Federal Government & Politics II

[kwoldtimer]

Originally Posted by shreddog

Since Jan 1 - the CAD has dropped by 3.8% (from .755 to .725)
Since Jan 1 - Brent has increased by 5.8% (from 86 USD to 91 USD)

When we go back to Jan 2022, the CAD was trading at .782 to the USD and oil was was $53. So in the past 2 years, the dollar has dropped while Brent has almost doubled. **

I guess you have a different definition of "petroleum currency"

** Performance against the Eur is basically the same.

Sources - CAD FX
Brent

It will drop below .70 this summer if interest rates start to fall in June, although I wonder if today's big jump in gasoline prices in ON and QC won't delay any rate reduction for a few more months.

[casper]

Originally Posted by shreddog

Since Jan 1 - the CAD has dropped by 3.8% (from .755 to .725)
Since Jan 1 - Brent has increased by 5.8% (from 86 USD to 91 USD)

When we go back to Jan 2022, the CAD was trading at .782 to the USD and oil was was $53. So in the past 2 years, the dollar has dropped while Brent has almost doubled. **

I guess you have a different definition of "petroleum currency"

** Performance against the Eur is basically the same.

Sources - CAD FX
Brent

Well, the US is a major producer and exporter of petroleum products. That change has happened fairly recently.

Do the comparison against a currency that has no significant petroleum production.

Since January 2022 the Canadian dollar went from $1 CDN=0.68 Euro to $1=0.68 Euro.

Since January 2022 the Canadian dollar went from $1CDN =91.19 to $1=118.86 Yen.

Since January 2022 the Canadian dollar went from $1 CDN =1.10 Australian Dollar to $1 CDN = $1.14 Australian dollar.

Basically our currency is holding steady.

[acottawa]

Originally Posted by Truenorth00

I have heard this suggestion before from housing experts and advocates. Basically to combat land banking. Don't give surplus government property to a private developer who will sit on it for years or even decades. Give it to a crown corporation with a mandate to immediately develop.

That already exists, the Canada Lands Company. I would ‘t call their work immediate though, they operate on the same 1-2 decade timeframe as the rest of the federal government.

[Truenorth00]

Originally Posted by acottawa

That already exists, the Canada Lands Company. I would ‘t call their work immediate though, they operate on the same 1-2 decade timeframe as the rest of the federal government.

Not quite CLC still parcels out lands for private sector developers. Rockcliffe is an example of this. The idea would be to have a public developer who would literally build out a property themselves. And note they don't have to be federal. Provincial governments could do this well too. And done right, they should not require much of a taxpayer subsidy.

[acottawa]

Originally Posted by Truenorth00

Not quite CLC still parcels out lands for private sector developers. Rockcliffe is an example of this. The idea would be to have a public developer who would literally build out a property themselves. And note they don't have to be federal. Provincial governments could do this well too. And done right, they should not require much of a taxpayer subsidy.

I can’t see any possible way the Feds could deliver construction in any sort of efficient way. They would still have to deal with the mountain of municipal red tape that slows down the private sector, plus a mountain of complicated government procurement rules, plus years of indigenous consultation (and payoffs), indigenous procurement, GBA+ analysis, numerous contracting scandals, delays because PMO will want construction in certain ridings.

Provinces might be better, but it would still take years to deliver these projects.

What they should do is tax vacant, zoned land based on highest and best use, which would incentive shovels in the ground.

[whatnext]

Originally Posted by GenWhy?

Under the old status quo at municipal, provincial, and federal housing policy / funding situations (pre-2024) I think we could hit between 1.5m and 1.8m completions by 2031.

Under the red-tape overhaul we're seeing at all levels, something closer to 2.5m by 2031 might be possible.

Again, I'm fairly certain the said "unlock" and not "we will build". We'll have to see what the cities and provinces do with their zoning and permit approval processes.

Really. As a developer, pray, tell us where you’ll get the labour and materials.

