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Are you worried about the debt?
- Thread starter LiNK666
- Start date
Type17
Well-known member
Housing affordability and transit.
Riceburner
Well-known member
Cost of living now. Medical, hydro, gas etc. My kids can pay the debt.
I spoke to my neighbour. He said magna is looking to move out of Ontario. Large increase in costs and labour along with Trump rhetoric is making US more appealing.
He is the sole provider of his family and worries about his future.
Transit can obviously be easily addressed (or not) by the government, but what ideas are you looking for that will help housing affordability? I find most meddling in housing just makes things worse and wonder if there are some good ideas out there.
They could do something with land transfer tax, but that's not a huge barrier, if that's what breaks affordability the dwelling was unaffordable to begin with.
Some condo buildings are being constructed with low-income units (although in the ones I have seen, they are entirely separated with their own entrance which I think is uncool). It would be interesting to see how things would work out if ~5 units per building were sold to TCH (funded by selling off uber-expensive and maintenance intensive detached housing stock). Integration normally improves society.
I would love to see the principal residence tax exemption capped (say at $1,000,000 and indexed to inflation). I think that's a federal problem though. That lets people make some decent money while preventing people from grossly overhousing to grow money tax free. Depending on what tax rate was applied, this could actually bring a lot of properties back to market as it could be advantageous to rent and invest the money in securities or commercial real estate.
Debt seems like such an abstract concept when it's at the scales it is now. The US national debt is something like $20-trillion; does anyone really care anymore?
Unfunded liabilities worry me more because they're "real" and coming due as the population ages and begins demanding their pensions and long-term care and so on. People aren't just looking for interest on their investment in a stable democracy (as is generally the case with debt); they're looking for far more vast sums of money as they start drawing pensions as income and needing more healthcare etc.
Cities and states and perhaps even provinces declare bankruptcy because of unfunded liabilities, not because of "debt" per se.
Unfunded liabilities worry me more because they're "real" and coming due as the population ages and begins demanding their pensions and long-term care and so on. People aren't just looking for interest on their investment in a stable democracy (as is generally the case with debt); they're looking for far more vast sums of money as they start drawing pensions as income and needing more healthcare etc.
Cities and states and perhaps even provinces declare bankruptcy because of unfunded liabilities, not because of "debt" per se.
Not surprised. Magna is selling off much of the land they acquired for their new head office (although future Magna head office signs were recently erected on the remaining parcel).
I would love for each government to be required to have a balanced budget over their term. You could spend more some years, but this would have to be made up in the other years or there are huge consequences (your party is not allowed to participate in the following election?, elected representatives do not get pension? etc). In practice, this would bring spending reasonably in line with income yearly as the swings would be horrendous for them to deal with.
Unfunded liabilities should not be allowed without a clear path to clean them up (eg. we are going to sell the remainder of Ontario Hydro to clean up x [this is a bad idea and put here for conceptual purposes only).
All of the above because they are the result of corruption or incompetence or both.
IMO the situation is so bad that no decent person would want the job so we end up voting for whoever appears to be the least corrupt / incompetent.
I feel that we have lost faith in Canada and it's pretty much every person for themselves.
The debt bothers me because it shows how stupid people are when they think the government can reduce hydro or insurance rates. Al the government does is subsidize the rates. Guess who pays?
IMO the situation is so bad that no decent person would want the job so we end up voting for whoever appears to be the least corrupt / incompetent.
I feel that we have lost faith in Canada and it's pretty much every person for themselves.
The debt bothers me because it shows how stupid people are when they think the government can reduce hydro or insurance rates. Al the government does is subsidize the rates. Guess who pays?
Actually, that sort of illustrates an "unfunded liability": For decades, Ontarians paid a few cents per kW/h and no one in a position of importance ever thought that someday hydro infrastructure will start to degrade and need repair and replacement, that nuclear plants will need refurbishment etc. They paid their piddly bills and installed their baseboard electric heaters, all the while the liabilities of infrastructure and refurbs went under- or just plan un-funded. Now, today, we're seeing a truer realization of the real cost of electricity and are also expected to pay for those earlier generations getting a free ride. Conservatives and Liberals alike ***** about the price and hydro and blame Wynne or Harris or whatever but the fact is they should kick their grandparents in the crotch for screwing them in a bad deal that started 40 or more years ago.
Can't say i agree with the auto sector. Business is booming for my company.
