*Updated* Ongoing Bank of Canada Benchmark Rate Announcements

[Slava]

Originally Posted by you&me

Wait... We don't have all of the details, but there are some pretty safe assumptions that can be extrapolated depending on the specific case.

Like if you have a spare $25k sitting around and can put it in a GIC at 6%, or pay down your 3% mortgage by $25k, the interest earned in the GIC will be greater than the interest saved by the reduction in the mortgage principle (disregarding taxes, etc).

To argue otherwise would demonstrate a poor comprehension of reading math.

That all said, the peace of mind on having less / no mortgage is priceless.

Edit - opendoor beat me to it.

Well the real issue in these questions is that we don't know what the savings really are. Like you put that $25k against the mortgage today, and at the end of 22 years (for example) we know the savings because we know what the interest rates were and we know how many months you shaved off with the lump sum.

Was gaining say 3% for three years worth the delay? Maybe. But we can't know. All we know is how one option plays out over 3 years with full certainty.

[bizaro86]

Originally Posted by Fuzz

Ya, and sorry I don't mean to come across as anti-immigrant. I consider overpopulation a global problem, and there would obviously be a benefit for those coming from other countries to improve their lives.

I'm just arguing against the concept that Canada has all this excess capacity that can be used with no detrimental impacts. Boosting the economy maybe isn't the only goal we should consider.

This train of thought is exactly how we ended up with a housing affordability crisis, which has exacerbated homelessness and caused all sorts of other issues.

We're nice Canadians and not anti-immigrant so we let in lots of people.

But we don't want to expand the cities they want to live in into the outlying areas, so we pass laws to protect farmland/Greenspace.

Then we're surprised that after we've restricted the supply of something and juiced the demand for it the price goes way up.

I think there's a moral argument that Canada needs to take immigrants, especially from places like Ukraine and Afghanistan lately. But that should require us to also build enough new housing units for people to live in. IMO the only way that's possible is with significant upzoning and physical expansion of the size of our cities. Maybe we could build some new cities as well, although I think the historical record for planned new cities is quite poor.

[Fuzz]

Originally Posted by bizaro86

This train of thought is exactly how we ended up with a housing affordability crisis, which has exacerbated homelessness and caused all sorts of other issues.

We're nice Canadians and not anti-immigrant so we let in lots of people.

But we don't want to expand the cities they want to live in into the outlying areas, so we pass laws to protect farmland/Greenspace.

Then we're surprised that after we've restricted the supply of something and juiced the demand for it the price goes way up.

I think there's a moral argument that Canada needs to take immigrants, especially from places like Ukraine and Afghanistan lately. But that should require us to also build enough new housing units for people to live in. IMO the only way that's possible is with significant upzoning and physical expansion of the size of our cities. Maybe we could build some new cities as well, although I think the historical record for planned new cities is quite poor.

I'm confused by that. Which train of thought? That would should consider environmental and resource limiting factors to growth, beyond chasing GDP?


I'm just saying the environment has limiting factors to growth, and ignoring those for growth will just lead to more problems with tough solutions.

[iggy_oi]

Maybe we could make changes to the system that would increase the likelihood of new Canadians not being exploited by highly profitable employers who want to pay them peanuts and then those new Canadians could afford to pay more for rent. Just a thought.

[PeteMoss]

Originally Posted by Fuzz

But why??? That's a miserable existence. That stretch of BC is my idea of hell. So is living on top of a train station. They do that becuase they have to, not becuase they want to.

I get there are ways to densify Canada(and no shortage of examples around the world), my point is it doesn't provide benefits to happy living. Is the point to stretch every resource and ecosystem to the limit? Why? Who's life improves from that? How is that good for the planet?

Any dense city or country is going to rely on imports from elsewhere to function. If those resources are already stretched, how does adding more people fix that?

A few points:

What makes you happy obviously differs from others. People are still barrelling into Toronto and Vancouver or New York city despite them being crowded and expensive.

Even if you don't want 100 million Canadians, we need immigration now to keep 40 million Canadians because our birthrate is below the threshold to sustain our population.

The environment thing rings hollow because these people are coming from somewhere. Its not like we are creating these people in a lab and they have no environmental impact where they come from vs coming here and having impact.

There are benefits to having a bigger population. You are less reliant on the US. Plus you have someone to pay for all the oldies that are going to be around in the next 10-30 years including some of us.

[DoubleF]

Originally Posted by Sliver

This is the internet. I thought we were just supposed to make a series of assumptions that aligned best with the point we felt like making at that particular moment.

Yeah and end up in a topic so far away from the original topic we don't know what the original thing we were arguing is.

Originally Posted by you&me

Wait... We don't have all of the details, but there are some pretty safe assumptions that can be extrapolated depending on the specific case.

Like if you have a spare $25k sitting around and can put it in a GIC at 6%, or pay down your 3% mortgage by $25k, the interest earned in the GIC will be greater than the interest saved by the reduction in the mortgage principle (disregarding taxes, etc).

