"Losing their homes" - Macleans.ca

“Losing their homes”


From last week’s debate:

Canada is not the U.S., Mr. Harper said, adding that Canadians are not in danger of losing their homes or their jobs.

Mr. Dion shot back that Mr. Harper’s do-nothing attitude is endangering Canadian prosperity…

“The economy is not fine and if you talk to Canadians that’s what they’ll tell you. Either you don’t care or you’re incompetent. Which is it?” NDP leader Jack Layton charged, scoffing at Harper’s suggestion that Canadians are more worried about the plummeting stock market than losing their homes

‘You’re so out of touch with people when you say they’re not worried about losing their jobs and losing their homes,’ Ms. May said after Harper suggested Canadians are worried about the stock market drop, not about jobs…

From the Globe and Mail, via Worthwhile Canadian Initiative:

An estimated 20,000 to 25,000 Canadian home owners are currently in arrears, said Will Dunning, chief economist at the Canadian Association of Accredited Mortgage Professionals (CAAMP), in a report released Monday.

This means about 0.3 per cent of Canada’s 8.05 million home owners are behind on their mortgages by three months or more, he said.

By contrast, arrears in Canada hit about 0.7 per cent in 1992, as the effects of the housing bubble in the late 1980s and early 1990s worked their way through the mortgage market, Mr. Dunning said….

The closest comparison to Canadian arrears levels in the United States are 90-day mortgage delinquencies, Mr. Tal said. They are now in the 2 to 3 per cent range, meaning that about 1.5 million U.S. home owners are currently in delinquency.

In August, the last month for which data were available, one in every 416 U.S. households received a foreclosure filing, a 12 per cent increase from July and a 27 per cent increase from August, 2007.

National foreclosure statistics aren’t available in Canada, but lenders say the rate is low, and hasn’t shown an appreciable increase over last year.

At 70 per cent, the equity Canadians have in their homes has also been increasing over the past decade, while in the United States that level has slipped to below 50 per cent, Mr. Dunning said.

The U.S. housing collapse was a crisis brought on by overuse of subprime mortgages. Thus, Mr. Tal said, it’s important to remember that at its peak risky mortgages made up 5 per cent of the market in Canada, compared with 33 per cent in the U.S.

When will this Prime Minister do something show he cares about this avalanche entirely unremarkable rate of foreclosures?


“Losing their homes”

  1. True facts and context that go to the very heart of the issue facing the Canadian electorate.

    They therefore have no place in our debate (and certainly not on our news pages),

    lest the user of such information be labeled a heretical “cheery”, uncaring, out-of-touch fool.

  2. I’m not scared of losing my home- I’m scared of losing my job.

  3. No, but wait a minute: leaders like Layton have actually made people aware that he will protect each and every citizen of this country. You see, within such context all other context are to be thrown overboard.

    You may not believe this, but some voters actually take Layton’s words literally. Such voters believe that a PM can look after individual problems, whereas a man like Harper believes the fundamentals of our Canadian economy need to be in good shape to protect the ‘average’ citizen.

    Cold? Perhaps. Realistic? Most certainly. There is no other reality, after all.

  4. I think the real issue with Harper and the economy is his inability to express an understanding of what Canadians are feeling. Yes the stock market may rebound (etc, etc, etc…), but don’t tell those living on their current stock value of their stocks (RRIFs) that it is a good time to buy. Don’t just say that everything is fine without addressing the concerns of the populous.
    And when you dismiss people’s fears they look further at what you are as a whole. And when you do that with Harper you quickly realize how many times he has dismissed people before (whether you agree or not):
    – Arts funding
    – Income trusts
    – Listeria
    – Political Firings
    – Canadian Wheat Board (at least could have had an honest ballot)
    – Etc…
    People start to connect the dots. If he had not been so dismissive he could have fared better.

  5. they all yelled fire in a crowded building. shame.

    dion’s emergency meeting with economists will result in them telling him to keep doing what were already doing. reduce spending, pay down debt, invest strategically.. the chretien/harper method.

  6. although harper hasn’t really reduced spending. but our debt to gdp ratio is improving.

  7. You may not believe this, but some voters actually take Layton’s words literally. Such voters believe that a PM can look after individual problems…

    Exactly. Just ask the people of New Orleans how well it works when you wait for the government to solve your problems for you.

