Federal Government & Politics II

[P'tit Renard]

Originally Posted by casper

Not ideal. The question is if you are 3-5 years into a mortgage, at renewal are you better extending it out beyond 25 years or are you better selling the equity you have built up to date and renting an equivalent property.

It doesn't matter if it's ideal or not if the homeowner can't afford their mortgage payment. The stress test's original intent was to ensure homeowners can handle a sharp rise in interest rates, but in hindsight clearly the 2% threshold was too low. Stretching out the amortization period to create the false illusion that they can still afford the mortgage is bound to make the homeowner's financial position even more precarious, since it'll barely reduce their monthly payments. It'll push them to the brink of bankruptcy if they face a sudden loss of employment or a big drop in income without the savings to back it up.

Some (maybe all) credit unions in BC also do the same stress test. I know Vancity does.

Ontario credit unions like Meridian and EQB and alternative lenders are not obligated to apply the stress test. Perhaps it's BC regulators requiring it.

The federal government rules change removes the stress test on renewal when changing banks. It basically puts all the banks on a level playing field.

The federal government's so called "mortgage charter" only governs insured mortgages, but the majority of mortgages are not insured. Of course, this is only possible because the federal government is foolishly shouldering all of the risk by guaranteeing the MBS bonds packaged with insured mortgages. The perfect poster child of privatizing gains and socializing losses.

OFSI isn't going to risk their reputation by doing away with the stress test on uninsured lender switches, and they have said so repeatedly, especially given how precarious Canada's housing and mortgage markets currently are. Putting banks on a level playing field as you've suggested does not reduce systematic banking risk. If anything it makes it materially worse by polluting every Canadian bank's loan book with amplified NPL risk, exposing the whole Canadian banking system to risk of failure and contagion.

[OldDartmouthMark]

Originally Posted by Truenorth00

I don't see it. I think this is something we tell ourselves to self-soothe and so that older generations can justify their avarice in the face of obvious social and economic failures with the generations that follow. Nobody really wants to admit that their legacy is going to be one of them being remembered as a leech. Especially not while they are actually alive. So we keep saying it'll get better just to justify kicking the can further down the road.

While your tone seems a little sanctimonious, I know it comes from a good place.

I'm still having trouble understanding exactly the point you are trying to make, but I'll give it a try...

It sounds like you are saying that the older generations (the silent generation, boomers, gen X) were wrong to fit within society norms of working hard to live a better life so that you could provide a home for yourself and your family (or just yourself, if you didn't have a family), spend your entire productive years paying the bank double the purchase price for a mortgage that you might be able to pay off just as you face a massive reduction in income as you hit your retirement years, and then expect to live in the house that was essentially the most tangible product of your working years.

So these people trundled through the highs and lows of life, with the majority (middle class?) paying their dues to keep the bank and debt collectors away. Meanwhile, while they were busy doing what they were always told they had to do to be an honest, productive person, the world changed around them. They suddenly found that politicians had screwed everybody over by creating a situation whereby housing was now at a shortage, and younger generations (well, everybody) who missed the cut-off date were no longer able to attain housing at prices that only the uber rich could now afford. And suddenly, it became some kind of a sin for regular working schmucks who managed to live to retirement age, to attempt to live your remaining healthy, self-sufficient years in the home that you spent your life trying to keep (for those lucky enough to have been able to do so).

It seems that the target of your ire are the people who were just trying to live their best lives by being hardworking and honest, and whose only failure seems to have been to manage to live to old age. Yet, no solution to the 'problem' is being offered.

As I said previously, if we can balance supply and demand for housing, won't pricing naturally drop? I don't see how having a glut of housing would allow the market to maintain artificially inflated pricing in a democratic capitalist society - sooner or later somebody will get tired of holding onto assets that aren't bringing in a return, and the dominoes will start to fall.

Originally Posted by Truenorth00

Saying this is all housing massive minimizes the problem given that housing is the primary instrument of both wealth creation and wealth preservation in Canada. Locking large groups out of the housing ladder doesn't just condemn them to poverty. It basically condemns their offspring too. This isn't a minor problem or technicality. It's basically feudalism.

