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The Mortgage Maelstrom: Navigating the Impending Financial Tempest in Canada


5 minute read

From The Opposition with Dan Knight substack

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

As we wade through the current economic climate, it’s becoming increasingly clear that a storm is brewing on the Canadian horizon, one that could sweep away the financial stability of countless households. The heart of this looming tempest? The mortgage market—specifically, the shock awaiting about 60% of mortgage holders in the next three years as their terms come up for renewal.

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.

Here’s the scoop, folks. Bank of Canada Governor Tiff Macklem laid out a cold hard truth: fiscal and monetary policy are at loggerheads. While the central bank is straining every sinew to wrestle down inflation with rate hikes, the federal and provincial governments are lighting the fuse with their spending, fueling the very inflation the Bank of Canada is trying to stamp out.

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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Dan Knight

Writer for the Opposition Network/ Former amateur MMA champion / Independent journalist / Political commentator / Podcaster / Unbiased reporting Podcast


Government subsidies cost more than EV capital investments

Published on

From the Canadian Taxpayers Federation

Author: Franco Terrazzano

The Canadian Taxpayers Federation is calling for an end to corporate welfare following today’s Parliamentary Budget Officer report showing government subsidies are 14 per cent more than the capital investments corporations are making in the electric-vehicle supply chain.

“Putting taxpayers on the hook for more money than these corporations are spending to build their own factories is an awful deal for ordinary Canadians,” said Franco Terrazzano, CTF Federal Director. “Taxpayers are being taken to the cleaners with this EV corporate welfare.”

The PBO released a report regarding recent government subsidies for EV factories.

“For the $46.1 billion in investments (capital expenses) across the EV supply chain, PBO estimates total corresponding government support (for capital and operating expenses) to be up to $52.5 billion, which is $6.3 billion (14 per cent) higher than announced investments,” according to the PBO report.

Of the $52.5 billion in taxpayer subsidies, the PBO estimates $31.4 billion is coming from the federal government and $21.1 billion is coming from provincial governments.

“These lopsided numbers show that these corporate handouts are nothing more than a vanity project for politicians,” said Jay Goldberg, CTF Ontario Director. “If these politicians want to grow the economy, they should cut taxes and red tape rather than make bad bets with taxpayers’ money.”

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Alberta gets credit boost because of budget discipline

Published on

News release from the Canadian Taxpayers Federation

Author: Kris Sim

“bringing net adjusted debt to an estimated CAD 57.5 billion in fiscal 2024 (ended on March 31) from CAD 74.6 billion in fiscal 2022”

The Canadian Taxpayers Federation is applauding the Alberta government for its fiscal discipline which earned the province a boost in its credit rating.

“Alberta is one of the only provinces in Canada with a balanced budget, and it shows with this credit upgrade,” said Kris Sims, CTF Alberta Director. “Paying down the debt, restraining spending and saving for the future were very good moves by this government.”

In its most recent budget, Alberta reported a $367-million surplus. That stands in contrast to neighbouring Saskatchewan’s $273-million deficit and British Columbia’s record-breaking $7.9-billion deficit.

The rating agency, Fitch, upgraded Alberta’s credit from AA- to AA this week, highlighting its debt repayment as a key reason for the improvement.

“Alberta used its recent economic rebound to accelerate fiscal improvements and lower its debt, bringing net adjusted debt to an estimated CAD 57.5 billion in fiscal 2024 (ended on March 31) from CAD 74.6 billion in fiscal 2022,” the Fitch report reads.

The agency also cited Alberta’s spending restraint as a reason for the positive outlook.

“The rapid decline in debt and adherence to spending restraint in recent budgets have been complement with last year’s introduction of a fiscal framework requiring balanced budgets, annual contingencies and using surpluses for debt repayment, savings or one-time investment, is likely to bolster future resilience,” the Fitch report reads.

Interest charges on the province’s debt are estimated to cost taxpayers $3.3 billion this year.

“Credit ratings matter because Albertans pay billions of dollars on interest payments on the debt every year, better credit ratings make it less expensive to pay for that debt, and the less money we waste to pay debt interest charges the better,” said Sims.


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