  8. Andrew…. simple question…. if we accept all of this is a non-issue, that Canada is sound while pretty much the rest of the G8 faces turmoil, that no lag effect is coming (all tenable)…. then pls explain why a 30-day consultation is not an acceptable course of action?

  9. (sorry hit post to fast)

    in that it is characterized as ‘talk’ and ‘not action…

  10. I’m reminded of the ’90s, when crime rates were slowly but steadily falling. A journalist pointed this fact out to a Reform MP, whose reaction was to say that it didn’t matter what was *actually* happening; what mattered was people’s perception of what was happening, and people’s perception was that crime was getting more prevalent.

    I’ll be voting Liberal, but all of their ranting and raving about the economy and the need to “DO SOMETHING! ANYTHING! NOW!” is getting a bit tiresome. I expected better from Dion. But then, I expected better from Harper than the sellout of any hint of principle that AC has documented so well.

  11. Consultations with Finance and BoC and private sector gurus are not a problem. The problem is that the gurus are there to be consulted, and ARE consulted, whether or not the Liberals are elected. (This explains their high income.) Even if Jack moves into 24 Sussex, rest assured he will have consultations. It’s the politicalization of institutions that have worked hard to stay out of politics that makes me dislike this plan. Tories get a lot of heat for their skepticism of the public service, but Grits apparently get praise for claiming it as their exclusive domain, which is the flip side of the same coin.

    As for the housing market, it’s unlikely that existing homeowners are gonna get turfed any time soon, but I’m pretty sure the insane housing boom in Vancouver had got to slow down soon. There are at least seven highrises within sight of my home that are under construction or just finished, and I’ll be damned if they’ll all be filled up within a year of completion.

  12. Hi Kelvin, sorry was my post was not clear enough… what i find incredibly frustrating in this serious of posts by Andrew is not that there is no substance, but that they are incomplete in my eyes…

    to the degree that the SH/CPC have suggested that

    1) continued minority government; and/or
    2) the green shift both threaten inducing a recession; and
    3) that the proposal for a 30 day examination of the situation before any action is not an acting with enough urgency…

    they are also using the global financial situation to fearmonger.

    If he is gonna call lout all the opposition partie for this then why not the CPC?

  13. “Exactly. Just ask the people of New Orleans how well it works when you wait for the government to solve your problems for you”

    That’s the scary part for me in all of this, that people personally feel no sense of comfort within their own assessment of situations.

    I remember the days when Canadian interest rates hoovered around the 20% mark. I am certain of that because we paid it. We had just started a new business and let me tell you: it ain’t a sound sleeping picture. But we knew if we would keep a tight rein on things we could make it. Choices are made according to circumstances. What else is new?

  14. Dale, more recently Harper did the same thing:


    But Mr. Harper made it clear in the same speech that he isn’t interested in what Statistics Canada has to say. In fact, he isn’t interested in data at all.

    “Some try to pacify Canadians with statistics,” he scoffed. “Your personal experiences and impressions are wrong, they say; crime is really not a problem. These apologists remind me of the scene from the Wizard of Oz when the wizard says, ‘pay no attention to that man behind the curtain.’ But Canadians can see behind the curtain. They know there’s a problem.”

    This is a truly amazing statement. Mr. Harper implicitly acknowledges that his claims about crime are not supported by data. But that doesn’t matter, he says. What matters is subjective perception. Rational inquiry isn’t the best way to discover the truth. Feeling is.

    This is much bigger than the debate about crime policies. It is an epistemological claim of staggering primitiveness.

    Ignore statistics. Forget rational inquiry and science. Damn the Enlightenment. Our feelings reveal what is true.

    Coming from an 18th-century king, this would be an appalling defence of ignorance. From a 21st-century prime minister, it is much worse.

  15. comment by Ian on Thursday, October 9, 2008 at 1:41 am:

    Coming from an 18th-century king, this would be an appalling defence of ignorance. From a 21st-century prime minister, it is much worse.