Well, I actually said: "It seems that a large part of this is related to housing."

It confuses me when you say that "housing is the primary instrument of both wealth creation and wealth preservation in Canada". Is it really? I thought housing was a place to live for the vast majority of us. It has always been expensive to buy and maintain, but unless you buy everything cash nothing short of our recently artificially inflated market would ever qualify as an investment, given that the financing costs are huge for most of us.

Also, who is intentionally "Locking large groups out of the housing ladder"? Is it not just the supply/demand thing playing out? Of course I know there were issues with foreign investors (mostly from China?) laundering money through Canadian real estate, and massive influxes of population both temporary and permanent that created the supply issue... but is the average 'old Canadian' responsible for this, or the people who are supposed to be running things for us? I'll answer it for you - the people who were supposed to be running the country fucked it up for all of us.

Again, can you explain to me why increasing housing supply while restricting the flow of 1.5 million new people per year into the country won't bring the housing market back to reality again?

Originally Posted by Truenorth00

Does it suck that our old folks are basically house poor millionaires? Yes. That's a result of decades of policy that let them tie their wealth in their homes instead of forcing them to save it.

This literally doesn't make sense to me, because in order to buy a home, most of us had to put everything we earned into it.

Originally Posted by Truenorth00

Practically speaking, we can't fix this for the Boomers. We should fix it for Millennials though. We can however encourage Boomers to at least support themselves a bit more with that stored up wealth through policies like OAS reform. Nobody needs OAS above say $40k in income. You want a more comfortable retirement at that income level? Maybe it's time to cash out.

...and live your "more comfortable retirement" where? In a tent in a city park? You seem to forget that living 'comfortably' involves having a place to live. And how does this improve the situation for younger generations - the prices are still inflated, so you are only selling the house to a rich person who can actually afford the shit, while the people who don't have houses are still 'locked out of the housing ladder'...

Honestly, how does this not be fixed without massive supply increases combined with demand decreases (by reducing immigration until the market stabiilizes... not by killing off 'old people', or throwing them out on the street (not that you were suggesting this... or at least I hope not).

The more I think of it, there's no need to answer any of my questions... this will just continue into a circular conversation and nothing will be solved (not that it ever would be by a messageboard discussion). What really needs to happen is for regular folks like myself to just stay out of the conversation while the torches and pitchforks are out. I hope some government in the future can turn this country around before it literally becomes a third world nation, as that seems to be the direction in which we are heading.

In a historical sense, maybe that's where we have been heading all along. I mean, the standard of living that had become accepted in Canada was always better than many places in the world, which is why it was always an attractive place to which people wanted to immigrate - to have a chance to create a better life for themselves and their children. But perhaps this was just a temporary situation that was always destined to fall, and its demise was only accelerated by politicians and industry leaders to cash out by moving our productive capabilities overseas, while leaving us with a service economy that doesn't really make anything, other than natural resource extraction/collection.

I guess that's why I always had an aversion to politics - it's all just utter bullshit. And, I discovered, somewhat by accident, that a lot of this is mirrored in internet forum discussions... just on a smaller scale.

[shreddog]

^^ The problem I have with the current situation is that yes the "majority" of boomers/Gen-X just followed the "buy a house, work hard, pay it off and cruise into in a post-work period". They obviously made sacrifices to pay off their house and deserve the value of that. What they did not do was anything that resulted in the insane increase in valuation of said house. They didn't change the economy, change the demand side, change the supply side. All they did was what was expected from them - good. But seeing as so much of the valuation of said house was a result of things in which they had no control, perhaps that valuation should be taxed accordingly. When we hear of sanctimonous seniors whining about increased property taxes on their home (now worth millions) it's hard to feel sympathy since again, they did nothing to add to that value.

Perhaps it's time for capital gains taxes on primary homes in excess of 1M? Perhaps it's time to introduce serious inheritance taxes?

