Business
The Mortgage Maelstrom: Navigating the Impending Financial Tempest in Canada
From The Opposition with Dan Knight substack
As renewal rates surge and interest rates soar, Canadian households stand on the precipice of a fiscal fallout that could redefine the nation’s economic landscape
As we wade through the current economic climate, it’s becoming increasingly clear that a storm is brewing on the Canadian horizon, one that could sweep away the financial stability of countless households. The heart of this looming tempest? The mortgage market—specifically, the shock awaiting about 60% of mortgage holders in the next three years as their terms come up for renewal.
RBC has crunched the numbers and the forecast is grim. More than $186 billion in mortgages is set to renew in 2024 alone, and if today’s interest rates hold, homeowners could see their payments leap by a staggering 32%. And that’s just the beginning. The following year, $315 billion worth of mortgages are on the renewal chopping block, many of which are variable-rate mortgages, potentially pushing the payment shock to 33%.
What’s the root cause? It’s the interest rates—sitting at a 5% benchmark, the highest we’ve seen since the turn of the millennium. If there’s no significant decrease, we’re looking at a tidal wave of credit losses come 2025. And let’s not forget the elephant in the room: those with variable-rate mortgages could face a payment shock as high as 84% by 2026 if the rates stay put.
Here’s the scoop, folks. Bank of Canada Governor Tiff Macklem laid out a cold hard truth: fiscal and monetary policy are at loggerheads. While the central bank is straining every sinew to wrestle down inflation with rate hikes, the federal and provincial governments are lighting the fuse with their spending, fueling the very inflation the Bank of Canada is trying to stamp out.
In the red corner, we’ve got the Bank of Canada, gloves on, ready to slug inflation down to its target by 2025. In the blue corner, Trudeau’s government, doling out dollars like there’s no tomorrow. What does this mean for John and Jane Doe on Main Street? As their mortgage renewals roll in, they’re staring down the barrel of a 32% to a mind-boggling 84% payment shock.
Folks, let’s cut to the chase. This economic quagmire we’re sinking into? It’s got Trudeau’s fingerprints all over it. The fabric of Canadian society is getting shredded not by accident, but by a government playing fast and loose with fiscal policy. The Bank of Canada is scrambling to counteract with rate hikes, but Trudeau’s Liberals seem hell-bent on doling out dollars like candy on Halloween, inflaming inflation and leaving families to foot the bill.
As for Trudeau, he’s steering the ship with a blindfold on, and the polls? They’re reading like an obituary for the Liberals’ prospects. Come the next federal election, if these mortgage hikes hit as hard as predicted, Trudeau’s so-called economic strategy could be the very thing that buries his political future. We’re not just talking about a swing in the voting booths; we’re talking about a full-scale revolt from a populace that’s had enough of being ignored in the face of an economic abyss.
As Canadians navigate the turbulent waters of an economy where the dream of homeownership slips through their fingers and the basic necessity of putting food on the table becomes a herculean task, the political pageantry of promised dental plans rings hollow. When the ballots are drawn, the echo of dissatisfaction will thunder across the voting booths. Yes, my dear readers, as the national mood simmers with the desire for change, there’s a palpable sense that a political reckoning looms on the horizon — a red wedding in the electoral sense, where the old guard may be unseated in a dramatic upheaval.
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Dan Knight
From the Canadian Taxpayers Federation
By Ryan Thorpe
Like all areas of Ottawa’s ballooning bureaucracy, the cost and size of the Prime Minister’s Office has increased under the Trudeau government.
The inflation-adjusted cost of staffing the PMO has risen by 16 per cent under the watch of Prime Minister Justin Trudeau, according to access-to-information records obtained by the Canadian Taxpayers Federation.
Salary costs for the 103 staffers in the PMO came to $10.5 million in 2022-23. That figure does not represent overall compensation for PMO staff (including benefits), but rather base salary, according to the records.
Taxpayers are now on the hook for an additional $3.2 million in annual PMO salary costs over 2014-15, the last full year former prime minister Stephen Harper was in office.
“The cost of running the PMO has increased under Trudeau, but it’s a good bet most Canadians don’t think they’re getting any better performance from the prime minister,” said Franco Terrazzano, CTF Federal Director. “If Trudeau can’t find savings right under his nose, how can taxpayers trust him to cut the fat across government?”
The growth in PMO staff comes at a time when the Trudeau government has been ballooning the federal bureaucracy across the board.
Both the number and cost of the federal bureaucracy has exploded under Trudeau’s watch, according to other government records obtained by the CTF.
The number of federal bureaucrats increased by 42 per cent under Trudeau, with more than 108,000 new bureaucrats added to the government payroll.
Spending on federal bureaucrats hit a record high $67.4 billion in 2022-23, representing a 68 per cent increase since 2016.
The size of the federal c-suite has also expanded, with the number of executives increasing by 42 per cent under Trudeau.
The Trudeau government has handed out more than $1 billion in bonuses since 2015 and more than one million pay raises in the last four years.
Meanwhile, spending on consultants also reached a record high, with planned expenditures for 2023-24 sitting at $21.6 billion.
“Everywhere you look – the PMO, the federal c-suite, the bureaucracy – the cost and size of government is out of control,” Terrazzano said. “Trudeau must take air out of Ottawa’s ballooning bureaucracy and the place to start is his own office.”
PMO staff costs, government records obtained by the CTF
|
Fiscal year |
Number of PMO staff |
PMO salary costs |
|
2014-15 |
94 |
$7,258,436 |
|
2015-16 |
74 |
$6,353,188 |
|
2016-17 |
84 |
$7,462,686 |
|
2017-18 |
99 |
$8,155,068 |
|
2018-19 |
100 |
$8,479,353 |
|
2019-20 |
90 |
$8,536,672 |
|
2020-21 |
99 |
$9,840,834 |
|
2021-22 |
94 |
$9,383,328 |
|
2022-23 |
103 |
$10,536,649 |
|
Total |
|
$76,006,214 |
From the Canadian Taxpayers Federation
By Carson Binda
Taxpayers are glad to see Parks Canada backing away from a $12-million deer cull on Sidney Island.
“Parks Canada’s plan to blow $12-million on a deer cull was ridiculous from day one,” said Carson Binda, B.C. Director for the Canadian Taxpayers Federation. “Parks Canada is right to cancel the project, but it’s worrying that it took them this much wasted money to figure it out.”
Parks Canada used so-called sharpshooters in helicopters, firing down on invasive fallow deer from above, during phase one of the cull which occurred last December. The so-called sharpshooters killed 84 deer, but only 63 were the correct species. The cost for phase one came in at $834,000, roughly $10,000 per deer.
Subsequently, Parks Canada erected fencing made of fish nets around the 12-square-kilometer Island to trap the deer, in anticipation for a second round of culls which were scheduled for Nov. 15.
Several animals became entangled in the netting, painfully thrashing themselves to death.
“Seeing deer thrashing to death because of bureaucratic incompetence is heartbreaking,” Binda said. “Parks Canada needs to explain how this happened and how much taxpayer cash was wasted on this project before the cancellation.”
Residents of Sidney Island and local hunters have been culling deer on the island for years, for free. Last fall 54 deer were culled by local hunters at no cost to the taxpayer.
“Local hunters filling their freezers at no cost to the taxpayer is obviously better than Parks Canada blowing millions of dollars to shoot the wrong deer from helicopters and leaving others to suffer in a net,” Binda said. “Hopefully the bureaucrats learn from their mistakes with this boondoggle.”
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