Moral hazard

The No.2 property outfit in China, Evergrande, is wobbling. The stock has tanked as the company says it can’t make a big payment on its bank debt, due Monday. The developer has hundreds of thousands of homes under construction – all sold – so Beijing has just moved in to bail it out ensuring “social stability” is maintained and the real estate gets built.

This is a $300 billion (US) mess. No, it’s not as much money as Justin can borrow in a year, but it’s still a big deal. “So China follows our approach… create a bubble, bail out those who participated… rinse.. repeat,” says a prominent Vancouver financial advisor and blog dog. “Hey, It’s real estate.. it can never fail or go down !!”

For years the two of us (officially we’re competitors) have watched the Canadian bubble inflate. We’ve marveled at the risks people take. The leverage they swallow. The blind faith they have in dirt. The lack of diversification they embrace. The debt they brush off. And the blind avarice that an historic run-up in one asset class can cause. There is willful blindness to what could, and probably will, happen. The wisdom of the crowd defeats caution.

All of this is the polar opposite to how Stu and I do our jobs. People give us their life savings. Then we pursue two goals: (a) don’t lose money and (b) generate a decent and predictable return. Our waking hours are spent understanding risk, then working to contain it. Market risk. Inflation risk. Currency risk. Macroeconomic and monetary policy risk. Tax risk. And human nature – FOMO, fear and greed and the eternal propensity to buy high and bail low.

“In our next lives,” he says, “you and I will come back as real estate professionals instead of portfolio managers.”

Roger that. Here are his reasons why.

1. When we put our clients into real estate they’ll think long term.  If it goes down, they will be telling us “no problem, it will be great in the long haul.”  No hand holding in bad markets.
2. The government will be our friend, as they’ll lend 90% of the money our clients need to buy.
3. Imagine if the government guaranteed through a stock market equivalent of CMHC clients who blew themselves up by overleveraging their portfolio, then asked other taxpayers to make good on it.
4. There would be no such thing as Discount Brokerages where the clients had a choice or valid lower cost option.
5. We would control the data as a monopoly.  Imagine if a client had to make multiple phone calls just to check on what a stock actually sold for a week ago !!
6. During tough times we could count on our friends in government to change the rules to our benefit.  Just extend the amortizations.  Harper went to 40 years in 2009; Japan was helpful in 1989 with 100 year mortgages.  How wonderful, thank you government.  Nothing like good old Moral Hazard.

Hmm. What are we to make of this in light of the looming vote on Monday?

The rabble, according to T2 and Jag, want to punish those with liquid assets, diversified holdings, successful careers and investment patience. All the masses want is a house. They think it’s a human right.

To find the money supporting real estate our leaders are ready to enact some dramatic things. A new tax bracket on high incomes, pushing the top rate towards 60% (so the employee keeps only 40%). An increase in the capital gains inclusion rate from 50% to 75%, meaning a 30% higher take on returns from money that was already taxed before being invested. Higher taxes on corporations, especially the banks, which represent almost a third of the Canadian equity market and help fund millions of retirement plans. A new souped-up tax shelter only for people under 40 and only for buying a house. Taxes on residences the politicians think aren’t used enough or were sold too quick. And a promised assault on REITs, which have been a staple of the economy.

All these are examples of the four-legs-good (housing), two-legs-bad (financial stuff) attitude of governments and politicians. The die was cast the day RRSPs were opened up for tax-free down payments. It launched a tsunami of wealth into a single asset. I only wish at the time (1992) I’d seen it coming, could have surmised the outcome and voted against in Parliament. The financialization of housing is truly one of the failures of our times. Bad political choices caused it. More on the way. The disruption ahead could be socially and politically destabilizing, as this election makes things worse.

My pal Stu and I stand and observe. We try to guide our clients into balanced lives. We’re risk managers. Not risk-takers. As Canada pivots more and more towards a one-asset economy where leverage is rewarded and success whacked, we have our hands full.

About the picture: “This is Winnie, a 9 year old SPCA rescue, possibly a Rat Terrier but no one knows,” writes Herman. “She hates men and motorcycles but loves kayaks, women, children and me, the only male she’s ever liked.   She came to me with a lot of issues, most of which have been resolved with patience and love.”

 

130 comments ↓

#1 604Sam on 09.17.21 at 2:26 pm

Could it be… first?

#2 Woke up this morning... on 09.17.21 at 2:32 pm

#223 Immigrant man

That one is easy. Canadas fertility rate is 1.5 births per woman. For replacement you need 2.1. So not enough new humans are made domestically, that’s why imports are needed. All developed western nations are in the same boat.

——————

Wonder what would happen if young kids didn’t have their government load them with deficits and debt?

Wonder what would happen if youth didn’t have to work in gig-economy?

If youth could find jobs that allowed stability and confidence to start a family?

What would happen if people didn’t have to go into debt for millions just to have a home?

What would happen if student debt wasn’t a huge burden and a for-profit business.

Would all these policies help youth move along with their lives and not put off having families?

Would it help them start families sooner and have more kids to hit 2.1?

Would this senseless battle on “Man, The Provider” by fooling women into thinking they can have it all carrier and giver of life? Giving life is a privilege, a miracle and to be enjoyed! Vs. popping them out and dropping kids off at overpriced daycare for someone else to raise. Or bringing essential near-slave Pilipino labour here and tearing Pilipino mothers away from their children to raise ours?

We have lost the plot in a major way.

We are eating our young.

We have no ethics.

We are a moral hazard.

I’m surprised they are still at 1.5 per woman to be honest Immigrant Man.

#3 My Body My Choice on 09.17.21 at 2:34 pm

The 2021 Canadian Election Rhymes (updated):

Trudeau’s not your Bro’ – he’s your foe, don’t you know? He must go.

Singh, the man who would be king. Financial knowledge and balanced budgets is just not his thing.

Annamie is your frenemy: the queen of dramedy, ennui and entropy.

The PPC stands for you and me: a true north strong and free, liberty, prosperity and personal responsibility – but a vote for them may split in two and cause a Liberal minority.

O’Toole wants to rule and tries to look cool. He’s been endorsed by the Greater Fool. Vote for him and get rid of the Trudeau Fool.

On election day, don’t delay, OK? Else, you’ll pay.

#4 jdjones on 09.17.21 at 2:39 pm

“There is willful blindness to what could, and probably will, happen. ”

Lol how many more decades is the audience going to have to wait for it by the way?

#5 Felix on 09.17.21 at 2:40 pm

Dogs certainly do present a moral hazard, very true Mr. Turner.

Happy Feline Friday!

Did you know:

If dogawful mutts could vote, they would all be supporting Maxime Bernier.

#6 Rainman on 09.17.21 at 2:44 pm

I agree with all you and Stu say, but sometimes you have to go with the flow and ride it out. Still more to come unfortunately. Still a ways off before a RE collapse, the government will make sure.

#7 cuke and tomato picker on 09.17.21 at 2:46 pm

O’Toole was happy with how King Kenny was dealing with covid how ever now he does not know Kenny or where
Alberta is in Canada.

#8 Money for nothing! on 09.17.21 at 2:47 pm

$300 Billion there. $400 Billion here. $20 Trillion for this? $20 Trillion for that.

Money for Nothing…Dire Straits…indeed.

We’ve escaped reality.

It doesn’t matter anymore.

P/E of 30? 50? 100? 200? 400? NO PROBLEM! Let’s go for 1000!

HAPPY HOUR soon, time for a Unicorn Pee Cocktail Pixy Dust burger with Rainbow fries! YEAY!

DON’T FORGET TO VOTE! …it matters…so we tell the kids.

#9 Habitt on 09.17.21 at 2:49 pm

Great post Sir. Thanks again for the voice of reason.

#10 Dolce Vita on 09.17.21 at 2:54 pm

THAT was beautifully written Garth. A woeful lament.

“Vero è che in sul la proda mi trovai,
Della valle d’abisso dolorosa,
Che tuono accoglie d’infiniti guai.”

CANTO IV , Inferno
-Dante

#11 wallfower on 09.17.21 at 2:55 pm

Every day, Winnie’s horror past recedes just a little more … she has a beautiful present and a glorious future.

#12 Repurchase Disagreement on 09.17.21 at 2:56 pm

For some reason the Media seem to think O’Toole is running for Alberta Premier. Or maybe they are just carrying water for someone with nice hair.

Balance would actually be asking T2 today and yesterday and tomorrow how many older Canadians actually died in abject isolation in the first wave because he personally messed up and was SO LATE with the initial doses which were needed by the most vulnerable. Is it hundreds? Thousands?

#13 Matt on 09.17.21 at 2:57 pm

My friend from Hong Kong was going on yesterday about how this Evergrande mess is the beginning of a new financial crisis along the lines of 2008. It’s all doom and gloom out here. He thinks there will be a lot of Chinese capital leaving Vancouver as a result.

#14 Julio on 09.17.21 at 2:57 pm

Garth, with all due respect, but I told you so (under other nicknames and IPs that got banned. Yes I use a VPN now to post comments here). The governments will do whatever they can to keep the bubble going. It will be much more expensive to pop it and make everybody “poor” again.
Another cause is the amount of new Canadians coming every year. Everybody want a place to live. If there’s demand and no supply, the prices go up and the people overextend.
So, yes. Everything is priced in. The prices you see right now is the new normal (+-5%). For the ones who want to buy, stop timing the market.