Of course had those policies been introduced 10 years ago, any revenue collected would have been spent on "social" programs and not on infrastructure or housing (at least not until 2 weeks ago!), so perhaps it is better to keep that money with boomers such that they can pass it on untaxed to their kids and continue the LPC program of creating a class system in Canada.

[bolognium]

I think the boomers being such a massive cohort always voting in their best interests was, and is, the real problem. Boomers voting in their best interests during their young post-secondary years, into their family starting years, into mid-life, and finally into retirement. Every step of the way they have been able to pretty significantly tailor things to fit their current needs. Sure most boomers probably want to see governments reduce deficits, but not if they see a clawback of their OAS bucks. Most boomers probably want young people to be able to afford homes, but maybe not so much if it means their retirement nest-egg McMansion loses value.

We're in the trenches of our housing crisis, and now you see boomers turn up to vote against developments and put up roadblocks wherever they can. Retired boomers in houses that have been paid off for decades derailing townhomes and low-rise walkups because of how it will affect the "character" of their sleepy SFH neighbourhoods. This is the "pulling up the ladder behind them" attitude people are frustrated with.

I don't think anyone is mad at the boomers for just holding down a job, starting a family, buying a house, and comfortably retiring. It's more the constant tweaking of the rules at every stage of their lives, to benefit them and their generation, at the expense of others.

This gets said a lot these days "A society grows great when old men plant trees in whose shade they know they shall never sit." Have boomers planted any trees for the younger generation?

[Truenorth00]

Originally Posted by kwoldtimer

Hours that international students can work to be capped at 24 hours, beginning in September. Not unexpected, but I wonder why they didn't just return to the old 20 hour limit?

24 hrs = 3 x 8 hrs or 4 x 6 hrs. It's a very useful number scheduling wise for employers.

[Truenorth00]

Originally Posted by casper

I think the problem with these hourly restrictions is many of these students are making money in the gig economy. I suspect hours probably are not a good measure if your delivering for skip or uber.

The real problem is how many of them work under the table. Especially the faux students just here to make money. 24 hrs is plenty for a legitimate student. Not enough for a faux strip mall college student.

[Truenorth00]

Originally Posted by bolognium

I think the boomers being such a massive cohort always voting in their best interests was, and is, the real problem. Boomers voting in their best interests during their young post-secondary years, into their family starting years, into mid-life, and finally into retirement. Every step of the way they have been able to pretty significantly tailor things to fit their current needs. Sure most boomers probably want to see governments reduce deficits, but not if they see a clawback of their OAS bucks. Most boomers probably want young people to be able to afford homes, but maybe not so much if it means their retirement nest-egg McMansion loses value.

We're in the trenches of our housing crisis, and now you see boomers turn up to vote against developments and put up roadblocks wherever they can. Retired boomers in houses that have been paid off for decades derailing townhomes and low-rise walkups because of how it will affect the "character" of their sleepy SFH neighbourhoods. This is the "pulling up the ladder behind them" attitude people are frustrated with.

I don't think anyone is mad at the boomers for just holding down a job, starting a family, buying a house, and comfortably retiring. It's more the constant tweaking of the rules at every stage of their lives, to benefit them and their generation, at the expense of others.

This gets said a lot these days "A society grows great when old men plant trees in whose shade they know they shall never sit." Have boomers planted any trees for the younger generation?

This is basically what it amounts to. Boomers voted in their self-interest and continue to do so. Gen X increasingly aligns with them. Politically, the question is when do other cohorts actually pursue policies in their interests? And when will they have the numbers to overcome the Boomer-Gen X vote. We might be getting close now.

That said, even PP's stated policies are mostly about can kicking. He isn't promising to do anything that fundamentally changes courses for the bleak future Millennials and younger cohorts face.

Policy wise I'd argue some big changes are needed immediately:

1) More income and maybe wealth gates for everything. Particularly for OAS. But there's a whole bunch of other programs (even at the provincial and municipal level) that need to be limited too.

