Well. I’ve had a lot of ideas in my adult life that I felt passionate about, but doing business here is remarkably unrewarding. I can do what I enjoy and I’m good at with an American company for 2-3x what I’d realistically earn here working at least as hard on my own business.
I’ve consulted for several Canadian tech companies and their finances often seemed remarkably poor. I know some are doing well; I’m more so speaking about “regular people” businesses. Small private companies with staff around 10-20 people.
They work really, really hard for their incomes and the rewards really aren’t what you’d expect. This seems true outside of tech as well.
My wife works for the federal government on the other hand. She earns much less than I do, yet still dramatically higher than the average for our city and the rest of the country. She also has generous time off, training, an excellent union, interesting work, etc. Why in the world would she start a business? She actually could, too. She’s an awesome hydrographer with cutting-edge skills and knowledge. But she’d have to work herself to the bone if she went private and she’d have to work in wildly different and less comfortable contexts. And for what? 1.5x the income? 2x? After that’s chewed up by taxes, she has traded her family life for a career that barely pays more when you do the quantitative and qualitative maths.
Yet I think this is a huge problem. It isn’t really wise to work hard and innovate here, and I think it’s actually harming our workforce and economy quite seriously. Look to many countries and you can quickly point at many past and recent innovations and core competencies. But what do you see when you look at Canada? There’s certainly less, and seemingly less all the time. Our small population is a huge disadvantage here, but we have such immense opportunity for innovation.
I do think we innovate in extractive industries. We do a lot of environmental research around our primary industries, and that’s very valuable. Economically though, I don’t know… We aren’t much of a land of opportunity these days, and it doesn’t seem like much is happening to reverse this trend.
This is true for tech work as well. Pay is higher in east european countries after a certain level of seniority. All in all Canada is noth worth it for the money. Everyone I know from the UK moving to Canada came back running as pay was easily higher. That means businesses can't afford people.
Fwiw, I'd still prefer living on the west coast of Canada than an overwhelming majority of other places like the U.K or U.S, even despite literally not having a job, any prospects, or the possibility of owning a home at any point in my life, even as a software developer. If I left, and it's possible, it would be because all of those factors got to a point where I had no choice.
You can get a 3 bedroom townhouse with a garage and a small yard 45 minutes from Vancouver for 900k. Is that really unachievable? Split it with a partner or a friend, rent out the 3rd room for $1k a month, and you need to save 90k for the Downpayment and the mortgage is 5k a month minus the rent, so you need to chip in $2000 a month to the mortgage. Rule of thumb for accommodations to be less than 30% of your income so your income is 6,666/mo or 80000 a year, or $41/hr.
Any tradesperson can make that. People are charging $45/hr to clean air bnbs.
Generally I approve of this type of thinking, it's how I got my start, too. So I'm only quibbling to improve the fidelity of the model for those who are like us.
1) My impression is that it's prettttty tough to get those 10% down mortgages these days. Though, again, that's behind me now, I could be wrong.
2) The bank will not consider your accom to be mortgage-minus-sublet-rent for the stress test, I promise you. They'll count your rent as additional income, at some discount (fuck you, bank), and then count 30% of that against your mortgage payment (for the stress test). I guess if you know someone who actually got this past the bank stress test then let us know, and let us know which bank, because I'll move the next time my mortgage comes up. But I have tried in the past. So you'd need a joint income of 200k (I trusted your estimate of mortgage at present rates on $810k), minus 10k/a for the rent, is $95k each, $46/h.
Still. Although it is definitely difficult, it is, as you say doable.
I meant brailsafe’s share of the down payment is 90k, and brailsafe’s partner would also have to come up with 90k. 20% down. Agree 10% down is not plan A.
Also agree on the banks being difficult to work with on including the future rental income when qualifying.
It sucks if you are a single person - probably have to go apartment route or 1 bedroom condo. The most successful guy I know, who has a pretty sick motor yacht now, had a room mate until his now wife moved in.
Right, okay. And, to be clear, back in my day 5% down (FIVE) was totally plan A, so that has gotten harder for the next generation. Thanks, fedgov!
> difficult to work with
Heh, notwithstanding the amusing savagery of my sibling comment, is "difficult to work with" a euphemism for "impossible to work with", or do you have reason to believe that this is even possible?