#15 Philco on 09.17.21 at 2:58 pm

Hi Garth
Yes I just watched a piece on Evergrande this am. WOW.
T2 and Jag = Disaster policies their promising!? How anyone can support them bewilders me. I can only surmise they are as financially illiterate as they are?
Lord help us.
Great talking to you. I reschedule with your guy for next week as I’m still at my business.
Its raining like cats and dogs here, we need it!

#16 Dolce Vita on 09.17.21 at 2:59 pm

PS:

Google translate makes a bullocks of Dante.

Best English translation I have read to my prior Comment:

“I found myself on the brink of the woeful valley of the pit, which collects a thunder of endless wails.”

Still leaves much to be desired.

Why a Romance is in many cases, untranslatable…it speaks for the heart and not the technical mind.

#17 RichardTO on 09.17.21 at 3:00 pm

Where do I find the best advise for moving my assets out of Canada in a tax-efficient way?

Financial guys or lawyers?

#18 alexinvestor on 09.17.21 at 3:00 pm

Evergrande is an issue, and it’s very likely just the tip of the iceberg. China can make good on the yuan denominated debt, but US denominated debt will be trouble … and China cannot afford to bail out everyone.

A bust in Chinese RE might trigger a bust in Canadian RE too. Cash (USD) is starting to look better and better (says Jeremy Grantham).

#19 Jens on 09.17.21 at 3:02 pm

Neither the Canadian nor the Chinese government can prevent the inevitable forever: no matter how much they pledge to prop it up, the housing bubble will burst.
Besides, does anyone seriously believe the next government, whichever colour, will have the money to deliver on any of their campaign promises?

#20 SunShowers on 09.17.21 at 3:05 pm

“The financialization of housing is truly one of the failures of our times.”

Hey, now there’s something we can agree on.

#21 KLNR on 09.17.21 at 3:05 pm

@#7 cuke and tomato picker on 09.17.21 at 2:46 pm
O’Toole was happy with how King Kenny was dealing with covid how ever now he does not know Kenny or where
Alberta is in Canada.

must be a lot of cursing going on in tools backroom.

#22 ogdoad on 09.17.21 at 3:06 pm

Keep the masses indebted and close to their weed and beer. Keep FOMO alive so the weak minded masses spend whats left on crap they don’t need (whatever everyone else is getting like hmmm teslas and houses), get stressed b/c, perhaps, they’re not quite as good looking as the peeps on HGTV (Certain!) and their kid isn’t playing rep hockey (you HAVE failed as a parent!!) then resort to more weed and beer.

Or something like that.

Og

#23 Nonplused on 09.17.21 at 3:08 pm

#219 Nonplused on 09.17.21 at 1:34 pm
#176 crowdedelevatorfartz on 09.17.21 at 8:11 am
@#165 Nonplused
“It is the imaginary numbers coming out of budget land than have the power to truly warp space and time into contortions previously unimaginable.”

+++

Trudeau’s Budgets are from Star Trek?

—————————–

Have you got a better explanation? A “tacheon beam” seems more likely to get us out of this situation than any solution Trudeau has.

#24 Nonplused on 09.17.21 at 3:11 pm

I’m with ya Garth, I think we can sleep through the EverGrande thing. I guess it is always nice to have something to fret about on Wall Street Bets but this ain’t no Long Term Capital.

#25 XGRO and chill on 09.17.21 at 3:12 pm

The capital gains inclusion rate in Canada was raised from 50 to 75% from 1988 to 1990. In the 1990’s Canada paid off a lot of federal debt.

In 2000, we lowered it from 75% to 50%.

But for some reason, we can’t raise it to 75% now, I guess.

Source – https://www.business.unsw.edu.au/research-site/publications-site/ejournaloftaxresearch-site/Documents/Capital%20gains%20taxation%20in%20Canada,%201972-2017%20evolution%20in%20a.pdf

#26 ottawa on 09.17.21 at 3:12 pm

Here is the message I received form realtor (ottawa): Moral what’s that?

Right now is the perfect storm in real estate with 4 major factors affecting what’s happening in our market:

1. Current Health Crisis

2. Federal Election

3. School Starting

4. Historic Low Interest Rates

There are currently less people focused on looking for a home, which results in more homes being on the market, more choice for a home buyer and less competition!

Literally, the PERFECT storm!

No one knows how long this will last,

But for today …

YOU are in the drivers seat!

If you have had any thoughts of buying a home this fall,

This is your time.

Before this opportunity passes us up, let’s book a few minutes to talk about what your home buying plan looks like and how we can get started!

Click the button below and we will be in touch!

#27 Quintilian on 09.17.21 at 3:14 pm

IHCTD9: Sometimes smart people say silly things out of anger.

“Lots of tricks still in the bag. Look at Trudeau’s FTHTFSA taxpayer subsidized DP plan for an example. I’ll bet you didn’t see that one coming eh? None of us did. You can’t even dream up all the ways the gas bag can be made to gain psi. How about 30-40 year mortgages? How about zero interest government DP loans? How about…?”

The current blog post is mandatory reading for IHCTD9
because you may not have the knowledge to even guess what could go wrong.

#28 Dolce Vita on 09.17.21 at 3:15 pm

Gov Italia decree in effect MANDATORY VAXING, sleight of hand, by October 15 (unanimous vote):

“Italy to require ALL workers to show ‘green pass’ certificate”
https://www.bbc.com/news/world-europe-58590187

Private, Public and Self-Employed…when they say ALL they mean all.

Exempted are those that cannot be vaxd, even in that event, they must show proof of testing provided free by Gov Italia.

“The access of personnel to the workplace” without the green pass is punished with fines of :”

€ 600 to € 1,500 individuals
€ 400 to € 1,000 employers

5 day grace period without a Green Pass, then fines, then suspension from work and without pay but not fired.

DRACONIAN.

And Gov Italia will enforce it. 7 hrs ago from the Interior Ministry (Il Viminale) Covid 19 measures (decrees like the one above) enforcement:

77,230 people checked, 109 sanctioned, 10 complaints;
6,629 businesses checked, 7 sanctioned owners, no closures.

—————-

The World has changed, well, here in Italia in a couple of months.

#29 Dirty Dan on 09.17.21 at 3:15 pm

Going against the liberal narrative of housing for everyone at any cost and over taxing people who work hard??

I guess you’re officially a racist, white patriarch transphobe and whatever else is fashionably hated.

Welcome.

Ironically, you’ll find we’re more inclusive – we take all the riff-raff that doesn’t tow the establishment line. Hell, I found myself cheering on anti-vaxx green hippies protesting in BC recently. I’m sure they’re the same ones that helped kill the pipeline, but we can’t be enemies all the time.

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

#30 S.Bby on 09.17.21 at 3:19 pm

Any voice of reason no longer matters it is all about votes and power and greed. The politicians are just playing to their voting base and that base wants houses so the government is delivering. Most people can’t see beyond their front yard and that’s all they care about.

#31 Linda on 09.17.21 at 3:21 pm

#22 ogdoad on 09.17.21 at 3:06 pm

Very sad but that’s the truth. The masses should be kept stupid and docile. Stupid with beer and weed, docile with a big-ass mortgage so they’re afraid of losing jobs and their house. Great system! Whoever came up with it, was a genius!

#32 Dolce Vita on 09.17.21 at 3:25 pm

Reading the Comments today about Trudeau & Associate PM TikTok…

Indignant to Vociferous.

I couldn’t agree more with my fellow Commenters.

Hopefully the Cons will form Gov.

If not, well, the government you elect is the government you deserve.

TJ was so correct about that (and so was de Maistre).

How history repeats.

#33 McSteve on 09.17.21 at 3:42 pm

Bought gold miners and oil producers today…throwing off cash and P/E ratios under 10. I love the unloved assets – especially the profitable ones.

#34 Shirl Clarts on 09.17.21 at 3:43 pm

I see in the near future (short term), both equities and housing take a hit at the same time. But if you can afford to stay in your house and not sell any of your portfolio until at least 2035, you’ll be ok.

The robinhood and reddit crowd, with their FIRE mentality, are going to get whacked. This mainly young demographic, does not know how to save or invest. And they also lack both houses and DB pensions – I feel for them.

My wife commented on a mile long Tim Horton’s drive-thru line the other day. She said “Wow, look at all those cars… for a coffee?!” People need to rein in their DISCRETIONARY SPENDING if they want to get ahead. I know it’s old school thinking, but it all adds up. Think of it as combatting inflation.

My wife is noticing the rising cost of groceries. The other day, she made a home made mac n’ cheese casserole using up about 1/2 a brick of cheese. She joked how we could’ve had steak!

#35 DON on 09.17.21 at 3:45 pm

#13 Matt on 09.17.21 at 2:57 pm
My friend from Hong Kong was going on yesterday about how this Evergrande mess is the beginning of a new financial crisis along the lines of 2008. It’s all doom and gloom out here. He thinks there will be a lot of Chinese capital leaving Vancouver as a result.

