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Canada is leading the way among OECD members in household debt measures. Also of note is that labour costs in Canada were negative at -0.4% Y/Y
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Debt has been fueling lifestyle especially in cities like Vancouver and Toronto where extreme speculation, serial flipping and inert local and federal officials stand by with failed policies and ineffective regulations. There is no cop on the beat; it's do unto others what you want.
In less than 2 decades we have gone from a country where the ability to easily change employment or one's residence has evaporated. Now we are pinned to our job and our postal code because leaving either results in lineups to fill our departure.
I suggest that both the opening of access to information via the internet and the collapse of bond yields sponsored and promoted by governments mirroring each other have left us with a country of over-consuming and under-producing populace.
My regularly updated Household Debt Chart includes the FDI-FDO plot which illustrates the point; we are a country of consumers highly prized by offshore producers, a situation that is now entrenched in our behaviour, modified by our regulations. Currently, for every $1.00 of Foreign Direct Investment into Canada, there is $1.27 of Canadian savings being invested offshore where the yield is greater.
The Paradise Papers underscores the problem; greater access to stealth information along with domiciled yield suppression has led to increasing capital flight by Canadians and Canadian corporations unwilling to invest in Canada. This and the vacuum created from interest rate suppression has turned a lot of us into serial house and condo flippers and the ease and return on investment has attracted a flood of offshore money wanting in on the fun.
Those of us who could not or did not participate in the mania have been left with the sorry reality that for the last 10 years, housing costs in the runaway markets have increased by 10-12% per year or more depending on location and product. Wages have not increased to the same degree but balance sheet debt to equity ratios have.
In less than 2 decades we have gone from a country where the ability to easily change employment or one's residence has evaporated. Now we are pinned to our job and our postal code because leaving either results in lineups to fill our departure.
I suggest that both the opening of access to information via the internet and the collapse of bond yields sponsored and promoted by governments mirroring each other have left us with a country of over-consuming and under-producing populace.
My regularly updated Household Debt Chart includes the FDI-FDO plot which illustrates the point; we are a country of consumers highly prized by offshore producers, a situation that is now entrenched in our behaviour, modified by our regulations. Currently, for every $1.00 of Foreign Direct Investment into Canada, there is $1.27 of Canadian savings being invested offshore where the yield is greater.
The Paradise Papers underscores the problem; greater access to stealth information along with domiciled yield suppression has led to increasing capital flight by Canadians and Canadian corporations unwilling to invest in Canada. This and the vacuum created from interest rate suppression has turned a lot of us into serial house and condo flippers and the ease and return on investment has attracted a flood of offshore money wanting in on the fun.
Those of us who could not or did not participate in the mania have been left with the sorry reality that for the last 10 years, housing costs in the runaway markets have increased by 10-12% per year or more depending on location and product. Wages have not increased to the same degree but balance sheet debt to equity ratios have.
- CBC News November 23, 2017 - Canadian households lead the world in terms of debt.
- Toronto Sun July 2, 2017 - Canada's middle class shrinks.
- Market Watch November 3, 2017 - Blame the Internet for your stingy paychecks.
- Stats Can November 11, 2017 - Housing prices, social ties and transfer payments may inhibit mobility.
- Stats Can March 24, 2017 - Canadian waste management revenues increased 11% in two years to 2014.
- CHPC.biz Ongoing Chart - Foreign Direct Investment OUT higher than IN over the last 20 years means Canadian companies are investing outside of Canada to get a better return on Capital and Labour.
- CBC News November 6, 2017 - More than 3,000 Canadian names in the Paradise Papers.
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Globe and Mail October 15, 2017 - The CRA is unable to identify the assignors who sell (flip) their contracts.
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