National Economy

[thurmas]

it feels like the housing crisis will soon tip to becoming like hong kong to go up 100k in price in just 5 months is frightening. this government needs to fall on a confidence motion we cannot bring in this many people when there are no homes for them it makes them poorer and Canadians poorer.

[Acajack]

Originally Posted by goodgrowth

A leading indicator of net worth:

Quebec's figure is probably at least partly a reflection of the fact that we've always been a province of renters (more than the others), moreso than a huge reaction to the current price inflation.

[Truenorth00]

Originally Posted by thurmas

it feels like the housing crisis will soon tip to becoming like hong kong to go up 100k in price in just 5 months is frightening. this government needs to fall on a confidence motion we cannot bring in this many people when there are no homes for them it makes them poorer and Canadians poorer.

It makes some Canadians poorer. It makes others richer. And the stats will average it all out to say this is fine and that we're all richer. This is what I was getting at earlier.

I have a cousin who is a senior car mechanic. His wife cleans hotel rooms. Combined family income is six figures. They can't afford to buy more than a condo in St. Catharines. I look at a situation like that and I know these stats are giving a bogus picture.

[MonkeyRonin]

Originally Posted by Innsertnamehere

And yea - Toronto and Vancouver have problems, nobody is debating that.. But Toronto accounts for about 7% of Canada's population. It's not all of Canada.

You're being disingenuous here. It's not just a central Toronto or central Vancouver problem anymore, and hasn't been for a while - you won't find any housing relief in the outer GTA or Metro Van either; and these two metros alone account for a quarter of the population.

Smaller cities in Ontario and BC might offer some relief, but unless you're cashing out of a TO/Van property, they don't have enough of a job market to support the prices (eg. I can't afford a home in Vancouver at my household income, but I could in Nanaimo. Except that I wouldn't find a job in my field at my current salary level there). Affordability is rapidly deteriorating in other cities like Montreal, Halifax (now the 3rd most expensive rental market apparently), and Calgary. I'd argue that the majority of Canadians now live in unaffordable housing markets.

The average Canadian home price is now $716,000 (which is above what the average household income could afford, without assistance). Rents are up 10-20% year-over-year. One won't be able to bury their head in the sand that everything is fine for much longer.

[lio45]

Originally Posted by Truenorth00

It makes some Canadians poorer. It makes others richer.

You took the words out of my mouth! I'd add that the latter are a much more reliable voting bloc...

[Truenorth00]

Originally Posted by hipster duck

Paul Krugman had a similarly tone-deaf article in the NYT today. Surely, if these high level, aggregated economic statistics were reported under a Republican administration his article would have been the same?

But even if the research is airtight - and I'm not sure a self-reported survey of wealth and spending that was last performed in 2016 is ("we used data from the 1925 economic wellbeing survey to prove a point in 1932!") - if there is a overpowering feeling of malaise and precariousness among the voting public, politicians would do well to heed it, regardless of whether people come off as spoiled or unable to position themselves objectively against the wellbeing of previous generations.

The stats don't much cover the precariousness of it all. Look at those surveys asking people if they can afford a $500 emergency bill. Or the levels of debt and especially increase in short term debt. The wealth that we see is increasingly funded by debt. People know this. And many know they are one bad recession from losing it all.

Toronto Life Guy is a great example of the above. Wins the housing lottery and still ends up with more debt than the original purchase price of their house (3x the original price). On paper, they are loaded. In reality, they had to move two hours from the city to actually live within their means. Sure, people mock TLG. But stats suggest that he's more representative of the average 50+ Canuck than we're willing to admit.

[lio45]

Originally Posted by MonkeyRonin

Rents are up 10-20% year-over-year.

To anyone who can't afford +20% rent per year, casper has the (final...) solution: "Have you considered MAID? It's legal now! Would permanently solve all your housing problems!"

[thewave46]

Originally Posted by Truenorth00

The stats don't much cover the precariousness of it all. Look at those surveys asking people if they can afford a $500 emergency bill. Or the levels of debt and especially increase in short term debt. The wealth that we see is increasingly funded by debt. People know this. And many know they are one bad recession from losing it all.

Toronto Life Guy is a great example of the above. Wins the housing lottery and still ends up with more debt than the original purchase price. On paper, he's loaded. In reality, they had to move two hours from the city to actually live within their means. Sure, people mock TLG. But stats that he's more representative of the average 50+ Canuck than we're willing to admit.

The bigger folly is that it shouldn't have got this far.

Had we cut off people before they got in really deep, we could have saved a lot of pain. People who stop drinking before they're ill generally have milder hangovers. We didn't. We didn't just pour the guy another drink, we gave him the bottle. Cool. The bubble made us wealthier, and drinking's always the most fun before the sick comes.

I'd rather a milder hit of slower economic growth of 2015-2020 and housing price appreciation in line with historical averages. Had the Liberals done this in 2015, we'd be in a better spot today. It will be their albatross.

But whatever. Lifetime amortizations can be fun too. Might be literally 'lifetime'. At least we're 'wealthy'.

[WarrenC12]

Originally Posted by Acajack

But we have amazing smartphones today and a one-week all-inclusive to Punta Cana has never more affordable!

Don't forget the chicken pox vaccine and boner pills.

[WarrenC12]

Originally Posted by goodgrowth

Examples that show the deflationary effects of tech and consumer goods that have made people better off just prove we need to make housing act more like a consumption good and less like an asset.