**************
The herd gets spooked, sentiment changes, investors become anxious…confidence is lost and folks start slipping out the exits.

Herdonomics 101.

RIP Smoking Man

“A very good friend of mine
Told me something the other day
I’d like to pass it in to you
‘Cause I believe what he said to be true
He said
We’re here for a good time
Not a long time
So have a good time
The sun can’t shine every day”

#36 Italian Kim jong un on 09.17.21 at 3:47 pm

The World has changed, well, here in Italia in a couple of months.

Yes the world has changed for senile and corrupt politicians that think that the vax “pass” what a shit name..will change something.

Disdain and distrust for any form of government will increase exponentially..

Most of u people should be sent to vacation in Siberian concentration camps, cause that’s what u like and endorse…and also raise my BP

#37 Dolce Vita on 09.17.21 at 3:48 pm

“3. Imagine if the government guaranteed through a stock market equivalent of CMHC clients who blew themselves up by overleveraging their portfolio, then asked other taxpayers to make good on it.”

-Garth & Stu

—————

Please reincarnate NOW.

Would love to buy an ETN that was designed to go to $0 yet throws off dividend yields of 32.57% (SLVO for the curious and/or risk hardy).

And no, I don’t own it but if #3 above is seen thru, I’m all in.

#38 DON on 09.17.21 at 3:48 pm

Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.

#39 Shawn Allen on 09.17.21 at 3:52 pm

The Mega Rich can never spend their wealth

We have a situation where the top 1% or whatever own a vast share of total wealth.

But each year they consume a far far smaller share of the total share of GDP. The mega rich may own 25% of wealth but they don’t consume 25% of actually anything.

The poor and middle borrow so that they may consume a larger share of what the economy produces than their wealth or income would otherwise allow.

In theory the mega rich have a giant claim check on future consumption and can someday consume vastly more than they do today. Leaving the poor with very little.

But really they can’t. One person can’t consume the food of a thousand even if their wealth permits it.

They won’t tend to own a thousand houses EMPTY houses either.

The mega rich and even most of the moderately rich will die with their wealth (claim checks on goods and services) largely unclaimed. So will their heirs if they even have any.

Ultimately the production of Canada and the U.S. will continue to be consumed on a basis that is NOT so skewed to the 1%. The bottom 40% (pick a number) will continue to be fed and housed and to live not so badly.

Where is this headed? I don’t know but it’s an interesting thought experiment.

#40 crowdedelevatorfartz on 09.17.21 at 3:55 pm

True-doh and the NDP are going to spend this country so deep in debt over the next few years… we will never see the light of day.

#41 Mickey on 09.17.21 at 4:00 pm

#7 cuke and tomato picker on 09.17.21 at 2:46 pm
O’Toole was happy with how King Kenny was dealing with covid how ever now he does not know Kenny or where
Alberta is in Canada.
****************
And Tudeau’s on record for admiring China’s dictatorship and Fidel Castro.

#42 The West on 09.17.21 at 4:03 pm

Not to worry lads, O’Toole is coming to save us…..

#43 crowdedelevatorfartz on 09.17.21 at 4:08 pm

I believe it was our Prime Minister that refused the Cruise Ships entry to Canada this Spring/Summer/Fall.

https://www.citynews1130.com/2021/09/17/bc-alaska-cruise-ship-bill/

Well when the Americans bypass BC…. get ready for huge fall out.

Trudeau’s inept handling of the Cruise ship industry is another kick in BC’s Gonads.
Closed for 2 years…… and the sheeple keep voting for him.

#44 James on 09.17.21 at 4:08 pm

#2 Woke up this morning… on 09.17.21 at 2:32 pm

#223 Immigrant man

That one is easy. Canadas fertility rate is 1.5 births per woman. For replacement you need 2.1. So not enough new humans are made domestically, that’s why imports are needed. All developed western nations are in the same boat.

——————

Wonder what would happen if young kids didn’t have their government load them with deficits and debt?

Wonder what would happen if youth didn’t have to work in gig-economy?

If youth could find jobs that allowed stability and confidence to start a family?

What would happen if people didn’t have to go into debt for millions just to have a home?

What would happen if student debt wasn’t a huge burden and a for-profit business.

Would all these policies help youth move along with their lives and not put off having families?

Would it help them start families sooner and have more kids to hit 2.1?

Would this senseless battle on “Man, The Provider” by fooling women into thinking they can have it all carrier and giver of life? Giving life is a privilege, a miracle and to be enjoyed! Vs. popping them out and dropping kids off at overpriced daycare for someone else to raise. Or bringing essential near-slave Pilipino labour here and tearing Pilipino mothers away from their children to raise ours?

We have lost the plot in a major way.

We are eating our young.

We have no ethics.

We are a moral hazard.

I’m surprised they are still at 1.5 per woman to be honest Immigrant Man.
_________________________________________
I have three children so am I doing well? Do I win?

#45 Dolce Vita on 09.17.21 at 4:08 pm

#36 Italian Kim jong un

Well Draghi is hardly corrupt nor is he senile. Head and shoulders above what you have in Canada. No one with half a mind would argue that.

Having said that what amazed me was that the Left (labour rights) and the Right (individual rights) in conjunction with the Labour Unions….

not a whimper today.

I subscribe to them all on Twitter, read 10 Italian online dailies this morning…same thing, NOT a whimper.

Personally I think it is Draconian.

My Cousins today that visited talked about in as many words:

VOX POPULI (not the US rag).

Hardly the stuff of “Kim jong un” and “Siberian concentration camps” that you speak of.

Gov Italia maybe Draconian but you’re TRITE.

#46 James on 09.17.21 at 4:11 pm

#35 DON on 09.17.21 at 3:45 pm

#13 Matt on 09.17.21 at 2:57 pm
My friend from Hong Kong was going on yesterday about how this Evergrande mess is the beginning of a new financial crisis along the lines of 2008. It’s all doom and gloom out here. He thinks there will be a lot of Chinese capital leaving Vancouver as a result.

**************
The herd gets spooked, sentiment changes, investors become anxious…confidence is lost and folks start slipping out the exits.

Herdonomics 101.

RIP Smoking Man

“A very good friend of mine
Told me something the other day
I’d like to pass it in to you
‘Cause I believe what he said to be true
He said
We’re here for a good time
Not a long time
So have a good time
The sun can’t shine every day”
_______________________________________
Good Lyrics from Trooper!

#47 Barb on 09.17.21 at 4:16 pm

“Harper went to 40 years in 2009”.

Wish Stu hadn’t said that 3 days before the election.

#48 Prince Polo on 09.17.21 at 4:16 pm

Repeat after me: I’m obviously a fiscal wreck since I’m a loser renter. Greaterfool.ca? What’s that?!?! Please, dear Photo-op Minister, let us raid 100% of our retirement savings since only rich people have non-real estate assets.

I think the steerage section that is paying attention needs a refresher on how to live quietly amongst the masses…but how do we hide the RRSP/TFSA balances from the Photo-op Minister’s grubby hands? Something tells me he’s not going to resign and will punish the prudent, circa 2022-5.

#49 dave on 09.17.21 at 4:23 pm

Garth has finally admitted…The government and banks will do what ever it takes to keep real estate going up.

NO OTHER ASSET has this level of protection, So why buy anything else. Buy real estate – Canada’s Prime Minister, CMHC and Bank Guarantee it!!!

#50 Nonplused on 09.17.21 at 4:24 pm

I’d like to propose a brief interruption to our regular programming, to ask others to take some time to define some terms we are throwing around so that I can understand the conversations better.

——————————–

“Affordable housing is a human right.”

What is “affordable”? Is it a percentage of income? After or before tax? What about interest rates?

What is “housing”? Is it a 400 foot condo or an 1,800 foot bungalow? Does it vary by region?

As a “human right”, does that mean you have to own it, or is renting good enough? What about the drop-in center? What about people who live in a van? What about people who want to live in a van or a cabin? Are we violating their rights if we don’t force them into a condo?

—————————

“We should tax the rich.”

Who is “rich”?

Who is paying the taxes now?

Are the rich not paying any taxes? If they are, how much? Are there any studies that show what they ideal rate might be? (For maximizing the economy.)

How did we get so far along without taxing the rich? Why didn’t anyone notice?

—————————————-

“There should be a wealth tax.”

What is “wealth”? Is it mark to market or realized gains? Is it just assets over a certain value, like the aggregate of a stamp collection for example, but not individual stamps or comic books?

Are there not already “wealth taxes”, i.e. capital gains and property taxes for example?

What is the ideal rate for a “wealth tax”?

Should it be graduated like income taxes are? Do we really want to be calculating everyone’s “wealth”?

What if your “wealth” is negative? Do you pay only on the “plus” side of the column? Or is it net?

What happens if you pay “wealth tax” on certain assets this year and then next year those assets go to zero like a certain EV manufacturer might next year? Do you get your money back?

Do we know what the ideal rate of “wealth” retention is for maximum economic growth? What happens if we let people keep too much money? Or take too much? Does it impact job and business formation?

—————————-

“Health care is a human right.”

What is health care?

Is it just what goes on at the doctor’s and the hospital, or does it involve chiropractors, dentists, nutritionists, and naturopaths?