[YOWetal]

Originally Posted by acottawa

I can’t see any possible way the Feds could deliver construction in any sort of efficient way. They would still have to deal with the mountain of municipal red tape that slows down the private sector, plus a mountain of complicated government procurement rules, plus years of indigenous consultation (and payoffs), indigenous procurement, GBA+ analysis, numerous contracting scandals, delays because PMO will want construction in certain ridings.

Provinces might be better, but it would still take years to deliver these projects.

What they should do is tax vacant, zoned land based on highest and best use, which would incentive shovels in the ground.

They certainly "could" but yeah they won't. There is no reason they need to go through all the BS. They could even bid to build the houses all at once triggering international bidding. Toll brothers could come and build houses 1000 at a time for half the inflated Canadian cost. But yeah it's a whole lot of nothing.

[ssiguy]

Originally Posted by casper

I would not expect the loonie to sink. We have a petroleum currency. (I know I hate to admit as well). The US has become energy self=sufficient and now is a net exporter of energy as well.

The Canadian dollar will hold up just fine.

Canada was often referred to as a Petro-currency but not so now. If it was, then with all the trouble in the Middle East, our currency should be soaring. The reality is that since the US has become oil independent and it is our biggest export market, the ability of oil to artificially prop up the Loonie is gone. This combined with the fact that oil is a commodity in the midst of a long decline and hence there has been little actual investment in our oil production as it takes decades for such investments to pay off and by 2050, oil will be on it's way out.

The Loonie could indeed hold up, at least against other non-US currencies, but that will require the BoC to keep interest rates elevated for a much longer period of time and this doesn't include the fact that Ottawa may soon see it's coveted AAA credit rating downgraded hurting the Loonie's value and cause the cost of gov't borrowing to go up even further.

This budget is an absolute catastrophe by any metric and it's the young who are going to be paying the heaviest cost by a lack of investment, lower wages, and a crushing debt burden that they will have to shoulder.

[Loco101]

Originally Posted by ssiguy

There are only 2 things that are making the headline in the business community and they both are very bad...............an unsustainable deficit and massive accumulations in the national debt and an increase to the capital gains tax.

Both of these things are going to scare off investors and the creation of new technologies and businesses. Not only will this result in lower investments in our already shrinking economy but also businesses know that it will inevitably lead to higher taxes down the road to pay for Trudeau's largess. High interest rates don't help small businesses and this is a very inflationary budget which will mean the BoC may have to keep the interest rates elevated as this budget will result in a lowering of the demand of the Loonie sending its value still lower which results in higher inflation for all imported goods.............. the BoC is trying to put a break on inflation while Trudeau has his foot on the accelerator.

Young people are definitely the losers in this budget as young entrepreneurs are going to find it harder to get investors in their start-ups while they, not the Baby Boomers, will be the ones that have to shoulder the burden of much higher taxes in the future to pay for all this debt.

I saw Mulcair today on TV and he was very clear that this is a budget that, despite Trudeau's claim of helping the middle class, will hurt young people the most and stop them from entering the middle class in the first place. Even he was surprised about how irresponsible this budget is and condemned the increase of the capital gains tax in a country where our productivity is falling while our debt levels soar to unsustainable levels. Hopefully Singh will come to the same conclusion so we can turf Trudeau out onto the street before he does anymore damage.

Which wealthier countries are running lower deficits per capita than Canada? A 40 billon a year deficit is actually quite good compared to our peers. Also, a lower Canadian dollar will help us for exports and also make us attractive to investors. I remember back around 2000-01 when our dollar was at its lowest in history yet exports boomed and allowed for a balanced budget. And only about 6 years later our dollar was worth more than the USD.

[Loco101]

Originally Posted by WarrenC12

Won't anybody think of the people making over $250k in capital gains every year?

Jesus Christ there's a lot of corporate dick-sucking in this thread. Are you the same people complaining about the state of our banking, grocery, and telecom oligopolies?

I totally agree.

[acottawa]

Originally Posted by Loco101

Which wealthier countries are running lower deficits per capita than Canada? A 40 billon a year deficit is actually quite good compared to our peers. Also, a lower Canadian dollar will help us for exports and also make us attractive to investors. I remember back around 2000-01 when our dollar was at its lowest in history yet exports boomed and allowed for a balanced budget. And only about 6 years later our dollar was worth more than the USD.

