What are banks for? Typically, banks are described as intermediaries that take deposits and lend them out, earning what is called net interest margin on the gap between what is paid on the savings and what is earned on loans. From where I stand, this description is wrong on three counts. First, it suggests that banks need deposits to make […]
Read moreResults of a major survey of post-secondary students were released on Thursday. The 149-page report, entitled Sources et Modes de Financement des Etudiants the Premier Cycle 2009, was written by the Fédération étudiante universitaire du Québec (FEUQ). It was done in collaboration with Léger Marketing, who suveyed almost 13,000 undergraduate students in Quebec, spanning 14 different post-secondary institutions in the province. According […]
Read moreMany blog readers are no doubt aware that, late last month, the Canadian Centre for Policy Alternatives released a paper by David Macdonald entitled “Canada’s Housing Bubble:Â An Accident Waiting to Happen.” As the title suggests, Macdonald argues: Canada is experiencing, for the first time in the last 30 years, a synchronized housing bubble across the six largest residential real […]
Read moreI have an op-ed in today’s Toronto Star. The piece stems largely from a policy paper I wrote on homelessness earlier this year, and that I blogged about here. In today’s op-ed, I argue that homelessness rises after a recession, but that there’s a lag effect. To be sure, after the recession of the early 1990s, homelessness in Toronto (as measured […]
Read moreThe Conservatives apparently think that it is deeply intrusive for the state to count your bedrooms through the mandatory long form census. “Asked to explain why this matters to the core Conservative constituency, one senior Tory strategist said, on background: “It’s all about the nanny state. Why is it mandatory to tell the government how many bedrooms are in your […]
Read moreToday’s Globe and Mail features an article about the University of Toronto’s plan to turn “to the private sector to solve their campus housing problems” for students. In particular, the article refers to a plan whereby the U of T would become “the first university in Canada to erect a large tower offsite with private money.” According to the article, […]
Read moreTwo weeks ago, the report of a government-appointed panel on Ontario’s social assistance system was made public. The report, entitled “Recommendations for an Ontario Income Security Review,” was written by the 11-member Ontario Social Assistance Review Advisory Council, which had been struck in December 2009 by the McGuinty government. The Council had been asked to make recommendations on the “scope and terms of […]
Read moreAmong TV financial pundits, I enjoy watching James Altucher. I have particularly appreciated his advocacy of no-nonsense quantitative easing by the European Central Bank, as opposed to the half measures unveiled so far. (My viewership has not been systematic enough to form an opinion of his stock tips.) I was recently pleased to discover that he is also a prolific […]
Read moreFurther to my recent post on the last Monetary Policy Report http://www.progressive-economics.ca/2010/05/11/the-bank-of-canada-and-the-recovery/ I cannot claim to be surprised that the the Bank of Canada has decided to begin to raise interest rates, albeit by an initial quarter point from extraordinarily low levels. They are also returning to normal overnight money market operations which will tighten credit to a degree. I […]
Read moreI recently wrote a paper on the recession’s impact on homelessness, looking at Toronto as a case study. I presented it on Friday at the Annual Conference of the Canadian Economics Association (May 28-30, Quebec City). The paper’s title is “Calm Before the Storm,” as I believe that, based on the outcome of the last major recession in the early […]
Read moreSome puzzling comments in today’s Globe story casting cold water on the notion that there is a housing bubble. The story makes the classic anti bubble argument that national averages conceal a lot of local variation, reflecting local conditions. http://www.theglobeandmail.com/report-on-business/economy/the-home-price-puzzle/article1475073/ “Toronto-Dominion Bank economist Pascal Gauthier says the diverse nature of Canada’s real estate market means a U.S.-style bubble is not […]
Read moreIt is striking that, even while moved to concern and some action, the Bank of Canada and the Minister of Finance are still desperately afraid to admit that Canada is experiencing a housing bubble. One can go on and on about how difficult it is to spot a bubble. But, as Dean Baker has often argued with reference to the […]
Read moreThis morning federal finance minister Flaherty announced a number of measures ostensibly aimed at reining in speculation in the housing market. His announcement was typically well-timed to coincide with the Vanier Institute’s annual report on the state of Canadian family finances, which reports record high levels of household debt, growing inequality and housing prices increasingly out of whack with incomes. But […]
Read moreA new study published today by the Frontier Institute for Public Policy finds that Vancouver has the most unaffordable urban housing market not just in Canada, but in all of Australia, Ireland, New Zealand, the United Kingdom and the United States. This conclusion is based on a very simple, yet effective measure of housing affordability: the ratio of median housing […]
Read moreIn October, Canada’s inflation-adjusted Gross Domestic Product (GDP) expanded by 0.16%, which rounds up to 0.2%. While a second consecutive month of growth is unambiguously good news, we should be concerned about the amount and type of growth. Amount of Growth Real GDP (in chained 2002 dollars) dropped from a peak of $1,241 billion in July 2008 to a trough […]
