Canada followed but this had the effect of pumping up Canadian real estate.

In the US, the bust caught the banks by surprise. The movie “The Big Short” shows their surprise.

in Canada, the banks were not surprised. They asked two questions: How far can we ride this? How can we get off? They could ride it until 2018 and they could get off when the stress test was put into effect.

I’d say that in Vancouver, in the eyes of the banks, the value has already dropped. There are a couple of different things: market price as shown in the MLS listings, assessed value as determined by BC Assessment and the value the banks put on real estate. The banks can drop the value they put on real estate. They can do this suddenly, drastically and without announcement. I think they have.

#92 does not matter on 01.21.19 at 10:25 pm

Rich will be fine, the rest will suffer. It is as it always is. Didn’t have money when times were good, and probably won’t in the future either.

We get some conservative crank next, as we are always following right behind america, delayed by a few years… Country makes me sick somtimes, if nothing but for our lack of creativity.

#93 TurnerNation on 01.21.19 at 10:27 pm

This weblog is back with old school jamming. Can’t believe my eyes, Bikes, Babes, & Balanced Portfolios.

Or for the more erudite of readers, Harleys, Hotties, & Hedge Funds

#94 Mike Allston on 01.21.19 at 10:33 pm

Did anyone actually get to the article? I was too busy watching the movie.

#95 JWD on 01.21.19 at 10:36 pm

Memories…

That happened to me as a 15 year old on a summers day. I was riding my bike home on the sidewalk, and out of the corner of my eye, 2 beautiful girls in bikinis. They were washing a car in their driveway. I stared a second too long, lost control of my bike and found myself going through a parked car window. Of course, they saw the whole thing, took me inside their house and proceeded to pick glass out of my body for 30 min. They patched me up in their soapy bikinis and sent me home. Embarrassing to say the least, but also one of the greatest days of my life! ;)

#96 HowDeepThe Pain? on 01.21.19 at 10:40 pm

#78 Stan Brooks on 01.21.19 at 9:11 pm
27 tccontrarian on 01.21.19 at 5:43 pm
“….Shacks in Mississauga and Vaughan for 1.5 – 2 mil. Really? What a mess.”

++++
Current count is about 5,000 units in the Greater Toronto Horseshoe listed for over a Million. And this is Mid-January!
…2,700 units over 1.5 Million.

I can’t imagine the devastation with 30% correction.

#97 Fortunate One on 01.21.19 at 11:03 pm

Wow… “Big hat no cattle” I haven’t heard that in a long long time.(Thank you for the stroll down memory lane) Perhaps some of the people you counsel should read The Millionaire Next Door. Unfortunately our society no longer values the essence of that enjoyable and pertinent read. I could loan them my copy which I still have. I also have their second book if somebody wanted to read it… just sayin

#98 Keith on 01.21.19 at 11:11 pm

When you look at what Canadian families make, and you see how most people live, it’s no secret how it’s happening. Wages have kept pace with inflation at best for most people, yet the lifestyle inflation is there for all to see. The home renovations, travel and expensive automobiles aren’t paid for in cash these days.

There is little incentive to save when GIC rates go below 4%, and the culture of thrift of my grandparents who lived through two world wars and the Great Depression would be laughed at by young adults today. Warren Buffet writes about the virtues of thrift, and being able to sleep at night when you have no debt.

People will be working for a very long time to pay off the toys and be able to retire. They will need to have the kind of job you can do into the seventh and eight decade at this rate. Great news for employers.

#99 B.C.'s largest public-sector union wants inquiry into money laundering, drugs on 01.21.19 at 11:17 pm

Billions with a capital B

https://nationalpost.com/pmn/news-pmn/canada-news-pmn/b-c-s-largest-public-sector-union-wants-inquiry-into-money-laundering-drugs

#100 Rentin on 01.22.19 at 12:19 am

Garth likes to say how things are always so similar in the USA.

https://www.cnbc.com/2019/01/08/chinese-middle-class-buying-up-american-residential-real-estate.html

Perhaps this is just realtor hype BS or does the gov of USA keep better records?

It different here…..

#101 Fortune500 on 01.22.19 at 12:57 am

While I personally appreciate the change from dog pictures … the Gillette fans are going to crucify you.

#102 jane24 on 01.22.19 at 1:23 am

With the exception of two members, one who scored on TO property and one who has an Ontario Teachers Pension, ALL my Canadian family are struggling as they come up to retirement. Very little to show for 30 to 40 years of work due to high energy bills from climate, low wages and high cost of living in Canada and ALL are professionals and/or university educated. They didn’t spend it all Garth, they never had it in the first place. That is life in Canada. It is so unfair to criticise these hard-working people. The only mistake they made was living in high cost Canada rather than low cost USA.