To argue otherwise would demonstrate a poor comprehension of reading math.

That all said, the peace of mind on having less / no mortgage is priceless.

Edit - opendoor beat me to it.

Because it's missing a few assumptions that factor in.

In theory it's the same with investing slightly ahead, but only if people follow that theory and pay down immediately after 3 years. The reality is that with cash on hand, a portion gets used because it is available rather than turn into a mortgage payment. Look at 1000 cases today and see the end results and I bet those who didn't lump sum are more behind to their peers vs that theory.

Your theory isn't wrong. But reality is that someone might take a portion and spend it on other stuff than the actual mortgage instead. Over 3 years you make $3-4K. Cool. You won't be tempted to use half on a TV? Then you're behind. Do that another dozen to half a dozen times and compound the interest difference. That's about a year or two behind. Reinvest to keep ahead of the mortgage rate and rinse and repeat a few times without spending a penny?

It's like the rent vs own theory a few years ago. It was right, until this insanity happened. Now in hindsight, is it right or wrong? We don't know in foresight, but reality typically is that in that Calc, those people with those pay down habits gets it paid down faster than those chasing a few extra percent on the market.

People investing the spread of GIC vs mortgage aren't going to do it short term. They'll keep reinvesting as a habit. This also isn't including the potential for more favorable rates and whatnot earlier or the fact the rates are still fluctuating.

[Leondros]

Originally Posted by PeteMoss

A few points:

What makes you happy obviously differs from others. People are still barrelling into Toronto and Vancouver or New York city despite them being crowded and expensive.

Even if you don't want 100 million Canadians, we need immigration now to keep 40 million Canadians because our birthrate is below the threshold to sustain our population.

The environment thing rings hollow because these people are coming from somewhere. Its not like we are creating these people in a lab and they have no environmental impact where they come from vs coming here and having impact.

There are benefits to having a bigger population. You are less reliant on the US. Plus you have someone to pay for all the oldies that are going to be around in the next 10-30 years including some of us.

From an environmental standpoint one could argue their footprint would be much smaller in a less developed country than compared to a North American lifestyle that is just naturally going to be more carbon intensive.

[Fuzz]

Originally Posted by PeteMoss

A few points:

What makes you happy obviously differs from others. People are still barrelling into Toronto and Vancouver or New York city despite them being crowded and expensive.

Even if you don't want 100 million Canadians, we need immigration now to keep 40 million Canadians because our birthrate is below the threshold to sustain our population.

The environment thing rings hollow because these people are coming from somewhere. Its not like we are creating these people in a lab and they have no environmental impact where they come from vs coming here and having impact.

There are benefits to having a bigger population. You are less reliant on the US. Plus you have someone to pay for all the oldies that are going to be around in the next 10-30 years including some of us.

I don't think that is true at all. We have a responsibility to protect wild areas for future citizens. We also have water shortages(speaking of Alberta) where water allocations are near or at maximum. I've already mentioned other environmental impacts that woudl be local to Canada.


And again, I'm not against immigration, or even growth if it is done in a responsible smart manner(though I really do prefer fewer people). I'm not at all convinced that is what is happening.

[PeteMoss]

Originally Posted by Leondros

From an environmental standpoint one could argue their footprint would be much smaller in a less developed country than compared to a North American lifestyle that is just naturally going to be more carbon intensive.

That is very likely true although we go for 'high-value' immigrants for the most part - so they likely have a bigger environmental footprint where they come from than the average person from wherever they are coming from.

[PeteMoss]

Originally Posted by Fuzz

I don't think that is true at all. We have a responsibility to protect wild areas for future citizens. We also have water shortages(speaking of Alberta) where water allocations are near or at maximum. I've already mentioned other environmental impacts that woudl be local to Canada.


And again, I'm not against immigration, or even growth if it is done in a responsible smart manner(though I really do prefer fewer people). I'm not at all convinced that is what is happening.

They aren't going to pave over the entire country. There would be plenty of wild areas if you expand Calgary upward and outward some. You can live in downtown Toronto and drive like 30 minutes and go camp in the wilderness if you want.

I'm assuming the water shortage issues are planning issues. Obviously don't build a city in a place where we might run out of water. There is water options out the wazoo in most places in Canada so that shouldn't be a big issue with a little planning.

[Fuzz]

Originally Posted by PeteMoss

They aren't going to pave over the entire country. There would be plenty of wild areas if you expand Calgary upward and outward some. You can live in downtown Toronto and drive like 30 minutes and go camp in the wilderness if you want.

I'm assuming the water shortage issues are planning issues. Obviously don't build a city in a place where we might run out of water. There is water options out the wazoo in most places in Canada so that shouldn't be a big issue with a little planning.

I guess I'd just have to suggest you aren't aware of all the issues that population increases have on the environment if that's the thought process. The pressure on wildlife is already immense and I've mentioned other issues.

