Sunday, July 13, 2008

There is a storm brewing in the hinterland

The rampant real estate speculation in the Golden Horseshoe, increased government spending and Alberta's oil boom will only temporarily paper over the fact that forestry, most mining and pretty much all manufacturing is in recession.
Thirty years ago, Terrace Bay, Ontario, was a community with full employment and people earning, on average, about four times the minimum wage. They worked in forestry, the railway, and some construction, plus support businesses and retail. In today's dollars, a typical income was about $75,000.
Today, you can buy an ordinary house in Terrace Bay for the price of a mid-sized car Sure, it's a wartime house and all, but it does have a finished basement and has been kept up nicely. Want something more upscale? Here's a cute place for the price of an SUV. And maybe the price is negotiable. Surely the vendor is, um, motivated.
Or maybe a really splashy place, with sauna, jacuzzi, fireplace and a stunning view of Lake Superior. I expect you could get them down below $100K.
Or you could buy the best house in town -- look at that brand new kitchen, the marble countertops, hardwood floors, fireplace, two-car garage and just a few steps to a sandy beach and golf course -- for about the price of a 750-square-foot condo in Aurora, Orleans, or Laval.

(Also notice the municipal taxes aren't listed.)

In fact, you can buy a house in any North Shore town -- Wawa, White River, Marathon, Terrace Bay, Schreiber, Nipigon -- with a decent-limit Visa Gold card.
Each one of these listings represents a financial disaster to a Canadian family and a failure of the Canadian economy to keep decent working people employed and forestry companies productive and competitive.
No one is talking about this in Canada.
Toss a carbon tax into the mix, without anything to alleviate the trade policies that are destroying Canadian manufacturing, and the storm will blow into urban Canada.

Last week, Royal Dutch Shell announced it was shelving plans to build a gasoline refinery in eastern Canada and an oil sands processing plant in Alberta. The unrefined heavy oil will be sent to Texas and the finished gasoline will be sent to Ontario. Not one federal politician saw the importance of this announcement.

H/T to my mother for the property listings. She says the government has "revived" downtown Port Arthur (Thunder Bay) by opening a casino in the old Eaton's store. It's doing a big business 24/7 relieving the locals of the money they would have spent on food, clothes, heat and mortgages.

1 comment:

Anonymous said...

I wonder what the taxes would be on the "best" place in town?
Gathering by the decline in traffic on both the local roads and at the local Walmart (which used to be always busy all the time) and what a couple of delivery guys and real estate guys are saying, the economic boom is ending in Southern Ontario.
Just wait until fall and the delivery of the first tank of winter heating oil. $1,200+ by my calculations at the current prices for a 200 gallon tank.