Canadians need to ask what we have to show for the Liberal’s monumental fiscal and monetary failure except higher taxes, growing lines at foodbanks, inflation, a decaying Medicare, military and education system, increased drug use and homelessness, and a wealth-destroying devalued dollar. 

This coming budget year Ottawa will almost spend as much money on interest charges from the debt it has accumulated than it will on health care. The federal government spent $11.3 billion in interest payments during 2023’s third quarter, 36% higher than the same quarter in 2022. This will increase every year until the current government is gone and means higher taxes and less disposable income for consumers to save.  So, prices for most goods will have to decline inline with shrinking disposable incomes. This is a perfect example of interest charges destroying an economy and people’s pocketbooks for zero benefit.  

It is not just finances that are hurting the economy but the current government’s social policies such as immigration and a decaying education system. The issues in our education system surprises only our politicians. As schools opened last year, they discovered we have a shortage of teachers. Obviously, we desperately need more that specialize in math since no one in Ottawa understands the subject. 

A prime example is using company forecasts, it will take until 2043 for the federal and provincial governments’ $28.2b 'investment’ in two new electric vehicle battery plants in Ontario to breakeven. This is much longer than the five years the Liberal calculations showed. 

The Liberals’ poor math skills can be seen in housing as well. They are the only ones to blame for our home prices.  We built 250,000 units last year, an increase of 25,000 from the year earlier. During this period, we allowed one-million immigrants into Canada, plus we have maybe a few-hundred thousand young people trying to leave home and roughly 70,000 foreign students to house.  Ottawa says it will allow in only a half-million more immigrants in 2024. Guess why the housing situation is out of control? It is not the lack of money, but nobody in Ottawa realizes we cannot fulfill demand because our schools do not turn out enough skilled labour.

Housing debt is destroying many household finances. This is not surprising because it is hard to understand how most can afford the average price of $678,000(2023) in Canada without a CHMC mortgage which requires a $270,000 downpayment. Based on the average family income of around $125,000, it takes decades for most to save that.   More importantly, if you can save that amount within a reasonable time, one will be far better off renting and continue saving. Specifically, there will come a time when the income from the savings will cover rent or mortgage payments for the rest of your life. This will occur long before the mortgage is paid off. It is hard to justify purchasing the average home at today’s prices without a 20% downpayment because the interest cost would consume all the benefits of ownership. Specifically, the difference between cash-outlays for property taxes, repairs and maintenance, mortgage interest and the opportunity cost from not investing the downpayment is far greater than renting in todays market.   

Because Canadians cannot lock-in a 25-year mortgage like the US, we are at the whim of the market which can change drastically between renewal dates, like what we are witnessing today.  This is why it is critical to never have a mortgage larger than three or four times your household income. If you’re not a big spender and can direct more money to the mortgage than the four-times household income is fine, but it is better to stick to three-times if you prefer more discretionary spending. Anything above this you either must lower your expectations or rent and wait for prices to correct further. 

Prices will correct further eventually.  Since this is a man-made shortage, price declines are slow but this will not prevent prices from declining to meet what the average family can afford. This means a potential 50% price decline (worse case scenario) from peak.  

Trudeau does not understand that if we allow this level of immigration, and using Statistics Canada’s average housholde size of 2.51 people, there is a need for almost four hundred thousand new housing units today. The above demand does not include the natural turnover of homes or for renovations which lowers the amount of available labour for new-build construction. Home prices are clearly a result of demand outstripping supply. Until things changes, there will be an ongoing shortage of shelter and prices will remain out of reach. 

Immigration should be based on available social infrastructure, housing, and attracting skills the economy demands.  Not vote buying like it appears the current policy is attempting.  More importantly, it should be guided by population preservation with no more than 1.5% growth (which will double the population every 48 years, not like the 150% increase the Liberals want by 2100).  Any growth above this and the economy does not have time to adapt. As soon as Trudeau’s immigration targets are reversed, all real-estate prices will fall to a level based on income and the rate of interest. It will be a good thing having the average Canadian afford to have a family, buy a home, support the economy, and grow the population properly.