Here in Britain we watch the Brexit circus with our mouths hanging open. How it is possible for MPs to be so self-centered and power hungry for the poison chalice of govt. Always a silver lining through if you have cash. We are looking to upgrade our car and the prices are dropping every week and I have yet to book my flight tickets for this year’s holidays and they are dropping too. I cannot believe how cheap flights are to Canada this August for example.

#103 Dolce Vita on 01.22.19 at 2:05 am

#36 Debtslavecreator

Well said, indeed.

The financially reckless you talk about will get theirs soon enough and be taken out of the economy for a decade or more.

Financial ego and hubris never end well for the vast majority of people. That, you can bank on.

———————————————

“Only a matter of time” and “And you know what’s coming.”

Yes, I still accuse you of being timid my Liege. Then again, your words do carry weight and if you so much as intimate the “R” word the Cdn., 2 bricks short of a full load, MSM will begin quoting you widely and then you’ll get blamed as is customary per human nature (“punishment of the innocent”).

Buona Mattina & a truth filled Blog.

#104 DON on 01.22.19 at 2:35 am

My road to financial freedom is getting a job at the BC Legislature…I need a wood splitter also, lucky for me they have one there too.

#105 westcoastguy on 01.22.19 at 2:58 am

Have you ever gone to a bank machine and looked at transaction slips that are left behind or sticking out of the garbage?

I assure you almost any that you find will show a balance less than $500 usually closer to zero.

Bonus points if it shows a negative overdraft balance or if they paid a $2.50 extra service fee for the privilege of taking money out because they didn’t prepare.

It’s scary how many people have next to nothing in their bank account. Must be stressful …

#60 PastThePeak on 01.21.19 at 7:27 pm
#55 Catalyst on 01.21.19 at 7:03 pm
Common, 46% within a cell phone bill of insolvency is pure fear mongering and blatant lies. In this fake data world, this one doesnt pass the smell test.
+++++++++++++++++++++++++++++++

My take on it is that the people have about $200 in their bank account at the end of every month, and that’s what they base this response on. It likely doesn’t take into account that they could cut spending on other areas if something were to happen. Still an important data point though.

#106 David Driven to Succeed on 01.22.19 at 4:34 am

Jobs numbers great? What crap! That’s a Liberal propaganda spew that’s so phony it’s sickening. Hiring newcomers into federal government jobs and funding provinces to do the same serves to hide the fact that more people are falling off the EI rolls and not being counted! You only have to look at the jobs numbers which prove that 99% of the hiring is government vote buying. Using new debt in ethnic religious ghettos and corrupt public service union bank accounts. Premiers like Gord are correct , Canada is already in recession but the American Trudeau backers are paying to hide the facts.

https://www.bnnbloomberg.ca/doug-ford-says-liberals-carbon-tax-will-plunge-canada-into-recession-1.1201515

#107 MF on 01.22.19 at 7:05 am

#101 jane24 on 01.22.19 at 1:23 am

“They didn’t spend it all Garth, they never had it in the first place. That is life in Canada.”

-How did my parents end up in retirement with a big nest egg, paid off GTA house, full cpp/OAS, minor business venture providing passive income, and a pension to boot then?

Why am I able to save about 30-40% of my savings, while renting in the GTA?

#102 Dolce Vita on 01.22.19 at 2:05 am

Posts like this have been popping up in our comments section since I started reading in 2010.

Any time now.

#97 Keith on 01.21.19 at 11:11 pm

“There is little incentive to save when GIC rates go below 4%, and the culture of thrift of my grandparents who lived through two world wars and the Great Depression would be laughed at by young adults today”

-Not at all. Why do you think the sharing economy is so pervasive among young people? There is a huge movement towards saving and investing.

You just don’t hear about them on here complaining (me excluded).

MF

#108 MF on 01.22.19 at 7:10 am

#82 Stan Brooks on 01.21.19 at 9:36 pm

Who is THEY?

Anyways, anyone over 6 years old should have learned a long time ago that there are zero guarantees in life for anyone.

This is true for health and, yes, even finance. You can worry about it and stay home and rot, or you can live your life with hope and positivity. The successful usually live like the latter. It’s true which option this poster chose though.

MF

#109 David Driven on 01.22.19 at 7:48 am

DELETED

#110 Stan Brooks on 01.22.19 at 7:55 am

#107 MF on 01.22.19 at 7:10 am

Why 6 years old and not 7? Or 10?

