[Flash Walken]

Originally Posted by Slava

I do understand what you're saying, but the fact is people buying luxury goods is totally taxable. These aren't necessary items and they're a lot of "nice to have" things. I see your argument that the tax might cause some decrease in sales, but then how do you juxtapose that with the sales in say BC of these items? They have higher taxes, and seemingly little issue selling iPads and such in Vancouver.

Well, again, this is highly anecdotal.

The fact is, Vancouver and BC have undergone a big change in the last 15 years or so. The answer is, debt:

If you look at the numbers, Vancouverites are simply too poor to afford real estate. In some areas, it’s astonishing that we even try.

The average income in Metro Vancouver in 2009, was only $41,176, according to Canada Revenue Agency statistics. In Vancouver proper, we are getting by on $43,911. However, Richmond residents are barely scraping by at $33,350 a year — the lowest average income in the region, followed by Burnaby, with an average of $34,961.

Only 0.56 per cent of British Columbians declared incomes higher than $250,000, says Andrew Romlo, executive director of Urban Futures, which studies demographics. That’s less than the proverbial 1 per cent that owns everything.

With the average selling price of a detached house in Vancouver at $1.116-million, the incomes do not jibe – even if we are the most indebted province, according to a recent TD Bank report. B.C.’s income-to-debt ratio is the highest, with Albertans a close second. But they’ve got lower house prices and high-paying jobs.

http://www.theglobeandmail.com/life/...ticle12436288/

An Equifax report in December revealed that per-capita consumer debt in Vancouver is $23,570 — higher than the national average, but lower than in either Calgary or Edmonton. And liability levels have been declining in almost every quarter since the third quarter of 2012, when average Vancouver consumer debt was at an all-time high of $24,205.

A bigger part of personal indebtedness in Vancouver, of course, is tied to mortgage debt. Nationally, nearly two thirds of debt is attributable to mortgages, and you can bet the proportion here is greater.

While some may wonder how people cope with Vancouver’s high housing costs, they do.

Possibly the best quote I recorded last year came from Cameron Muir, senior economist at the B.C. Real Estate Association, who asked this rhetorical question: “If nobody can afford to buy, how are people buying?”

His point hit home. Indeed, the typical price for a Metro Vancouver home last fall — accounting for all property types — was up nearly six per cent from a year earlier. And even in that circumstance, sales were up 8.4 per cent.

For the relatively small percentage of Vancouverites who cannot cope financially, there is either bankruptcy or a consumer proposal, the latter requiring agreement from a creditor to settle for a generally reduced payment from the borrower.

That is where Blake Elyea comes in. The senior vice-president and bankruptcy trustee at Grant Thorton tells me the biggest factor in debt loads is the “huge discrepancy in Vancouver between cost of living and income.”

With housing costs so high, “credit is becoming a necessary point of affording daily costs.” And some use their lower-interest lines of credit to pay down their higher-interest credit.

“What we’re seeing among the younger generations in particular is that it’s now normal and acceptable to carry credit card debt as a means of maintaining their lifestyle.”

Elyea says many make only minimum payments on outstanding balances and don’t get in a jam until a major life event like job loss or illness intervenes.

Seniors have the fastest-rising insolvency rate in Canada, “with B.C. higher than the Canadian average.

“Debt is the one dirty secret that individuals do not really want to talk about. When was the last time you overheard a conversation about how much debt someone was in?”

http://www.vancouversun.com/business...601/story.html

TORONTO - Canadian household debt hit a record high during the third quarter, as it grew at a faster pace than disposable income, according to the latest figures from Statistics Canada.

The total amount of credit market debt — which includes mortgages, non-mortgage loans and consumer credit — held by Canadian households increased to 162.6 per cent of disposable income during the quarter, from a revised 161.5 per cent in the previous quarter.

That means Canadians owed about $1.63 for every dollar of disposable income in the third quarter.

The previous record of 161.7 per cent was set in the third quarter of 2013.

http://www.theprovince.com/business/...139/story.html

While the average non-mortgage debt stands at nearly $27,000 for all of Canada – actually down two per cent from the end of last year – B.C. is the only province to increase, up almost four per cent at nearly $39,000.

“B.C. is actually increasing to the point we’re the most indebted citizens in all of Canada right now,” said Blair Mantin, trustee with Sands & Associates. “It’s really moving in the opposite direction to the rest of the country.”

While Mantin believes part of the reason is because other provinces, like Quebec and Ontario, have better awareness for dealing with debt, a major part is British Columbians “just aren’t dealing with their debts.”

“Normally it’s just that something happened – most of the time people are ticking along just fine and then they lose their job, or their relationship ends, or they get sick,” he said. “A lot of people are just one or two missed pay cheques away from having to be in a position where they can’t pay their debts any longer.”

http://globalnews.ca/news/615066/b-c...est-in-canada/

It's a really big problem.