Recession drags rising number of Albertans into financial ruin

[GGG]

Contractors are eligible for EI if they choose to pay into the program now. If he was temporary staff/hourly he would be eligible for EI. It's ambiguous in the article.

Your person in the example above is almost solvent with just EI. If he cashed out his RRSPs to survive at that point or any savings he has let's say that nets him 5k more that gives him 500 per month for 10 months to live off of. Then add in various loan vehicles he could have which may or may not be a good choice to use say a 5k credit card limit and a 5k LOC he got from the bank because he was worried about the recession. Now he has access to 15k worth of funds plus his 1 year of EI. So can survive for about 16 months off of 5k of savings.

[Locke]

Originally Posted by GGG

Contractors are eligible for EI if they choose to pay into the program now. If he was temporary staff/hourly he would be eligible for EI. It's ambiguous in the article.

Your person in the example above is almost solvent with just EI. If he cashed out his RRSPs to survive at that point or any savings he has let's say that nets him 5k more that gives him 500 per month for 10 months to live off of. Then add in various loan vehicles he could have which may or may not be a good choice to use say a 5k credit card limit and a 5k LOC he got from the bank because he was worried about the recession. Now he has access to 15k worth of funds plus his 1 year of EI. So can survive for about 16 months off of 5k of savings.

That is correct but incorrect. Contractors are eligible for EI if they choose to pay in but are only eligible in the cases of health concerns, disability or maternity, not job-loss.

[Locke]

From CRA:

http://www.esdc.gc.ca/en/reports/ei/..._benefits.page

And:

Since the self-employed are not entitled to unemployment benefits, they don't pay the employer portion of premiums — and won't receive benefits if their business folds, for example.

http://www.cbc.ca/news/business/taxe...ance-1.1350596

[Swift]

Originally Posted by GirlySports

i dont have numbers but i dont see a change in spending habits. I went out for dinner last night, had to line up. I wanted to go camping today, campsites, all booked solid.

unless people are just spending money they don't have now compared to money they did have before.

I think sometimes people can't see outside of the O&G bubble in this city. Despite all the layoffs in Calgary, the vast majority of the working population still have jobs, and many with jobs that have been unaffected by the downturn. For instance using myself as an example, I work in insurance, my wife in banking, and thankfully we've been completely unaffected by any of this and gone on living and spending as normal.

[V]

Yup, my office is completely unaffected as well, I've been hiring fairly consistently since the downturn. We don't make as much, but there's a level of security that's hard to pay for by working in a stable industry that isn't tied to O&G.

[foshizzle11]

My brother and I know this couple from the article, haven't talked to him in like 15 years, but still know him none the less. Him and his wife are in their early forties. So have had time to save and have been together for at least that long as well. But we don't obviously know their financial situation, I hope they can turn it around and figure something out.

It has been said that people are spending more on camping then say spending weekends in Kelowna at a hotel, or Banff, etc. So that is a big reason the campgrounds are full right now.

I can see a difference in how many people go out for Friday night drinks, the places might seem busy but most will only stay out for 1 beer or 2, then head home to drink instead of staying for 4 or 5 beers and dinner.

I don't see it getting better any time soon, I hope I'm wrong and we don't hear of more stories like this one.

[OMG!WTF!]

I have a lot of sympathy for people going through these hard times. But there is also typically a strange and aggravating sense of entitlement when it comes to foreclosures. Like now it's the big evil bank's fault. So let's trash the house, sell the carpet and go out with a bang. Somehow the liability gets flipped around. I never understood that.

[CliffFletcher]

Originally Posted by btimbit

No kidding. How many people here could honestly survive with zero income for a long period of time? Don't think I could.

How many people would go for a long period of time with zero income? There are jobs out there - crappy, low-paying jobs. I've worked many of them. They suck. But they pay money. And you can use that money to pay for things like rent, bills, and food.

[taco.vidal]

Originally Posted by CliffFletcher

How many people would go for a long period of time with zero income? There are jobs out there - crappy, low-paying jobs. I've worked many of them. They suck. But they pay money. And you can use that money to pay for things like rent, bills, and food.

The problem is that if you have $3000 a month in mortgage payments, $1500 to $2000 in monthly car payments, then working at Starbucks wont even make a dent in that and thats before all your other bills.

[btimbit]

Originally Posted by taco.vidal

The problem is that if you have $3000 a month in mortgage payments, $1500 to $2000 in monthly car payments, then working at Starbucks wont even make a dent in that and thats before all your other bills.

