Oh Canada! The Looming Economic Meltdown

Via GoldTelegraph.com,

Canada may find itself in the unexpected position of a world leader – a leader in global debt.

Canada’s Fourth Quarter economic growth was 1.7% following positive signs of growth earlier in the year. This growth, however modest, is attributable to easy credit and the increased consumer spending. At this time, Canadian households are facing one the largest indebtedness when compared to most other countries. For every $1.00 of income, consumers owe $1.68. This is the highest income to debt ratio in the world. For low-income Canadian households, the $1.00 disposable income to $3.33 debt ratio is even worst.

Canada, along with other nations, especially emerging markets are carrying records levels of consumer debts, may be facing a serious crash as further growth becomes unsustainable.

Canada combined deficit rose to $18.1 billion in 2016, from $12.9 billion in the previous year. Higher debts and increased spending are causing serious concerns that the Canadian economy is on an unsustainable economic path.

A considerable portion of Canada’s future economic growth has been predicated on strengthening and improving the country’s infrastructure. However, Prime Minister Trudeau’s policies are destined to strangle potential economic growth by shifting C$7.2 billion allocated to infrastructure improvements to government programs such as gender equality hiring opportunities. According to the Conference Board of Canada’s Craig Alexander

This isn’t a budget that’s about growth, as much as it’s about equality and breaking down barriers to opportunity.

Canada appears to be stunting its own economic growth as a matter of policy.

Three major infrastructure projects, The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and possibly the Energy East pipeline ($15.7 billion) would have been instrumental in guaranteeing economic growth for decades to come. However, these have been stymied in favor of Trudeau’s economic egalitarian vision. As a result, investors have been abandoning certain projects. The last time Canada’s saw such heavy-handed government interference in its economy was during the presidency of Trudeau’s father, Pierre Trudeau.

The fate of the Energy East pipeline is still uncertain and may be next in line to be scuttled. The reason for this is that the National Energy Board has decided to continue and widen its studies on the environmental impact of the entire oil industry, leaving the future of the TransCanada Keystone XL project very uncertain. With 100,000 jobs at stake, this has even Trudeau’s liberal Alberta government worried as they accuse the NEB of serious and unprecedented overreach. Politicians, not market consequences, are determining Canada’s energy future. And that does not bode well for Canada.

Canada’s shaky economy is also suffering from a loss of 88,000 jobs due to mandated minimum wage increases. Employers who have been unable to meet the new wage demands have been forced to let workers go. The wage increases could foreshadow impending inflation, which would likely lead to high prices. During the First Quarter of 2018, the job market was still relatively strong, but the full effects of the minimum wage hike are still unknown.

If, as anticipated, consumer spending will see a decline in the coming year, this will contribute to the slow economic growth facing Canada. Still, housing costs are relatively low when compared to the rest of the world, but prices have been rising at a rate of 13 percent in 2016 and 10.8% in 2017. A staggering forty percent of Canadians are homeowners. Trudeau’s immigration plan is to include 60 percent of immigrants who are educated, family-oriented and able to find employment. This move is seen as favorable for the housing market, although an increase in mortgages can lead to more economic problems.

With more homebuyers in the market for bigger houses and bigger mortgages, Canada may be approaching a housing bubble similar to the US in 2007. Mortgage debt already comprises 70 percent of Canada’s GDP, a number close what the US was seeing before the housing market tanked catastrophically. Unparalleled household debt is proving to be Canada’s greatest vulnerability and Prime Minister Trudeau’s biggest headache. The high debt to disposable income ratio is increasing, and there are few signs of a reversal of this ominous trend. Even with stringent banking mortgage rules in place, private mortgage lenders are cutting sharply into the mortgage business.

Canada appears to be at a crossroad, and its greatest challenge in 2018 is uncertainty. An uncertain household and government debt level, coupled with higher minimum wages and laid-off workers, could signal a historic crashing point. With immigration plans still uncertain and awaiting finalization, the housing market will remain unstable and end up bringing on a disastrous high level of questionable mortgage lending.

Is there hope for Canada? Perhaps. While Trudeau is making all the right liberal noises to cheer social justice warriors and bring economists to tears, thus far, he’s been long on words and short on action. Little has been done to implement Trudeau’s more potentially ruinous policies, and much of his time seems to be spent in photo opportunities which very well might be Trudeau’s most surprising and best possible legacy.

Comments

Crassius IH8OBAMA Mon, 03/05/2018 - 21:48 Permalink

How dare you insult the experience of Canada’s Prime Minister by comparing him to Obama.

Mr. Trudeau was no less the son of a former PM, AND he also worked a few summers as a camp counselor.

Compared to Obama’s qualifications, Mr. Trudeau,s resume is deep, evidencing profound qualifications for the office he holds.  He’s also adroit at dressing in costumes.

 

 

 

 

In reply to by IH8OBAMA

Bigly Rakshas Tue, 03/06/2018 - 05:11 Permalink

...'even worst'?