    That’s the whole problem with Harper. He’s like Chauncey (Peter Sellers) given over totally to his own sound byte. Jacko-beat-the-tom-toms-Layton and the Dippers joined with Harper when they DUMPED ON SENIORS AFTER THE PROMISE TO ‘NEVER TAX’ INCOME TRUSTS. Those SENIORS are now part of a struggling group after having lost their means for planned independence.

    The Dippers say, ‘they stand for preserving the dignity of SENIORS.’ Their actions actually prove the reverse. Both Harper and Layton were aware the government lied about ‘tax leakage.’

    Mulcair admitted it directly when he appeared before the finance committee Dec 05 2007. “As you know, our political party was not favourably disposed towards income trusts.

    **However, we never lied to people the way the government did.”**

    What kind of ‘distinction’ is that? They never **”lied,”** but they **went along** with a lie when they voted with the CPC.

    Most of those SENIORS, having sustained significant losses from their income trusts, WERE FORCED to rely on their familiies for assistance, and, in some cases, the families had to take their mothers and fathers into their homes. The capper was when Flaherty gave 18 blacked-out pages **”in support,”** of his UNPROVEN RATIONALE.

  16. Who said Canadians were suffering the same fate as their American cousins? I didn’t hear any leader say that, or that there is a major threat of financial institutional failure here. What I did hear was that Canadians are feeling repercussions — whether it’s stress or actual job losses — from the tidal wave that is overwhelming the highly deregulated U.S.
    And because we had a very tightly confined mortgage regulatory system, unlike our cousins, the cause and effect of our troubles may take slightly different forms. It will be more from job losses, from investment losses, from higher interest rates.
    But hey, Andrew’s idea of ‘staying the course’ likely is betting that Harper will pull another post-election lie and suddenly show his Conservative colours, axing programs to save the heirlooms for the batty but comfortable aunt and uncle.

  17. I’m wondering when the larger media outlets like CTV and the Globe and Mail are going to begin reporting about the real economy. The one where housing starts are high, jobs are grown, banks are fine and mortgages are paid on time.

    If you just tuned into the news or read the papers, you’d think the sky was falling.

  18. Andrew,

    You’re letting the facts get in the way of the story.

  19. Andrew, thanks for this and the previous post. Indeed, this market correction — the TSX P/E ratio is back to normal at 12.4 — is welcomed by the experts.

    The PM should not change anything. Rich Canadians, however, should jump into action and buy into the market now. This will stop the decline and help the pensions and the jobs of the less fortunate. A win-win situation.

    Layton and Dion want us to consider a US-style bailout. Sad.

    I will vote for no one but Harper.

  20. 70%? I hear its 80% equity that people have in their own homes, Andrew. I guess its all about who one quotes.

    And at its peak 5% of Canada’s mortgages are risky? Its way higher than that. More than 40% of all homes bought in Canada in 2007 were bought with 40 year, 1.5% down or less mortgages. In 2008 from January to July, that percentage increased to 68%.


    I suppose it depends on how one defines the word “risky”, but if this housing market tumbles broadly across Canada and people face serious negative equity in the face of a pancaking real estate bubble, bankrupcies will become quite tempting coupled with falling commodity valuations and a climate that has hollowed out manufacturing/forestry jobs from a federal government that likes to inflate foreign M & A’s and foreign ownership of our economic sectors to prop the dollar.

    The ugly numbers are delayed and we all pretty much know it, but hey if y’all wanna say it ain’t so to get your favorites elected, don’t spare us the spin on why the markets are tanking.

    Now that should make for good entertainment!

  21. A good splash of cold facts helps. But the rate of foreclosure and the whats in peoples minds are always different tings.

    I watched Flaherty’s briefing today and there was a reporter who kept coming back to the idea that the PM had said Canadians arent concerned about losing their homes. If the question is always phrased this way then there is no rational way to answer. Even in boom times one always worries about that possibility, you worry about that till the day you comletely own it and then after that because of maintenence costs.

    But are we seeing the rates of foreclosure in the US, absolutely not. I am not one to go around blaming the media on conspiracy, but I do blame them on soft headed thinking. Fair question to ask the PM, and the mirror question to Mr Dion and Layton is, “there is no eveidence of increased foreclosure rates in Canada? Are you not just stoking fears by implying they are?”

    Follow Up, ” If the problem is as bad as you say are offering to prevent foreclosures in Canada?”