Type17
Well-known member
Honestly, I'm unsure how the government can fix it and I'm not an expert in housing. For the time being, what I really want is an understanding of the root causes of the issues, as well as the regulatory and economic environments that are creating it. Not every big city in the world suffers from the issues that Toronto suffers from; I'd be happy with a look at comparable cities (both US and EU) and an in depth analysis of what it is that enables their real estate prices to be lower.
The natural comparison for me is Chicago. Similar sized city and a major US financial hub, but has far more affordable housing stock.
That would be an interesting study, but I'm not sure a government is the best driver for it. If that's the extent of a governments involvement with housing affordability, I would argue that's not enough to gain any votes.
I would think something like universities or public policy consultancies would be a better steward of such a study. The problem with any study will be that half the population will argue that it was biased by the person writing the cheque.
They said if Wynne were elected again, they would move. And they said that in 2016.
Now if a hardline socialist as Horwath get elected, without doubt, they are going to move.
J_F
Guest
bad deal
yes, the lowered corporate taxes, reduced regulation
weakening of the unions, and threats to kill NAFTA are bad for us here
Servicing the national debt is just the age old game of kicking the can down the line. It's one of those shrug-the-shoulders-let-the-next-gen-worry-about-it kinda deal.
What I think is more pressing is housing debt: over-leveraged mortgages, tapped-out HELOCs.
More than 15% the of the Canadian economy is tied to real-estate and related services: construction, financial institutions, insurance companies, real estate agents, lawyers, home inspection, etc.
In addition to this, the housing boom has created a "wealth effect", people borrow heavily from their ever-rising home equity to buy cars and trucks, renovate, go on vacations, eat out at restaurants. Housing is driving the red-hot domestic economy. Because they're secure in the fact that whatever they're borrowing will easily be repaid when their house is worth 10% more the next year, and the next.
It's a house (pardon the pun) of cards that is just waiting to fold. We can't keep interest rates low forever. The minute rates rise and people can't afford to keep up with mortgage payments, cars won't be bought, vacations won't be taken, renovations won't be done. Defaults on mortgages will affect FIs, decreasing home prices will have a reverse wealth effect and it'll take down the Canadian economy with it. Unemployment will rise, causing even more hardship servicing mortgage and HELOC debt.
This is the debt that needs to be addressed. Not some random number called the "national debt" that people have been throwing around for generations, and will continue to do so for generations after us.
What I think is more pressing is housing debt: over-leveraged mortgages, tapped-out HELOCs.
More than 15% the of the Canadian economy is tied to real-estate and related services: construction, financial institutions, insurance companies, real estate agents, lawyers, home inspection, etc.
In addition to this, the housing boom has created a "wealth effect", people borrow heavily from their ever-rising home equity to buy cars and trucks, renovate, go on vacations, eat out at restaurants. Housing is driving the red-hot domestic economy. Because they're secure in the fact that whatever they're borrowing will easily be repaid when their house is worth 10% more the next year, and the next.
It's a house (pardon the pun) of cards that is just waiting to fold. We can't keep interest rates low forever. The minute rates rise and people can't afford to keep up with mortgage payments, cars won't be bought, vacations won't be taken, renovations won't be done. Defaults on mortgages will affect FIs, decreasing home prices will have a reverse wealth effect and it'll take down the Canadian economy with it. Unemployment will rise, causing even more hardship servicing mortgage and HELOC debt.
This is the debt that needs to be addressed. Not some random number called the "national debt" that people have been throwing around for generations, and will continue to do so for generations after us.
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Type17
Well-known member
This is partially the reason im worried about the impact of this wealth that’s locked up in real estate. Lots of people that have very average salaries suddenly found themselves sitting on a pile of money, thought themselves financial geniuses and started balling out. When you look at housing prices to wage multiples you realize very quickly that without help from previous generations, the current generation cant really afford their lifestyles should something happen. It may not happen today or tomorrow, but eventually we’ll have to pay the piper...
The key to getting ahead financially is to think about getting rich instead of looking rich. Immigrants that haven't bought into the American dream seem to do OK.
Mad Mike
Well-known member
The biggest worry I have is the sustained strength of our economy. I worry that the staggering losses of well paying long term manufacturing jobs have hollowed the economy and made it fragile. I worry that employment growth in Ontario has mostly been from government expansion of the civil sector, gov't infrastructure spending, and a sugar high from a red hot residential construction market. In the past, low Canadian dollar and the strong American economy created billions in trade surpluses -- no more, were not making as many things today, so there is less to export. The changes in balance of trade might be the canary in the coal mine - the canary ain't singing today.
The current infrastructure spend can't go on for ever, same with the construction boom. What happens when these cool down?
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