2) An end to tax deferment programs. We all want to feel sorry for old people. But given them tax breaks on million dollar assets when families are trying to raise kids in shoebox condos is ridiculous. All this so they can avoid doing what every generation of seniors before them did: downsize. If it's politically unacceptable to remove deferment programs, ramp up the interest rate above prime. Let them tell their kids that their inheritance is getting spent keeping empty bedrooms for the sake of nostalgia.

3) Inheritance taxes. Millennials are already screwed. This would screw them over more. But it would at least save Zoomers and Alphas some pain.

4) Lifetime tax exemption. If we aren't going to cap the personal residence exemption, then it's time to give younger people limited tax breaks while getting on their feet and shift the burden higher. Say first $250k in income is tax free. A new lawyer might burn through that in a year. A new school teacher doing occasional supply while waiting for a full time gig might take 5-7 years to use up the exemption. It's a way of giving something that mimics the free wealth support of a house. This policy doesn't help Millennials. But will help Zoomers and Alphas.

[OldDartmouthMark]

Originally Posted by shreddog

^^ The problem I have with the current situation is that yes the "majority" of boomers/Gen-X just followed the "buy a house, work hard, pay it off and cruise into in a post-work period". They obviously made sacrifices to pay off their house and deserve the value of that. What they did not do was anything that resulted in the insane increase in valuation of said house. They didn't change the economy, change the demand side, change the supply side. All they did was what was expected from them - good. But seeing as so much of the valuation of said house was a result of things in which they had no control, perhaps that valuation should be taxed accordingly. When we hear of sanctimonous seniors whining about increased property taxes on their home (now worth millions) it's hard to feel sympathy since again, they did nothing to add to that value.

Perhaps it's time for capital gains taxes on primary homes in excess of 1M? Perhaps it's time to introduce serious inheritance taxes?

Of course had those policies been introduced 10 years ago, any revenue collected would have been spent on "social" programs and not on infrastructure or housing (at least not until 2 weeks ago!), so perhaps it is better to keep that money with boomers such that they can pass it on untaxed to their kids and continue the LPC program of creating a class system in Canada.

It sounds like you are saying the best solution is to tax all but the rich boomers out of their homes. Those people will be competing for others for an apartment, but their windfall will allow them to use their house money to pay rent, which will ripple down the food chain until those at the bottom end are forced out on the street. Rich people will buy the boomer's house.

That improves the housing situation how?

Also, aren't boomers' and gen x kids millennials and gen y? So if they inherit a house, or a share of the house's value, doesn't this allow younger generations to afford housing for themselves?

The common theme seems to be that there is no way to solve the housing crisis (i.e. supply and demand), so therefore the best solution is to bring everybody's standard of living down rather than try to collectively bring the standard of living up. Absolutely millennials, gen y, gen z and all the other future age groups should have the same access to housing that the older generations had - the solution is to bring Canada back to where it appeared to be headed many years ago. Responsible government who is knowledgeable and strong enough to steer the country in the right direction, and make painful decisions... but I don't see anybody who will be on the potential ballot that fits this description currently.

[OldDartmouthMark]

Originally Posted by bolognium

I think the boomers being such a massive cohort always voting in their best interests was, and is, the real problem. Boomers voting in their best interests during their young post-secondary years, into their family starting years, into mid-life, and finally into retirement. Every step of the way they have been able to pretty significantly tailor things to fit their current needs. Sure most boomers probably want to see governments reduce deficits, but not if they see a clawback of their OAS bucks. Most boomers probably want young people to be able to afford homes, but maybe not so much if it means their retirement nest-egg McMansion loses value.

We're in the trenches of our housing crisis, and now you see boomers turn up to vote against developments and put up roadblocks wherever they can. Retired boomers in houses that have been paid off for decades derailing townhomes and low-rise walkups because of how it will affect the "character" of their sleepy SFH neighbourhoods. This is the "pulling up the ladder behind them" attitude people are frustrated with.

I don't think anyone is mad at the boomers for just holding down a job, starting a family, buying a house, and comfortably retiring. It's more the constant tweaking of the rules at every stage of their lives, to benefit them and their generation, at the expense of others.