> It sucks if you are a single person
I would say that it's getting closer to hopeless if you're a single-income family, and being a single-income individual isn't much better, because 1br condos are actually not that much cheaper than 1br.
I'm in a condo, btw, and I could have done it on my income alone when I bought (laxer stress tests, I provided the down solo anyway, rates were lower, prices were lower), but I could not buy this condo solo today, and certainly not with the income I had then.
I guess my overall message is: I think that the type of financial modelling you were doing is excellent to show that it is not yet impossible or hopeless, and if someone wants to make it happen, it's still within reach... but... it's genuinely really hard. For decades I've been scoffing at people whining about affordability, saying that they just spend too much on short-term pleasures, but in the last decade I've kinda stopped the scoffing and shut my mouth.
The math for a 1 bedroom condo in the 20 min from downtown (not that it's relevant to my lifestyle) works out to about $5k a month if I had a clean income history and a 20% downpayment. It's just not an amount I could see my partner and I being able to absorb, nor would it be worth it if we could. It's unfortunate, because we've lived in our already relatively expensive studio basement suite for 4 years. Shit is cray out there.
I mean, I guarantee you can do better than that. The condos you describe certainly exist, but there are other options. Maybe 2 bedrooms for $3k isn't enough of a difference for you to care about, though.
And you don't need a "clean income history", that's not a real thing. You need all the people on the mortgage to have a stable job, typically 6 months. If your source of income is more variable/complicated, they'll ask for 2 years of tax returns.
This kind of doomerism is why I wanted to support applied_heat's post in the first place.
I don't really think 2 bedrooms for $3k, in Metro Vancouver would be a likely find. I'd say even if you're willing to sacrifice literally every other characteristic, but usually if you're in that range now you're looking at very high condo fees or something like no laundry in building.
But again, if space is literally all you're after, and you might be for all sorts of perfectly valid reasons, then that might be your choice. On the flipside, it would be weird for us to work relentless and double or more likely triple our monthly expenditure while basically getting only marginal or specious value for that money.
For example, even if the numbers or stability on our end made sense, and committing to that wild increase in cost didn't increase our exposure dramatically, we'd still be trading triple our shelter expenses for the added utility of basically one room and the power to knock out a wall or something.
No matter how you spin it, without a huge pool of cash and unrealistically high income(s), or a bunch of people subsidizing your mortgage, it's not impossible but generally not a sensible move unless you absolutely must own something for some reason.
I can theoretically earn above $100k, but it doesn't really matter unless that's sustained for a long time with few breaks, and that's not happening enough to bet on, such that I'd take out a mortgage expecting that income to be there long-term.
I'm not sure it's doomerism, as in, I wasn't saying things were "hopeless", just unrealistically demanding to attempt pursuit of what used to be considered a standard gradual path of upward growth. I live where I do despite that, and basically will until it's not feasible to do at all, along the way we'll have to face some seriously tricky choices anyway unless we can find someone else's basement to live in till at least our mid-thirties.
I think mortgage brokers were a bit more flexible than the big banks at recognizing future rental income, especially if you already had one property generating some rental income indicating you would probably make it work again.
For the first property I agree you would need to qualify without taking the rental income in to account.
This part is a problem, because it sounds like 45 minutes to where the traffic starts, from there another 1.5 hrs to the parts of the city you want to go.
Just because some configuration of variables could hypothetically come together in the right order over some long-enough period of perfect stability if me and my partner relentlessly pursued just that specific goal, which I don't have, for years, doesn't make it a sensible idea to do so, and I didn't say it was hopeless; just kind of a worthless and unlikely pursuit.
However, I definitely should have been more narrow with my specification of West Coast. I like where I currently live, and have no plans to move, and have no plans to work myself into the dust in arbitrary jobs to afford a type of house that I don't want, somewhere I don't care to live, possibly dependant on a car I also don't want. If someone gave me the house you describe, I'd rent out the whole thing and continue renting where I am.
Ideally I'd shoot for a 1 or 2 bedroom condo in a more central area, but the math does not work out in a way that makes any sense to me, in part for the other reasons I cited in the original comment.
