For those wise peeps who fear the comments section, here’s a summary.
Yesterday we asked how the next government will ever balance the books and stop the debt sink Canada’s now in. The majority of responses were to defund the CBC (inconsequential and vindictive), give OAS only to the needy (big bucks saved, but impossible), cut kid pogey back (consequential, political suicide) and hike the GST (raising $18 billion per point). Few want more personal taxes. A number of folks think it’s time to tax house profits. And, in general, posters are ashamed of what we’ve done to the Canadian Forces.
Will the Poilievre Cons sweep to power by promising less? Will Canadians vote for fiscal restraint and adulting? Or are we just pooched as a nation and on our way to Argentina status?
One note from the convo we had on this topic: negativity abounds. The PP message that Canada is a failing country and things have never been more difficult for families (especially young people) is resonating.
By the way, the year that the Leader of the Official Opposition was born (1979) the Bank of Canada rate was 11.25%. The inflation rate was 9.14%, on its way to 10.3% when Pierre was graduating to Huggies. When the little gaffer was three he probably didn’t notice that a five-year mortgage in Canada was costing adults 19.5%. When wee P was four years old the unemployment rate was 12.5%.
Now, those were dark days. Yet people had kids, held jobs, got by.
As you know, the bank rate is now 5%. Inflation is 3%. Mortgages are 6%. Historically, rates sit below the long-term average, even at the apex of a tightening cycle. Inflation will have 2-handle in a few months and it looks increasingly like there’ll be no recession, even after ten Bank of Canada hikes to get things under control. Not so bad.
More facts to ponder: Canada has created 400,000 jobs so far this year. An unemployment rate of just over five per cent is but a hair above its record low for modern times. Six in ten homeowners have no mortgage debt. On Thursday the GDP number will probably be flat. What an amazing thing after a year in which we had record wildfires and flooding in Canada, the longest, costliest strikes in decades, and all those interest rate bumps.
Despite that, equity markets have rebounded. Bond yields have dropped like a stone. Wages are shooting higher in a country where a third of all workers are unionized (the US = 10%). On Friday we get the latest jobs stats. More gains are expected. Meanwhile incomes have been swelling above the rate of inflation for most of the year. Says our fav economist Derek Holt, “these are fastest wage gains in excess of inflation that you will find anywhere.”
‘The fastest wage gains anywhere’ are here
Source: Scotiabank Economics
In short, PP and all the moany young people who think they deserve a condo and a six-figure income for not going to work have never experienced truly high rates, seriously runaway inflation or a meaningful recession with debilitating job loss.
Instead, they face a crisis of expectations. Not a real crisis. Things are actually fine.
So, what’s the problem? Why are opposition politicians finding such resonance among younger voters? Where did the negative vibes come from, that echo through the morose corridors of Reddit and lead posters here to call our peaceful land a shithole country?
Housing. That’s it. The kids want to be just like their parents and secure a piece of real estate. Without a big downpayment, of course. Preferably with a 2% mortgage. In the downtown, or close by. Without a commute. And hopefully financed by a job that doesn’t involve, you know, actually going to work. Or sacrificing for a career, which is so Boomerish and sad.
Well, are we saying Canada’s perfect?
Nah. Over the last few days we’ve spelled out a lot of issues. The national fiscal path is not ideal. Houses cost too much. A little package of raspberries at ten bucks is a crime. There shouldn’t be encampments in urban parks. Too many people made a mistake when they borrowed teaser mortgage money. The government spends too much. Alberta wants to steal the CPP. AI may erase too many jobs. There’s a big wealth gap. The climate is hurting.
Yup. We get it.
But also understand expectations are unrealistic because you were delivered a stable, prosperous and promising first-world country by people who overcame far worse, burned up years commuting, never knew WFH, paid outrageous interest, clung on through recessions, bowed to bosses and now, in their autumn have accumulated what you crave in your spring.
About the picture: “Garth, here’s a picture of our American Cocker Spaniel YoYo,” writes John (‘Another Deckchair’). “He’s with us 24/7, is our sailing partner, and pro tennis ball hunter. On walks he’s always hopeful that someone will stop by and give him a pat, and maybe a treat. He gets us up and walking for long walks daily, so long as it’s not raining as he does not like getting his feet wet. Then it’s a bit of a struggle, but he eventually gives in. Thanks for the help over the years, it means that worrying about purchasing good dog food, vets bills or a steady stream of squeaky toys is not a financial burden, but is a “no brainer”. I’m currently overseas getting my fill of people friendly places; currently walking in Britain, tomorrow heading to The Hague again for more cycling, walking and practicing my Dutch. Yee hah!”
To be in touch or send a picture of your beast, email to ‘[email protected]’.
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