Who is talking about guarantees?
Life is about probability and likelihood.
Pretending that it/probability of certain outcome does not matter is rubbish. You take risks considering the rewards and the probability for it/the favourite outcome/ to occur.

Yes, you can jump out from the 30th floor and hope to survive, even be positive about it.
But the probability for that is…. well, a little just above zero.

Or eating junk food and hoping to stay healthy.

It’s not what you don’t know that kills you, it’s what you know for sure that ain’t true.

All I am doing here is providing relevant information to help you assess the risks and the likelihood of specific outcomes.

I am not here to teach you (as you naively are trying to), the decision is all yours.

You don’t need to repeat other’s mistakes if you can learn from it.

http://kacommercialcorp.com/conscious-paranoia-is-healthy/

#111 -=jwk=- on 01.22.19 at 8:00 am

cheers to MF for keeping it real.

@104 westcoastguy

Have you ever gone to a bank machine and looked at transaction slips that are left behind or sticking out of the garbage?

I assure you almost any that you find will show a balance less than $500 usually closer to zero.

It’s scary how many people have next to nothing in their bank account. Must be stressful …

chequing account money is dead money. keeping just the minimum in there is the smart play. We move about 10k in bills (including retirement contributions) per month through our chequing account but only keep a balance of 100 bucks or so. No stress here, just smart financial management.

#112 Stan Brooks on 01.22.19 at 8:05 am

#107 MF on 01.22.19 at 7:10 am
#82 Stan Brooks on 01.21.19 at 9:36 pm

Who is THEY?

———————-

Jimmy Hoffa?

#113 Headhunter on 01.22.19 at 8:06 am

MF
-How did my parents end up in retirement with a big nest egg, paid off GTA house, full cpp/OAS, minor business venture providing passive income, and a pension to boot then?
______________

Birth house/genetic lottery perhaps. Who knows? Can you duplicate what they have done? What worked 25-30 years ago doesn’t apply today.

I have a friends raised a family, stay at home wife. Sold Kenmore stuff at SEARS.

#114 crowdedelevatorfartz on 01.22.19 at 8:10 am

@#86 AM in MN
“Much of the robust job growth is still in construction, especially condos, but that’s just a time lag.’

++++++

Yup.

There are still lots of cranes all over the city but developers with millions sunk into half finished condo builds and completion dates 6 to 12 months out…oh baby ….must be crapping their pants right now.

I’m thinking a Spring sales slump smellier than my elevators should wake the last of the buyer deniers up to the fact that this horse is …dead… and there is no point in Realtors flogging it.

#115 jess on 01.22.19 at 8:18 am

warnings of a different kind … who is “they”

https://github.com/daviddao/awful-ai

Awful AI – Raising awareness to the misuses of AI
Artificial Intelligence (AI) is getting more widely used by companies and governmental agencies around the world despite evidence of biases. Awful AI aims to track the current misuses of AI in the hope of triggering a discussion around opposing biased AI tools

For example:

Sexist Recruiting – AI-based recruiting tools such as HireVue or an Amazon internal software, scans various features such as video or voice data of job applicants and their CVs in order to tell whether they’re worth hiring. In the case of Amazon, the algorithm quickly taught itself to prefer male candidates over female ones, penalizing CVs that included the word “women’s,” such as “women’s chess club captain.” It also reportedly downgraded graduates of two all-women’s colleges. [summary]

#116 dharma bum on 01.22.19 at 8:22 am

#26 Yorkville Renter

Now the game is getting the wife to hold off on house horniness until after the crash is in full bloom… I’m running out of runway- Spring 2020 is about as far as she’ll go!
——————————————————————-

Time to start looking…for a new wife, that is!

#117 crowdedelevatorfartz on 01.22.19 at 8:26 am

@#101 Jane24

jane jane jane.
You’re blaming “the high cost of energy bills” for the fact that your “university educated” friends didnt save for their future?
Please. They were too busy spending the money they had in the present rather than squirrel some a way for the future.
Greaterfools and their money.
Then you move on to the idiots in British Parliament squabbling over Brexit. Did you( like the rest of Limeyland) just now realize what a total disaster it is?
I seem to recall you bragging about your “villa” in Italy and how Brexit was no big deal…..
Make sure your British …or better yet your Canadian passport is up to date because I’m sure once jolly old Blighty is unceremoniously dumped from the EU due to self inflicted economic suicide…… most boorish Brits wont be too welcome in “The Continent”.
Lastly.
Your gleeful bragging about “vulturing” for “deals on airline tickets and new cars” in Brexit-land seems a bit out of place when you just finished complaining that your “friends” have “no pensions”.
Careful. Your lack of empathy is showing.

