Are Canada's conservatives a house divided?

Here's a question dear reader. 

Are you conservative or liberal? 

It might seem a straight forward, but I imagine responses would vary widely based on the context of the question.  Are we talking about political parties, money, human rights...all three?

In terms of party politics, the Conservatives are hot.  Sure they're not yet garnering a majority of votes in any recent election, but their numbers keep going up and they are the single largest minority by a good margin.

If you're on the left hand side of the political spectrum you have a lot of choice in this country.  You have the Liberals who many consider to be fiscally conservative based on the Chrétien/Martin record of balanced budgets and paying down the national debt.  Then  there's the NDP for those who strongly support the labour or union movement.  The Greens present themselves as fiscally conservative with a strong emphasis on protecting the environment.  And Quebecois have the added choice of the Bloc, generally  speaking a very socially progressive party, albeit one determined to take Québec out of the country.

For conservative minded voters on the right...uhm, you've got Harper's cons or a few fringe parties with no hope of winning a seat anytime in the foreseeable future.  Sorry that's it, and that's all.

Stephen Harper has achieved electoral success by bringing in divergent groups into the Conservative tent.  Fiscal conservatives enraged at the Liberal Ad-Scam scandal, social conservatives looking for action on things like abortion, the death penalty and same-sex marriage.  Even libertarians who want to see government reduced to providing only core  bare bones services.

And from where I sit I don't see how any of these groups can be happy with the job our Prime Minister has done. 

So-cons have seen zero action on any of the initiatives on their agenda, with MP Brad Trost saying Harper isn't even Pro-Life, the PM's membership to an evangelical church notwithstanding.

Fiscal conservatives can't be happy with record setting deficits and the elimination of all the gains made in paying down the national debt by the Chrétien/Martin Liberals.

And the libertarian element of the party must be just thrilled with all the corporate welfare being doled out.  $2 million for a fake lake, I'm sure that went over huge with the less government constituency. 

The only thing that all CPC members can be happy with is victory, they've won the last 3 elections and now finally have a majority mandate.  But what is victory worth if the issues which drew voters and members to the party aren't being addressed?  At least with a minority mandate Harper had some cover.  The Conservatives had to appease at least one of the opposition parties to ensure they remained in power, such is no longer the case.

The saving grace right now is the damage they've inflicted on the Liberal brand with the constant stream of negative attack ads we've seen on successive Grit leaders.  Will conservative voters upset with the PM be able to bring themselves to support a party that has been so denigrated over the past several years?

Time as always, will tell.

Brad Trost says Harper is not Pro-Life and chastises the PMO

I just finished reading a Macleans interview with Conservative backbench MP Brad Trost. 

For those, like me, who've seen his name in the press about the issue of abortion, and formed the opinion that he is a one string banjo plucking the Pro-Life chord over and over...I strongly suggest giving it a read.  I think you'll find the interview engaging and perhaps find at least a modicum of respect for the Saskatchewan MP.  I did, and more than a modicum. 

On the issue of abortion he laments the fact that Canada is the only industrialized nation in the world with no laws whatsover relating to the termination of pregnancy.  He points to Sweeden and France as two examples, countries probably more liberal minded than Canada, yet they have legislation and we don't. 

Now, for those who like the status quo, and who have been fearful that the so called 'secret agenda' might include re-introduction of abortion to the criminal code, take a big relaxing sigh.  According to Mr. Trost, and I'll quote directly from the interview here, he says of the PM:

In all of his runs for leadership, or I even believe going back as a Reform MP, he’s never been pro-life.

He's not critical of the PM's opinion, in fact he speaks very respectfully of Mr. Harper, saying the Prime Minsiter is basically 'sticking with what he says'. 

Mr. Trost does however have some not so kind words for the Prime Minister's Office, again quoting from the interview:

It’s very hard to communicate with them. And they may not like it if you print that in there, but frankly, they need to have someone who can actually communicate with Members of Parliament and they don’t.