  22. If you’re not at least concerned, you’re not paying attention.

    The housing market is drying up and has been for the past six months. Prices are now beginning to drop in just about every market, after at least a decade of growth. Thanks to this government’s 40-year, zero-down mortgages (and their own irresponsibility) people are in houses that they can’t afford. The collapse of the US market will affect us. There will be job loses. People without jobs can’t pay their mortgages.

    It doesn’t take a genius to see that there is a major risk that the cheery situation you describe will get a lot worse.

    It wouldn’t hurt the PM to show at least a bit of empathy. The stories about his mother, with his smug “I’m lying” smile plastered across his face, aren’t cutting it.

  23. One additional reason why Canadians are less likely than Americans to lose thier homes may be because we do not have mortgage deductability on principal residences here in Canada. This means that Canadians are encouraged by the tax system to pay down their home mortgages instead of using their home to leverage their credit lines.

    Indeed, if I remember correctly, it was the Joe Clark Progressive Conservatives who toyed with the idea of introducing mortgage deductability in Canada during the 1979 election.

    Canadians may be dull and overly cautious, but it certainly saves us from extra pain at times like this.

  24. BTW, Lots of green on the world markets today…lots….not necessarily huge gains, thats ok, but solid ones and broad based.

    Once again I point that out, not that it should matter a great deal…but to those who were relying on the market doom to justify criticisms you just have a major plank removed.

    I continue to say, that should markets look like they have stabilized, and that the worst is over, a couple of leaders will look like they were in a panic. Perhaps speaking to emotionally before all the facts were in, maybe too eager to see some bad stuff happen to justify their own positions.

    But the day isnt over, the week isnt over and the larger credit issues havent been fully worked through yet. But a China Syndrome like meltdown of faith in the future looks like it is abating….the Black Swan seems to be flying off.

    The question I have to AC and others, will the political reporters get that, I know they need a horse race….and their own stock porfolios were hurt but maybe just maybe things are not as dark as they seemed, and maybe just maybe it wasnt emoting that we needed, but something else.

    Once again, day isnt over, election isnt over, and the ultimate problem is done with yet. But maybe someone wasn’t a leader….I am just saying.

  25. Andrew,

    Check out the latest World Economic Forum Report on Canada.


    It says that in terms of global competitiveness, Canada is ranked 10 out of 134 countries.. thats up from number 13 last year.

    How bout the state of our banking sector?

    Ranked #1 out of 134.

    How about the protection for investors in the market?

    Ranked #5 out of 134.

    I’d say that’s pretty darned good. Number one in the world for banking. I hope the media picks up on this!

  26. So who all is buying these days? Like piling your cash into the markets these days? Could Harper make a more emphatic statement than showing his investment portfolio to the public and on it have a swath of big buys from the last couple days. It won’t happen of course….and I doubt there are any purchases anyway. Same with Coyne and most other Con supporters here.

    Bush et al were telling Americans everything was okay too. RIght up until it all fell out from beneath them. Canada is in better shape, but we’d be naive not to think the US troubles won’t spill over and cause more grief up here. Long term investors have the luxury of capitalizing on this moment. Folks like my Dad (64 years old and pondering retirement) and my inlaws (already retired) don’t quite have that luxury do they?

  27. I think the real issue with Harper and the economy is his inability to express an understanding of what Canadians are feeling.

    If that’s the case, if that is what Canadians are basing their votes upon, then we are all doomed… forever. The day I vote according to how well a candidate expresses “what I’m feeling” is the day I should have my voting rights stripped from me.

    Serendipity, seniors were forced into the care of their families due to the income trust decision? Did you post that with a straight face?

  28. Lots of red on my IPhone stocks widget. Could the Dow…*shriek*…drop below 9000?

    Be back in 20 minutes with a much-anticipated update.

  29. I’m actually convinced that I’m supposed to be panicking, I just can’t decide what I’m supposed to be panicking about.

    The opposition parties tell me that the economy is in such a fragile state that I should panic in that Harper’s not going to do anything to save it.

    The government tells me that the economy is in such a fragile state that I should panic, because if the Liberals get elected it will destroy the economy.

