Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
  • The energy industry’s insatiable thirst for water threatens First Nations’ treaty-protected rights June 21, 2017
    Our latest report looks at the growing concerns that First Nations in British Columbia have with the fossil fuel industry’s increasing need for large volumes of water for natural gas fracking operations. Titled Fracking, First Nations and Water: Respecting Indigenous rights and better protecting our shared resources, it describes what steps should be taken to […]
    Canadian Centre for Policy Alternatives
  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
  • Canada-China FTA will leave workers worse off June 2, 2017
    Global Affairs Canada is currently consulting Canadians on a possible Canada-China free trade agreement. In CCPA’s submission to this process, CCPA senior researcher Scott Sinclair argues that an FTA based on Canada’s standard template would almost certainly reinforce rather than improve upon Canada’s imbalanced and deleterious trade with China. It can also be expected to […]
    Canadian Centre for Policy Alternatives
  • Faulty assumptions about pipelines and tidewater access May 30, 2017
    The federal and Alberta governments and the oil industry argue that pipelines to tidewater will unlock new markets where Canadian oil can command a better price than in the US, where the majority of Canadian oil is currently exported. Both governments have approved Kinder Morgan's Trans Mountain Expansion Project, but a new report finds that […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Glass-House Mortgages

A letter appears in today’s Globe and Mail in response to recent direction given by Minister Flaherty to private mortgage lenders over mortgage rates.  The letter was written by Steve Pomeroy, one of Canada’s leading housing policy experts.

Here is the full text of the letter:

Glass-house mortgages

Twice in recent weeks, the Minister of Finance has chastised Canada’s lenders for offering discounted mortgages, which he feels will overstimulate the precarious housing market (Flaherty Pushes Up Lending Rates – March 20).

The difference between Manulife’s discounted 2.89-per-cent rate and its previous rate of 3.09 per cent for a five-year mortgage amounts to $10 a month, on a $100,000 loan – a saving of $600 over five years. Meanwhile, the minister is spending $185-million this year to hand out tax credits worth $750 to to first-time buyers to “help people buy homes.” I’m not sure $750 really makes a difference!

So the minister should ask himself: Who is really overstimulating the housing market, and at what cost to taxpayers? Hint: People dwelling in glass houses should not throw stones.

Steve Pomeroy, Carleton University Centre for Urban Research and Education

Enjoy and share:

Comments

Comment from Larry Kazdan
Time: March 21, 2013, 3:36 pm

For an analysis of housing bubbles and debt, read The Bubble and Beyond by Michael Hudson

http://commonground.ca/2012/10/the-bubble-and-beyond/

Comment from Kasey
Time: March 28, 2013, 8:01 am

Does this example suffer due to the 100,000 mortgage? Are not most mortgages at least twice that amount which would make Flaherty’s spending look a little better?

Comment from Derek
Time: April 3, 2013, 8:11 pm

Nice point about Flaherty handing out $750, but the comparison is not valid. Houses don’t cost $100,000, the average house is $350,000. Using your number of $10, that would make it $35 which would be more than $750 after 2 years and $2100 after 5 years.

So while the $750 is also a bad idea, it is only a one-time payment. The slight change in interest rates is many times more important over the course of a mortgage.

Write a comment





Related articles