4 ms·

They're not rich. There's no fixed 30 year mortgage in Canada, only 5 year fixed. They're screwed. They're middle class, anxiously looking at the interest rates

They're not rich. There's no fixed 30 year mortgage in Canada, only 5 year fixed. They're screwed. They're middle class, anxiously looking at the interest rates and holding on to jobs they hate to stay afloat. Canada is a slowly failing state. Its economy is gutted and distorted. Renters in Canada aren't middle class. They're poor: its just that the country has become poor.

eulgro 3y ago
Can you expand on the "Canada is a slowly failing state" bit? It's an idea I've seen a lot in the past years but I don't fully get it, as a Canadian. How is Canada failing more than the US or European countries like Germany or UK for example?
- adriand 3y ago
  “As shown in research published in 2021 by BCBC (Williams, 2021a), and in the Globe and Mail (Williams and Finlayson, 2022), the OECD projects that Canada will be the worst performing economy out of 38 advanced countries over the next forty years (2020-2060), achieving the lowest growth in real GDP per capita – the most important measure of overall prosperity.” https://bcbc.com/insight/canadas-productivity-performance-over-the-past-20-years/ https://bcbc.com/insight/canadas-productivity-performance-ov... I’m not sure I agree with the idea that Canada is a “failing state” but I do think there is a significant risk that we will not maintain the standard of living we are accustomed to and that I think we believe we deserve - deserve in spite of the evidence that we’re not innovating.
- Spark_Ed 3y ago
  The US isn't failing. It's balkanizing. That balkanization will probably undo itself. Even if it doesn't, the ununited states would still be economic powerhouses. Not as prosperous as it was during reconstruction or the height of the petrodollar, but that's an impossible standard to hold onto forever.
- cmrdporcupine 3y ago
  Sky rocketing housing prices, declining primary industries, biggest major resource exports destroy the earth and nobody sane wants/needs them, provincial gov'ts de-fund and undermine public health care, partisan nastiness inspired by imported US culture wars crap, contradictions in interests between geographical regions, monopolistic parasitic local bourgeoisie, should I go on?
12907835202 3y ago
Doesn't Canada have some of the highest education citizens in the world? That seems like a good indication of a successful country although of course not the sole thing to measure that on.
- thsksbd 3y ago
  No, the countries' self reported rates of degrees obtainment are irrelevant. The quality of primary education is very low [1]. University education is mediocre, about par with the US [2]. Waterloo and UofT have decent CS programs but other than that nothing impressive. Canada imports its highly educated workforce (Dr.s, top engineers, etc) from China and Europe. For many, Canada is a stepping stone to go to the US. [1] I moved to Canada twice as a kid from two separate non-English countries. Both times I was shocked at how far behind my peers were. Grade 10 history devoted an entire lesson to the Summit Series, but neglected the Cuban missile crisis. Oh, and the Summit Series lesson was just jingoistic dribble, not a word of how Clarke is a thug who should be in jail. [2] The US (undergrad) engineering programs are better, but I'll admit Canadian grading is not as bad as American; far less grade inflation. So let's call it a tie. Nothing compared to a continental European program, or East Asian program (or, frankly some select L. American universities).
quickthrower2 3y ago
Some are screwed. I wonder what the percentage is. Someone who paid off their mortgage is not screwed or owes their original 1990 mortgage amount.
- cmrdporcupine 3y ago
  Honestly, I'm sitting at only $30k remaining on my mortgage, which we paid off in 19 years (sold first home, and upgraded in the middle of that) and frankly the rates now aren't really any higher than the first mortgage we got in 2005. So I'm sitting in a pretty good state and just hoping for a major downward drop in housing prices so that my kids (now teens) can afford rent and housing as adults. Or we'll all be living here on the farm. I feel privileged for my own personal situation but also just flabbergasted at the debt people have been willing to take on. Zero interest rate policies and poor regulation of the real estate market drove prices so high and it's amazing to watch people suddenly act as if it's higher rates now that are the cause of affordability problems. Absolutely short-termist thinking. Governments (both fed and provincial) let ... no, encouraged ... this to happen. If your workers can't afford to live where they work... you will stop producing anything at all.
  - user_named 3y ago
    The combination of high nominal prices and nornal-ish rates is what results in a high monthly outlay, that's what everyone is talking about. Affordability, not rates. At present prices, not 1990 prices.
    - cmrdporcupine 3y ago
      Present prices need to drop. A lot. If rates drop, prices will just continue to climb like crazy. You cannot fix affordability by just making loans more affordable. We need way higher supply, much better regulation, and normal (e.g. not insanely low like they were from 2008-2023) interest rates for this sickness to go away. If that means "destroying" the perceived wealth of homeowners like myself, so be it. Look at a graph of BoC rates for the last 40 years and then see what an anomaly the period after 2008 is. Nobody should be expecting/demanding a return to that.
SuperNinKenDo 3y ago
Precariously rich is still rich. The article makes some good points, I don't feel your comment responds to any of them.
seec 3y ago