Is there a limit to the amount that can be spent? At what point does it become prohibitive and thus detrimental to the economy? Do we need to do cost/benefit analysis when determining who gets what? For example a major surgery that could save a 30 year old for another 40 years might not make as much sense applied to an 85 year old. Who makes these decisions?

Should there be “health spending accounts”? Where everyone gets a certain amount of money over their lives?

————————————-

I have many more questions but this is a lot for one go. Perhaps our resident socialists can explain to me how all this works.

#51 Xennial Parent on 09.17.21 at 4:24 pm

As a borderline Gen-X/Millenial, I am fortunate to have two kids. My wife and I have discussed a third, but there’s no way we can make it work financially or logistically. We have no support from our parents, huge childcare costs in a major centre at close to $2K per month per kid, and are trying to find a place to buy that doesn’t break us. The rental we are in, and the ones available, certainly don’t provide the space for three growing children. Sure, we can make it work when they are small, but we’d like for our kids to have their own room, like we did growing up, especially when they are teenagers. Maybe the bubble will have burst by then (yeah right).

Of course, this probably means we’ll be labelled entitled for wanting a standard of living for our kids that we had growing up, but whatever. We have stopped at two, and we’re fortunate. Most of our peer group stopped at one, if they had any at all.

Anyone who can’t understand that the structural factors in our economy is what is driving the low fertility rate hasn’t asked a young couple what is stopping them or a young family from having more kids.

#52 Ustabe on 09.17.21 at 4:30 pm

#38 DON on 09.17.21 at 3:48 pm

Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.

I do any invasive landscaping in the fall so its ready to enjoy and use come spring.

So just a couple of days ago finished a power rake, top dress, over seed of my back lawn. Now this…I wonder where all my grass seed ultimately ends up?

#53 Mark on 09.17.21 at 4:35 pm

60% marginal tax rate. Jesus chr***. we’re not moving towards a socialist state, we’re already there.

Now the question is, what will they do when all of the small business owners, tech workers, and other high income earners who have financial mobility flee the country and take the economy with them? that will be a fun show. the way things are going, that should happen right around the time UBI spins up. has the world ever seen an economy that is 100% financed by government spending with no actual private sector economic activity? better hoard that popcorn. it’s gonna be the next t.p.

#54 Millennial 1%er on 09.17.21 at 4:36 pm

If taxes get any higher I’m leaving to the states. I can’t afford to throw away this much money

#55 Loonie Doctor on 09.17.21 at 4:41 pm

#25 XGRO and Chill

Yes the capital gains tax was raised in the 80s to deal with the fiscal mess left after years of Trudeau 1.

See a pattern?
-LD

#56 Concessionman on 09.17.21 at 4:47 pm

For those of us who had the wisdom to contribute to RRSP’s at a young age, but otherwise didn’t have the financial resources for a down payment, the 1992 introduction of the HBP was literally my foot in the door to home ownership.
How was/is it a bad thing? It was my money, and it had to be repaid over time or the tax had to be paid back on it.
Now sitting on a paid off 2 Mill spread that carries for (much) less than rent.

Two million? That is exactly the reason. – Garth

#57 NoName on 09.17.21 at 4:54 pm

So many things life that we think have little or significance ended up as great memories older we get. Sadly Mr. Smokingman you are missed but not forgaten.

https://youtu.be/bMdeg-WKt1U

https://www.youtube.com/watch?v=u9Dg-g7t2l4

https://www.youtube.com/watch?v=Lin-a2lTelg

#58 IHCTD9 on 09.17.21 at 5:00 pm

#27 Quintilian on 09.17.21 at 3:14 pm
IHCTD9: Sometimes smart people say silly things out of anger.

“Lots of tricks still in the bag. Look at Trudeau’s FTHTFSA taxpayer subsidized DP plan for an example. I’ll bet you didn’t see that one coming eh? None of us did. You can’t even dream up all the ways the gas bag can be made to gain psi. How about 30-40 year mortgages? How about zero interest government DP loans? How about…?”

The current blog post is mandatory reading for IHCTD9
because you may not have the knowledge to even guess what could go wrong.
—————-

I’m not a dude that spends a whole lot of time seriously trying to guess what’s coming down the pipe in order to escape the flak. I prefer to be prepared as much as I can be. It may all be for naught in the end, but I do what I can.

As for today’s post, I’ve also stood by and observed RE getting pumped like an E rated radial. A few years back I decided Mr. T’s investing philosophy was the way to go, and I am now B+D’d courtesy of TI itself. I’m not party to the one asset strategy. I don’t fear big income tax hikes because I’m nowhere near the top bracket. I don’t fear more RE gains because I own my 4 acre backwater bunker complex free and clear. I control my cost of living and tax remittances with an iron fist. Zero debt. I’m not in the free fire zone anymore, it don’t affect me who wins.

For years I said our RE market was cruising for a bruising, but it never happened. Today we have a pretty good picture of why. Our politicians are now officially “riding the tiger”, and the insane election promises like the FTHTFSA proves it. They’re going to do every single last thing they can to keep it going. If Trudeau gets in again, you’ll be waiting an extra 10 years for the inevitable SHTF event.

You and I are very different, but we want the same thing. We both want a thermonuclear mushroom cloud rising a mile high over the Canadian RE market. Just understand that the metrics aren’t working like they used to anymore. Too much government and central bank interference. You like Trudeau? Well, just understand how he’ll affect your prospects, he’s the guy fighting the metrics tooth and nail…

These days, you can’t look at the metrics and boldly make predictions without factoring in what government and the BOC have in their quiver, and like I said – there’s enough left to still have you waiting at 50 years old. The way I see it, you’re sunk. You vote for your own destruction. 10 years goes by like a lightning strike.

A vote for Trudeau, is a vote to kick your home owning dreams a decade further into the future. Eventually we’ll both surely get to see what we want – but how long it takes depends on who is running the show.

#59 Leo Trollstoy on 09.17.21 at 5:04 pm

Hillary Clinton and Obama support JT!
https://twitter.com/hillaryclinton/status/1438902448442195971

https://twitter.com/barackobama/status/1438541175607242766

Bernie Sanders supports Jagmeet!
https://twitter.com/berniesanders/status/1438936022159593474

#60 Damifino on 09.17.21 at 5:22 pm

#38 DON

Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.
——————————

Don… you ought to know. It’s only a wee sprinkle of the kind we’d normally expect about this time of year. It fills the reservoirs, and those fires are out, out, out.

Still, I’m glad I don’t have to go anywhere today. Kind of cozy here by the fire.

#61 Baffled on 09.17.21 at 5:26 pm

Justmeet Sideau are going to be an even worse prime minister than they’ve already showed us they can be.

Oh well if those Trump idiots keep it up down there and Uncle Joe doesn’t swat this crap down we will have lots else to worry about because that crap won’t stop at the 49th parallel.

#62 Faron on 09.17.21 at 5:30 pm

#52 Ustabe on 09.17.21 at 4:30 pm

#38 DON on 09.17.21 at 3:48 pm

Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.

I do any invasive landscaping in the fall so its ready to enjoy and use come spring.

So just a couple of days ago finished a power rake, top dress, over seed of my back lawn. Now this…I wonder where all my grass seed ultimately ends up?

You guys can always ping me. I watch the weather closely. It’s part of my job. I could have told you 10 days ago to ix-nay on the andscaping-lay. La Nina is starting lean on us. Unfortunately, I can’t change the weather, or at least it takes some time to rev up the contrail machines to do so… ;-).

We are on the cool side of the jet for the rest of this weekend. Maybe some showers as we transition back to a weak ridge. Next weekend looks like some nice “indian” summer. Temps back up into the 20s. Overall, the storm track is currently very active, so systems will be transient.

#63 Quintilian on 09.17.21 at 6:00 pm

IHCTD9:
Much of what you say is true, we don’t fundamentally disagree on the current state.

Where we disagree, is how much is JT to blame.
I think the Cons lit the tinder box, and the Liberals kept the fire going.

I just don’t think the Cons would have done anything differently.

Libs and Cons are both prostitutes, but with no morals.

As I said earlier, I think O’Toole is a decent man, but the people the party attracts at the fringe are dangerously angry people.

Peace Bro

#64 Faron on 09.17.21 at 6:02 pm

#46 James on 09.17.21 at 4:11 pm

#35 DON on 09.17.21 at 3:45 pm

#13 Matt on 09.17.21 at 2:57 pm
My friend from Hong Kong was going on yesterday about how this Evergrande mess is the beginning of a new financial crisis along the lines of 2008. It’s all doom and gloom out here. He thinks there will be a lot of Chinese capital leaving Vancouver as a result.

**************
The herd gets spooked, sentiment changes, investors become anxious…confidence is lost and folks start slipping out the exits.

Could be interesting. Notable that US long bonds have been sold pretty hard in the past few days despite equity weakness. As we all know, a lot of US treasuries are held in China. Speculative, but seems possible that bonds will need to be sold by some Chinese banks to raise cash to cover Evergrande’s defaults and any other like institutions (there are many). Sharp upward changes in yields can be rough on growth equities i.e. NASDAQ. Always keep in mind that the news we get out of China is a tiny glimpse of what is actually happening there.