Norway, Denmark, Cyprus, Ireland, Singapore, Sweden, Switzerland, Netherlands, Portugal, Luxembourg, Finland, Lithuania

[shreddog]

Originally Posted by casper

Do the comparison against a currency that has no significant petroleum production.

Since January 2022 the Canadian dollar went from $1 CDN=0.68 Euro to $1=0.68 Euro.

Since January 2022 the Canadian dollar went from $1CDN =91.19 to $1=118.86 Yen.

Since January 2022 the Canadian dollar went from $1 CDN =1.10 Australian Dollar to $1 CDN = $1.14 Australian dollar.

Basically our currency is holding steady.

Again, your claim is that the CAD is a petroleum based currency, yet it is only holding steady against currencies from countries with no significant petroleum production while the price of oil has doubled.

Isn't the definition of a petroleum based currency that it should appreciate when the price of oil increases.

[acottawa]

Canadian oil trades at far below world prices, so I am not sure why we would expect the Canadian dollar to track Brent. West Canadian select is $20 below Brent and going in the opposite direction.

Thinks might change when transmountain goes online and more oil starts getting sold at the global market price.

[Acajack]

According to CBSA in Jan-Feb just under 9000 people arriving at Canadian airports requested asylum in this country. Number 1 is Montréal. Toronto number 2. Lion's share are at these two airports.

[acottawa]

Originally Posted by Acajack

According to CBSA in Jan-Feb just under 9000 people arriving at Canadian airports requested asylum in this country. Number 1 is Montréal. Toronto number 2. Lion's share are at these two airports.

And I am sure nearly all of them had Canadian visas.

[goodgrowth]

Originally Posted by acottawa

Canadian oil trades at far below world prices, so I am not sure why we would expect the Canadian dollar to track Brent. West Canadian select is $20 below Brent and going in the opposite direction.

Thinks might change when transmountain goes online and more oil starts getting sold at the global market price.

I believe Newfoundland oil gets Brent prices. Has to do with the oil quality. But yeah a smaller share of the overall Canadian oil market.

[goodgrowth]

The decoupling of CAD from oil prices does have a benefit though since it is an export priced in USD.

If I remember correctly in NL's case if the price of a barrel of oil went up $1 it was an extra $15M in royalties per day. Likewise if the Canadian dollar dropped by 1 cent in value it was essentially the same effect...an extra $15M per day (from the exchange rate benefits).

So the divergence has a doubling effect on oil royalties.

[YOWetal]

Originally Posted by Loco101

Which wealthier countries are running lower deficits per capita than Canada? A 40 billon a year deficit is actually quite good compared to our peers. Also, a lower Canadian dollar will help us for exports and also make us attractive to investors. I remember back around 2000-01 when our dollar was at its lowest in history yet exports boomed and allowed for a balanced budget. And only about 6 years later our dollar was worth more than the USD.

It wasn't only or even mostly an export surge that balanced the budget. It was careful and thoughtful budgeting. No helicopter money and at the same time no irresponsible tax cuts.

Originally Posted by acottawa

And I am sure nearly all of them had Canadian visas.

I think many still arrive visa exempt. Though most of those were from Mexico which is a loophole now closed.

[lio45]

Originally Posted by YOWetal

It wasn't only or even mostly an export surge that balanced the budget. It was careful and thoughtful budgeting. No helicopter money and at the same time no irresponsible tax cuts.

And as others have pointed out, there's a good chance that the timing of the money men stepping in will force Pierre Poilievre to become the Jean Chrétien of this generation.

[lio45]

Originally Posted by MonctonRad

This is what I fear too. -

JT has gifted us a sinking loonie probably worth 62 cents, worsening inflation and a resultant prolonged period of higher interest rates. This is going to make all of us poorer.

If I wasn't in pre-retirement mode, I would be seriously thinking about decamping to the US. I almost did it in 1995.

I'd decamp completely too at this point, if it weren't for the fact that one of my main business fields in Canada actually benefits greatly from JT's devastation.