This gets said a lot these days "A society grows great when old men plant trees in whose shade they know they shall never sit." Have boomers planted any trees for the younger generation?

The voting thing perplexes me - if you look back boomers voted for: Liberals, Conservatives and NDP. Is there another party that should have been voted for that would have avoided the crisis that we are in now?

I agree with your other points, for the most part. NIMBYs should not be given power by weak politicians. They are not the majority and therefore should not get the majority vote. I find it frustrating sometimes when I read that boomers vote, but they are not the majority anymore... so how do we get more younger people out to vote for the politicians that will defend their views, or at least will see them as a group that they need to pander to?

[Truenorth00]

The NIMBY Boomer thing is real. And it's not so much that they vote. It's that they are the only folks showing up in the middle of the work day to all these hearings. They get to be the vocal minority while the prime who need that housing are at work.

[Truenorth00]

Originally Posted by OldDartmouthMark

The voting thing perplexes me - if you look back boomers voted for: Liberals, Conservatives and NDP. Is there another party that should have been voted for that would have avoided the crisis that we are in now?

It's not so much that they have voted for specific parties. It's that the parties catered to their cohort's interests and they benefited from that. Should they have been more responsible with that power? Maybe. But i don't think they did anything any other cohort wouldn't do in that situation. The question now is what other cohorts do with their growing influence as the Boomer's influence wanes. Nobody should judge Millennials for voting in their interests just as Boomers did.

[Hecate]

Originally Posted by OldDartmouthMark

The voting thing perplexes me - if you look back boomers voted for: Liberals, Conservatives and NDP. Is there another party that should have been voted for that would have avoided the crisis that we are in now?

I agree with your other points, for the most part. NIMBYs should not be given power by weak politicians. They are not the majority and therefore should not get the majority vote. I find it frustrating sometimes when I read that boomers vote, but they are not the majority anymore... so how do we get more younger people out to vote for the politicians that will defend their views, or at least will see them as a group that they need to pander to?

Yes how do we convince an entire generation who has been ostracized and shit on by politicians to vote for politicians. How many people are sitting on governments across the country today precisely because of NIMBYism. They run because of NIMBYism and they get elected in because of NIMBYism. The boomers have to be the most narcissistic entitled generation ever. They sold out their own kids and grandkids so they’d be comfortable. Now they need people to wipe their asses so bring on the immigrants.

[kwoldtimer]

Originally Posted by Truenorth00

The real problem is how many of them work under the table. Especially the faux students just here to make money. 24 hrs is plenty for a legitimate student. Not enough for a faux strip mall college student.

With little, afaik, in terms of enforcement efforts.

[YOWetal]

Originally Posted by Truenorth00

The NIMBY Boomer thing is real. And it's not so much that they vote. It's that they are the only folks showing up in the middle of the work day to all these hearings. They get to be the vocal minority while the prime who need that housing are at work.

This is for sure real with many projects blocked or towers shortened. If we add all boomer voting behaviour how much of housing costs can be blamed on the constraints?

Seems to me it's an Anglo worldwide problem with Canada having an especially bad case because of immigration and how our mortgage rates are structured.
Obvious simple solution is stop immigration for a few years including especially TFWs and students. Yes employers might have to pay more and we can bring teenagers back into the job market.

[Innsertnamehere]

Originally Posted by Truenorth00

The NIMBY Boomer thing is real. And it's not so much that they vote. It's that they are the only folks showing up in the middle of the work day to all these hearings. They get to be the vocal minority while the prime who need that housing are at work.

Definitely real - but most consultation meetings have long been held in the evenings to encourage a wider audience to attend. Younger people simply don't. But even when they are scheduled outside of work times, younger people are busy with their kids and other activities.

I've attended quite a few development consultations over the years, and not once do I think I have seen one which has not be over 90% seniors, and the vast majority are overwhelmingly white seniors at that, and overwhelmingly homeowners, not renters, too.

