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Canada’s Housing Bubble Could Spell Disaster for Trudeau

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According to experienced strategists, Canada’s housing market is in danger of collapsing since it has one of the greatest housing bubbles in history. The degree of debt that Canadians have taken on in contrast to their earnings has left many in a perilous situation if mortgage rates continue to climb, which is likely, according to Phillip Colmar, partner at MRB Partners, in an interview on Tuesday.

“Canada is probably sitting on the largest housing bubble of all time,” he said.

Colmar suggested that inflated housing prices in Canada are a result of the Bank of Canada’s monetary policy providing easy money for two decades for a variety of reasons. Currently, he sees risk in mortgage rates rising as Canadian bond yields rise, especially at a time when debt-to-income ratios are sky high.

“The worst part for a housing bubble is when you have [a] credit bubble underneath it,” Colmar cautioned. The amount of Canadian indebtedness in the system against income is tremendous — and debt servicing has increased dramatically.”

While Canadian banks are doing their lot to keep the property market from collapsing, Colmar predicts it will.

There is clearly a risk that if mortgage rates rise, unemployment rises, or we enter the next recession, this thing will wind up in a deleveraging cycle, he added.

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Trudeau Hasn’t Helped in Canada’s Soaring Housing Cost

The rising cost of housing in Canada has become a key electoral issue for Prime Minister Justin Trudeau, as his main opponent focuses on generational frustrations over affordability.

This summer, Trudeau has played defence on the problem, naming a new housing minister and diverting some of the burden to other levels of government. However, with Trudeau’s party already slipping in recent surveys, housing has become a serious vulnerability for him.

“Failure to appear to be doing enough on housing could be politically disastrous for the Liberals,” David Coletto, CEO of polling firm Abacus Data told Bloomberg.

The issue is especially crucial for Canadians under 40, a critical group that Trudeau’s party could not have won the last two elections without, according to Coletto. His firm’s most recent survey showed Pierre Poilievre’s Conservatives leading the Liberals by ten points.

The average price of a home in Canada has more than quadrupled in the last decade, reaching $760,600 (US$572,470) in June. Trudeau’s government, which took office in 2015, has also steadily increased yearly immigration targets, with more than one million people coming last year, putting a strain on an already scarce housing supply.

Poilievre has pounded Trudeau on the issue, concentrating on young people’s rage. He told reporters outside the Parliament building in Ottawa on Tuesday that Canada’s home affordability is among the worst in the world.

“Rent has more than doubled,” he remarked. “Mortgage payments have doubled.” Down payments were required and doubled. All of this comes after eight years of Justin Trudeau.”

To be fair, rising housing costs have many causes outside of Trudeau’s control. Provinces and cities, which are in charge of land-use planning, zoning, and permitting, are to fault, as are real estate investors, overseas buyers, years of low loan rates, and other issues.


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Nonetheless, Canada’s aggressive immigration ambitions have outpaced housing construction, exacerbating the demand-supply imbalance. In the year to March, 4 to 5 international migrants landed in Canada for every new unit of housing construction that began. That is the highest ratio of new Canadians to new residences in statistics dating back to 1977.

Poilievre, on the other hand, dodged reporters’ inquiries on whether he will lower immigration targets on Tuesday.

Former Liberal member Adam Vaughan, who assisted in the development of Trudeau’s $82 billion national housing policy, said that the country is better off now than it would have been without his party’s policies. He claims that if the government had done nothing, federal spending on social housing would have been merely $1 billion this year.

More needs to be done, he says, and time would be better spent concentrating on solutions across levels of government rather than laying blame. Trudeau’s remark on Monday that housing is not a fundamental federal priority was “problematic,” according to Vaughan.

“It is a responsibility of the federal government, if not literally, then politically, and I would argue that it is morally,” said Vaughan, who now works at public relations firm Navigator.