That's bullshit. Surely if you have a home worth over 3 million you can sell it and never have to work a single day in your life. Even if you have 50 years of life left, that's 60k per year, and that's more than many working people get with the cost of being active. The reality is that the complainers are usually filthy rich boomers with an insanely luxurious lifestyle, and they want you to believe otherwise but it never checks out... I got a price complaint just the other day, from one of those with a fully paid home (with a single salary) that would take over 30 years to buy with a current median salary. The home cannot be bought by a person holding the exact same job at the same exact pay level when they were purchasing. The funniest thing is that they still get 190% of minimum wage salary and 126% of median wage salary. As far as I know they can buy another house much easier than a working household because they have full house equity as collateral. There is a lot of political silencing going on, but boomers are disgusting and basically stole generations future on top of burning the planet to get there. I just don't get why we still let them do so much posturing and pretending.
- thsksbd 3y ago
  Your average home in Canada is not 3 million. And your average "homeowner" is really a mortgage holder who is going to be in a world of pain as soon as his low interest rate mortgage is renewed. Anyway I don't get your aggression. My point was that Canadians are far worse than the article suggests: half the country should be considered poor (the renters) and the "wealthy" are one interest hike away from bankruptcy.
  - seec 3y ago
    I don't know why or how it would get renewed but I guess some people have bad deals. Doesn't make the majority of good deals disappear though. I'm not aggressing you or anyone else here? I'm a bit unsettled by the situation that has been created overtime thought exploitation, corruption and negligence of the previous generation. If you feel attacked maybe you are compensating because you feel this message is destined for you? I honestly don't know and can't say because I know nothing about you and couldn't care less about you specifically (no offense). The point if someone concerned reads this he will understand and he will know, just like when you point at some bitten door and the dog knows... Also considering the rules in place for borrowing, it's more than doubtful that an interest hike would put anyone out of their house. Or they lied to the bank, or have an irresponsible unsustainable lifestyle compared to their means, stuff like that. We don't lend money to people who don't have revenues that can cover significantly more than typical life costs. Otherwise, there would be virtually no renters... Sure, maybe Canada is not doing good overall but that doesn't change the fact that some are pretty rich compared to rest of Canada and even more compared to the rest of the world. And this is exactly what the article say !
throw0101b 3y ago
> They're not rich. There's no fixed 30 year mortgage in Canada, only 5 year fixed. And yet the home ownership rates are basically the same in the two countries (~65%), and the median net worth of Canadians is higher than that of Americans: * https://www.nytimes.com/2019/04/26/world/canada/middle-class-income-wealth.html https://www.nytimes.com/2019/04/26/world/canada/middle-class... * https://www.investopedia.com/financial-edge/1012/u.s.-or-canada-which-country-is-best-to-call-home.aspx https://www.investopedia.com/financial-edge/1012/u.s.-or-can... And outside the last 2-3 years, short-term, variable-rate mortgages have been a better deal the majority (90%) of the time (especially since the 1980s with mostly-falling rates): > Many fans of variable mortgages quote research by Moshe Milevsky, a professor of finance at York University. He found that, between 1950 and 2000, Canadian homeowners would have been better off with a variable mortgage almost 90% of the time. More recently, between 2007 and 2022, the five-year variable interest rate has mostly been lower than the five-year fixed rate, sometimes considerably so. * https://www.ig.ca/en/insights/fixed-vs-variable-mortgage https://www.ig.ca/en/insights/fixed-vs-variable-mortgage
- thsksbd 3y ago
  1. I hardly think the US is a paragon of economic hope. But I find it amusing that a (presumably) Canadian goes straight to compare the country to the US. Nothing ever gets done in Canada until the ritual comparison is done. Very provincial mindset, inherited from Canada's past status as colony. 2. The US has always had much large underclass which Canada, to its (partial [1]) credit does not. The bottom 10% in the US are much worse off than the bottom 10% in Canada. 3. At least 10% of the US population are illegal immigrants. The US syste can hardly be blamed for having the poorest people in the world pouring in. (Though the system could be blamed for turning a blind eye to it, but that's another convo.) 4 The net wealth in Canada is a mirage. For most people its tied to unproductive, inflated assets - people's homes. Thats a very scary place to be as a society. To its credit, Canada has a (lackluster to poor) public health care system, and caps university tuition. The US has (financially) the worst medical and education system in the world. Both countries' health care systems will not be fixed until they collapse. But overall, Canada is only as secure and as stable as the US (which is not stable or secure right now). Paired with unique Canadian challenges, Im scared for Canada. Actually, Im only scared for my siblings. I really don't care for Canada more than I do any other country. [1] most of the credit goes to the UK for banning slavery much earlier than the US and not having a climate suitable for it. Also, Canada gets no credit for having tundra and the richest country in the world as neighbors.