The council meetings themselves are typically mid-day though, yes.

[Nashe]

Originally Posted by shreddog

^^ The problem I have with the current situation is that yes the "majority" of boomers/Gen-X just followed the "buy a house, work hard, pay it off and cruise into in a post-work period". They obviously made sacrifices to pay off their house and deserve the value of that. What they did not do was anything that resulted in the insane increase in valuation of said house. They didn't change the economy, change the demand side, change the supply side. All they did was what was expected from them - good. But seeing as so much of the valuation of said house was a result of things in which they had no control, perhaps that valuation should be taxed accordingly.

I'm not sure I understand what you're getting at... you're saying they have no control over the growing valuation of their home, but at the same time saying that since they can't control that, they should pay for that increase that they had nothing to do with? That doesn't seem to make any sense...

Originally Posted by shreddog

When we hear of sanctimonous seniors whining about increased property taxes on their home (now worth millions) it's hard to feel sympathy since again, they did nothing to add to that value.

...except to unlock it they have to 1) move somewhere that is equally expensive or 2) die.

Originally Posted by shreddog

Perhaps it's time for capital gains taxes on primary homes in excess of 1M?

This kind of thing, to me, is the only reasonable solution. It only hits the people who cash out, not the ones who just want to live in a home they spent 30 years paying for and renovating.

Originally Posted by shreddog

Perhaps it's time to introduce serious inheritance taxes?

So they should sell them instead of giving a leg up to their own millenial and gen-y kids? Errr...

None of this solves the issue of someone being taxed out of their paid-for home by escalating assessments that they have no control over and that they can't really benefit from if they just plan to live there, like most people.

It's insane how far people will go to find bogeymen when they are stressed. You'd swear based on some of these posts that granny who skrimped and saved and cut coupons is some sort of robber baron. She's not greedy, she just wants to live a quiet life in a place that has meaning to her. Like everyone does.

[MonctonRad]

Good post.

C'mon guys, don't pick on Granny!!

[goodgrowth]

The whole catering to boomers is kinda weird because a lot of MP's seem relatively young by politician standards. All the recent leaders of the parties are relatively young. Hell Poilievre, Singh, Scheer are almost millennials.

It would be interesting to see a comparison of the averages ages between MP's and various councils and mayors.

You probably have situations where certain municipalities have had the inertia of older demographics that just vote in older councillors and mayors and the municipality essentially becomes a nimby homeowners association first and foremost.

And not all of these municipalities are out in middle of nowhere. They can be enclaves in large growing metros.

[YOWetal]

Originally Posted by goodgrowth

The whole catering to boomers is kinda weird because a lot of MP's seem relatively young by politician standards. All the recent leaders of the parties are relatively young. Hell Poilievre, Singh, Scheer are almost millennials.

It would be interesting to see a comparison of the averages ages between MP's and various councils and mayors.

You probably have situations where certain municipalities have had the inertia of older demographics that just vote in older councillors and mayors and the municipality essentially becomes a nimby homeowners association first and foremost.

And not all of these municipalities are out in middle of nowhere. They can be enclaves in large growing metros.

What specific Liberal policy was pandering to Boomers. Besides catering to their fear around Covid I don't see it as a pro-boomer government.
Most of the housing problems are from immigration. Millennials are the pro immigrant voices at the ballot box. Boomers are the xenophobic racists.

[WarrenC12]

Originally Posted by theman23

Was just at a downtown Toronto quick service restaurant and counted 3 people come in with resumes during my 10-15 minutes visit asking if they were hiring. Answer was no. Is this the labour shortage Casper and Loco keep warning us about?

Meanwhile every single fast food joint in Gillette Wyoming (or wherever you can think of in flyover country) has signs up advertising $16/h starting wage to flip burgers. Somehow they managed to keep the lights on and do what appeared to be brisk business.

Solid anecdotes. As I mentioned before, we have multiple 6 figure job openings here we can't find people for.

The labour market appears stronger in the US for sure. But Canada's doesn't seem that weak (yet).