It's pretty common for people to come out of the woodwork when affordability or job concerns are raised to just imagine a series of variables whereby if you just keep dividing the space, adding jobs, and moving further out, there's no problem, because theoretically you can still pay for something regardless of how much or how far or how many other people you share it with.
I'd rather disagree with the premise, and spend my time and energy elsewhere instead of on some mcmansion in Langley for an amount of money it shouldn't be worth.
It's also rude to denigrate people who clean Airbnbs for $45/hr (which isn't enough) as if it's not a skill and anyone can just switch to it. It is a skill, and I don't have that skill, or the equipment, or any of the other stuff someone would require to get operating as a business which they'd need to be. Likewise tradespeople, which software developers clearly are in some ways.
The facts are that the Canadian software development market is terrible, job volatility is higher than it's been in quite a while, and housing of all kinds is higher than it's ever been all over the country. Those are not promising conditions for prosperity.
I didn’t mean to denigrate cleaners, I have friends who clean air bnbs and they are charging more than $45/hr, I just saw that advertised. Anybody can pick up $50 worth of cleaning products and start scrubbing without any special education or training so we might disagree on how much skill is required, but my Airbnb cleaning friends definitely have motivation, and a positive attitude and outlook on life despite the challenges they face in other areas.
Either you rent for your whole life or you buy something and have to compromise on some of the variables. I see lots of people working hard, mostly in jobs they don’t love, and making those compromises and choosing to buy somewhere.
> despite literally not having a job, any prospects, or the possibility of owning a home at any point in my life, even as a software developer
I hope things turn around for you! I meant to point out that home ownership is possible, but it sounds like you have already evaluated the variables and if you are set on only living in some specific area then home ownership might not be possible in that location without a couple of well above average incomes.
I do think the mission of buying a house in an arbitrary place is kind of a misguided gen-x goal unless you have a legitimate space constraint like kids, already have a car as key component of your life, or have no established community. My point was that it's not worth relentlessly pursuing home ownership in some place just because it seems like inherently sensible goal. To acquire a house I'd need an improbable set of other variables to align, or relentlessly pursue it at all costs, and it's just so expensive for such a marginal and specious gain, that I don't think I'll concern myself with not having, whereas a few years ago it was merely a choice to keep renting and the delta between the two ongoing expenses wasn't like 3x.
Seems like you just picked an arbitrary and astronomical threshold, zoomed in somewhere that seemed vaguely close to Vancouver from the sky, and made your argument based on that. Parent was entirely correct in posing their question, because 45min from X is a giveaway.
Squamish is a wonderful small town up the coast; a haven for climbers and outdoors people. Not many people have the intention of moving there—it's quite isolated—but even still, that attached townhouse has more than doubled in value since it's last sale in 2007, probably the majority of which came in the last 5 years.
I found a little paradise on earth near Wawa, on Lake Superior.
Well, found, no. There is also petroglyphs there.
But damn, the lake has small island, coves, beaches.
Absolutely stunning and mostly devoid of intense tourism. ( aka : no stress to find a camping spot, you can also sleep in most places if you are respectful)
Winter in Toronto (lattitude 43.6) isn't really much different from Chicago (lattitude 41.8) and pretty much the same as most of the US northeast and not nearly as bad as a place like Minnesota (or Vermont or Maine, etc.) etc. Toronto sits at the same latitude as northern California, and while it has plenty of very cold days the total length of winter isn't any longer than much of the northern half of the US.
It ain't California or the PNW, but it also doesn't fit the stereotype of the Great White North, eh? As a person from a part of Canada with actual winters, calling this never-ending winter seems like a giant distortion. Most years we don't really have proper snow on the ground until after Christmas, and it's gone before April. Where I grew up in Alberta it's snow from late October until April.
> Toronto sits at the same latitude as northern California
This is
(a) just actually not literally true (41N at the border vs 43N),
(b) particularly off-base when you consider that "northern California" is typically a reference to the SF Bay Area
(c) completely deceptive.
Four months of the year with around two feet of snow, with an average low below freezing. San Francisco has barely ever gone below freezing in its entire historical record (literal record low of −3C a hundred years ago).
Yes yes, you don't have igloos in Toronto, fair point. But a person who drives on summer tires year round in Toronto is a homicidal maniac. In Vancouver that's merely lazy, an excuse to call in sick a few days a year.
