Kamloops Will Cry, But PG Will be a Good Host

(Aired on September 17, 2010)

Well, good for Prince George.  P.G. won the right to host the 2015 Canada Winter Games today.  It's believed the games will bring 3600 athletes and $60-million in economic activity to the winning city.

That, of course, would have been more than welcome in Kamloops, but is even more necessary in Northern BC.  Though it wasn't that long ago that Kamloops had a local economy dominated by the forest industry.  Insightful and innovative leadership in both the public and private sector led to better diversity in the business community here.  That hasn't been the case in Prince George, where the economy is still largely based on forestry.  And with the downturn, the entire region is hurting.  So in that way, it's good for P.G.

Here's another reason it will work out well for Prince George - 2015 will be the 100th anniversary of the city's incorporation.  There may be some negative aspects to the city.  I've never visited, but people who have tell me it's poorly laid out, the downtown has virtually been abandoned, and of course, it stinks.  But apparently, contrary to popular belief, Prince George does have adequate facilities to host the event.  And they have five years to get up to speed.

Good on Kamloops for a strong bid, I'm sure we'll get many more high profile events in the future.  For now, we'll cry in our beer, and tomorrow's another day.

It's Not That Bad

(Aired on July 8, 2010)

There was a letter to the editor in the Kamloops Daily News today complaining about the number of mosquitoes in Kamloops right now.  I agree there are more than usual, but the total is still almost negligible. 

It got me thinking about how good we have it here in Kamloops.  Talk to anyone from the prairies - like me - about mosquitoes, and you realize it's all relative.  Same story goes for complaining about the cold weather in winter time.  Things aren't perfect in our city and in our province, but they're getting pretty close.  The weather is nice, and the bugs aren't that bad. 

Even the economy is doing relatively well.  In spite of the downturn, Kamloops just saw record numbers for building in a six-month period and in a twelve-month period.  And according to Finance Minister Colin Hansen, BC appears to be recovering better than expected as well.  It's not smoking hot, mind you, but it's turning around.

From my perspective, just like the weather, you don't want it to be too hot.  I lived in Alberta five years ago when the province was making money so fast it literally did not know what to do with it.  At one point, Ralph Klein actually started giving it back in lump sum cheques.  While that's all fine and good, the growth of the economy had plenty of negative side effects.  No one wanted to work in the service industry because of all of the high-paying jobs in the oilsands.  So try getting a table and a lunch in a reasonable time frame.  Urban planning in cities like Calgary was completely thrown to the wayside because growth was too quick.  And the wealth did not solve the social issues like homelessness and child poverty.  In fact, all that wealth in the hands of so many young oilsands workers led to rampant drug use and addiction.

We're doing quite well here in Kamloops, not so well that I won't be able to find something to, shall we say "point out" - but quite well nonetheless.

Too Soon to Raise Interest Rates?

(Aired on June 1, 2010)

The move was not unexpected, but the Bank of Canada is treading on very dangerous ground in moving the interest rate up substantially this morning. The rate jumped from 0.25% to 0.5%, likely the first of several moves to get the rates up from the rock bottom levels set last year. The drop in rates in 2009 was designed to help stimulate the economy. There are signs the economy is starting to bounce back, but in raising the rates, the Bank of Canada is counting on the fact that the economy will continue to rise.

The question is - did they make the move too soon? Are we really far enough into a comeback to be able to raise the rates? The world economy is still on very shaky ground. The stock markets have not rebounded to previous levels. Europe's unfolding debt crisis has shaken expectations of a global rebound. And since we are tied so much to world markets, are we assuming too much in raising our rates?

And let's not forget the impact on the local economy. Those interested in going to the banks to raise money to get back on track will have more trouble with higher borrowing rates. Young people trying to get into the housing market will certainly be affected. While the rates are still pretty low, and there may be some truth to the fact that there is still room for lots of stimulus, the move is still risky given all the criteria.

I don't think you'll find many takers on the streets of any city in our viewing area who feel the economy has bounced back to the point where such a risk is worth taking. Let's hope Bank of Canada Governor Mark Carney doesn't regret his actions a few months down the road.

A Penny Saved... Ain't Worth It

(Aired on May 21, 2010)

Above my desk sits a rather large coffee mug.  Said mug is about 7/8s filled with change.  Not the good kind of change, mind you.  The kind of change that might as well not exist.  If my mug was in fact filled with a tasty beverage and not change, the pennies would constitute the mocha and the silver change would constitute the delicious whipped cream on top.

The fact is, I haven't made a concerted effort to pay with something using pennies in years.  I only collect them, I never divest myself of them.  If by some chance I happen to have one in my pocket and I'm paying for something with change, I may have one penny less.  But usually I don't have pennies on me - I put them in my mug you see - and it's more pennies I get back.

My penny collection has convinced me that it's finally time the penny be taken out of production.  Here are some numbers to consider, care of the CBC.  Depending on whom you believe, it costs somewhere between 0.8 and five cents to produce one penny.  In 2007, a survey conducted by the Canadian Mint found that 63% of retailers were in favour of ridding the economy of the one-cent coin.  It seems crazy to think that there would be no way to pay for the smallest measure of currency, but there's nothing you can buy for less than a nickel anymore.  And if there is, it's a case of the exception proving the rule.

There are enough pennies in circulation already, so you wouldn't necessarily need to adjust pricing up front.  It could be phased out over time so we can all get used to it.

That's my thought.  And I won't charge you a penny for it.

Increased Fees no April Fools Joke

(Aired on April 1, 2010)

You may have seen a story in the Kamloops Daily News this morning announcing coin-operated water meters for the city. A funny story and of course, an April Fools' Day story.

