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INTEREST RATE SHOCK

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Interest Rate Shock

Open Letter to The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

January 4, 2021

FOR IMMEDIATE RELEASE

Red Deer – Mountain View, AB

The economic collapse as a result of COVID-19 lockdown measures has pushed the real interest rate to record lows. This rate however, is very misleading given our current economic environment.

  1. Baby boomers are retiring and are reducing the pool of available investable funds.
  2. Reduced number of people in the workforce will result in higher wage demands.
  3. Inevitable higher taxes required to repay significant debt brought on by lockdowns.
  4. High likelihood of reduced outsourcing in order to protect domestic supply chains.
  5. An economic plan that focuses on “green” incentives and destroys Canada’s oil and gas industry.
  6. Inflated housing prices across Canada despite a poor economic outlook.
  7. High consumer debt levels pre-COVID-19.
  8. Long running Bank of Canada policy which encourages consumption over investment.

Your government has indicated that it is considering adding an additional $100 billion in stimulus spending once the “virus is under control”. As the Canadian economy is already flooded with record government spending, the potential for inflation is very real.

Considering the above, the return of high interest rates, as seen in the 1980’s, is entirely possible. While we may not see record high mortgage rates of 21.46% as posted in August 1981, even small increases in rates could result in significant interest rate shock for many Canadians.

Increases in inflation and interest rates would impact low-income families most adversely. Most notably, these individuals may struggle to pay for food, shelter and healthcare, all of which are basic necessities.

COVID-19 has already resulted in the biggest transfer of wealth in human history. I am strongly urging you to end the pursuit of a “green economy” and commit to a drastic reduction in red tape to allow the private sector to begin generating wealth, something the government is only able to redistribute.

Sincerely,

Jared Pilon

Candidate for Red Deer – Mountain View, AB

[email protected]

https://www.jaredpilon.com/

I have recently made the decision to seek nomination as a candidate in the federal electoral district of Red Deer - Mountain View. As a Chartered Professional Accountant (CPA), I directly see the negative impacts of government policy on business owners and most notably, their families. This has never been more evident than in 2020. Through a common sense focus and a passion for bringing people together on common ground, I will work to help bring prosperity to the riding of Red Deer – Mountain View and Canada. I am hoping to be able to share my election campaign with your viewers/readers. Feel free to touch base with me at the email listed below or at jaredpilon.com. Thanks.

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Toronto, Vancouver named “Impossibly Unaffordable”

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From the Frontier Centre for Public Policy

By Courtney Greenberg

Two Canadian cities — Toronto and Vancouver — have earned the title of “impossibly unaffordable” in a new report.

“There has been a considerable loss of housing affordability in Canada since the mid-2000s, especially in the Vancouver and Toronto markets,” according to the Demographia International Housing Affordability report, which is released annually.

“During the pandemic, the increase in remote work (working at home) fuelled a demand increase as many households were induced to move from more central areas to suburban, exurban and even more remote areas. The result was a demand shock that drove house prices up substantially, as households moved to obtain more space, within houses and in yards or gardens.”

Vancouver was the least affordable market in Canada, and the third least affordable out of all of the 94 markets observed in the report. The West Coast city’s affordability issue has “troublingly” spread to smaller areas like Chilliwack, the Fraser Valley, Kelowna, and markets on Vancouver Island, per the report.

Toronto was named as the second least affordable market in Canada. However, it fared slightly better than Vancouver when it came to the other markets, ranking 84 out of 94 in international affordability.

“As in Vancouver, severely unaffordable housing has spread to smaller, less unaffordable markets in Ontario, such as Kitchener-cambridge-waterloo, Brantford, London, and Guelph, as residents of metro Toronto seek lower costs of living outside the Toronto market,” the report says.

The findings of the report have “grave implications on the prospects for upward mobility,” said Joel Kotkin, the director at the Center for Demographics and Policy at Chapman University, a co-publisher of the report along with Canada’s Frontier Centre for Public Policy.

“As with any problem, the first step towards a resolution should be to understand the basic facts,” he said. “This is what the Demographia study offers.”

The report looked at housing affordability in 94 metropolitan areas in Australia, China, Ireland, New Zealand, Singapore, the United Kingdom, the United States and Canada. The data analyzed was taken from September 2023. The ratings are based on five categories (affordable, moderately unaffordable, seriously unaffordable, severely unaffordable, and impossibly unaffordable) with a points system to classify each area.

The report determined affordability by calculating the median price-to-income ratio (“median multiple”) in each market.

“There is a genuine need to substantially restore housing affordability in many markets throughout the covered nations,” said Frontier Centre for Public Policy president Peter Holle, in a statement. “In Canada, policymakers are scrambling to ‘magic wand’ more housing but continue to mostly ignore the main reason for our dysfunctional costly housing markets — suburban land use restrictions.”