No argument about Minnesota, though, nor about The Texas Of The North. And yes, it's hardly never-ending winters. The summers in T.O. are brutal too.
How about the Texas of the South? Here's my observation.
I would think there is some comparison between Canada and Texas as major trend-setters of their own unique culture, both philosophically and financially, within a diverse North American continent. For some things there are more similarities than differences. A lot of extractiveness with few owners but excess amounts of resources traditionally trickling down from there.
In Texas it's been declining for entrepreneurs starting 40 years ago. The most recent 20 years have been more of the same. There's still bright spots like anywhere else but overall the outlook for independents has only become more negative in the long run.
One of the obvious things nobody really looks at, Houston was founded (on an undeveloped floodplain) as a planned center of industry and commerce for Texas when it became a new nation after independence from Mexico. The idea was to replace San Antonio which had been the capital as a Spanish colony and Mexican state, and which had been inhabited by indigenous cultures since prehistoric times.
Growth-entrepreneurialism was ingrained and universal in Houston from day one, then put on steriods after the discovery of oil & gas.
After the arrival of the telephone most businesses depended on listing in the phone directory. Something I understand many young entrepreneurs have never seen nor utilized, so I digress.
By the 1970's (when everybody still had a land line telephone and the phone company was still a monopoly and quite uniform across the US) most cities had a directory format where the "white pages" at the beginning of the book were the fine-print alphabetic listing of all residential and business numbers, with businesses often appearing in bold in order to stand out among the residences, depending on their service agreement. Followed by the yellow pages which were a business listing with alphabetized categories (rather than alphabetized by business name), containing paid display advertisements, so you could look up consumer-oriented things like plumbers and auto mechanics, etc.
Unless you knew the correct name of the business, you were probably better off looking for a business number in the yellow pages, which would be maybe about the last half of a fairly massive softcover book.
In a place like Atlanta it was getting pretty crowded and they would then issue the white pages and the yellow pages as two separate massive volumes. Atlanta was a pretty hoppin' place.
But in Houston there were so many independent businesses that the phone company published a separate one of their huge soft-cover fine-print black & white directories each year just for individual business phone numbers. No display ads, just data, this was not the "yellow pages" which contained the sometimes whole-page paid advertisements, there were so many of those they were issued in two separate massive alphabetical volumes bound from the traditional yellow paper. This was the fine print and there wasn't room for the businesses within the residential directory anyway since that had already been divided into two separate alphabetical volumes of their own residential white-pages. They might have had a set up like this in other crowded places like Los Angeles.
Even after the Nixon recession had been suffered miserably by small businesses, the Houston business pages alone were about as big or bigger than the entire phone book of most other American cities, which I attribute to enhanced survival due to unprecedented high oil prices. But eventually after the Reagan recession kicked in, the business pages began to dwindle to a shadow of their former self.
We don't have the equivalent documents today to make a valid comparison with, since we're measuring thin pages by the kilo, but the gradual displacement of widespread opportunity with widespread malaise that was apparent in the macro environment has seemed to continue unabated for about 40 years now and it's about time people noticed.
Just another thing independent entrepreneurs have to face, they are an endangered species who has been under constant threat since before so many of them were born.
Our winters here in Victoria are great. A decent amount of clear skies, never too cold, not as much rain as people think, heaps of stuff to do nearby or a day trip away. It’s hard to beat.
Victoria is also the most expensive city in Canada, which - reading the accounts of low pay in this thread, make it seem out of reach for most Canadians.
Yes. It’s brutal. I earn a somewhat low income by SV standards, but my income (excluding my wife’s) is around 3.5x the city’s household income average. I recently bought a house for $1M and the mortgage eats 40% of my income. This was the low end of the market for a family home.
I wonder almost every day what ~70% of the city is doing to survive. We are very diligent about spending and while we’re comfortable, we still need to be careful. That’s insane. The situation is bad. Our local subreddit is loaded with people who are struggling, leaving, venting, etc. over money and work. It’s the worst I’ve ever seen it.