    It seems to me that ALL of our political parties are interested in getting me all worked up and worried about an upcoming catastrophe. They just have different notions of what horrible future I should fear. The Harper message, imho, isn’t so much “Don’t panic”. It’s “Don’t panic about THAT, panic about THIS!”

    Luckily, as I think they’re all full of it, for now, I think I’ll forgo panicking.

  30. Ti-Guy,

    Little red, little green, it will vary throughout the day. Best described as sideways, movements up and down are pretty much under 1%….normal noise.

    Days like this indicate market is looking for info and direction or a bottom or top is reached. In this case people would be looking for a bottom.

    Point being it looks like the storm is pausing. But my point is, and you and others demonstrate it well, the Libs and Dippers need to find bad ews, you are invested in bad news, the poitical equivalent of short sellers.

    When things dont look like bad then the narrative is undercut, a short squeeze….a couple of sideways days and reassurring noises will put the squeeze on. But who knows if that will happen, this was a major bubble burst and there will be effects. But to call them unprecendented, to not recognize the strength in Canada and its position risks being caught in the short squeeze.

    The squeeze may not happen till after the election and then the Dippers and Lib strategy will have been successful. Once again we shall see.

    But Canada has been a relative island of calm in all of this. I think you would be hard pressed to find another country that doesnt wish it was in Canada’s position.

    Relative vs absolute arguments are tough to make, so the cons have an uphill battle.

  31. Yep Coyne, and what happens when those US homeowners who are in arrears stop buying stuff, you know, like cars and lumber from up North.

    Eh? You know as well as everyone that there is a time lag between the US sneezing and Canada catching a cold, to use a well worn analogy.

    I can tell you that this issue is ALL anyone at work talks about, and I work for a gas utility, the most stable employers there are. It’s all my parents talk about, and one’s a professor and the other is a teacher. So you can imagine what’s going through the head of someone who’s a technician at a manufacturing plant in Ontario.

  32. Davy,

    The rest of Flaherty’s statement reinforces Harper’s message that the Canadian economy and financial sector are sound and the Conservative government took early action to protect this:

    the IMF predicts that Canada will lead the G7 in growth in 2009…Canada is in a strong position to deal with this global crisis.

    Canada’s banks and financial systems are sound and well capitalized and are less leveraged than their international peers.

    Our financial system is strongly regulated and our mortgage system is sound…We announced additional steps this summer to further protect and strengthen our housing market.

    …our approach—to the supervision of financial institutions, to deposit insurance and to mortgage finance—has served us well.

    we have taken a number of actions that have allowed us to weather the storm better than most G7 countries up until this point.

    we will continue to take strong action with prudent decisions and policies, and will take any additional measures that are necessary to ensure that we can navigate through these turbulent waters.

  33. Who listens to the IMF anymore?

  34. Here is a good discussion of Libor….and a decent recent history lesson on what has happened and what is happening. Well worth the read


    Pete, will the waters keep rising and affect us, a definite possibility. Is there much more the government can do over and above what it is doing, thats open for debate.

    Thanksgiving Dinner is the important one as this gets hashed out amongst families and friends, as is the lead in.

    What happens in the US and world markets on Monday might just drive this election. Cons hoping for a no news or slow news day on the markets and the Libs and NDP hoping for a slaughter.

    Libor is canary in the coal mine economically. As it returns to normal levels then things will be start back on the mend.

  35. “Canada’s banks and financial systems are sound and well capitalized and are less leveraged than their international peers. ”

    Oh, yeah, that’s real rich coming from you neo-cons and Coyne himself. Real rich.

    The ONLY reason Canada’s banks are as strong as they are is because they were denied mergers in the 90’s, and because they are regulated up the wazoo.

    Who was in favour of deregulating the banking industry in Canada? Would that be you, Andrew Coyne? Who was in favour of the bank mergers in principle? Mr. Coyne?

    From your column on Wednesday, December 16th, 1998.
    “Reform financial services regulation. Take away the banks’ protections. Then let them merge. ”

    From June 1999
    “The consumer interest is best protected not by regulation, but by competition. The intent is the same in either case: to bend capital in the service of the public interest, for which the consumer interest is usually (though not always) a reliable proxy. But between the two, regulation most often comes a poor second. ”

    Hmm. Canadian banks – regulated. U.S. banks – competetive. Who came out on top?