P.S.
You should book that cheap flight to Canada now before the food riots start in England and every plane is filled with refugees…..

#118 dharma bum on 01.22.19 at 8:31 am

Here’s the solution to avoid bankruptcy:

Start being a cheapskate.

https://www.youtube.com/watch?v=-Fs4ctVXApY

Just save your money dogs. It’s the same Garth message.

Over, and over, and over, and over, and over, and over…

#119 crowdedelevatorfartz on 01.22.19 at 8:31 am

@#103 Don
“My road to financial freedom is getting a job at the BC Legislature…I need a wood splitter also, lucky for me they have one there too.”

+++
Good one.
I almost chocked on my dinner last night when some pompous ass in charge of the latest BC corruption investigation to hit the incompetents infesting the BC Legislature stood in front of the TV cameras and said, “We’re here to protect the taxpayer and how their money is spent……”

Really.
BC Rail.
BC Place Roof
2010 Winter Owe-limp-icks
Site C
on and on and on.

#120 not 1st on 01.22.19 at 8:33 am

Garth, I love hearing from the socialists on this blog. The delusion is wonderful so is the theme that millennials and young ones are some how using their sunny ways to save like the greatest generation did. Hilarious.

That generation survived and prospered by being defensive, by preparing for a raining day and by owning practical real estate. They didn’t go around upgrading houses every year and trying to park more cars on the driveway.

Far as Canada job numbers are concerned, well that can be summed up as make the take out window great again. There are no high tech, high wage, manufacturing jobs coming here. Resources are at a standstill thanks to liberal ineptitude. IMF has Canada squarely in the 1.5% GDP range for the next decade. GDP less than inflation, well that does that mean? Yup technical recession, prolonged. Move your maple to MAGA.

The socialists in BC and GTA should have a read what happened in Venezuela today.

#121 PastThePeak on 01.22.19 at 9:41 am

#101 jane24 on 01.22.19 at 1:23 am
With the exception of two members, one who scored on TO property and one who has an Ontario Teachers Pension, ALL my Canadian family are struggling as they come up to retirement. Very little to show for 30 to 40 years of work due to high energy bills from climate, low wages and high cost of living in Canada and ALL are professionals and/or university educated. They didn’t spend it all Garth, they never had it in the first place. That is life in Canada. It is so unfair to criticise these hard-working people. The only mistake they made was living in high cost Canada rather than low cost USA.

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

Approaching retirement, so not necessarily impacted by the high cost of housing now, and could have been a beneficiary if purchased over 10 years ago. Something doesn’t add up.
– University educated. Question is in what? If it is “XXXX studies”, then I can understand.
– Professional. Again, in what. Most persons I know that would use that designation all make good to very good salaries – 100K is quite common with say 10 years of experience. Couple to a similar spouse, seems like some solid income.
– Perhaps you missed out on something relevant, like an illness, accident, or divorce, which can clearly derail saving and retirement plans
– If these family members lived in GTA and Van, and never purchased (or purchased after the big increase), then I can see a problem. But that is the point many on here make – there is a country beyond these two cities, if the costs of living are just too high.

#122 TurnerNation on 01.22.19 at 9:43 am

Oh our global elites. How they will sup and dine, and be roaring with laughter for the hold their have over our money and drug-addled brains.
They’ll stone you just like they said they would.
“Shine your shoes Guv’?”
……
The Financial Post reports in its Tuesday edition that the global elite are on their way to Davos for the World Economic Forum’s annual gathering, and joining the party are the cannabis elite. The Post’s Vanmala Subramaniam writes that a bevy of executives and former politicians — all of whom are involved in the legal cannabis industry — are expected to attend the first-ever “Cannabis Conclave,” a three-hour lunch at an alpine eatery only accessible by cable car. …Among those scheduled to appear at the lunch are former Israeli prime minister Ehud Barak, who serves as chairman of the Israeli medical cannabis company InterCure, and Bruce Linton, chief executive officer of Canopy Growth. This year marks the first time that cannabis events, attracting prominent members of the industry, are being held on the sidelines of the World Economic Forum, a sign of growing legitimacy of the global marijuana sector….© 2019 Canjex Publishing Ltd. All rights reserved.

#123 expat on 01.22.19 at 9:49 am

BobC wrote
But in reality there’s only 2 truths.
1. Trump and his thinking is bad.
2. Keep voting for socialism.
Everything will get better.