Or even like my hypothetical, that job doesn't pay any more than the max EI would. And that example is someone that hasn't overextended themselves, let alone the average person whos is struggling with debt even before getting laid off.

[FlamesAddiction]

Originally Posted by taco.vidal

The problem is that if you have $3000 a month in mortgage payments, $1500 to $2000 in monthly car payments, then working at Starbucks wont even make a dent in that and thats before all your other bills.

If someone has $5,000 / month in mortgage plus car payments, they over spent. (Unless they are independently wealthy)

Don't buy a house until you can get your mortgage payment close to what a rent payment would be, and avoid buying a new car. Use transit until you can afford a cheap used vehicle.

[calgaryblood]

Originally Posted by GGG

Contractors are eligible for EI if they choose to pay into the program now. If he was temporary staff/hourly he would be eligible for EI. It's ambiguous in the article.

Your person in the example above is almost solvent with just EI. If he cashed out his RRSPs to survive at that point or any savings he has let's say that nets him 5k more that gives him 500 per month for 10 months to live off of. Then add in various loan vehicles he could have which may or may not be a good choice to use say a 5k credit card limit and a 5k LOC he got from the bank because he was worried about the recession. Now he has access to 15k worth of funds plus his 1 year of EI. So can survive for about 16 months off of 5k of savings.

How would it work for seasonal employees though that don't get the required hours?

Just because you pay EI doesn't mean you are eligible form EI if I understand correctly.

[Shazam]

Man people must have crazy house payments.

$450K mortgage @ 2.49 25 year amort = $2016 month.

Jesus Christ on a stick.

[boogerz]

Originally Posted by Shazam

Man people must have crazy house payments.

$450K mortgage @ 2.49 25 year amort = $2016 month.

Jesus Christ on a stick.

But if you were O&G family with double incomes on the pre-2015 gravy train, $2k per month is a drop in a bucket.

[GGG]

And if you compare renting in this city that is not far off what a house rents for.

Also if you had a house pre 2006 and traded up you might have a 650k house with a 300k mortgage.

[heep223]

Originally Posted by FlamesAddiction

Not just an Alberta thing I am sure, but there are a lot of people who qualify for stupid high mortgages and then buy the maximum they can. I mean, just because a lender is willing to give you $600k for a mortgage, it doesn't mean you need to take it.

Same thing with cars. I am not a super high earner, but I know I could go into a car dealership and buy a new truck on credit. But I also know that it wouldn't be wise.

While I feel for people who lost a lot during the recession, a lot of it comes down to poor decisions.

The conservative nature of the government over most of the boom played a role as well. When the money was coming in, they should have been collecting more taxes and investing more in diversifying the economy. Obviously there was nothing anyone could do about the price of oil, but you can't have all your eggs in one basket and not know that busts follow booms.

Agreed. I'd add that they should also have saved more themselves, so that they don't have to borrow so much to spend during the tough times.

The government is just as guilty as the consumer in getting caught up in the short sighted fun during the boom times.

[heep223]

Originally Posted by Shazam

Man people must have crazy house payments.

$450K mortgage @ 2.49 25 year amort = $2016 month.

Jesus Christ on a stick.

Are you a single person living with roommates in an apartment?

[Shazam]

Originally Posted by heep223

Are you a single person living with roommates in an apartment?

No, why? Should I be?

[Erick Estrada]

I do feel bad for people that have bought and mortgaged any house in Calgary over the last 15 years. I bought my place in the 90's when houses were fairly priced for the quality of house. I would say more than half the houses built in the housing boom are garbage quality and I cringe when I see houses sell on my street for half a million. If I was in the position of some of these people paying for overpriced junk houses I would probably cut bait as well if unemployed as they simply aren't worth the investment.

[CliffFletcher]

Originally Posted by taco.vidal

The problem is that if you have $3000 a month in mortgage payments, $1500 to $2000 in monthly car payments, then working at Starbucks wont even make a dent in that and thats before all your other bills.

If you spend $4500 to $5000 a month on mortgage and cars, then presumably you're in a household with two high-earning professionals, and you have the resources to put away a significant amount of money for savings. If you have those kind of expenses and you're not in a household with two high-earning professionals, or you are but didn't set aside savings, then you're an idiot. There are plenty of houses in Calgary under 500k, and plenty of cars for under 25k.