Also weird: Victoria is the most expensive by many measures, yet remote work salary ranges never consider Victoria an expensive city. Vancouver, Toronto, they’re always on the list of course. But never Victoria. I had to turn down a role recently because it was around $40k per year lower than I’d earn in Vancouver, and I found their inflexibility and unreasonable stance on the matter incredibly concerning. I would pay almost exactly the same amount to live in Vancouver, but their calculator disagreed.
Only if you consider "rest of the world" to mean Europe + English speaking countries. There's an insane amount of entrepreneurship coming out of China and India, and a similar hustle culture. Also in some parts of Africa, like Nigeria and Kenya.
"While the lowest five corporate tax rates worldwide are held by corporate tax havens (led by Ireland), the United States and Canada have ranked ninth and tenth respectively out of 33 major economies for the past two years. The corporate tax rate in Canada is lower than all the averages of regional jurisdictions, including the global and G7, according to the average tax rates of 33 UHY international firms, assuming companies have a profit of $1 million. "
Canada's problem is not excessive taxation. It's monopolies and lack of competition and over-reliance on commodity exports.
Something is paying for Canada's massive public sector. What do you think it is?
As for California, a lot of companies moved to Washington to escape the high taxes. Washington used to be a low tax state, but no longer, and companies aren't moving here anymore.
(Washington recently added a capital gains tax, payroll taxes, a $.50 per gallon additional gas tax, and boosted the sales tax to 10.1%.)
Why don't you try using facts and numbers instead of insinuations, then? Show me how Canadians are being screwed on taxes.
Actually I know working class Canadians are -- Canada's system is actually not very progressive compared to many US states, the bottom end of the tax bracket is fairly heavily weighted... but corporations here are sitting pretty. Best gig in Canada (after real estate) is to be a fake "contractor" paying corporate taxes instead of personal income taxes, and stashing your wealth in corporate assets and paying your spouse dividends... it's ridiculous.
In any case, to throw it back: Something is paying for the US's massive defense sector. What do you think it is?
So, so many people have recommended I do the fake contractor thing. Dude, just pay your wife to do “HR stuff” or something. Wait, why buy a personal vehicle? You could buy one for your company to travel to client meetings. You know you could be putting X amount into your “business”? Why lose all this money in taxes?
The thing is, we need people to pay taxes because our public systems are having major issues and people earning or paying less is a real problem for all of us. Would I like to get more from what I earn? Yeah, in a sense. Do I need it? Not as much as the average Canadian. Not even close.
It does seem like in the last 10 years the tax code in Canada has become more strict and the CRA really doesn't like single-customer "corporations" anymore and ends up taxing them just like employment. So some of the holes at least have been plugged.
For 10 years I worked at Google and pulled in what I would consider a ridiculous salary. But over 50% of it was pulled away in taxes. I am a socialist by conviction so don't complain about these kinds of taxes much, but it really chafed me to see people in contracting situations bringing in more than me by squirreling away money, hiding it from the gov't in these kinds of corporate arrangements.
I’ve consulted for several Canadian tech companies and their finances often seemed remarkably poor. I know some are doing well; I’m more so speaking about “regular people” businesses. Small private companies with staff around 10-20 people.
They work really, really hard for their incomes and the rewards really aren’t what you’d expect. This seems true outside of tech as well.
My wife works for the federal government on the other hand. She earns much less than I do, yet still dramatically higher than the average for our city and the rest of the country. She also has generous time off, training, an excellent union, interesting work, etc. Why in the world would she start a business? She actually could, too. She’s an awesome hydrographer with cutting-edge skills and knowledge. But she’d have to work herself to the bone if she went private and she’d have to work in wildly different and less comfortable contexts. And for what? 1.5x the income? 2x? After that’s chewed up by taxes, she has traded her family life for a career that barely pays more when you do the quantitative and qualitative maths.
Yet I think this is a huge problem. It isn’t really wise to work hard and innovate here, and I think it’s actually harming our workforce and economy quite seriously. Look to many countries and you can quickly point at many past and recent innovations and core competencies. But what do you see when you look at Canada? There’s certainly less, and seemingly less all the time. Our small population is a huge disadvantage here, but we have such immense opportunity for innovation.
I do think we innovate in extractive industries. We do a lot of environmental research around our primary industries, and that’s very valuable. Economically though, I don’t know… We aren’t much of a land of opportunity these days, and it doesn’t seem like much is happening to reverse this trend.