How about this.

Socialism and its evil cousin Communism killed more people than fascism.

Simply look up the numbers.

As a person who has lived under both I can tell you Socialism destroys its society as it hunts for wealth and dooms the populace to misery and suffering like no other as the state gets more and mroe extreme.

As it evolves into Communism the state turns against its people.

You clearly know nothing about what its like. You would do well to go back to your history books…
Better yet talk to people who lived under these regimes. Redistribution of wealth by state is a failed miserable philosophy.

Socialism destroys society. Look at how this country has become a power? It is through hard work, great ideas, and luck.

Not welfare.

Canada has turned into a Nanny state that is heading towards Communism.

You are witnessing it in BC now and Canada in general as the state becomes a monstrous beast that feeds itself on more and more wealth as the selected few party members live like gods….

Educate yourself.

Capitalism and all its worts at least offers the individual an opportunity to a quality of life like no other.

If though those indivicuals prefer to sit on their butts and smoke legal dope and do nothing to better themselves –

it is their choice.

Its not our job to feed them.

Self actualization my friend.

I started with nothing and millions as well have bettered their lives.

#124 LivinLarge on 01.22.19 at 10:04 am

“Garth, why would investors hold the Canadian Banks with this scary blog post?”

Well, for a starter, lending isn’t the core earner for CDN banks that it once was. BMO for one reported a %36 increase in revenue from their US opperations in their last quarter and raised their dividend as a result. Their yield is just over %4 PA now and that offsets inflation and then some because the divs are treated so advantageously at tax time. You aren’t getting rich quickly with banks but you aren’t ever going to see a decrease in divi face value with any of the big 3 or 4 of them…never has happened in over 100 years. Worst case is the divi just stalls for a few years like it did in 2008-12. Capital growth takes a hit along most other equities when the economy goes for a dump but knowing you can count on the Bank divi staying there s a rather nice feelng.

IMO, the only time to invest in the banks is after they’ve taken a hit in a recession and that’s a gold mine f rhe first order. Just buy and sit on what you have and buy on the BIG dips.

#125 not 1st on 01.22.19 at 10:09 am

https://www.imf.org/en/Countries/CAN

Right here. Look what Trudeau is bringing you. Next 5 yrs GDP at 1.6% and (reported) inflation 2.1%.

Looks like the 1970s all over again. Stagflation. High debt and a housing bubble and massive consumer credit to boot. Add in a Liberal/NDP govt and Canada is fd. Your wealth is being eroded and you don’t even know it.

Garth is reading the tea leaves in Canada all wrong.

#126 kothar on 01.22.19 at 10:20 am

If we strip out Toronto GTA and Vancouver areas from the Canadian debt to income ratio, I wonder where the “rest” of Canada falls? It seems as if the majority of housing debt and prices have occurred in these two areas.

#127 Alistair McLaughlin on 01.22.19 at 10:27 am

@#72 Herb, yes, many Americans are carrying too much debt. However, the household debt picture has improved markedly in the US over the past decade, whereas in Canada it’s gotten worse and worse. We are now at exactly the same level of indebtedness vs. disposable income as Americans were in in 2007, right before everything collapsed there. One does not need to be a right wing ideologue to see that this time it is Canadian households who have the more serious debt problem.

#128 Stan Brooks on 01.22.19 at 11:06 am

#126 Alistair McLaughlin on 01.22.19 at 10:27 am
@#72 Herb, yes, many Americans are carrying too much debt. However, the household debt picture has improved markedly in the US over the past decade, whereas in Canada it’s gotten worse and worse. We are now at exactly the same level of indebtedness vs. disposable income as Americans were in in 2007,

Not really, at the peak of their housing bubble US household debt to income ratio was around 1.38 (now it is 1.10), ours is 1.78 !

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

It seems many people (not necessary crazies) are expecting recession here:

https://ca.finance.yahoo.com/news/canada-slip-recession-without-u-100000923.html


(Bloomberg) — Canada’s economy may soon endure something it hasn’t faced in 68 years: A recession without the U.S. in the same boat.

That’s the view of Jim Mylonas, global macro strategist at BCA Research Inc. in Montreal, a firm that’s been making calls on markets and economies since 1949. Mylonas says the surge in household debt combined with rising interest rates will push the Canadian economy into recession, even while the U.S. economy continues to grow.

“I think we’re just on the precipice of embarking on a serious recession,” Mylonas said in an interview from Bloomberg’s Toronto office. “It’s not a matter of if, but when.”

