Winners and Losers of Canada’s New Government
It is no surprise where the real
winners and losers of the Trudeau-lead government lie. Throughout his campaign
he talked about two things: the middle class and people wearing white lab
coats. Since Trudeau was voted into office, billions of dollars have been spent
on funding research projects in educational facilities and laboratories.
Nevertheless, the true losers of a
Trudeau government will ironically be those who helped get him elected; that is
Millennials looking to buy their first house. The Liberal government made a
decision in October to add a mandatory “stress test” for buyers. In effect the
policy applies an added interest rate that is above market rates for mortgages
backed by Ottawa. Experts suggest that the housing market is being kept afloat by
buyers who were already pre-approved under the old laws. However, this will
eventually come to an end and the negative effects of the new policy will soon
take over. An Ottawa based Canadian Real Estate Association expect in 2017
house prices will effectively experience its first drop since 2008. For such
declines in prices they have placed the blame solely on the Trudeau’s regulatory
changes.
Many first time buyers will be
shutout of the housing market as the purchase of their dream home becomes less
attainable. Economist fear a drop in demand will decrease house prices, which
will in turn trigger a nationwide crash in the economy. Furthermore, at a time
of high mortgage indebtedness, the economy is ripening for a possible economic
meltdown.
Taken from an article by the National Post, written by John Ivison.
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