Read moreLast week, the City of Vancouver’s task force, the Greenest City Action Team, issued a plan for the city with short and longer-term goals and policy advice on achieving them. The report covers more than climate change, a good thing as it is important to identify win-wins that lead to improvement on other environmental, health and social objectives as we […]
Read moreThe Canadian media didn’t pay much attention to this economic crisis before the stock markets plunged last fall, and that has continued to be a major focus. But this focus on the stockmarket and the mistaken perception that this crisis is all the fault of the U.S., is leading to the overly optimistic forecasts of recovery. There’s been very little attention […]
Read moreHousing has been one of the major drivers of the BC economy in recent years. Low interest rates led to rising home prices and a psychology of “must get in before being locked out forever”; leading a housing bubble that had everyone in town swapping jaw dropping stories of bidding wars and outrageous prices paid. The economic driver was not […]
Read moreDeclan picks up on Stephen’s suggestion that economists were too diffident to raise concerns about the real estate bubble: How to square the group of economists in the front pages of the paper offering a series of right wing prescriptions supported by neither fact nor theory with the economist unwilling to point out a housing bubble because it doesn’t fit […]
Read moreThe Progressive Economics Forum’s open letter is now making the rounds. Signatories include four chairs of economics departments, two former Presidents of the Canadian Economics Association, a former federal Secretary of State (Finance), and a former Quebec Minister of Industry. Here’s the text and the 88 signatories: Open Letter from Canadian Economists on the Current Economic Crisis and the Appropriate […]
Read moreI’m pleased to see the federal government are taking action to modestly reign in the wilder excesses of the Canadian mortgage lending industry. They propose to insure only loans with a 5% downpayment and 35 year or less amortization period – compared to tnhe status quo which permits insurance of no down payment 40 year loans. My recollection is that […]
Read more… is people like me, who have made spectacular capital gains as home owners. Through the dumb luck of having bought real estate at the right time, before the current boom, my family has reaped a windfall profit that only an oil executive could sneer at. It is not particularly accessible. We need to live somewhere and could only really […]
Read more … is homes. Check out this astonishing admission, as reported by CBC: St. Paul’s in downtown Vancouver, one out of every four beds is being used to treat the homeless, drug addicts and the mentally ill, said [Lorna Howes, the director of acute and community mental health for Vancouver with the Vancouver Coastal Health authority]. We are spending money on […]
Read morehttp://www03.cmhc-schl.gc.ca/b2c/catalog/z_getpdf.jsp?pdfkey=2913653764704560038976021471679303982482875120909016402/65901.pdf CMHC have published a joint study with StatsCan on the dynamics of housing affordability, 2002 to 2004. Affordable housing is defined as paying more than 30% of household pre tax income on shelter costs. Annually published cross sectional estimates show that about 20% of Canadians were paying too much for housing in any given year over this period. This […]
Read moreThe current issue of Maclean’s features a typically provocative cover on “Real Estate 2008.” The “Buy? Sell? Panic?” headline caught my attention because I am currently selling a place in Ottawa and moving to Toronto. The story inside Maclean’s is far more soothing, suggesting that there is no risk of a real estate crash in major Canadian cities because: sub-prime […]
Read moreare high, according to a new report, summarized by Gordon Laird in the Toronto Star: According to a new report from the Sheldon Chumir Foundation for Ethics in Leadership, Shelter: Homelessness in a Growth Economy, homelessness is costing Canadian taxpayers $4.5 billion to $6 billion a year. Canada in 2007 collectively spends more managing homelessness than it spends on international […]
Read moreOver at MaxSpeak, the state of housing and whether or not it is a bubble is reviewed: THE GREAT HOUSING BUBBLE FLAP Probably most who read this blog accept that there was a bubble in the US housing market, and that it has come to an end. Some regulars here, notably the notable Dean Baker, were early out the door […]
Read morehttp://www.businessweek.com/magazine/content/07_12/b4026050.htm A rather moving story from Business Week about the real victims of the crisis of the US subprime mortage market – the borrowers. The late stages of the US housing bubble were sustained by a flood of new buyers – lower income households tempted to get into the housing market by superficially low interest rate mortgages for which they […]
Read moreThe story below was the banner headline piece on page one of today’s Vancouver Sun, and is a perfect choice for the “we told you so” file. Three years ago, after being awarded the 2010 Olympics, our BC Solutions Budget (and in subsequent editions) made many of the same points as the Olympics Housing Roundtable’s soon-to-be-released report. This report, and […]
Read moreLast Fall, in my capacity as a member of the Vancouver City Planning Commission, I helped organize a conference on affordable housing from a longer-term urban planning perspective. The final report is now available here. It features a summary of what happened at the conference, written by yours truly, but also contains lots of great visuals that were developed and […]
Read more