It is so obvious these articles are written by someone who is not an english primary speaker/writer.

The volume of readers here warrants a peer review/critique prior to posting. I'm not being nit picky in saying it needlessly undermines credibility / authority on these topics.

In reply to by Rakshas

Moski Bigly Tue, 03/06/2018 - 09:34 Permalink

I gripe about same and get ripped for it as tho diction, grammar, etc. are unimportant. I explain there's an entire centuries-old service engaged in correcting same but the fact does not impress.

A reader's mind is forced out of the story/article when they notice these problems. It can be a giant detour from the trip the author intended.

In reply to by Bigly

Savvy johnnycanuck Mon, 03/05/2018 - 22:09 Permalink

Actually Canada did a fine job of bailing out the banks in '08. I seem to recall some $115 bn for just RBC and CIBC. Not sure about the others. Don't care, my protest would count as much as the 92% of Americans who voted against bailing out banks back then..

My revenge is to give as little as possible to either the gov or the banksters. Sadly most have not learned that little lesson.

In reply to by johnnycanuck

hoppy-harrington Savvy Mon, 03/05/2018 - 22:48 Permalink

No. Canadian banks did not receive a bailout in 2008. American, Irish, Uk, Spanish Banks did.

That is a fact. !! That is what made Mark Carney a global superstar.

  GM was bailed out by US and Canadian govt. US bought 25% and Canada bought 10 % of shares in the new restructured GM, both Govt's have since sold the shares for a profit.

In reply to by Savvy

Déjà view snblitz Tue, 03/06/2018 - 01:33 Permalink

HEADS UP! Keyboard basement dwellers/trolls...

Radon in homes
Radon is the heaviest of all gases, eight times heavier than air. It accumulates in basements or on lower floors and then, diffuses throughout the building.

The average radon level in US homes is 1.25 pCi/L. About 1 out of every 15 homes exceeds the EPA's "action limit" of 4 pCi/L and nearly 1 out of 6 exceeds the EPA's "consider action limit" of 2 pCi/L.

Radon is a potent carcinogen
Radon gas decays into minute radioactive particles which float in the air we breathe. These particles get trapped in the lungs where they undergo radioactive decay with a half life of 22 years. The radiation damages the DNA of adjacent cells and causes lung cancer.

“Radon is the most potent environmental carcinogen to which the general public is exposed.” [2000 Report on Carcinogens]
“Radon is the second leading cause of lung cancer.” [The Surgeon General]
“Radon causes more deaths than home fires, drownings, and airplane crashes combined.” [US EPA]
“Radon causes about 21,100 deaths in the U.S. each year.” [US EPA & The National Academy of Sciences, 2003 estimate]

http://www.free-radon-test-kits.com/radon-gas.htm

In reply to by snblitz

nmewn Mon, 03/05/2018 - 21:03 Permalink

AAAHAHAHAHAHAAA!...eh heh heh heh...AAAHAHAHAHAHAAA!

What a fucking boi tool Trudeau is, geeebus guys, what the hell happened...eh? ;-)

Meyer Bauer nmewn Mon, 03/05/2018 - 22:13 Permalink

You pathetic little internet creep. I'd love to get my hands on your neck.

As mentioned before: Canada needs to:

1. get the fuck out of NATO

2. create stronger, mutual ties with Russia viz. economic, geopolitical and especially military.

3. purchase only Russian killing products especially fighters and S300/400 systems, etc.

4. transform its military to a totally asymmetric force the goal of which is to attack US grids, water sources, communications and the like - fat people, skinny people, tough guys and women, gays, whatever necessary to infiltrate the US empire - they're transposable into US cities, countryside and could help the world rid our stinking, murdering, fucking dual citizen controlled, shithole country before it's too late for the real world to survive our cruelty and pettiness.

In reply to by nmewn

ebear nmewn Mon, 03/05/2018 - 23:27 Permalink

I know, right? 

What's really striking is how completely clueless he is.  Nobody dresses like that in India except on high holy days, and even then not to that extreme.  It's beyond ridiculous, it's extremely insulting, and a lot of Indians took it that way.

Just to be clear, what he did is the Indian equivalent of visiting Russia looking like this:

http://www.abc.net.au/news/image/8163694-3x2-940x627.jpg

 

 

In reply to by nmewn

Paul E. Math skbull44 Mon, 03/05/2018 - 22:36 Permalink

It's SHITE being Canadian! We're the lowest of the low. The scum of the fucking Earth! The most wretched, miserable, servile, pathetic trash that was ever shat into civilization. Some hate the English. I don't. They're just wankers. We, on the other hand, are COLONIZED by wankers. We can't even find a decent culture to be colonized BY. We're ruled by effete arseholes. It's a SHITE state of affairs to be in, Tommy, and ALL the maple syrop in the world won't make any fucking difference!

In reply to by skbull44