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Veteran Advisor

Yo! Canuck 2

1 Reply
Veteran Advisor

Re: Yo! Canuck 2

Yes pretty much what I have come to understand.

I am, of course, no expert but the biggest risk to our economy would seem to be your economy. As your economy slows down so does ours.

As noted we have not had the financial woes in banking that you did. That is claimed to be because of the stricter controls on our banking system.

I can see where there has to be a slow down in housing coming.

Just driving into any urban area in Ontario, even small towns, and there is no end to the new houses being built. Sooner or later they will run out of people to put in them let alone able to pay the price for them.

The down payment required for new mortgages has been raised in the last year and it is sometimes hard to compare things across our border since we do get tax allowances for house payments. Houses are therefore paid with after tax $$.

 

I think there is an even bigger 'bubble' in agriculture. Particularly our dairy industry which you may know is protected by high tariffs and runs on a quota system. This limits their market to Canada only but has shielded them from the low prices suffered in you dairy industry.

The problem I see for them though, is most think the steady income/profit will continue forever and many have expanded building BIG new barns which requires huge amounts of capital just to buy the quota (license to produce X kgs of milk) then throw in the necessary land etc. and the debt load is tremendous. Some of us not in the industry see dark clouds when, not if, the quota system is removed.