The Bank of Canada's latest review of the financial system listed "...the country's climbing level of household debt and its persistently overvalued real estate market as key vulnerabilities in the financial system."
It also warned of an oil slump and the systemic stress that may cause to the economy. While little or nothing can be done to mitigate the problems caused by an oil slump, many things can be done -- or better said, should have been done -- to address and mitigate the shockingly high level of household debt and overvalued real estate. Canadians should have been encouraged to become savers as they once were, instead of having been encouraged and enticed to buy expensive real estate with small or no downpayments. Coupled with foreign buyers' insatiable thirst for our residential homes, this is what drove real estate prices through the roof.
Prime Minister Stephen Harper has proved time and again that he either does not care, nor understand, the mechanics of our residential real estate prices getting out of reach to the average Canadian. As real estate and the construction industry account for close to one-third of the Canadian economy, he should have known that housing affordability had been problem number one for quite some time. He recently turned a deaf ear to the pleas of thousands of Vancouverites and Torontonians that signed petitions calling for their governments to curtail the foreign buyers outbidding each other for our residential real estate.
Unfair bidding for the very roofs over our heads has already rendered most middle class Canadians unable to compete with financially superior foreign buyers. So instead of looking into this most burning issue at home, he simply shrugged it off. Mr. Harper seems to be preoccupied by just about anything else. Like playing international policeman by threatening Russia for their aggression on Ukraine, which would have been a noble thing to do had he only had that issue to worry about. By becoming a master of diverting attention away from ourtailspin economy (described as "atrocious" by the Governor of the Bank of Canada), shutting down debates in the parliament 100 times, showing utter indifference with the goings-on in the senate, promising jobs etc. he has turned himself into a "yesterday's politician," trying desperately to hang on to believing he can convince Canadians to give him a chance for a third term.
However, it appears that the faith of Canadians in Mr. Harper had been lost for quite some time now. Noted Globe and Mail analyst, Mr. Jeffrey Simpson, during his interview with TVO a few weeks ago, indicated that 65 per cent of Canadians want to see Mr. Harper go. This seems to be a fairly established certainty given that Mr. Harper failed to redeem his leadership qualities on a domestic front. The time has come for him to go. If anything, for the sake of his own political party to which he has become a liability and unwanted "baggage."
In fact, if his own Conservatives allow him to remain at the helm, they may end up getting decimated come next election time. Aspiring new leaders should realize that after the collapse of the oil industry, Canada has very little to rely on in terms of keeping the economy going. Wealthy foreigners should be enticed to invest in our industry, manufacturing and other commercial sectors, instead of buying our residential real estate, which is rapidly turning into a land grab. Continuation of foreigners buying our homes will only exacerbate the problems of the Canadian middle class and their ability to afford the homes in their own country.
The feedback I received from the readers of my recent article regarding Chinese monies flooding Canadian real estate, only confirms that our government should arrange for a responsible centralized housing authority which would stop or severely restrict foreign buying of residential real estate, just as Australian authorities did. Issuances of permits to condominium buildings should be curtailed and instead, small or medium developers should be encouraged to enter into the construction arena by building rental accommodation to be capped at levels of affordability.
Such an initiative would alleviate the chronic shortage of affordable housing and provide the construction industry with an added boost. It would create jobs and housing for our citizens at prices that are affordable. Don't count on Harper any more to help our middle class preserve their quality of life. Canadians should pay close attention on what our next Prime Minister (whoever that may be), has to say about the subject of affordable housing.
So far, unfortunately, neither Tom Mulcair nor Justin Trudeau indicated that they would form a centralized housing authority to curtail foreign buyers and deal with the burning issues of (non)affordability. This is something that the Canadian electorate should be asking of them, expecting to receive clear and concise answers.
By electing a responsible government at the next election, we may at least stand a chance of securing the future of our children and preserve our culture, heritage and tradition.
Short of that, we are already well on the way to selling out our country to foreigners. Before you know it, we may find ourselves in a position of becoming second class citizens, catering to financially superior foreigners buying our residences and immigrating to Canada in droves.
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