I wrote a week or so ago about the front running of the monthly options expiry that has helped force dips in 6 of 6 previous months. Well, that seems to have happened this week with lower indexes by a few percent and a rising VIX (today was the end of expiration with the weeklies). As of today, the stickiness in the markets will be much less for a little bit meaning up or down moves can be sharper. Regardless, equities are weak next week, so anything that spins out of Evergrande might get amplified a bit.

Doesn’t mean crash or even correction, just volatility. Gurus see a SPX floor around 4250 with 4350 more likely (ES_F settled at 4408 today). Economic numbers were positive on Thursday. Delta is topping out in the US. There’s a good chance that in a couple of weeks COVID will be looking much much better (even in Alberta where cases are now topping) and economic numbers will continue to be strong. Furthermore, if there’s some weakness this and next week, inflation numbers may look better once commodities come down. All of this should rebalance sentiment further away from euphoria which is actually better for broad equity price expansion.

None of this is advice. Listen to Garth and only Garth and his colleagues or other CFPs when making investment decisions.

#65 R on 09.17.21 at 6:06 pm

The other way of looking at it, if you are a boomer, a vote for T2 is a vote to keep the RE gasbag inflated. This will keep the greatest wealth transfer from mellinials to boomers going. Mellinials, be careful what you are voting for.

#66 Ponnaps on 09.17.21 at 6:14 pm

Only in Canada

Does my barber, cable guy and baby sitter have bigger houses than me.. go figure..

#67 Ponnaps on 09.17.21 at 6:19 pm

Jagmeet comes across as someone just faking it as he goes along with the ride..as a practicing Sikh there’s no way he could lean that left as he has..Sikhism is all about duty and responsibility and not about freebies and undeserved spending

#68 IHCTD9 on 09.17.21 at 6:29 pm

Meanwhile, before the Internet…

https://www.youtube.com/watch?v=JW5UEW2kYvc

#69 jim tow on 09.17.21 at 6:40 pm

Evergrande II brought to you by the Bank of Canada.

#70 Cottagers STAY THE HELL AWAY! on 09.17.21 at 6:45 pm

Stay home so you can get ready to vote Monday, all you inbred slimy little pathogens from the GTA.

Summer’s over. We’don’t want you here.

Just.

Stay.

Home.

#71 Philco on 09.17.21 at 6:51 pm

Mr T is Mr cover up I do believe.
I find deeply disturbing that he gets any votes other than his crew and the ones he aids and abets.
“Documents released by the Ethics Commissioner reveal that the PM and aides arranged at least 49 separate meetings & phone calls to discuss SNC-Lavalin’s legal troubles & save the company from criminal prosecution.”
~ Blacklocks Reporter

#72 Winterpeg on 09.17.21 at 7:03 pm

#3 My body my choice’s Rap song.
Love it.

Is there going to be a survey on Monday as to how everyone voted? Just wondering.

#73 IHCTD9 on 09.17.21 at 7:15 pm

I’ve always thought getting older has been great. But…

https://www.youtube.com/watch?v=OOgd9hitEAE

On the flip side, when you’re older, you got no issues writing a song like this :)

Great beard!

#74 NOSTRADAMUS on 09.17.21 at 7:15 pm

DESPERADOS!
More than one or two real estate agents, in addition to a whole lot of Bankruptcy trustees, along with their brother banditos, (aka) real estate lawyers, are all rubbing their hands in anticipation. They are all looking to cashing in on the swinging doors of real estate. Desperation to buy and desperation to foreclose. “Fear yee not faint hearted.” For the Real Estate generals, Re/Max, and Royal Lepage,) are singing in harmony, predicting calm waters ahead, smooth sailing, don’t panic, stay the course, there are enough life boats for all. Meanwhile, the bankers are chewing up the last of the life boats. Once again,” Beware The Ides Of November.” I am on my throne and I will not step down.

#75 Human Right on 09.17.21 at 7:21 pm

#50 Nonplused

I’d like to propose a brief interruption to our regular programming, to ask others to take some time to define some terms we are throwing around so that I can understand the conversations better.

——————————–

“Affordable housing is a human right.”

What is “affordable”? Is it a percentage of income? After or before tax? What about interest rates?

What is “housing”? Is it a 400 foot condo or an 1,800 foot bungalow? Does it vary by region?

As a “human right”, does that mean you have to own it, or is renting good enough? What about the drop-in center? What about people who live in a van? What about people who want to live in a van or a cabin? Are we violating their rights if we don’t force them into a condo?

——————————–

I’ll take on this first one for you Nonplused.

First, let me start by noting that it is not ““Affordable housing is a human right.” , it just plainly “Housing is a human right.” as it is written in the laws.

Now, below I’ll include some details for you that provide an overview.

Before I go any further I should note that I am not a lawyer. However, it is hard for me to see it any other way than as I’m about to tell it with what I know about how laws are applied.

When you read the statement “Housing is a human right.” it is clear in my view that the courts will interpret this as such. It will not mean that it has to be affordable or not. Definition of “housing” will be subject to what accommodations the person who’s human right is granted selected as suitable for themselves.

What will be key, and I think what most landlords want to know is this: will the human right to housing be conditional on paying the rent or lease or mortgage.

It is my view that courts will decide that IT IS NOT.

No human right is granted, for a monthly subscription fee.
And under the statement that “Housing is a human right” it cannot be conditional on such a subscription fee, however it maybe calculated. Eventually I believe the courts will have make that conclusion once the cases are brought up and ruled on.

No one is obliged to grant another person the human right of housing. However, if you choose to be a landlord, and therefore indeed do grant someone the right to housing, then by doing so you also lose the right to withdraw the human right you’ve granted. No where else is a right granted, and then withdrawn at will.

There have been no cases in course that have interpreted this law yet. However, I can hardly see how the courts prioritize landlord’s right to be paid rent, owners right to evict from a rental unit because of sale, over someone’s human right to housing.

This will especially become obvious where contracts/lease agreements, etc. are not in place outlining rights. But even then, when the courts will be asked, I have a hard time believing they will put those contractual rights above a HUMAN RIGHT.

>>
In Canada, the right to housing is not included in either The Constitution Act, 1867 or the Canadian Charter of Rights and Freedoms (the Charter). Also, Canadian provinces and territories do not protect housing in their laws. Provincial human rights codes protect only against housing discrimination and denial of housing, and sometimes against forced evictions. They also allow for special programs that prevent inequality, which may include housing programs.

Nevertheless, Canada has signed and ratified the International Covenant on Economic, Social, and Cultural Rights which, as mentioned earlier, recognizes adequate housing as a fundamental human right. Since Canadian legislation does not mention the right to adequate housing, courts have to rely on international legal instruments when interpreting and applying section 7 of the Charter (which guarantees the right to life, liberty and security of the person) and section 15 (which protects equality rights).

#76 theoryAndPractice on 09.17.21 at 7:25 pm

Nothing else matters!
https://www.youtube.com/watch?v=x7bIbVlIqEc

Nothing Else Matters
Metallica
So close, no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
And nothing else matters
Never opened myself this way
Life is ours, we live it our way
All these words, I don’t just say
And nothing else matters
Trust I seek and I find in you
Every day for us something new
Open mind for a different view
And nothing else matters
Never cared for what they do
Never cared for what they know
But I know
So close, no matter how far
It couldn’t be much more from the heart
Forever trusting who we are
And nothing else matters
Never cared for what they do
Never cared for what they know
But I know
I never opened myself this way
Life is ours, we live it our way
All these words, I don’t just say
And nothing else matters
Trust I seek and I find in you
Every day for us something new
Open mind for a different view
And nothing else matters
Never cared for what they say
Never cared for games they play
Never cared for what they do
Never cared for what they know
And I know, yeah, yeah
So close, no matter how far
Couldn’t be much more from the heart
Forever trusting who we are
No, nothing else matters

#77 Philco on 09.17.21 at 7:37 pm

Mr Patterson gets it….Tax the big guys a adios amigos.
The country will actually become poorer as a whole if ya run the rich off.
Trickle down economics.

https://www.bnnbloomberg.ca/jim-pattison-warns-wealth-tax-will-lead-to-canadian-capital-exodus-1.1653262

#78 Lorne on 09.17.21 at 7:48 pm

#38 DON on 09.17.21 at 3:48 pm
Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.
……
Lovin it….we need it. No need to complain….you should be happy!

#79 Wrk.dover on 09.17.21 at 7:57 pm

Looking east above the horizon from my place, I could see the massive cloud hovering over Lunenburg as Garth wrote his piece.

All while my solar grid tie produced 80% capacity and my solar hot water maxed the 200L tank that feeds the timed electric one.

It’s time to go tangible people, China can print like Goldman alumni now.

#80 Tripp on 09.17.21 at 7:57 pm

#28 Dolce Vita on 09.17.21 at 3:15 pm

“Italy to require ALL workers to show ‘green pass’ certificate”

“ The World has changed, well, here in Italia in a couple of months.”

————————————————————

Dolce, there is always a next step from anything. What do you think will be the next step fo Bella Italia in this case?

