Canada’s “Conservative” Finance Minister, Jim Flaherty recently announced that—in the interest of helping Canadians rein in their ballooning household debt—any future mortgages backed by CMHC (the Canadian Mortgage and Housing Corporation) must be paid back within 25 years. The 30-year mortgages that have been allowed in recent years are a thing of the past.
I suppose we should be grateful to have the Finance Minister showing such deep concern for young Canadian families starting out with their first home. It’s true, household debt has risen to alarming levels and, in a struggling economy, additional credit card debt and consumer loans have put some families in a position where paying off their debts has almost become a fantasy. For others, the debt-spiral has become a nightmare, lending itself (no pun intended) too often to the shame and trauma of bankruptcy.
The Finance Minister has correctly identified one of the contributing factors to mounting household debt: the longer the term of any mortgage or loan, the more interest will be paid. Increased interest costs add to the total debt.
However, this raises a number of questions that a responsible government should consider:
- The tax burdens imposed by bloated governments at all levels consume almost half of the average Canadian’s income. Every dollar paid in taxes is one less dollar available to struggling households for food, shelter, savings, investment, and personal loan servicing.
- Canada’s “mortgage” (national debt) is climbing. Mr. Flaherty’s government continues to borrow an additional $58 million each and every day!
- Canada’s accumulated national debt is (today, the moment I’m writing) $586, 243, 275, 199 and increasing by about $1,000 per second!
- Every Canadian child is born $16,909.07 in debt! That’s his or her portion of the national debt. College debt and a mortgage just add to it.
- The free-spending “Conservatives” under Mr. Harper have increased the size of government by about 42%; they’ve run the biggest budget in Canadian history as well as the highest deficits ever!
- While telling other Canadians to tighten their belts, the Prime Minister and Finance Minister continue to hand out lavish pension entitlements to themselves and to every MP with six or more years of service. They inject taxpayers’ money (read: “borrowed money which taxpayers will have to pay back with interest to the chartered banks and global financiers”) to the tune of $248,000 per year per MP! This is on top of their base salaries of $157,000 per year!
My question is: “Who is it that needs a lecture about reining in spending?” Every day that goes by, this government is adding to the household debt of every Canadian. This government has not made one principal payment on its “national mortgage” since 2008. That’s four years.
My suggestion to Mr. Flaherty and Mr. Harper is: If you want to borrow something, borrow a page from the playbook of the Christian Heritage Party (we charge no interest and you’ll never have to pay us back). Our Better Solutions are available to you. Our long-standing policy is that Canada’s federal government should:
- Stop spending money it doesn’t have.
- Begin paying off our “national mortgage” as quickly as possible.
When evaluating our current debt quagmire, the lines of the old coal-miner’s song “16 Tons” come to mind. “Another day older and deeper in debt…” What a sad legacy for those sucked into the vortex of ever-increasing debt! While the deceptive nature of debt lures many families into heartbreaking and unmanageable levels of debt, this should never happen to a resource-wealthy nation like Canada! The elected leaders of this great nation should demonstrate the courage and discipline necessary to return to surplus budgets and take concrete steps to “pay off the mortgage.” If 25 years is good enough for Canadian citizens, it should be good enough for our politicians!
If you want to see how Canada can pay off its mortgage, read our Better Solution. If you want to help CHP Canada bring our policies to Ottawa, join the party. If you want to have a mortgage-burning party in 25 years, you’ll have to start working for it today! CHP Canada is leading the way!