  36. “But my point is, and you and others demonstrate it well, the Libs and Dippers need to find bad ews, you are invested in bad news, the poitical equivalent of short sellers.”

    Stephen, that generalised comment removes you from “the moment.” It’s important in to say in character.

    Look…More green! Everything’s comin’ up roses!

  37. Ti-Guy: “Who listens to the IMF anymore?”

    Weren’t Dion and Layton quoting it when the forecast was bad for Canada? When will you stop your relentless attacks on Dion’s character?

  38. What on earth is wrong with everybody? Why can’t you see this very simple, very clear situation?

    We all know the banks are strong (although I actually thought they were stronger than they are–in that I didn’t know we had ANY sub-prime type mortgages). That’s great, but that doesn’t mean our jobs won’t be affected because of the U.S. recession. With our customers unable to buy our stuff, that means layoffs. With a credit squeeze for our businesses, that just makes it worse. If you lose your job and can’t get another, similar one in a reasonable period of time (like in a recession) that means it affects your ability to stay in your home.

    “Average” Canadians can see this stuff coming. “Average” Canadians worry about stuff they see coming EVEN IF THEY ARE FINE AT THIS EXACT MOMENT. And we are voting for who will be our Prime Minister for the next 2? 4? years–not who will be Prime Minister for the next day or week.

  39. Oh come on, Jenn. Mr Harper has already said that he can’t proceed in a minority parliament with no assurance as to when the other parties are going to pull the plug.

    Therefore, if Mr. Harper gets elected with another minority, he’ll obviously be calling another election within a day or a week. So everything’s fine.. honest. Hey, would he lie to you?

  40. Jenn,
    Yes, but beyond hand-wringing and convincing posing (“I feel your pain”) by our esteemed leaders, what do you want them to do?

  41. Good point, T. Thwimm, but spending another 3.1 million or whatever an election costs us, isn’t my idea of doing something to minimize the coming recession.

  42. I simply want them to recognize that “losing their homes” is a very real worry. I want them to look at what, if any, possibilities there are to reduce the impact.

    Personally, I think now is a good time to deal with our aging infrastructure–yes, it will put us in a deficit position but I suspect we’ll end up there anyway, and at least we might as well get something out of it. This is not to say that I don’t want them to do everything possible to minimize the amount of deficit (like, for example, spa treatments or an unneccesary election). Mind you, I’m not an expert on governmental budgets or an economist. But I do know you’ll never find a solution if you don’t look for one.

  43. Oh, and when I say “now” I don’t mean right this minute. I mean over the next year or two.

  44. Jenn,

    Are you saying a huge new tax on carbon, followed by a massive jump in social spending isn’t going to help…? Say it isn’t so….


  45. I’m gonna go ahead and say that if people start to lose jobs because of a recession (and yes, we’re now using the ‘R’ word), it’s fair to say that people will be unable to maintain mortgage payments. Ergo, the talk about Canadians worrying about losing their housing is quite relevant.

    You truly see the world through blue-coloured glasses.

  46. Message for Mr. Coyne! Message for Mr. Andrew Coyne?

    Mr. Coyne, your readership invites you to take the rest of the night off. There will be no need for any discussion of real FACTS on the nation’s economic shape today; Macleans.ca is currently pre-occupied with more important issues: present vs. future tenses in the English language and the despicability of a journalist.

    That is all sir, if you could sign next to the red X. Thank you, the yellow copy is yours. Good night, sir!

  47. Mr Layton in the big league!

    After years of pointing fingers and attaching everyone in power, it has become an obsession. He might be more interested in a big opposition than governance. Jack has been stealing tag lines from his idol the US democratic Obama and has been stealing the green colour of the Green party. Kitchen table issues!

    I wonder if the old socialist has anything of his own to say. Maybe he realizes that it is easier to be in opposition for life than to govern for two years! Or maybe he realized that his socialist, union mentality of treating the most incompetent and the most productive the same does not work.

    However, about 20% of Canadians don’t seem to see through him. Perhaps power corrupts, even virtual power. Does Ontario remember the NDP government of Mr Ray? N.D.P. No Damn Progress!