#129 Stan Brooks on 01.22.19 at 11:14 am

#124 not 1st on 01.22.19 at 10:09 am

Garth is reading the tea leaves in Canada all wrong.

Don’t underestimate the Maestro, he knows perfectly well where we are heading, he just can’t say it yet/while I can.

#130 n1tro on 01.22.19 at 11:33 am

#52 expat on 01.21.19 at 6:55 pm
Bankruptcy and insolvency typically is a process not an event.

They simply wake up one day and say enough….
Its called the boiling frog syndrone in my circles…
They don’t even realize they are dying until they do..

I’m curious

How mnay of you have been through a 40-6-% real estate correction?
—————————–
I’ve been through 1. 1988-2002(?) Great bargains to be had if you had cash on hand. This time around, when banks unload the mortgages they are holding and cash in for any losses with the CMHC, any drop in their share prices because of hype by silly wet behind the ears hedge fund gamblers will be bought by this guy.

#131 Ronaldo on 01.22.19 at 11:55 am

#118 crowdedelevatorfartz on 01.22.19 at 8:31 am

And let’s not forget the 1/2 billion dollar Fast Ferry Fiasco. The interest on that one alone would take care of a lot of expenditures.

#132 IHCTD9 on 01.22.19 at 11:58 am

#110 -=jwk=- on 01.22.19 at 8:00 am

chequing account money is dead money. keeping just the minimum in there is the smart play. We move about 10k in bills (including retirement contributions) per month through our chequing account but only keep a balance of 100 bucks or so. No stress here, just smart financial management.
__

You are probably 1 in 100,000 people if you are managing your working account “leftovers” so tightly as to keep a 100.00 buffer in there.

Our account will bounce between several thousand and maybe 800-1000 depending pretty much solely on what time of the month it is. I’m regularly throwing out slips that show 2-4K when money went in, and no bills had vacuumed it all out yet.

Right now our chequing account is between 7-8K just because it has slowly climbed there since last September due to the absence of certain withdrawals previously knocking the balance down. The wife and I only just mentioned it last week and discussed putting it somewhere else after deciding it would not get drawn down anytime soon.

I can’t be rare doing things like this. I’ll bet all those 500-600.00 ATM receipts you see laying around represent the account holders’ total available cash much more so than active management of dead cash :).

#133 LivinLarge on 01.22.19 at 12:44 pm

A second reason to invest in CDN banks is their board’s perenial determination to keep their common shares affordable to the rank and file mom and pop retail investor.

Unlike the vast majority of common share issues, the banks regularly split their shares. Usually and in recent times that happens as a 1:1 share dividend. Splitting as a share dividend doesn’t require a shareholder vote so the board can declare one when ever the decide it is due.

My favorite bank is BMO, because they are the oldest issue in Canada and their history of increasing dividends without ever cutting it.

When they split you have twice as many shares usually trading at half the pre split price (div too) but this makes the shares themselves much more affordable to the retail investor and “usaually” stimulates buying.

BMO. Last split in early 2001 and pundits have been expecting another slit since 2017…let’s hope.

So, unlike the vast cohort of common shares, when you look their online chart you don’t get the full picture without also looking at their split history too.

With board lots sitting at 100 shares to avoid sub lot premiums, if the bank trades around $100 then the investor needs to cough up $10,000 and that “seems” to be a major resistance point.

So, banks keep their shares affordable to retail investors through one of their only legitimate methods…splitting.

#134 LivinLarge on 01.22.19 at 12:49 pm

Keep in mind as well that while the big banks have been buying up small US retail and investment banks, the vast bulk of their US holding’s revenues are now coming from financial management service fees and not traditional consumer lending and this situation dramatically lessens their exposure to loan losses.

#135 Iconoclast on 01.22.19 at 12:57 pm

If the Chinese got pissed off enough, they could suggest
Chinese nationals divest their Canadian real estate.

For their own good, of course, due to Canada’s recent
actions. And to avoid any allegations of money
laundering.

Would a fire sale cause a crash?
Would a crash trigger a cascade of local-buyer defaults?
How much damage would this cause Canada?

I wonder what they’re coming up with…

#136 Mattl on 01.22.19 at 12:59 pm

110 -=jwk=- on 01.22.19 at 8:00 am
cheers to MF for keeping it real.

@104 westcoastguy

Have you ever gone to a bank machine and looked at transaction slips that are left behind or sticking out of the garbage?

I assure you almost any that you find will show a balance less than $500 usually closer to zero.