eulgro 3y ago

Can you expand on the "Canada is a slowly failing state" bit? It's an idea I've seen a lot in the past years but I don't fully get it, as a Canadian. How is Canada failing more than the US or European countries like Germany or UK for example?

adriand 3y ago
“As shown in research published in 2021 by BCBC (Williams, 2021a), and in the Globe and Mail (Williams and Finlayson, 2022), the OECD projects that Canada will be the worst performing economy out of 38 advanced countries over the next forty years (2020-2060), achieving the lowest growth in real GDP per capita – the most important measure of overall prosperity.” https://bcbc.com/insight/canadas-productivity-performance-over-the-past-20-years/ https://bcbc.com/insight/canadas-productivity-performance-ov... I’m not sure I agree with the idea that Canada is a “failing state” but I do think there is a significant risk that we will not maintain the standard of living we are accustomed to and that I think we believe we deserve - deserve in spite of the evidence that we’re not innovating.
Spark_Ed 3y ago
The US isn't failing. It's balkanizing. That balkanization will probably undo itself. Even if it doesn't, the ununited states would still be economic powerhouses. Not as prosperous as it was during reconstruction or the height of the petrodollar, but that's an impossible standard to hold onto forever.
cmrdporcupine 3y ago
Sky rocketing housing prices, declining primary industries, biggest major resource exports destroy the earth and nobody sane wants/needs them, provincial gov'ts de-fund and undermine public health care, partisan nastiness inspired by imported US culture wars crap, contradictions in interests between geographical regions, monopolistic parasitic local bourgeoisie, should I go on?

12907835202 3y ago

Doesn't Canada have some of the highest education citizens in the world? That seems like a good indication of a successful country although of course not the sole thing to measure that on.

thsksbd 3y ago
No, the countries' self reported rates of degrees obtainment are irrelevant. The quality of primary education is very low [1]. University education is mediocre, about par with the US [2]. Waterloo and UofT have decent CS programs but other than that nothing impressive. Canada imports its highly educated workforce (Dr.s, top engineers, etc) from China and Europe. For many, Canada is a stepping stone to go to the US. [1] I moved to Canada twice as a kid from two separate non-English countries. Both times I was shocked at how far behind my peers were. Grade 10 history devoted an entire lesson to the Summit Series, but neglected the Cuban missile crisis. Oh, and the Summit Series lesson was just jingoistic dribble, not a word of how Clarke is a thug who should be in jail. [2] The US (undergrad) engineering programs are better, but I'll admit Canadian grading is not as bad as American; far less grade inflation. So let's call it a tie. Nothing compared to a continental European program, or East Asian program (or, frankly some select L. American universities).

quickthrower2 3y ago

Some are screwed. I wonder what the percentage is. Someone who paid off their mortgage is not screwed or owes their original 1990 mortgage amount.

cmrdporcupine 3y ago
Honestly, I'm sitting at only $30k remaining on my mortgage, which we paid off in 19 years (sold first home, and upgraded in the middle of that) and frankly the rates now aren't really any higher than the first mortgage we got in 2005. So I'm sitting in a pretty good state and just hoping for a major downward drop in housing prices so that my kids (now teens) can afford rent and housing as adults. Or we'll all be living here on the farm. I feel privileged for my own personal situation but also just flabbergasted at the debt people have been willing to take on. Zero interest rate policies and poor regulation of the real estate market drove prices so high and it's amazing to watch people suddenly act as if it's higher rates now that are the cause of affordability problems. Absolutely short-termist thinking. Governments (both fed and provincial) let ... no, encouraged ... this to happen. If your workers can't afford to live where they work... you will stop producing anything at all.
- user_named 3y ago
  The combination of high nominal prices and nornal-ish rates is what results in a high monthly outlay, that's what everyone is talking about. Affordability, not rates. At present prices, not 1990 prices.
  - cmrdporcupine 3y ago
    Present prices need to drop. A lot. If rates drop, prices will just continue to climb like crazy. You cannot fix affordability by just making loans more affordable. We need way higher supply, much better regulation, and normal (e.g. not insanely low like they were from 2008-2023) interest rates for this sickness to go away. If that means "destroying" the perceived wealth of homeowners like myself, so be it. Look at a graph of BoC rates for the last 40 years and then see what an anomaly the period after 2008 is. Nobody should be expecting/demanding a return to that.