#81 calgary rip off on 09.17.21 at 8:01 pm

What is happening in Alberta reflects many in Alberta.
Its a sad state of affairs when conservative is paired with Canadian. Likely Kenney failed to act because he wants public health care here to implode.
I see Michelle Remple conservative signs everywhere in nw Calgary. Mrs Remple has less education than i do, as does Kenney. Why these signs are up i have no idea. Failed on pipelines, budgets and health care. And yet apparently my neighbours want this party in. Maybe i dont want these people as my neighbours.

My NDP candidate is a geophysicist with ties to oil and gas. While O’Toole is likeable, his party is inept.

Likely the pretend conservatives will vote conservative again in my neighbourhood.

#82 salty dawg on 09.17.21 at 8:14 pm

#28 Dolce Vita
>Gov Italia decree in effect MANDATORY VAXING, sleight of hand, by October 15 (unanimous vote):

Dolce Vita, as someone who lives in Italia and understands the culture, do you think this decree will work (most workers will get vaccinated), or that people will find ways around it?

I think of Moscow’s attempted vaccine pass a few months back, which was canceled after extensive ads for fake passes and fake vaccinations appeared on Telegram.

About all I know of Italy (rightly or wrongly! :) ), is that the Mafia developed there as a response to corrupt & ineffective government, so I think of it as a place where creativity in rule-following is traditional.

#83 Flop… on 09.17.21 at 8:26 pm

Down Tools, Down Under…

M47BC

“Victorian construction workers will be required to be vaccinated for COVID-19.

Those who haven’t received at least one jab by Thursday, September 23, will not be allowed to work, Premier Daniel Andrews said on Thursday.

He said the decision was prompted by the significant transmission of the virus within construction sites in the state.

“And they will need to demonstrate to their employer that they have done that.

“We’ve seen too many cases in construction.”

Andrews said medical exemptions from the vaccine are “fair enough”, but otherwise there’s “no debate” around the mandate.

The decision is set to put the Victorian government on a collision course with the industry.”

#84 IHCTD9 on 09.17.21 at 8:33 pm

Man, this was well done! 10/10

https://www.youtube.com/watch?v=ouWQ25O-Mcg

#85 IHCTD9 on 09.17.21 at 8:41 pm

#63 Quintilian on 09.17.21 at 6:00 pm
IHCTD9:
Much of what you say is true, we don’t fundamentally disagree on the current state.

Where we disagree, is how much is JT to blame.
I think the Cons lit the tinder box, and the Liberals kept the fire going.

I just don’t think the Cons would have done anything differently.

Libs and Cons are both prostitutes, but with no morals.

As I said earlier, I think O’Toole is a decent man, but the people the party attracts at the fringe are dangerously angry people.

Peace Bro
— –

Overall, I guess I can’t disagree. JT has been a horror show, but would the cons have been different? I like to think so, but we’ll never really know.

At the end of the day, it’s pretty much every peoplekind for him/herself in Canuckland.

Here’s to SHTF coming to town… soon.

#86 Flop… on 09.17.21 at 8:42 pm

When it rains like this every station is a Waterfront Station…

M47BC

——————————-

“Plans for a high-speed passenger-ferry service between the port of Nanaimo and Waterfront Station in downtown Vancouver were announced Thursday by a Toronto private equity firm.

Details are skimpy but Rupesh Amin, chief executive and founder of Conqora Capital Partners Inc., said the ferry will be privately funded, and more information will be released in coming weeks.

“I imagine a lot of people are thinking: ‘I’ve heard this before,’ ” he quipped to the Times ­Colonist in an interview.

That’s because a commuter ferry between downtown ­Nanaimo and Vancouver has been tried, unsuccessfully, many times before. Three services started and ended after collapsing financially. Others have announced plans for a ­foot-passenger ferry that failed to materialize.

There’s no question that many in Nanaimo are eager for a walk-on ferry — it’s been a perennial election issue for decades.

The latest venture comes as Nanaimo’s population tops 100,000 and construction of multi-family homes booms in the harbour city, raising the possibility of people buying homes in Nanaimo and commuting to work in Vancouver, where home prices are higher.”

#87 Yukon Elvis on 09.17.21 at 8:43 pm

#77 Philco on 09.17.21 at 7:37 pm
Mr Patterson gets it….Tax the big guys a adios amigos.
The country will actually become poorer as a whole if ya run the rich off.
Trickle down economics.

https://www.bnnbloomberg.ca/jim-pattison-warns-wealth-tax-will-lead-to-canadian-capital-exodus-1.1653262
+++++++++++++++++++

The Rolling Stones moved to the south of France in the spring of 1971 as tax exiles fleeing the Labour government’s punitive tax on high earners.

https://www.theguardian.com/music/2010/apr/25/stones-exile-on-main-street

#88 Average Joe, Vancouver on 09.17.21 at 8:47 pm

All these are examples of the four-legs-good (housing), two-legs-bad … Animal Farm , yep sounds about right at this point in Canadian history

#89 IHCTD9 on 09.17.21 at 8:50 pm

11/10:

https://www.youtube.com/watch?v=7NJqUN9TClM

#90 VladTor on 09.17.21 at 8:53 pm

to #59 Leo Trollstoy on 09.17.21 at 5:04 pm
Hillary Clinton and Obama support JT!
Bernie Sanders supports Jagmeet!

***********
Better for them takes care of the US and does not meddle in our affairs

#91 Europe on 09.17.21 at 9:03 pm

Italy was always a shit hole testing ground for communism and then socialism. How did you think they got rid of the communists with Mussolini. Their money devalued, inflation ate all the value of Italy’s economy.

The European Union was a Mr. Romano Prodi big backing and now the Eu, Euro is a basket case and if you want to live like that country, region then good luck. I hope China goes bankrupt and their people destroy their communist government 71 years of terror and killings. People will reach a limit and I don’t want to be in charge.

#92 Ponzius Pilatus on 09.17.21 at 9:18 pm

#78 Lorne on 09.17.21 at 7:48 pm
#38 DON on 09.17.21 at 3:48 pm
Ah…can someone get on the horn to mother nature and get her to turn the shower taps off in the BC coastal region.
……
Lovin it….we need it. No need to complain….you should be happy!
———–
I for one am happy.
Keeps the antivaxx protesters in their basements.
Can’t believe now they are protesting at schools.
Retards.

#93 Philco on 09.17.21 at 9:21 pm

#87 Yukon Elvis on 09.17.21 at 8:43 pm

Politicians never learn.
The next few years should be fun. Some more bad choices and stupid policies….and oh oh…lol

#94 Ponzius Pilatus on 09.17.21 at 9:26 pm

#82

Dolce Vita, as someone who lives in Italia and understands the culture, do you think this decree will work (most workers will get vaccinated), or that people will find ways around it?
————-
Dolce is a wanna be Italian.
Italian culture is over 2000 years old, and he’s just scrapping the surface.
Just like Billy Boy, who pretends to be a cheque.
Pathetic.

#95 liberals are not for liberty but for tyranny on 09.17.21 at 9:27 pm

Justin Trudeau as his father are good friends with Fidel Castro’s Communist, socialist Cuba. This tells you everything. They are both great admirers of Communist Party of China. This is all you need to know what he wants to turn Canada into. Notice how Freeland is missing in action during the campaign. She started to put her foot in her mouth and now is very quiet.

#96 FriedEggs on 09.17.21 at 9:38 pm

Its harvest time – have a nice Gelato hanging dry and some Indica’s coming in a few weeks. Even got mom to plant two clones for me at her house (no limit to how much you can have in the fridge at any time). Who needs to spend money at the OCS if you just know what you are doing and get your hands dirty to work. Nothing getter than living organic soil and love.

Picked apples off the one and only apple tree the original owner planted and shared them to friends, neighbours and family.

#97 Sara on 09.17.21 at 9:56 pm

The demand for COVID-19 vaccinations tripled in Alberta on Thursday, the day after Premier Jason Kenney announced the province’s version of a vaccine passport.

Alberta Health reported 28,158 doses were administered at Alberta Health Services clinics and pharmacies on Thursday compared to 9,750 on Wednesday.

https://www.cbc.ca/news/canada/edmonton/alberta-vaccinations-triple-1.6180529

Kenney announced the new restriction exemption program Wednesday night.

#98 wealth taxes suck the country dry on 09.17.21 at 9:59 pm

Philco, not just a massive capital exodus but a massive future reduction of new capital coming in. Remember what happened when Pierre Elliot Trudeau tried to tax heavily capital in Canada. It did not end well.

#99 Dirty Dan on 09.17.21 at 10:04 pm

#59 Leo Trollstoy on 09.17.21 at 5:04 pm
Hillary Clinton and Obama support JT!
https://twitter.com/hillaryclinton/status/1438902448442195971

https://twitter.com/barackobama/status/1438541175607242766

Bernie Sanders supports Jagmeet!
https://twitter.com/berniesanders/status/1438936022159593474

Thanks for the chuckle… this should be front page!

#100 45north on 09.17.21 at 10:07 pm

Human Right First, let me start by noting that it is not ““Affordable housing is a human right.” , it just plainly “Housing is a human right.” as it is written in the laws.