It’s scary how many people have next to nothing in their bank account. Must be stressful …

chequing account money is dead money. keeping just the minimum in there is the smart play. We move about 10k in bills (including retirement contributions) per month through our chequing account but only keep a balance of 100 bucks or so. No stress here, just smart financial management.

____________________________________________

Same here. We make sure every dollar in our checking account is allocated to debt or savings. A large checking account balance is a sign of financial incompetence or real wealth.

I suspect even real wealthy folks keep their account balances low as a percentage to net worth. I mean why run a large balance? Almost all purchases go on the CC, that gets paid in full each month via bank transfer, and the cycle repeats.

#137 Ace Goodheart on 01.22.19 at 1:30 pm

If Canadians owe billions in HELOCs and mortgages, and banks have been loaning out all this money, that of course raises the question, whose money is this?

Who has fronted all this cash, that the banks are loaning out to everyone, willy nilly, as much as they can, secured to houses that might not be worth anywhere near the amount they’re mortgaged at?

Who is providing all these deposits? Where are the banks getting all this deposit money?

The answer will surprise you. We all know that people for the most part have no savings. There are not billions of dollars in savings accounts at Canadian banks, which can be used as piggy banks for all of this lending. The banks themselves don’t have this sort of capital just lying around to lend out.

So where does the money come from?

Well, it’s made up of credit notations in bank ledgers, offset by secured assets, and insured by the Federal government.

That’s right. The money to buy the house, was loaned by the bank, based on the value of the house, which is mortgaged to the bank, for the value of the mortgage, and this entire financial arbitrage situation is insured by our Feds (who run billion dollar deficits every year, are billions in debt and could never make good on this insurance, if things were to go south).

Have a look at your mortgage. You will see that the mortgage registered on the house is for the entire value of the house, and not for the amount that you actually borrowed. The bank keeps track of how much you actually owe.

Banks are required to have a small percentage of the money that they loan out, actually in cash. The rest is just a credit notation, secured by an asset notation.

Read here: (It’s fascinating to understand this stuff):

https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp

So what we have here is billions of dollars in mortgages, loaned out using financial arbitrage, and insured by a central insurance agency which could never afford to actually pay out all that is owed.

What does that sound like to you?

AIG?

2008?

A lot of money created out of nothing?

#138 IHCTD9 on 01.22.19 at 1:38 pm

#112 Headhunter on 01.22.19 at 8:06 am
MF
-How did my parents end up in retirement with a big nest egg, paid off GTA house, full cpp/OAS, minor business venture providing passive income, and a pension to boot then?
______________

Birth house/genetic lottery perhaps. Who knows? Can you duplicate what they have done? What worked 25-30 years ago doesn’t apply today.

I have a friends raised a family, stay at home wife. Sold Kenmore stuff at SEARS.
___

The scary thing is just how much more money the typical 2 income household earns these days. Women make pretty much the same as Men in the West – and most work in 2019. But, the short lived dual income advantage has been lost – now it’s a REQUIREMENT.

“Lifestyle” has now usurped the excess cash-flow and has set a new standard for what is normal. The pawl has clicked past another tooth – and there is no going back to where we used to be – unless we all go at the same time. Today we are seeing that even two decent incomes don’t cut it anymore in some places, so debt has stepped in where incomes gave out.

It’s like the old rule about trash: it “expands to fill the space provided”, so too “lifestyle” expands to absorb the cash-flow provided.”

So here we are now. If you want to live in the GTA, own a house, raise a family, and comfortably retire there – you need to be rich, even by today’s standards.

Too much money chasing all the wrong things for way too long. It won’t get fixed without fire and brimstone – you can take that to the bank.

#139 JuliaS on 01.22.19 at 1:42 pm

Low interest rates encourage reckless borrowing and high interest rates encourage savings. Slow creep in the interest rates sends out a message that sub-prime borrowing is a no-no. It’s a step in the right direction. Canadians have to deleverage and the banks give people the luxury of time to get out while they still can. Too bad that all our interest rates do is mimic the US policy and don’t seem to be based on the state of our economy. It’s more about maintaining a trade balance with the neighbor. If the US caves in and freezer or lowers rates, the chances of BOC staying the course are non-existent. We need higher interest rates, and if few basis points are enough to ruin your finances, it’s merely an indication that you borrowed too much. Risk is always there, regardless of the cost of borrowing.

#140 not 1st on 01.22.19 at 2:07 pm

You know how when there is a tragedy and every body says hug your kids a little tighter tonight.

Well we have one in the works here and our kids will be paying for it. Give them a hug before you do something stupid at the ballet box. They will be paying.