Not a bad idea. More modular home building.

[Truenorth00]

^^^ Correct. But here's the worst part. To make sure, Toronto Life Guy isn't totally fucked, the government has to bring in record numbers of people, hope they stay in illegal substandard housing (so that rents skyrocket) and then hope some professional Millennial couple signs away their financial future in a competition with these poor immigrants. The stats will say TLG is richer than any of his ancestors. They'll also say the millennial couple who bought his home are well off. In reality, that millennial couple will never have the lifestyle TLG and his wife did. They'll slave for 30+ years to pay a mortgage that is 3-4x what TLG had. But stats won't show this picture today. Because TLG is helping boost the average.

[Truenorth00]

Everytime I think of Toronto Life Guy, I seethe. Nothing shows how failing up works, more than that dude. He's a writer. Wife's a newscaster. This let's them afford a house across from Trinity Bellwoods park and they live a two decades long party lifestyle to the point that they wrack up $900k in debt on a $300k house.

When innsertnamehere says that people are richer and better off today, my mind goes to TLG and his wife. I think a lot of the wealth we see is exactly this. Absolutely none of this would be possible today for anybody who doesn't own real estate already. Just imagine the jobs and income it would take to live what TLG and his wife did.

[lio45]

Originally Posted by Truenorth00

In reality, that millennial couple will never have the lifestyle TLG and his wife did. They'll slave for 30+ years to pay a mortgage that is 3-4x what TLG had.

10x, actually. (~$2M vs ~$200k.)

And quite possibly even more than 10x, if the Millennial couple had to resort to an CHMC-insured mortgage (95% of the $2.5M they paid to the TLG) while the TLG didn't (need the CHMC's help).

[LightingGuy]

Old poll, but haven't seen it discussed. This is downright scary, and explains why the nation at large isn't making a bigger fuss about the fiscal decisions made by the government. They are essentially saying "We want more services, but we don't want to pay for it, nor do we want to work harder for it." (I have a suspicion that there are certain forumers who share these beliefs as well)

Four in 10 Canadians prefer socialism but not higher taxes to pay for it

[Nashe]

Originally Posted by LightingGuy

Four in 10 Canadians prefer socialism but not higher taxes to pay for it

I suspect some of that is really not knowing what socialism IS, which is kind of a contagious situation brought out by proximity to the US. It's like we wanna be Norway but also the US, and don't realize those are mutually exclusive mindsets. Ignorance, largely.

[LightingGuy]

Originally Posted by Nashe

I suspect some of that is really not knowing what socialism IS, which is kind of a contagious situation brought out by proximity to the US. It's like we wanna be Norway but also the US, and don't realize those are mutually exclusive mindsets. Ignorance, largely.

They gave survey participants 3 definitions of socialism, and polled each definition separately.

1. Government takes over production = over 30% support

2. Government provides more services = over 60% support

3. Government provides UBI to everyone = over 50% support

There is more info here:
https://www.fraserinstitute.org/stud...-and-socialism

And the full report is here:
https://www.fraserinstitute.org/site...sm-polling.pdf

Ultimately the debt is going to become so high that the nation implodes. Reality will kick in eventually.

[acottawa]

Originally Posted by Nashe

I suspect some of that is really not knowing what socialism IS, which is kind of a contagious situation brought out by proximity to the US. It's like we wanna be Norway but also the US, and don't realize those are mutually exclusive mindsets. Ignorance, largely.

Socialism has so many definitions that it is not a useful word in describing anything anywhere.

[LightingGuy]

Originally Posted by acottawa

Socialism has so many definitions that it is not a useful word in describing anything anywhere.

See post above. I already said they gave definitions of socialism to the survey respondents before asking them to answer.

[niwell]

Having actually worked on programs that have resulted in significant tax increases with extensive public consultations the most common amalgamation of real-world responses can be summed up along the lines of:

"we don't want to pay more taxes, but we're willing to pay our fair share and would pay more if it can actually be tied to an increase in services received"

Keep in mind this wasn't with downtown residents, but smaller communities and some cities across Northern Ontario. Some of which are more traditional labour-based NDP, but others which are very Conservative with a libertarian bent.

[1overcosc]

A lot of people don't make the connection that more services for you means more taxes for you. There's a narrative popular in the anglosphere that we can have all the services in the world without more taxes by just "taxing the rich". This approach is never financially sustainable. It leads the situation that Margaret Thatcher famously summed up with: "The problem with socialism, is that you eventually run out of other people's money."

I think the political left would be a lot more successful if they were honest about this and tried to sell people on paying more taxes in exchange for getting more value from their state.

The Nordic model works because all of those generous services are paid for by the same people receiving them; Swedes don't expect to get a free ride from a tiny minority of the population. In the Nordic model, taxes on businesses are actually low and regulations are low as well. Countries like Sweden, Norway, etc. actually rank really high on indexes for things like "ease of doing business" and "economic freedom". Sweden has a thriving corporate sector - think of all the famous big brands that tiny country has produced - largely for this reason. So they have a "capitalist" approach to business while having a "socialist" approach to individuals. These go hand in hand, because the business-friendly economy creates the high paying jobs that allows the countries to have the personal income tax revenue to pay for all the programs.

You wanna be like Sweden? Add a bunch of high quality state services, pay for it with big tax increases on the entire population (not just on the rich), and slash taxes on businesses and investors while reducing their regulatory burden. That's the Swedish model.