If housing is a human right then government is obligated to make it affordable. Housing is unaffordable because it costs too much. The Federal Government has a huge influence on the price of housing – interest rates, CMHC regulations and the Bank of Canada which is buying mortgage-backed bonds from the banks. Over the course of a year, the Federal Government could reduce prices.

It’s hypocritical to say housing is a human right but pursue policies to make it unaffordable. It’s hypocritical to make housing more expensive and say “housing is a human right”.

#101 VladTor on 09.17.21 at 10:14 pm

to #3 My Body My Choice on 09.17.21 at 2:34 pm

The PPC stands for you and me: a true north strong and free, liberty, prosperity and personal responsibility – but a vote for them may split in two and cause a Liberal minority.

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

Hey, STOP IT!

This blog is ANTIVAX and …ANTIMAX !

#102 Smengy on 09.17.21 at 10:31 pm

Winnie looks Corgi to me. Our old Corgi loved kayaks too.

#103 Peter on 09.17.21 at 10:48 pm

Moral hazard is the least of the problem. It is the smugness, elitism, superiority that the recent and many years past the Bank of Canada, Liberal and other left leaning parties, NDP, Greens etc. that they are 100% certain that we have to follow their ideas, policies of lower to lower interest rates, QE, bond buying, massive debts, deficits, always new and higher taxes, pumping up housing prices policies, always much more regulation, red tape for mostly small, mid size businesses, divisive economic and other policies making everyone in the longer run poorer and finally they never take responsibility and blame others all the time when their crappy, destructive policies never work like socialism.

#104 Dan on 09.17.21 at 10:55 pm

What are they doing with REITs, I couldn’t find specifics from my googling. Thanks!

#105 Faron on 09.17.21 at 11:00 pm

A couple of, IMO, good threads on the Evergrande sitch if you don’t mind scrolling through twitter. Bottom line is that source of contagion is commodities and a slow down of the Chinese consumer. Recent USD strength and weakness in the miners reflects this. The link to the crypto space via stablecoins issued by Tether and probably others is a more speculative potential leak outside of the great wall. There’s a lot of $$$ wrapped up in crypto nowadays. An unwind there will make waves. I still wonder if US bond selling won’t get wrapped into this to help raise funds to cover the defaults.

First is endorsed by Burry:

https://twitter.com/INArteCarloDoss/status/1438944431734919175

https://twitter.com/TheLastBearSta1/status/1418302497014304772

#106 mike from mtl on 09.17.21 at 11:18 pm

#91 Europe on 09.17.21 at 9:03 pm
Italy was always a shit hole testing ground for communism and then socialism.
/////////////////////////////////////////////////////////

Exactly.

The whole idea of a ‘nation state’ is a modern idea. Given thousands of years of history none have proven stable. Inventively the small minority rich subsidise the poor without fail. Italy as it is today is a non-starter.

Locally here QC has +6m that live on the river basin, the river inland to midwest, some Hydro dams and a whole lot of useless tundra. That tiny sliver of land’s people bankroll all the freeloaders. Obviously this is not sustainable but here we are centuries on.

#107 Soviet Capitalist on 09.17.21 at 11:30 pm

Life is not fair, it never was and never will. Canadians used to have a rational society. They’re destroying it out of fear and ignorance. Too bad, but it only means the world is getting back to its usual savagery. Let’s just hope this year was the worst of our lives.

#108 Another Deckchair on 09.17.21 at 11:37 pm

@51 xennial parent

One of us stayed home. We switched roles so one worked and the other was not out of the workplace too long.

Yes we went outside of Canada to do this.

Think outside the box. This was 31 years ago when we cottoned on, things don’t change much here as you are finding out.

#109 fishman on 09.17.21 at 11:43 pm

You want weather go to Windy.com. My boat is contacting me on sat/phone to look it up when they can’t get internet. Hello Mr. Musk! Where do we sign? We make all our critical decisions on when to cross Hecate Straights Cape to Cape or make a run to Prince Rupert through Dixon Entrance, fishing plans etc. by Windy. I don’t think the boys even bother with government weather broadcasts anymore. We were planning around this 1st. big Sou’Easter a week ago. Bloggies can play around with Windy all across Canada. Its the best.

#110 Planetgoofy on 09.17.21 at 11:45 pm

#98 wealth taxes suck the country dry on 09.17.21 at 9:59 pm
———————————–
NO DOUBT eh….And typical right when we need capital the most…right bloody now.

#111 fishman on 09.17.21 at 11:51 pm

My correction. The captain would listen to government marine radio weather forecasts at least once a day. He is obliged to make himself aware of “Notice To Shipping” alerts.

#112 Human Right on 09.18.21 at 12:56 am

#100 45north

Human Right First, let me start by noting that it is not ““Affordable housing is a human right.” , it just plainly “Housing is a human right.” as it is written in the laws.

If housing is a human right then government is obligated to make it affordable. Housing is unaffordable because it costs too much. The Federal Government has a huge influence on the price of housing – interest rates, CMHC regulations and the Bank of Canada which is buying mortgage-backed bonds from the banks. Over the course of a year, the Federal Government could reduce prices.

It’s hypocritical to say housing is a human right but pursue policies to make it unaffordable. It’s hypocritical to make housing more expensive and say “housing is a human right”.

—————–

Without doubt what you say is true.

Since I’ve expressed my view on the fact that the human right to housing in a court challenge will trump all other rights or contractual obligations to landlords, there maybe a point where courts have to address the point of affordability to throw the landlords a bone.

While I don’t believe that any cost, even $1 per month will allow the human right to housing to be overruled, there maybe a formula that will be applied to affordable rent.

If we look at public housing that tends to be 30% of gross monthly income. It is not outside of realm of possibility that the courts rule that the landlord is entitled to that same percentage amount, potentially.

There are a lot of outcomes possible in that ruling, let me take the greatest as an example – you earn $5,000,000 of today’s CAD, obviously you won’t agree to pay 30% as rent and therefore you will vacate the property. Of course the other scenarios are less extreme, down to 30% of welfare or retirement paying the rent and needing to be sufficient and accepted.

Really the key points in affordability will happen shortly after the court challenges confirm Human Right to Housing trumps all.

The steps really will be:
1. Courts will confirm that human right to housing trumps all other rights, including those of the landlord and owner after the human right is extended to an individual.
2. This will extend of course to question of fair rent, and it will be declared at accepted level of 30%, as is the case with public housing.
3. Above actions will essentially cause a significant re-adjustment in operations and may potentially socialize all rental inventory for reasons of stock value and maintenance requirements due to point 1) and 2). There is a high chance that quality of rental stock decreases here, and government needs to step in. I believe they are prepared for this possibility.

These actions would likely cause many ripples in the housing market. I believe it would absolutely squeeze our most low-end landlords out land lording – because it would simply be unmanageable for them to be a landlord. It would push them out of condo ownership. It would collapse prices all around, no place to hide. Landlords would be running for exits. Investors would be running for exits.

By the same token it would likely push home ownership upwards – which is the desire of the government, clearly.
Owning would result in the individual satisfying their own human right. I think due to risks with rental stock in terms of availability/maintenance/quality many would prefer to buy to satisfy their own Human Right to Housing. Not sure what this does to prices. However, I have little doubt that a ruling by the courts that would put all the power in the hands of the person being housed would sour the landlord aspiration for nearly all as the venture would have no return by not being able to set rents at a value but only % of income, by not being able to evict, by not being able to evict upon sale – all due to violation of Human Rights to Housing being the result.

I think we’ll see this develop here potentially soon. First domino are those court rulings that Human Right trumps all as noted. I’m sure there are some cases on the way to being addressed. Law has been on the books, and Covid has pushed cases back. But we’ll know soon once someone refuses to pay rent and move out and challenges any attempt at eviction on basis that Housing is a Human Right in Canada.

#113 Bob Cajun on 09.18.21 at 1:06 am

Change the zoning laws and build more houses! Increase density close to urban cores. It’s easy.

#114 Human Right on 09.18.21 at 1:18 am

#100 45north

…further….

Under such scenario, I believe even with houses losing significant value would result in most owner occupants holding onto them for reasons of wanting to retain control over where people are housed. In essence people will likely decide that providing their own human right to housing is better than hoping someone else agrees to provide it for them.

But I just don’t see how investors and landlords want to keep the house under those court imposed conditions – and so market will be flooded with unit availability. Of course the second layer will be higher taxation on 2nd property, gains taxes, etc. potentially. I’m sure that will come as you hear politicians talk about it already.

It is possible to have owner occupants perhaps even continue to pay their mortgage debt as it currently is perhaps, although I wonder how courts would square not paying a mortgage with the bank not being able to evict for reasons of violating the occupant’s human rights.

The rabbit hole goes deep, and while I’m thinking it out on the fly here, I’m sure this was all thought out when the Housing is a Human Right law was passed in Canada and plans are in place once the court rulings come down, which will make landlords run for exits.

Forgive if this all sounds a bit like thinking it out as I type, to a good degree I am thinking it out as to what is likely to happen after court rules that someone who isn’t paying rent can’t be evicted.

One thing is certain, no one wants to be a landlord after that ruling happens in Canada, and as I said, it is coming.