Trudeau has the highest non recession spending by any PM in history. Choke on that a little while you sip your latte.

https://vancouversun.com/news/politics/trudeau-on-track-to-spend-more-on-government-programs-than-any-canadian-prime-minister-study/wcm/c385495f-693f-4668-a30a-a65cad1350a4

#141 Ronaldo on 01.22.19 at 2:27 pm

XIU up 10.8% since December 24th. I wonder how many jumped at this opportunity back then? I would expect that we will see this up 15-20% by year end.

#142 waiting on the westcoast on 01.22.19 at 2:31 pm

Leader seeing the example…

Toronto Sun: EDITORIAL: Trudeau’s spending habits a problem for Canadians.
https://torontosun.com/opinion/editorials/editorial-trudeaus-spending-habits-a-problem-for-canadians

#143 Ubul on 01.22.19 at 3:30 pm

#136 Ace Goodheart

Banks are required to have a small percentage of the money that they loan out, actually in cash. The rest is just a credit notation, secured by an asset notation.

Read here: (It’s fascinating to understand this stuff):

https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp

So what we have here is billions of dollars in mortgages, loaned out using financial arbitrage, and insured by a central insurance agency which could never afford to actually pay out all that is owed.

What does that sound like to you?

AIG?

2008?

A lot of money created out of nothing?

The best part of it is the credit notation, secured by an asset notation.

The asset backing the credit notation is the same house that you borrow the mortgage for.

On top of that, when the same house is being sold 3-4 times, and the actual cost of building it was already recouped when the first or second owner paid off their mortgage.

After that the bank is using an already paid off asset to charge interest. Money from the thin air.

#144 Eat crow on 01.22.19 at 3:38 pm

In regards to your post on evil
I quote
The Dippers have chosen to use a negative-option implementation, likely for the first time in Canadian tax history. Every single property owner in all of those municipalities will have to pay the assessed tax unless they apply for and are granted an exemption by the end of March. So citizens have to swear their real estate is a principal residence or leased out for at least six months of the year (or they are disabled, or sick or being divorced) in order to escape.
I will admit i found this comment confusing as i got mixed up with the current requirements to say you own your current home to receive a grant.

However, i shall now eat crow and apologise.
In todays Nanaimo paper one million people in BC are required to. Fill out a form to declare that they only own one property. To avoid the speculation tax.

To clarify the comment by Garth BC speculation tax requires one million people in BC to fill out a form to avoid the new tax
See Nanaimo news bulletin Speculation tax could have been a polite win on page 6.
Mr.Turner I apologise.

#145 Sold Out on 01.22.19 at 4:11 pm

#130 Ronaldo

Your ideological blinkers are quite evident. The BC Libs made damn sure to sell the fast ferries at the greatest loss that that they could manage. I’m surprised that they didn’t pay someone to take them off their hands, just to throw shade at the NDP. The NDP were only guilty of trying to create an aluminium boat – building industry, you know – the kind of high paid manufacturing jobs that everyone laments the loss of in Canada. The corrupt Liberal/Socred regime created a cash for access, money laundering kleptopcracy. I’ll see your “fast ferry fiasco” and raise you a BC Rail/BC Hydro/Site C/ICBC dumpster fire.

#146 AGuyInVancouver on 01.22.19 at 6:29 pm

#143 Eat crow on 01.22.19 at 3:38 pm
In regards to your post on evil
I quote
The Dippers have chosen to use a negative-option implementation, likely for the first time in Canadian tax history. ..
_ _ _
No, no, no. BCers already have to manually claim the homeowners grant on property tax, or you pay the higher rate.

#147 Dominoes Lining Up on 01.22.19 at 9:49 pm

So true, “RRSP Season” used to be a big media meme this time each year.

Too much financial stress and debt, methinks, for that to happen now.

#148 LivinLarge on 01.23.19 at 10:07 am

“Toronto Sun: EDITORIAL: Trudeau’s spending habits a problem for Canadians.” go figure.

And where does the money come to pay for this? Either cutting spending or raising revenue and cutting spending is out as the solution. They aren’t getting it from excise taxes on pot that’s for certain. IMO the money comes from more people taxes at the current rate or raising the effective marginal rate i.e changing the way taxable incomes are calculated.

The feds did this latter method in the late 80s when they replaced tax deductions with non refundable tax credits at the lowest marginal rate. That IMO was the biggest tax grab in Canadian history. I know in my personal case, my tax payable increased almost $2K one year on virtually identical income and expenses. That one seems to have been executed so well, almost no one noticed.