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Canada forgot to plan for its future by leaning on oil and the loonie

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Re: Canada forgot to plan for its future by leaning on oil and the loonie

#111

Post by ksenzee »

turnip1979 wrote: post #4
patrick_99 wrote: post #2

It seems like the effect of the low dollar is already helping the tech sectors. Companies like Shopify make their money in USD while salaries are a bargain. American companies like Amazon are expanding their offices in Toronto and Vancouver. The brain drain is real though. I feel like there's a problem when police officers make more than most software engineers.

Agreed on the brain drain. Toronto is a major (and expensive) world city. From talking with friends, 100K (Canadian, that's 70K US) is the ceiling for intermediate to senior developers. Junior devs make a lot less ... 50-60K (that's 35 to 42K US)! That said, free healthcare counts for a lot. Also, as a dev in a Canadian tech company, you are probably not going to see as much stress and volatility as your average Sili…

> Free healthcare counts for a lot

It's not really better than the inexpensive healthcare that comes with any good job in the US. If your choice is between $70K with free healthcare, and $120K with inexpensive healthcare, I know which I would pick.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#112

Post by btilly »

herge wrote: post #98
btilly wrote: post #76

Earlier quoted context omitted.

If the government invested all that money in small to middle sized local companies instead the province would be so much more prosperous. How exactly is anyone helped by money taking a round trip through the government rather than the same thing happening through free markets? You've made the cycle slower, you've made the recipients dependent on government bureaucratic decisions (who are not well-incentivized to deci…

> Quebec's largest mistake was, of course, Bill 101. No, no, Quebec's largest mistake was accepting confederation. If we'd just joined up with the Americans instead, and batter down all laws protecting our culture and laguage, we would have gotten assimilated anyway, but at least we'd have a stronger economy. Also, we wouldn't have to deal with the RoC...

Going back farther, the USA fought a war to get you in 1812...

That said it is worth reflecting that most of the natural resources that Quebec has is on land that was added post-Confederation.

Quebec received control of that land under a number of requirements, including that they take care of the natives. The natives do not believe that this requirement has been met, which is why for example the Cree voted over 95% for seceding from Quebec if Quebec seceded from Canada, by force if necessary. While the Quebecois were mixed on whether to secede, they had very strong opinions that Quebec was an indivisible whole. Including land given post-Confederation.

It would have been interesting to see what would have happened with this land if the 1995 referendum had gone through. I'm quite sure that nobody outside of Quebec would have agreed with the reasoning that "Canada is divisible but Quebec is not". So how would Canada have handled the question of how to handle the economically valuable parts of Quebec that wanted back into Canada?

See https://en.wikipedia.org/wiki/Partition_of_Quebec for more on this.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#113

Post by seanmccann »

guiomie wrote: post #30

The scary part in my opinion is: "Housing is the only thing keeping the Canadian economy afloat." This more an anecdote than an argument, but I know quite a few people who can barely pay their mortgage or have crazy margin debt (with mortgage) in Canada. I doubt their situation will get any better soon. There is this mentality around here that owning a house is a must or you are some kind of loser.

The way that housing is keeping the Canadian economy afloat is that homes have appreciated a tremendous amount over the last 10 years. In Calgary it's over 2x in 10 years or 9% per year.

In Edmonton and Calgary I can echo that there is a strong social influence in buying real estate. Owning a home is expected. With homes appreciating over 9%/year for 10 years, people assume that that will continue into the distant future.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#114

Post by cmrdporcupine »

nickff wrote: post #88
cmrdporcupine wrote: post #39

Earlier quoted context omitted.

That's a good story that the Fraser institute made a lot of noise about, and made a great headline but in reality Ontario was still contributing more in tax revenues and EI contributions than it got in equalization payments: http://www.thestar.com/opinion/commentary/2013/03/30/money_s...

> "That's a good story that the Fraser institute made a lot of noise about" Please avoid implying that the post you are replying to is a shill unless you have good evidence to that effect. Even well-supported ad hominiem attacks rarely discredit the substance of a post, and your ad-hominem attack is unsupported by any evidence. You also failed to reply to what the post above you actually said, which was that Ontario…

I didn't call the poster names or disparage them in any way. I posted an editorial that cited facts pointing out the inaccuracy of the claim that Ontario is a net subsidy recipient. Ontario's net contribution in taxes and EI payments outstrips any transfer payments it receives or has received.

That I pointed out that the Fraser institute has made political hay out of the fact that Ontario has received subsidies is completely legitimate. They have been by far the organization that has boosted this line the most. They are a highly partisan ideological organization that in general gets way more uncritical press than they should.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#115

Post by graeme »

eigenvector wrote: post #93
JamisonM wrote: post #50

Earlier quoted context omitted.

Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system. Yes and no, the resource-heavy provinces have been working hard for natural-resource carve-outs and natural resource revenues get a 50% haircut going in anyway. Any rational economist…

"Canada went all-in on oil" implies Canada had a choice. When the global price of a commodity you have massive reserves of spikes, what else do you do besides sell as much of it as you can?

Plan for the future by not leaning into the upswing of a boom and bust cycle. Governments encouraged more development, accentuating the cycle.

Governments could also have established rainy day funds. Alberta has one, but they haven't added anything to it since 1987. Canada as a whole has none (this is somewhat reasonable, as the federal government doesn't have jurisdiction over natural resources)

https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust...

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#116

Post by refurb »

alanctgardner3 wrote: post #45
HorizonXP wrote: post #20

Earlier quoted context omitted.

100% agreed. But that insulated bubble is tremendously helpful for growing from a little shitstorm of a startup into something potentially world-changing. Your odds are vanishingly low when it comes to succeeding in a startup. As a founder, you should do everything you can to stack the odds in your favour. Edit: I can't respond to your reply, so I'll do it here. It's not just about funding. It's about finding like-mi…

I love that people who don't work in tech can still afford to live in Toronto. I don't think we're doing as well as we could to combat income inequality, but I'm glad we aren't throwing billions of dollars at overinflated startups. Hell, the biggest recent Canadian startup success story is Shopify, which actually sells real products and has revenue. Not just "slap some ads on it and we'll turn a profit".

I love that people who don't work in tech can still afford to live in Toronto.

Isn't the average cost of a home nearing $1M in the GTA core? From what i've read, Toronto isn't that far behind SV when it comes to real estate price inflation.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#117

Post by graeme »

tahssa wrote: post #104
graeme wrote: post #87

Earlier quoted context omitted.

Might be the Greece 2.0 prediction. I was with you till there. Greece's debt was in Euros, which the Greek government didn't control. So Greece had no option to devalue it's currency in response to a slowing economy. Whereas Canada can devalue currency (as we're doing). We have the additional benefit that our debt load is in our domestic currency, so we don't face the debt appreciation challenge many countries face w…

I thought that Greeces problems stemmed from excessive govt spending leading to a situation where the tax revenue could not compensate for the debt load with a consequence of either bankruptcy or bailouts from other countries. At least that's where my comparison starts and ends.

That's true. But it's only true because the debt load is in Euros, and Greece doesn't control the value of the Euro.

If you're a country with currency control + debt in your own currency, it's basically impossible to have that same kind of crisis.

(You can have other problems, but they wouldn't be so intractable as what Greece has.)

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#118

Post by refurb »

Camillo wrote: post #53
turnip1979 wrote: post #4

Earlier quoted context omitted.

Agreed on the brain drain. Toronto is a major (and expensive) world city. From talking with friends, 100K (Canadian, that's 70K US) is the ceiling for intermediate to senior developers. Junior devs make a lot less ... 50-60K (that's 35 to 42K US)! That said, free healthcare counts for a lot. Also, as a dev in a Canadian tech company, you are probably not going to see as much stress and volatility as your average Sili…

> That said, free healthcare counts for a lot. If you're young and childless, it really doesn't.

I was going to say the same thing. Most SV companies have very good benefit packages where the cost of healthcare is pretty minor compared to salary.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#119

Post by krooj »

graeme wrote: post #77
krooj wrote: post #65

Earlier quoted context omitted.

That salary ceiling is definitely one of the reasons I left for the states. Funny thing: that article goes to pains to point out that foreign investment into Canadian housing is a big issue, and I'm now watching the Toronto market, with the depressed exchange rate and looming recession, wondering whether I should turn around and buy property as an investment. There are tricky factors surrounding when and what to buy,…

>wondering whether I should turn around and buy property as an investment Why would you do this? There's been nothing but talk about a housing bubble, especially in Vancouver and Toronto. This seems like the worst possible time to buy property there, especially if you take any debt to do it.

Buy after it bursts, when prices collapse.

Re: Canada forgot to plan for its future by leaning on oil and the loonie

#120

Post by serge2k »

Raphmedia wrote: post #89
btilly wrote: post #82

Earlier quoted context omitted.

Check the timeline. It wasn't separatism that drove companies out, it was Bill 101. (OK, Bill 101 was driven by the same motives as separatism.) Thanks to that bill, you had a population of professionals who had moved to Montreal for good jobs who found that, because they were born in a different province, their children could not be educated in English. These professionals found it less painful to move to Toronto an…

I'm from Québec. It's all about bilingualism. As someone who learned french from birth, I could not work in tech if I couldn't also communicate in english. That's a requirement for most jobs and I had to work really hard to get a good level of spoken english. We have people that speak french and spanish, french and english, french and german, etc. Bilingualism is strong here, pick it up if you want to work in the are…

> Bilingualism is strong here, pick it up if you want to work in the area

or I could work anywhere else in Canada or the US and not have to.

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