Water shortage isn't a management issue, it's a lack of resource issue. As glaciers shrink and high alpine areas dry more, there is just less water coming down with more demand on it.

[PeteMoss]

Yes - some wildlife population would suffer if we grew to 100 million Canadians. Just not sure when that's become a threshold for much of anything given all the land/animals, etc destroyed for everything else in the world - from Alberta's oilsands to potential Ring of Fire mines in Ontario.

If we have water issues in cities in Canada that aren't caused by terrible planning - then the entire world is basically screwed with all freshwater we have compared to our population.

Does your thought process change if certain populated areas of the world become inhabitable due to climate change?

[Fuzz]

Originally Posted by PeteMoss

Yes - some wildlife population would suffer if we grew to 100 million Canadians. Just not sure when that's become a threshold for much of anything given all the land/animals, etc destroyed for everything else in the world - from Alberta's oilsands to potential Ring of Fire mines in Ontario.

If we have water issues in cities in Canada that aren't caused by terrible planning - then the entire world is basically screwed with all freshwater we have compared to our population.

Does your thought process change if certain populated areas of the world become inhabitable due to climate change?

Bingo. Should we join them?


I'm not sure what thought process of mine would need changing? I'm not saying Canada shouldn't be compassionate for refugees, it's this target of 100 million and the idea Canada would be better for it.

[PeteMoss]

To be clear.. obviously you can off one off water issues. But if we have cities facing permanent water issues, there was planning issues in building where we did

[bizaro86]

Originally Posted by Fuzz

I'm confused by that. Which train of thought? That would should consider environmental and resource limiting factors to growth, beyond chasing GDP?


I'm just saying the environment has limiting factors to growth, and ignoring those for growth will just lead to more problems with tough solutions.

Sorry, maybe I should have quoted both posts. You had one saying that we shouldn't expand cities, and then a second saying you're pro-immigrant.

But those are competing priorities, and our unwillingness to choose between them has created a huge affordability crisis.

I'm in favor of expanding our cities, because I think that's a better option than shutting the door on immigrants, which I think is a pretty FYGM attitude.

I guess I just think if we're short water in Southern Alberta maybe we should all switch to drought tolerant lawns or artificial grass Sliver style, not close the door to people who don't have access to clean water where they live.

[bizaro86]

Originally Posted by Fuzz

Bingo. Should we join them?


I'm not sure what thought process of mine would need changing? I'm not saying Canada shouldn't be compassionate for refugees, it's this target of 100 million and the idea Canada would be better for it.

How compassionate do you want to be?

If we Canada grows population at about the current 1.5% per year we will hit 100MM people in 2085. That part is just math.

The choices we have are find somewhere for those people to live or stop letting them come.

[chemgear]

Originally Posted by bizaro86

How compassionate do you want to be?

If we Canada grows population at about the current 1.5% per year we will hit 100MM people in 2085. That part is just math.

The choices we have are find somewhere for those people to live or stop letting them come.

Or the compassionate care of increased tent cities in the local sidewalk, playground or schoolyard.

[bizaro86]

Originally Posted by chemgear

Or the compassionate care of increased tent cities in the local sidewalk, playground or schoolyard.

I mean, that falls under the broad "somewhere", I suppose. That's where the current set of choices we're making leads.

It doesn't seem complicated to me. Housing prices are already high. If we're letting in lots of people (which imo is what we should do from an ethical point of view) then I think that ethical burden includes building enough housing for those people.

Not everyone agrees with that point of view, but objections are almost always couched in other ways.

[Harry Lime]

Interesting what's being discussed in here. I've been uninterested in the title topic to some degree because I've already been hit in the face with it.

I've been interested in immigration policy for some time. I thought that it was a misstep when harper pushed yearly population growth past 500K without attaching it to some kind of metric. Trudeau had his "hold my beer" moment this past year with 1 million 50 thousand.

It's a taboo subject because the knee-jerk retaliation is to be labeled a racist, when policy and people can't be identified as different things.

Infrastructure and housing not keeping up and forcing an unnatural rise in living costs, as well as environmental impacts is only stracting the surface of what an arbitrary immigration number does to the country.

When there was celebration last month for 60K new jobs created, my first thought was whether that was enough to sustain the population growth, or if it symbolized regression. Imagine immigrating and then immediately finding out that there's nothing here.

[Fuzz]

@Bizaro86 I mean, if we are talking about immigration for ethics, it's one thing, and a different conversation with different type of immigrants than we mostly target. But I've just read repeatedly pretty much everywhere that it's for economic reasons, and that's what was being discussed. That we need to grow to survive. I'm saying choosing that brings other challenges, and growth has environmental tradeoffs, and a lot of our environment is a lot more stressed than people like to acknowledge when they have these conversations. More people mean more problems, expenses etc and the calculation shouldn't be made in isolation of those environmental limitations and future problems.


Mostly I think a lot more thought needs to be put into it than we do.