Debt canada

According to Mike Moffatt, senior policy and innovation director at the Smart Prosperity Institute, the federal government has a number of instruments at its disposal to address the housing shortfall without increasing its debt.

These approaches include focusing immigration policy on construction workers, electricians, and others who could help increase housing supply, as well as postponing international student visa approvals until provinces order universities to provide additional accommodation for them.

If the government does act, “they had better act quickly because time isn’t on their side, and there’s a chance that one of the opposition parties could really start to own this issue,” Moffatt said.

Former Trudeau policy director Marci Surkes believes the government is working on a housing strategy as a core component of its fall budget update.

“This is ground that the Liberal Party should be occupying and owning,” said Surkes, who currently works as an adviser for the Compass Rose Group. “At this point, they should have been making more tangible progress.” And yet, given the economic circumstances, whatever progress has been made to date does not feel sufficient.”

The New Democratic Party’s Jagmeet Singh, whose party has agreed to support the Liberal minority government in Parliament, said on Tuesday that Trudeau’s “finger-pointing” will not fix the housing crisis, despite the fact that all levels of government bear some responsibility.

“We can’t ignore the significant levers that the federal government has,” he remarked. “The levers are so significant that I would say the federal government has incredible powers to actually solve this problem if they choose to do so.”



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India, At UN, Is Mum About Dispute With Canada Over Sikh Separatist Leader’s Killing

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UNITED NATIONS — As he addressed world leaders at the United Nations General Assembly on Tuesday, India’s top diplomat avoided addressing his country’s dispute with Canada over the assassination of a Sikh separatist leader. However, he indirectly criticized how other nations respond to “terrorism.”

Foreign Minister Subrahmanyam Jaishankar devoted most of his speech to praising India’s rising global stature and aspirations for leadership, highlighting its recent tenure as chair of the Group of 20 industrialized nations and presiding over a substantial summit meeting last month.

However, he also stated that the international community must not “allow political expediency to determine responses to terrorism, extremism, and violence.”

India has frequently attacked Pakistan at the United Nations over what New Delhi perceives as Pakistan’s sponsorship of terrorism. This time, however, the remark could be interpreted as an attack on Canada, whose representative is scheduled to speak at the United Nations later on Tuesday.

As a result of Canadian Prime Minister Justin Trudeau’s statement last week that India may have been involved in the June murder of a Canadian citizen in a Vancouver suburb, relations between the two countries have reached their lowest point in years.

Hardeep Singh Nijjar, 45, was murdered by masked assailants, but Canada has not yet provided any public evidence of Indian involvement in the murder. India had designated him as a terrorist because he led the remnants of a once-powerful movement to establish an independent Sikh homeland, Khalistan.


India’s top diplomat avoided addressing his country’s dispute with Canada over the assassination of a Sikh separatist leader.

The Indian Ministry of Foreign Affairs dismissed the allegation as “absurd” and accused Canada of harboring “terrorists and extremists.” It also asserted that the allegations were politically motivated, indicating that Trudeau sought domestic support from the Sikh diaspora.

“Such unsubstantiated allegations seek to divert attention away from Khalistani terrorists and extremists, who have found refuge in Canada and continue to threaten India’s sovereignty and territorial integrity,” the ministry said in a statement released last week.

However, they have long accused Canada of allowing Sikh separatists, including Nijjar, unfettered reign.

Even though the active insurgency ended decades ago, the Modi administration has warned that Sikh separatists are attempting a comeback. New Delhi has urged nations such as Canada, where Sikhs account for more than 2% of the population, to do more to prevent a separatist revival.

After the G20 summit, Canada’s allegation obscured India’s diplomatic moment. Jaishankar sought to refocus attention on his country’s ambitions in the international arena, noting that India is the world’s most populous nation and a growing economic superpower.

“When we aspire to be a leading power, it is not for self-promotion, but to assume more responsibility and make more contributions,” he explained. “The goals we have set for ourselves will distinguish us from those who rose before us.”