SuperNinKenDo 3y ago

Precariously rich is still rich. The article makes some good points, I don't feel your comment responds to any of them.

seec 3y ago

That's bullshit. Surely if you have a home worth over 3 million you can sell it and never have to work a single day in your life. Even if you have 50 years of life left, that's 60k per year, and that's more than many working people get with the cost of being active. The reality is that the complainers are usually filthy rich boomers with an insanely luxurious lifestyle, and they want you to believe otherwise but it never checks out... I got a price complaint just the other day, from one of those with a fully paid home (with a single salary) that would take over 30 years to buy with a current median salary. The home cannot be bought by a person holding the exact same job at the same exact pay level when they were purchasing. The funniest thing is that they still get 190% of minimum wage salary and 126% of median wage salary. As far as I know they can buy another house much easier than a working household because they have full house equity as collateral. There is a lot of political silencing going on, but boomers are disgusting and basically stole generations future on top of burning the planet to get there. I just don't get why we still let them do so much posturing and pretending.

thsksbd 3y ago
Your average home in Canada is not 3 million. And your average "homeowner" is really a mortgage holder who is going to be in a world of pain as soon as his low interest rate mortgage is renewed. Anyway I don't get your aggression. My point was that Canadians are far worse than the article suggests: half the country should be considered poor (the renters) and the "wealthy" are one interest hike away from bankruptcy.
- seec 3y ago
  I don't know why or how it would get renewed but I guess some people have bad deals. Doesn't make the majority of good deals disappear though. I'm not aggressing you or anyone else here? I'm a bit unsettled by the situation that has been created overtime thought exploitation, corruption and negligence of the previous generation. If you feel attacked maybe you are compensating because you feel this message is destined for you? I honestly don't know and can't say because I know nothing about you and couldn't care less about you specifically (no offense). The point if someone concerned reads this he will understand and he will know, just like when you point at some bitten door and the dog knows... Also considering the rules in place for borrowing, it's more than doubtful that an interest hike would put anyone out of their house. Or they lied to the bank, or have an irresponsible unsustainable lifestyle compared to their means, stuff like that. We don't lend money to people who don't have revenues that can cover significantly more than typical life costs. Otherwise, there would be virtually no renters... Sure, maybe Canada is not doing good overall but that doesn't change the fact that some are pretty rich compared to rest of Canada and even more compared to the rest of the world. And this is exactly what the article say !

throw0101b 3y ago

> They're not rich. There's no fixed 30 year mortgage in Canada, only 5 year fixed. And yet the home ownership rates are basically the same in the two countries (~65%), and the median net worth of Canadians is higher than that of Americans: * https://www.nytimes.com/2019/04/26/world/canada/middle-class-income-wealth.html https://www.nytimes.com/2019/04/26/world/canada/middle-class... * https://www.investopedia.com/financial-edge/1012/u.s.-or-canada-which-country-is-best-to-call-home.aspx https://www.investopedia.com/financial-edge/1012/u.s.-or-can... And outside the last 2-3 years, short-term, variable-rate mortgages have been a better deal the majority (90%) of the time (especially since the 1980s with mostly-falling rates): > Many fans of variable mortgages quote research by Moshe Milevsky, a professor of finance at York University. He found that, between 1950 and 2000, Canadian homeowners would have been better off with a variable mortgage almost 90% of the time. More recently, between 2007 and 2022, the five-year variable interest rate has mostly been lower than the five-year fixed rate, sometimes considerably so. * https://www.ig.ca/en/insights/fixed-vs-variable-mortgage https://www.ig.ca/en/insights/fixed-vs-variable-mortgage

thsksbd 3y ago
1. I hardly think the US is a paragon of economic hope. But I find it amusing that a (presumably) Canadian goes straight to compare the country to the US. Nothing ever gets done in Canada until the ritual comparison is done. Very provincial mindset, inherited from Canada's past status as colony. 2. The US has always had much large underclass which Canada, to its (partial [1]) credit does not. The bottom 10% in the US are much worse off than the bottom 10% in Canada. 3. At least 10% of the US population are illegal immigrants. The US syste can hardly be blamed for having the poorest people in the world pouring in. (Though the system could be blamed for turning a blind eye to it, but that's another convo.) 4 The net wealth in Canada is a mirage. For most people its tied to unproductive, inflated assets - people's homes. Thats a very scary place to be as a society. To its credit, Canada has a (lackluster to poor) public health care system, and caps university tuition. The US has (financially) the worst medical and education system in the world. Both countries' health care systems will not be fixed until they collapse. But overall, Canada is only as secure and as stable as the US (which is not stable or secure right now). Paired with unique Canadian challenges, Im scared for Canada. Actually, Im only scared for my siblings. I really don't care for Canada more than I do any other country. [1] most of the credit goes to the UK for banning slavery much earlier than the US and not having a climate suitable for it. Also, Canada gets no credit for having tundra and the richest country in the world as neighbors.