I think Brad should read the text of a 1997 speech Harper gave to the Council for National Policy, a Washington based neo-con think tank.  In that speech our current PM compared our house of commons to the U.S. electoral college, except that ours continues sitting whereas in the U.S. the college disappears after an election. 

You can read the full article at Macleans site HERE.

Taxpayers on the hook for almost $600 Billion in mortgage debt

Do you know anyone who has recently bought a house with less than 20% down?  I know a few myself, young twenty somethings with decent but not great income, who've decided to take the dive.  And why not?  Qualifying for a mortgage is easy, and if you're not good enough at handling money to have put away a piddly little down payment, the banks will rebate it to you.

Why waste money on rent when you can build equity right?  I mean its not like we're the U.S. where record levels of personal debt and ultra low interest rates caused the RE market to bubble and eventually burst. 

This is Canada eh!!!

Uh huh.  This is Canada where banks are covered by the Canadian Mortgage and Housing Corporation, a federal crown corporation.  So if a homeowner walks away from a property and declares bankruptcy, the bank isn't on the hook, its taxpayers.  So why not rebate the down payment to a kid with no money of his or her own to put into a house?  The bank has its rear end covered by you and me. 

The problem now is that CMHC is almost at the $600 billion limit imposed on them by the feds.  How keen do you think a bank will be to loan out money if they're the ones on the hook if the borrower defaults and goes for the financial white out with a BK filing?

The reality that we're living in a housing bubble is not up for debate, the only question is when will the balloon pop.  And how far will housing prices fall.

Obviously major centres like Vancouver and the GTA will be hit hardest.  But over indebtedness is not exclusive to big city residents.  There are people in every part of the country who have gorged themselves on cheap credit over the past several years.

At the end of the day its all about supply and demand, yes Mr. Green I did pay attention in Economics class. 

A recent Globe & Mail article cited a dearth of listings in the GTA market.  So while demand has eased as the economy sputters, so has the available supply...which has managed to keep prices up for the time being.

But spring is almost here, and that's when things normally heat up in the RE market.  Many people like to move in the summer, so buying in April or May for a July closing makes sense. 

Is the reason for the dearth of listings that many are holding off selling in hopes of a spring feeding frenzy?  We'll know before too long.  If listings do swell, we could be looking at the first buyers market in a long time. 

Around 70% of Canadians already live in a home that's been purchased.  So where buyers will come from to soak up the extra supply...I don't know, everyone keeps saying China.  I have my doubts. 

If you're not yet totally fed up with reading about the pending collapse in RE values in this country then here's a link to a Macleans article which compares Canada now to the U.S. back around 2005. 

Warning, its not a pretty picture.  (LINK TO ARTICLE)

CREA projects average house prices to dip

The Canadian Real Estate Association is predicting that the national average for house prices will drop in 2012, but not by much.  I wouldn't put too much stock in such forecasts though, before the U.S. housing market cratered so called experts were out to lunch on their predictions south of the border.

The elephant in the room, so to speak, is household debt.  The national average is pegged at over 150% of income with low interest rates being cited as the major cause.  And with so many buyers leveraging themselves to the hilt to buy into a bubble market, many Canadians are sitting on mountains of debt with very little wiggle room should the need to access capital arise. 

Right now we're where the Americans were before their housing balloon went BANG. 

According to the governor of the Bank of Canada Mark Carney, roughly 10% of Canadians are vulnerable financially.  And with home ownership at over 70% in this country there isn't a lot of demand left over when listings start to swell.

My opinion, worth as much as that of the CREA, is that once prices start to dip, that many who were thinking of selling will decide to hang on until things improve.  But momentum in any market is hard to stop.  When real estate prices were climbing the mob mentality took over, with many paying more than they could reasonably afford due to fear of being priced out of the market.

It will be like people who bought Nortel north of $150 per share after it started coming down.  Many will hang on thinking that a rebound is just a year or two away....yes, like in the U.S. 

All it will take for a U.S. style drop in prices is another recession or even a minor bump in interest rates.  And both of those scenarios are more likely than not to occur over the next 12-24 months.