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
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.
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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Parents should take precaution this holiday season when it comes to artificial intelligence toys after researchers for the new Trouble in Toyland report found safety concerns.
Illinois Public Interest Research Group Campaign Associate Ellen Hengesbach said some of the toys armed with AI raised red flags ranging from toys that talk in-depth about sexually explicit topics to acting dismayed when the child disengages.
“What they look like are basically stuffed animals or toy robots that have a chatbot like Chat GPT embedded in them and can have conversations with children,” Hengesbach told The Center Square.
The U.S. PIRG Education Fund report also points out that at least three toys have limited to no parental controls and have the capacity to record your child’s voice and collect other sensitive data via facial recognition.
“All three were willing to tell us where to find potentially dangerous objects in the house, such as plastic bags, matches, or knives,” she said. “It seems like dystopian science fiction decades ago is now reality.”
In the face of all the changing landscape and rising concerns, Hengesbach is calling for immediate action.
“The two main things that we’d like to see are more oversight in general and more research so we can see exactly how these toys interact with kids, really just identify what the harms might be and have a lot more transparency from companies around how are these toys designed,” she said. “What are they capable of and what the potential risks or harms might be. I just really want us to take this opportunity to really think through what we’re doing instead of rushing a toy to market.”
As for the here and now, Hengesbach stressed parents would be wise to be thoughtful about their purchases.
“We just have a big open question of what are the long-term impacts of these products on young kids, especially when it comes to their social development,” she said. “The fact is that we just really won’t know what the long-term impacts of AI friends and companion toys might be until the first generation playing with them grows up. For now, I think it’s just really important that parents understand that these AI toys are out there; they’re very new and they’re basically unregulated.”
Since the release of the report, Hengesbach said one AI toymaker temporarily suspended sales of all their products to conduct a safety audit.
This year’s 40th Trouble in Toyland report also focuses on toys that contain toxins, counterfeit toys that haven’t been tested for safety, recalled toys and toys that contain button cell batteries or high-powered magnets, both of which can be deadly if swallowed.
Generous social programs come with trade-offs. Pretending otherwise is political fiction
Nordic societies fund their own benefits through taxes and cost-sharing. Canadians expect someone to foot the bill
Like Donald Trump, one of my favourite words starts with the letter “T.” But where Trump likes the word “tariff,” my choice is “trade-off.” Virtually everything in life is a trade-off, and we’d all be much better off if we instinctively understood that.
Think about it.
If you yield to the immediate pleasure of spending all your money on whatever catches your fancy, you’ll wind up broke. If you regularly enjoy drinking to excess, be prepared to pay the unpleasant price of hangovers and maybe worse. If you don’t bother to acquire some marketable skill or credential, don’t be surprised if your employment prospects are limited. If you succumb to the allure of fooling around, you may well lose your marriage. And so on.
Failing to understand trade-offs also extends into political life. Take, for instance, the current fashion for anti-capitalist democratic socialism. Pushed to explain their vision, proponents will often make reference to the Nordic countries. But they exhibit little or no understanding of how these societies actually work.
As American economist Deirdre Nansen McCloskey notes, “Sweden is pretty much as ‘capitalistic’ as is the United States. If ‘socialism’ means government ownership of the means of production, which is the classic definition, Sweden never qualified.” The central planning/government ownership model isn’t the Swedish way.
What the Nordics do have, however, is a robust social safety net. And it’s useful to look at how they pay for it.
J.P. Morgan’s Michael Cembalest is a man who knows his way around data. He puts it this way: “Copy the Nordic model if you like, but understand that it entails a lot of capitalism and pro-business policies, a lot of taxation on middle-class spending and wages, minimal reliance on corporate taxation and plenty of co-pays and deductibles in its health care system.”
For instance, take the kind of taxes that are often derided as undesirably regressive—sales taxes, social security taxes and payroll taxes. In Sweden, they account for a whopping 27 per cent of gross domestic product. And some 15 per cent of health expenditures are out of pocket.
Charles Lane—formerly with the Washington Post, now with The Free Press—is another who pulls no punches: “Nordic countries are generous, but they are not stupid. They understand there is no such thing as ‘free’ health care, and that requiring patients to have at least some skin in the game, in the form of cost-sharing, helps contain costs.”
In effect, Nordic societies have made an internal bargain. Ordinary people are prepared to fork over large chunks of their own money in return for a comprehensive social safety net. They’re not expecting the good stuff to come to them without a personal cost.
Scandinavians obviously understand the concept of trade-offs, a dimension that seems to be absent from much of the North American discussion. Instead of Nordic-style pragmatism, spending ideas on this side of the Atlantic are floated on the premise of having someone else pay. And the electorally prized middle class is to be protected at all costs.
In the aftermath of Zohran Mamdami’s New York City win, journalist Kevin Williamson had a sobering reality check: “Class warfare isn’t how they roll in Scandinavia. Oslo is a terrific place to be a billionaire—Copenhagen and Stockholm, too … what’s radically different about the Scandinavians is not how they tax the very high-income but how they tax the middle.”
Taxation propensities aside, Nordic societies are different from the United States and Canada.
Denmark, for instance, is very much a “high-trust” society, defined as a place “where interpersonal trust is relatively high and ethical values are strongly shared.” It’s often been said that it works the way it does because it’s full of Danes, which is broadly true—albeit less so than it was 40 years ago.
Denmark, though, has no interest in multiculturalism as we’ve come to know it. Although governed from the centre-left, there’s no state-sponsored focus on systemic discrimination or diversity representation. Instead, the emphasis is on social cohesion and conformity. If you want to create a society like Denmark, it helps to understand the dynamics that make it work.
Reality intrudes on all sorts of other issues. For example, there’s the way in which public discourse is disfigured on the question of climate change and the need to pursue aggressive net-zero policies.
Asked in the abstract, people are generally favourable, which is then touted as evidence of strong public support. But when subsequently asked how much they’re personally prepared to pay to accomplish these ambitious goals, the answer is often little or nothing.
If there’s one maxim we should be taught from childhood, it’s this: there are no panaceas, only trade-offs.
Troy Media columnist Pat Murphy casts a history buff’s eye at the goings-on in our world. Never cynical – well, perhaps a little bit.
Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.