It is not access to housing is a human right but HOUSING IS A HUMAN RIGHT. This is a serious serious law.

You know how Garth talks about people selling their houses at the top and cashing in? There will be landlords that will sell their rental units now, while evictions are still allowed that may end up looking like quite smart soon.

#115 Jane24 on 09.18.21 at 3:23 am

As someone who lives in Basilicata, Italy for a few months each year I can tell you that all adults in my village of 4000 are vaccinated, everyone wears a mask when out of their own front door and everyone has the green pass to allow them to enter shops and restaurants. After the horror of 2020 when our village had all three access roads sealed off by the police, everyone is taking preventive measures VERY seriously.

On the other here in Britain we have about 25,000 cases plus each day and about 100 to 150 deaths each day but no one cares any more. No masks or restrictions. Covid is so last year.

On another topic the British are both outraged and incredulous at the fact RE here has increased by 8% in the last 12 months. When I tell them the Canadian RE stats they simply don’t believe me. Our nearest big city is Southampton where you can still get a starter 3 bed semi for £220,00 or $385,000 Cdn. All my kids and all their friends in their 30s and 20s own their own homes and have families. It can be done. Just not in Canada. Think outside of your box kids. Check out the Rightmove site.

#116 Wrk.dover on 09.18.21 at 4:24 am

#81 calgary rip off on 09.17.21 at 8:01 pm
I see Michelle Remple conservative signs everywhere in nw Calgary.
_______________________________

Voting the candidate they would most like to neck with?

#117 david prokop on 09.18.21 at 7:58 am

O’Toole is running a terrible campaign, just like Sheer did 2 years ago.
There is so much anger out there about cost of living, housing, inflation, debt, etc.. all you need to do is harness it and point at Trudeau as the one who’s responsible for it.
And what is O’Toole doing…talking about balancing budget in 10 years and complaining about the $600M election that Trudeau has called.
O’Fool he is, he’s giving us 4 more years of Justin I’m afraid…

#118 My Body My Choice on 09.18.21 at 8:06 am

#2 Woke Up This Morning

“If youth could find jobs that allowed stability and confidence to start a family?

What would happen if people didn’t have to go into debt for millions just to have a home?

What would happen if student debt wasn’t a huge burden and a for-profit business.

Would all these policies help youth move along with their lives and not put off having families? ”

Yup. Well said.

#119 Prince Polo on 09.18.21 at 8:24 am

Soon after the swearing-in on Nov. 4, 2015, government continued to reinforce how positive this moment could be. The mandate letters were being finalized, and that was exciting. It was the first time that such letters – which detail what the prime minister is expecting of his ministers – would be made public. Much of the talk around the letters was great, and many of the orientation messages were music to my ears: “Politics is a secondary role we play”; “Science and the rule of law and the Constitution must be woven through everything we do”; “We must demonstrate the impact of how we spend taxpayer money”; “We must be open-minded about all different perspectives”; “Restoring Cabinet government, making decisions that reflect a team effort, will lead to better decisions”; “With politics we need to learn humility.” This was great stuff. I remember one day when we left a meeting, public servants were lined up clapping and cheering. They seemed so excited and relieved.

In these early days, a senior PMO official made a statement in front of the Prime Minister, members of the government, and public servants that has always stuck with me. It would come to mind many times during my years as minister. “The Prime Minister is your brand. You each serve at his pleasure. You each have a duty to country – and will need to at some point speak truth to power.”

You serve at his pleasure?! What a piece of work…how about serving at the pleasure of your own constituents? On Sep20, kick this guy to the CERB!

https://www.theglobeandmail.com/opinion/article-my-time-in-cabinet-showed-me-how-far-we-still-had-to-go-as-a-country/

#120 Cto on 09.18.21 at 9:16 am

It all stems back to absurdly low interest rates and QE for an excessively crazy length of time .
I say this over and over again, …
But if rates were closer to normal, we would not have 300 billion dollar bailouts…we would not have trudeau style, rain money from the skys governments, we would not have mal-investment in highly leveraged assets

So you have to ask,…what is the central banks game!?
After this amount of time, (2008), surely they can’t be just acting reactionary with 1 single plan???
People have to start focusing on this…it is the root cause of modern day crisis you, your kids and your grand kids.

#121 millmech on 09.18.21 at 9:23 am

#105 Faron
Lots of similarities to what is happening in the Canadian housing market, canary in the coal mine perhaps!
I am curious if the CCP is going to pull the money that was made in real estate in China and invested overseas back to China, all they have to do is make an example of one person to assure compliance.
I would also wonder if the masses(sheeple) of real estate investors are enjoying the shearing of their wealth and now look a little more cautiously upon real estate as an investment.
Would they look at the peak real estate in Canada and decide to not take a chance and take profit now.

#122 Dharma Bum on 09.18.21 at 9:53 am

#52 Millenial 1%er

If taxes get any higher I’m leaving to the states.
————————————————————————————-

Sounds great.

I hear that there are some spectacular real estate deals to be had in Flint, Michigan.

You know, the heartland of America.

#123 Dharma Bum on 09.18.21 at 10:04 am

#117 David Prokop

O’Toole is running a terrible campaign, just like Sheer did 2 years ago.
———————————————————————————

Yah! What is it about these guys?

I mean, right outta the gate they are dweebish nerds with ZERO media appeal, so there’s that.

Then, it’s as if they hired braindead publicists with virtually no talent, political campaign, image development, marketing, or promotional experience to manage their campaigns.

The worst of the worst.

Guys with nothing going for them in the charisma, looks, physical stature, personality, image, or articulation realm need highly skilled professional image makers, or they do not stand a chance. This is especially true when running against a vapid, empty suited, good looking (in many stupid people’s opinion), virtue signalling, photo opportunistic, climate change whoring, blackface prankstering, silly socks wearing, sympathy beard growing, flowing locks, ultra rich, family connected, corrupt, manipulating, lying, drama teaching, snowboarding, hypocritical scoundrel.

The Cons don’t stand a chance when they run nerdy looking doughboys against photogenic smiling ding-dongs.

Politics is Hollywood. Image is everything when trying to get elected.

Then again, there’s Joe Biden.

OK, so I’m wrong.

But not really.

O’tool is unelectable because of his lousy media image.

Shallow, but true.

#124 Dharma Bum on 09.18.21 at 11:09 am

#83 Fishman on Sept. 16th

Thats his job. Harvesting the innocent victims first. Their the easiest. The bad guys, the instigators come later.
——————————————————————————–

Regardless, it doesn’t matter whether or not he, she, or it is included, recognized, believed in, talked about, worshipped, ignored, feared, revered, acknowledged, or disdained.

It, she, or he doesn’t care. Doesn’t discriminate. Doesn’t play favourites. Doesn’t take bribes. Does Not Listen.

The entity is the epitome of randomness. Fate is unrelated to faith. Believer or non believer – some people are born with fortune smiling on them, others get the raw end of the deal. MOST of the population on this planet struggle through horrible lives of misery, poverty, despair, horror, difficulty, troubles, and agony. Through no fault of their own. Just the cruel fate of randomness.

https://www.globalissues.org/article/26/poverty-facts-and-stats

Belief in salvation is a construct and luxury.

80% aren’t so lucky.

#125 Anja on 09.18.21 at 11:49 am

Who is Stu?

#126 Steven Rowlandson on 09.18.21 at 11:49 am

“All the masses want is a house. They think it’s a human right.”

In Canada where having an address is a requirement for driving, voting, international travel, health care and renting a mail box or getting snail mail are you kidding?
It is damned near a bare minimum requirement of life.

#127 Lorne on 09.18.21 at 1:07 pm

#109 fishman on 09.17.21 at 11:43 pm
You want weather go to Windy.com. My boat is contacting me on sat/phone to look it up when they can’t get internet. Hello Mr. Musk! Where do we sign? We make all our critical decisions on when to cross Hecate Straights Cape to Cape or make a run to Prince Rupert through Dixon Entrance, fishing plans etc. by Windy. I don’t think the boys even bother with government weather broadcasts anymore. We were planning around this 1st. big Sou’Easter a week ago. Bloggies can play around with Windy all across Canada. Its the best.
…….
Love Windy. Predict Wind is pretty good also….allows you to access more than one forecast on the same screen and make a comparison.

#128 Lorne on 09.18.21 at 1:31 pm

#111 fishman on 09.17.21 at 11:51 pm
My correction. The captain would listen to government marine radio weather forecasts at least once a day. He is obliged to make himself aware of “Notice To Shipping” alerts.
………
Little nasty at Solander yesterday. Where was your boat hanging out?

#129 Human Rights Good Luck on 09.18.21 at 5:09 pm

Human rights are like taxes. You keep paying for them and they were never meant to help you or society. It was for the UN and all it’s global communist partners like China to confuse, deflect, delay the coming destruction of nation states in favour of the new global government operated for many years, the UN and IMF just to name a few.

#130 Nonplused on 09.18.21 at 7:33 pm

#114 Human Right on 09.18.21 at 1:18 am

“It is not access to housing is a human right but HOUSING IS A HUMAN RIGHT. This is a serious serious law.”

You have outsmarted yourself by half.