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Spain Charges Pop Singer Shakira With Tax Evasion For A Second Time And Demands More Than $7 Million

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BARCELONA, SPAIN — Spanish prosecutors have charged Colombian pop sensation Shakira with failing to pay 6.7 million euros ($7.1 million) in tax on her 2018 earnings, authorities announced Tuesday. This is Spain’s most recent fiscal accusation against the Colombian singer.

Prosecutors in Barcelona alleged in a statement that Shakira used an offshore company based in a tax refuge to avoid paying the tax.

According to the statement, she has been notified of the allegations in Miami, where she resides.

Shakira is already scheduled to be tried in Barcelona on November 20 for a separate case involving her residence between 2012 and 2014. Prosecutors allege she neglected to pay 14.5 million euros in taxes in this instance.

Prosecutors in Barcelona have asserted that the Grammy winner spent more than fifty percent of the 2012-2014 period in Spain and thus should have paid taxes in the country, even though her official residence was in the Bahamas.


Spanish prosecutors have charged Colombian pop sensation Shakira with failing to pay 6.7 million euros ($7.1 million) in tax on her 2018 earnings.

Last July, Spanish tax officials launched a new investigation against Shakira. Prosecutors have decided to file charges after reviewing the evidence compiled over the past two months. No trial date has been set.

Llorente y Cuenca, the public relations firm previously managing Shakira’s affairs, had no immediate comment.

Last July, it was stated that the artist had “always complied with the law and followed the advice of her financial advisors.”

Since she began dating the now-retired football player Gerard Pique, Shakira, whose full name is Shakira Isabel Mebarak Ripoll, has been linked to Spain. The couple, who have two children, resided in Barcelona until the end of their 11-year relationship last year.

In the past decade, Spain’s tax authorities have cracked down on football superstars such as Lionel Messi and Cristiano Ronaldo for not paying their entire tax obligations. These athletes were found guilty of tax evasion but were spared prison time due to a provision that enables judges to forego sentences of less than two years for first-time offenders.


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Toymaker Lego Will Stick To Its Quest To Find Sustainable Materials Despite Failed Recycle Attempt In 2023

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COPENHAGEN, Denmark – Lego stated on Monday that it remains committed to its quest to find sustainable materials to reduce carbon emissions despite the failure of an experiment to use recycled bottles. Lego is the world’s largest toy manufacturer.

After more than two years of testing, Lego “decided not to proceed” with producing its trademark colorful bricks from recycled polyethylene terephthalate (PET) plastic bottles because “the material did not reduce carbon emissions.”

Nonetheless, the toymaker remains “fully committed to making Lego bricks from sustainable materials by 2032,” according to the company’s website.

Two years ago, the private company that manufactures bricks from oil-derived plastic began researching a potential transition to recycled plastic bottles made of PET plastic, which does not degrade in quality when recycled.

The company stated that it had invested “more than $1.2 billion in sustainability initiatives” to transition to more sustainable materials and reduce carbon emissions by 37% by 2032.

The company reported that it was “currently testing and developing Lego bricks made from a range of alternative sustainable materials, including other recycled plastics and plastics made from alternative sources such as e-methanol.”


Nonetheless, the toymaker remains “fully committed to making Lego bricks from sustainable materials by 2032,” according to the company’s website.

E-methanol, also known as green methanol, is composed of residual carbon dioxide and hydrogen and is produced by splitting water molecules using renewable energy.

The company said it would continue to use bio-polypropylene, the sustainable and biological variant of polyethylene — a plastic used in everything from consumer and food packaging to tires — for elements in Lego sets such as leaves, trees and other accessories.

Long-term, “we believe that this will encourage increased production of more sustainable raw materials, such as recycled oils, and help support our transition to sustainable materials,” the report stated.

The company was founded by Ole Kirk Kristiansen in 1932. The name comprises the Danish words leg and godt, meaning “play well.” The brand name was created without knowledge of the Latin Lego, meaning “I assemble.”


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