So the bailout failed. What do we think, as Canadians? Is our economy still as closely tied with that of the US as it was in the 80s? Or can we weather this storm independently?
As closely? Not really. But we're still very close. We won't come out of the downturn unscathed, but in a lot of ways we're better off. Our banks for example are pretty strong, even CIBC (the one most exposed to this mess) isn't at much risk of collapsing. We have less bad mortages up here
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It's interesting that the Libs left a giant surplus behind and the cons have devastated it. I mean, I'm not naive enough to blame it all on politicians (tempting though it might be), but where the hell did that surplus go? Why wasn't it saved for just such an event?
I'm in Winnipeg, and there was a lot of talk that a good portion of the big jump in housing costs was simply adjustment - given that the city's houses have always been comparatively cheaper than anywhere else in the country. I certainly hope that's the case, because (on an entirely personal level) I'd hate to be saddled with a mortgage for a house that isn't remotely worth what is being paid for it.
Most of it disappeared when Harper passed his GST tax cut. Said GST cut was widely panned by economists as completely backward economic policy, but it was a central thing in his previous campaign, and Canadians generally like it (because Canadians have an irrational hatred for the GST).
So while at the moment I'm not much of a fan of Harper, I pin this one on Canadians. They got what they voted for on this subject, and thats more then you can say about politicians most of the time.
As for housing prices... prices were lower in Winnipeg then Vancouver due to location. More people want to live in Vancouver. :P I'm in New Brunswick, and its the same thing. Prices are lower then in Toronto due to the location. Shooting them way up is going to set things up for a fall later. Just how much of it actually will hold up like you say is something nobody can predict...
But I just bought a house in May, so I'm with you. :)
The federal government doesn't save up money when it is hundreds of billions of dollars in debt. The Conservative government has been making payments to the national debt throughout its term in office, just like the Liberals did. That where the money went.
As for the "devastated" surplus, it currently stands at $2.9B for the first four months of the fiscal year. That's not too shabby considering that the economic environment is far more challenging now than it was under the Liberals. Plus, we still have three quarters of the year left.
I do think houses were undervalued here for a very long time. Five to seven years ago, you could buy a 2500 foot triplex in a desireable area for just over $100 000. Now, you couldn't even buy a shack for that price. Somewhere between shack and triplex is where we should be. I guess we'll have to see where we end up.
Local news says the break-point for oil sands is $80-85/barrel, where conventional oil is $20-25/barrel.
I cannot see them suspending production of oil even if it's at a profit loss because they still have contracts to fulfill. Oil companies have built a nice cushion over the last few years to survive a while operating on a deficit. However they can't do that forever and it's still going to hurt.
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I'm in Winnipeg, and there was a lot of talk that a good portion of the big jump in housing costs was simply adjustment - given that the city's houses have always been comparatively cheaper than anywhere else in the country. I certainly hope that's the case, because (on an entirely personal level) I'd hate to be saddled with a mortgage for a house that isn't remotely worth what is being paid for it.
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So while at the moment I'm not much of a fan of Harper, I pin this one on Canadians. They got what they voted for on this subject, and thats more then you can say about politicians most of the time.
As for housing prices... prices were lower in Winnipeg then Vancouver due to location. More people want to live in Vancouver. :P I'm in New Brunswick, and its the same thing. Prices are lower then in Toronto due to the location. Shooting them way up is going to set things up for a fall later. Just how much of it actually will hold up like you say is something nobody can predict...
But I just bought a house in May, so I'm with you. :)
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As for the "devastated" surplus, it currently stands at $2.9B for the first four months of the fiscal year. That's not too shabby considering that the economic environment is far more challenging now than it was under the Liberals. Plus, we still have three quarters of the year left.
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I cannot see them suspending production of oil even if it's at a profit loss because they still have contracts to fulfill. Oil companies have built a nice cushion over the last few years to survive a while operating on a deficit. However they can't do that forever and it's still going to hurt.
Reply
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