Toronto and Vancouver both received the worst possible rating for affordability, making them stand out as the most expensive Canadian cities in which to buy a home. However, other Canadian markets — like Calgary, Montreal and Ottawa-gatineau — stood out as well. They were considered “severely unaffordable.”

“This is a long time coming,” senior economist with the Canadian Centre for Policy Alternatives David Macdonald told CTV News.

“We haven’t been building enough housing, we certainly haven’t had enough government investment in affordable housing for decades, and the chickens are coming home to roost.”

The most affordable Canadian city in the report was Edmonton, which was given a rating of “moderately unaffordable.” The city in Alberta was “at least twothirds more affordable” than Vancouver.

Overall, Canada ranked third in home ownership compared to the other regions observed in the report. The highest home ownership rate was in Singapore, at 89 per cent, followed by Ireland, at 70 per cent. In Canada, the rate was 67 per cent.

First published in the National Post here, June 17, 2024.

Courtney Greenberg is a Toronto-based freelance journalist writing for the National Post.

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conflict

Europeans Aren’t Concerned About Russian Bear Invading Continent After Ukraine

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From the Daily Caller News Foundation

By MORGAN MURPHY

 

The foreign policy blob in Washington, D.C., would have us believe that Vladimir Putin is Adolf Hitler 2.0 and must be stopped before he rolls over the rest of Europe. It is an intellectually lazy argument.

In the first place, Russia has struggled in its fight with Ukraine—a small nation with one-fourth Russia’s population and far fewer resources. How would Mother Russia fare against the combined firepower of NATO? Likely not so hot: Europe’s economy is six times larger than Russia’s. Likewise, the population advantage of Europe stands three-to-one over Russia.

Aside from Russia’s vast nuclear weapons stockpiles, it is no match for Europe.

Putin knows he would be crushed in a head-to-head with NATO and has repeatedly made clear that he has no interest in going to war with any NATO country, including Poland.

Secondly, if Europe was seriously under threat from the Russian bear, you might think that Europeans themselves would be more alarmed. They don’t seem to be. In fact, across nearly every threat measured by the Munich Security Council, trends show a downward ebb among Europeans. To most, Russia ranks as a threat below radical Islamic terrorism and mass migration. The Germans are more worried about cyber attacks than Putin; to the French, racism is more worrisome.

Aren’t these the very people America is spending $185 billion in Ukraine to protect from Russian expansionism?

Across the European continent, the United States maintains 100,000 troops on 185 major military bases and 78 minor sites (minor being defined as less than 10 acres or $10 million). Taken altogether, American forward operating bases in Europe sprawl over 265,000 acres with an estimated value of $95.5 billion. When one examines the Department of Defense’s annual budget, protecting Europe is America’s largest yearly expenditure—and that’s before Ukraine supplemental funding is added to the tally.

Yet the average resident of Berlin is likely more worried about his email getting hacked than he frets about the Kremlin rolling tanks through Deutschland.

Europe was the world’s center for combat power from roughly 1400 until 1945. No more. Even the larger armies of NATO are struggling to maintain effective combat power. The British Army cannot sustain a complete expeditionary armored brigade. At 23 years old, the Charles de Gaulle, France’s flagship and sole aircraft carrier, is reaching the end of its effective lifespan but sea trials are not expected to begin for its replacement until 2036.

The French have less than 90 heavy artillery pieces—Russia is losing more each month fighting Ukraine. Reporting in October 2022 found that Germany only had enough ammunition for two days of war, far below the NATO 30-day minimum. In 2022 NATO exercises, none of the Bundeswehr’s 18 new Puma infantry fighting vehicles were able to complete the drill.

Ukraine has revealed many of NATO’s weakness. These led a professor of war studies at the University of Warwick, Anthony King, to remark that Europe has “systematically demilitarized itself because it didn’t need to spend the money. They have basically gone to sleep.”

That ambivalence toward defense comes across in another recent survey of Europeans. Sixty percent of Italians, 47% of Germans and 40% of the French are in favor of cutting off arms shipments to Ukraine. Across Europe, 60% think that Ukraine will be an economic burden. Among the French, Spanish and Italians, more than 40% either don’t know or don’t care who wins the war in Ukraine.

Perhaps America’s security blanket for Europe has been too heavy and we have indeed lulled the continent into a stupor. Or maybe Europeans are correct in their assessment of Putin—that his invasion of Ukraine is not a precursor to the reassembly of the U.S.S.R.

In either case, more American taxpayers are questioning the D.C. logic that demands ever-increasing blank checks for a war with no end in sight.

Morgan Murphy is a former DoD press secretary, national security adviser in the U.S. Senate, a veteran of Afghanistan.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

Featured image credit: (Screen Capture/CSPAN)

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