You had me at this statement given that our US Federal debt is rated lower by S&P than Vancouver’s.
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If you want an example of home prices dropping being a bad thing look over at China where the failing developers are putting people’s life savings in jeopardy.
They have a bizarre housing market though.
People pay for their house in full before it is even built (they pay in advance).
The developer then takes that money and uses it to build housing (in the general sense).
Local authorities sell the land to the developers and get that money (that has been paid in advance).
Its basically a giant ponzi scheme as it is predicated on home values always increasing in real value.
New entrants pay for the housing (and home value) of the older entrants.
Excellent info, thanks. I had a devil of a time tracking down the ideological perspective of the Frazier group. Perhaps that was by design?
My quick read of the balance sheet led me to believe that the large bond holdings ($1bn) are set up to defense the maturing bonds listed later in the notes. Makes total sense.
Looking at the revenues, I see “developer contributions” of $309m. Are these the moneys you identified as the gravy train? I get confused as to whether they are part of the operating account or the capital account. In either case, they seem to be an important element in how the net assets performed. Can you help me out there? I admit to having zero experience to the Canadian Muni bond market.
Lol, anyone wants to live in Timmins, you go right ahead.
People living in SW Ontario where all the population exists think they’re living in Canada and it’s cold in the winter. No it’s not. It’s practically tropical down here.
I’ve been in Timmins at the end of May, and there’s been still 3+ feet of snow. And if you look at timmins on a map, it’s not exactly way far up north. Meanwhile in SW Ontario, i’d already cut my lawn three times. So imagine my surprise when I show up to camp in the bush wearing shorts and find out that I should’ve brought a snow shovel lol.
And that’s why canada doesn’t have as much land as one would think. That, plus they’re pretty protective of agricultural land, it’s hard to build on it. And the good agricultural land is also in the same area as where everyone lives, not up north.
They do have space, there are no big cities between Montreal and Toronto. If the govt would create a city and incentivize companies to move there it could create a new urban centre that is not boxed in by nature. Toronto, Montreal, and Vancouver are all boxed in limiting the suburbs that you can create.
My guess on this is as good as yours! Probably part of it.
When I referred to the gravy train, it was to all three levels of government not just to the city. The province and feds both receive substantial tax revenue from housing.
One thing I should add about the 2013 Fraser Institute report is that it reflected a low point in Vancouver’s financial state. The developer for the Olympic Athletes’ Village went bankrupt during the 2008 financial crisis and the city stepped in to underwrite the development in time for the 2010 Olympics. There were cost overruns and, at the time of the 2013 Fraser report, the city would have been showing large debt on this project. The housing was eventually sold with no financial consequences in 2014 and there is now a thriving community in that previously undeveloped part of Vancouver.
I opposed the 2010 Vancouver Olympics initially as well as several bids by Toronto for the Summer Games because of the questionable return on Olympic investments. However the Vancouver Olympics left a great legacy. The much-needed rail link from the airport to downtown and the suburbs as well as new community centres are very well used. The highway from Vancouver to Whistler was a death trap but now is a heavily used safer road. In addition there were no big stadiums required to be built: existing facilities were used unlike the situation that occurs in many Olympics when you have new stadia and underutilized facilities afterwards.
I ended up having one of the best times of my life going to the 2010 Olympic events and meeting people from all around the world. The Canadian Men’s and Women’s hockey teams won gold medals and curling was a hit: what more could a Canadian hope for?
Ottawa?
Yeah, and ottawa’s only there for historical reasons, because they wanted the capital far enough away from the US border.
They can’t just drop a city in between toronto and montreal. There’s no infrastructure, and no employment. Cornwall, brockvill, kingston, etc, all exist in that corridor and they’re not hotbeds of immigration because there’s nothing there. No jobs, it’s a low income area, etc.
they should build up Letterkenny for the tourism. only 5,000 people there last I heard
Letterkenny was based on listowel, a town not far from me. Heck, we bought our sofa there.
The show isn’t as much of an exaggeration from much of rural Ontario.
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- Ottawa is 4 and half hours away from Toronto, that is the same travel time from NYC to Washington DC
- I mentioned that the city would have to be govt driven, they can create a low tax zone or something similar to lure companies out there. If there are jobs to be had people will move there in a heartbeat
How are housing prices there? Asking for a friend.
It’s unbelievable. People back there have no idea what they have.
waterfront, 3br 2 storey house on a decent lot, about $500K canadian.
Waterfront family home for $750k Canadian. And I’ve seen waterfront there in the last couple of years for just over $500K.
Yeah, that’s not bad, especially given how high prices have gotten in Canada. I also didn’t realize it was $1.36CAD to the USD, I thought the CAD was a tad stronger than that but I admittedly don’t pay that much attention to the FOREX. That’s $550k USD, higher than where I’m at now but lower than where I was before (Colorado) for waterfront property.
Those are rookie numbers lol.
The buddy that I’ve mentioned before on this forum is the largest employer in that whole area of the province. In the small town of about 1500 people, they’re building another 300 houses, mostly to accomodate his employee numbers. But still, it’s a drop in the bucket. You can’t just drop 500k or 1mm people in the area. There’s nothing for anyone to do.
For a Canadian road trip sure, but for a metro area it is limited. Look at Los Angelos, it bleeds right into Anaheim and is 2 hours from San Diego. Same for San Fran, San Jose, and Oakland. In NYC you have NYC, Newark, and Jersey City. All of the cities I mentioned have jobs on their own, but together and especially given their proximity, it makes it a lot easier to live further out.
In the GTA everyone is commuting to Toronto, there are a few companies in Mississauga but not much. You are essentially limited to a one hour commute from downtown Toronto as opposed to NYC where you can live 2 hours away since there are plenty of jobs in Jersey City and Newark.
That is why the solution has to come from the govt, only they have the resources to pull something like this off.
I think that the Toronto-Ottawa-Montreal corridor is probably the best bet for growth.
There is no reason why you cant link up the three cities with high speed rail and additional housing.
I could see that attracting investment.
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Oh absolutely. High speed rail is a game changer.
Not gonna happen anytime soon though unfortunately.
In.terms.of.rookie numbers, I meant the time..I used to make it in a.lot.less.than that when I was young and stupid.
Ottawa was my first choice as a city to work in after graduation but the only actuarial employer hiring then was Metropolitan Life and I didn’t get the job. Would have been nice to have had a house in Ottawa, a cottage in the Rideau Lakes and skiing on the Quebec side of the Ottawa River.