But the rest of the news relating to money this April Fool's Day is no joke. In fact, it's a cruel scenario being played out as fees for a whole bunch of things are up today. Many of them affect the coast, but some affect all of us. B.C. Hydro rates are up over 9% today. Terasen Gas ups its rates 6%. If you take the ferry, use Transit at the coast, you'll pay more starting today. Overnight camping fees in provincial parks are up as much as $6 per night. You'll start paying PST on EnergyStar appliances.

What kind of message does that send about going green? Dig deeper in your pockets, folks.

And we're not done yet. The harmonized sales tax isn't far off, and the Bank of Canada is going to start increasing interest rates again in a month or two. The Banks, who take in billions and billions of dollars in profits every year, have already jumped the gun on that, raising many mortgage rates. Once you've got all the moths out of your pockets, start thinking ahead to what all this means. Individuals and corporations hurt by the global recession make less money, meaning less tax revenue for the government, but also the bigger chance for layoffs.

No wonder Canadians surveyed by the Royal Bank are pessimistic about things. How can they be anything but? I think a good stiff drink is in order to calm the nerves, but the government taxes that to death as well. It's not a rosy situation, despite indicators that show we're back on track for an economic recovery. It looks like we're getting that recovery off the backs of taxpayers, and eventually the taxpayers backs are simply going to give out. What then?

Saving for Retirement Difficult

(Aired on March 30, 2010)

It probably didn't come as an surprise on the weekend to hear former Bank of Canada governor David Dodge tell us we're not getting properly prepared for retirement. Dodge told a Liberal think tank session "Middle- and upper-income Canadians now in their prime earning years are both going to have to save more and expect to retire later in life than they'd hoped to do." He said most Canadians are not financially prepared for retirement.

If the Liberals paid Dodge to speak at their conference, they certainly wasted their money. Dodge said what most of us who prepare for retirement already know.
Dodge said Canadians need to save between 10% and 22% of their pre-tax incomes each year if they save consistently for 35 years to have comfortable retirement incomes. And there are precious few who can do that. I can look all around me at my family, my friends' families, people I meet in the work environment every day, and virtually none of them are starting to save for retirement. And they're already in their mid to late 30's and beyond. To expect families these days to do that is beyond expectations.

We're being taxed to death. Costs are going out of sight. People with young children aren't in a position to save, even with both parents working. No one can afford it. And the government is not helping. Banks, who are making fortunes in profits, raised mortgage rates yesterday, at a time when a new study indicates at least 20% of people are struggling to afford the homes they're living in now, and that productivity is suffering as a result. The Bank of Canada says it's soon going to start raising interest rates, probably before the summer. That will make it even more difficult to save.

Ultimately, of course, the government is going to have to pay because senior citizens won't be able to pay the bills and the government is going to have to take care of them. It's fine to tell us we have to save more, and we probably can all cut corners to do that a bit better, but we're not going to save what we really need to. With what we're paying in taxes and charges, it's just not going to happen.

Keep Interest Rates Down

(Aired on February 25, 2010)

The federal government is walking a fine line between success and disaster as we try to recover from our faltering slide in late 2008 and most of 2009. There are indications that interest rates will start to rise this summer, and although I am not some kind of financial guru, I can tell you right now that if that happens, we will head right back down the slippery slope we so recently started to climb up.

With personal debt at virtually record levels, and many people overextended in their personal lives, raising interest rates will make personal bankruptcies soar. They're already up some 27% this year, as people try to make it through tough times. To raise interest rates further will be disastrous. U.S. financial boss Ben Bernanke made the same comments yesterday. He's worried that if interest rates rise, the U.S. economic recovery will fail, and we all know what that means.

I am in favor of what the government is doing regarding putting new rules in place that will force people not to overextend themselves. Rules for purchasing homes that will restrict the amount of money that can be tied up in mortgages are badly needed. Many have been tempted to stretch themselves far too much to get into a home with low interest rates, and they've put themselves in trouble. To raise interest rates to stop that is not the answer. Education, and new rules to prevent that problem make much more sense.

There is concern that if inflation rises, higher interest rates will be needed. But from what I've been able to determine from the experts, rising interest rates will bring on way more problems than they will fix. Let's hope the government sees the light, and keeps interest rates low until we get out of the quagmire.

New Mortgage Rules Wise

(Aired on February 16, 2010)

It is probably a wise move for the federal government to put some new rules in place for people to qualify for a mortgage to buy a home. Some kind of mortgage affordability test is probably necessary in light of the fact that there is real concern we're taking on way more debt than we should. With the hot housing market, low interest rates and a new crop of people looking for first time homes, people have been stretching themselves to the limit. Older people, meanwhile, have been borrowing heavily against their homes.

While Finance Minister Jim Flaherty is absolutely right that we don't have a housing bubble yet, there is concern that if the economy struggles for too long, many of those with extended debt will have their feet cut out from under them. And that would be a troubling thought.

The government is facing a fine line here. They don't want to put the brakes on the fragile economic recovery, but they also must ensure that we don't let people extend themselves too far. That could create more problems down the road. And when you look at the results of a new study showing that household debt as a whole is soaring, the time has come for some restraint. Average debt climbed to $96,000 last year. That puts the debt to income ratio at 145%, the highest ever recorded. There was also a dramatic increase in late debt payments. So when you combine all those factors together, it becomes pretty clear that we need to get a better hold on our personal finances, and live more within our means.

No one is suggesting we're in a panic mode, but sometimes, as the saying goes, an ounce of prevention is worth a pound of cure.