Saturday, October 10, 2015
Many Canadians are at risk of bankruptcy with a raise in interest rates that would come with a Liberal or NDP government
People vote with their pocketbooks.
With nine days to go until Canada's election, feelings about Bill C-51, whether women can wear niqabs while swearing the citizenship oath, and the war against ISIS will not steer the compass to which candidate gets an "X" from the average voter.
Which leader is most likely to keep my job sector be secure, can I make my mortgage payments, and will I be able to put food on the table will be the questions that decide the election.
To that end, interest rates will be a big factor, and it strongly favors the Conservatives.
The current Prime Interest Rate is 2.7%. Lots of people have below-prime mortgages and are able to live in their own homes because those rates are so low. Canadian banks have kept those rates low, thanks in large measure, to the economic policies put in place by Stephen Harper's government.
Liberal leader Justin Trudeau is promising federal deficits and more government spending at a massive scale. To get an idea of what a Trudeau government's economy would look like, you only have to look at his mentor, Ontario Premier Kathleen Wynne.
Under Wynne's government, Ontario has become the largest non-sovereign debtor in the western world. There have been large tax increases, which she sometimes euphemistically calls "revenue tools," and her province is losing jobs to nearby US jurisdictions because of the high energy costs needed to run large-scale businesses in Ontario. Ontario's provincial debt rating has gone down under Wynne, and Trudeau's spending promises would do that to Canada as a whole.
The NDP's Tom Mulcair is promising balanced budgets, more government spending, and no significant tax increases. The NDP's recent plunge in the polls are for a variety of reasons, but almost certainly, one of them is that Canadians have concluded that Mulcair's promises on the economy are worthless. It doesn't help him that his candidate list is filled with people like Niki Ashton and Linda McQuaig who express admiration for policies that ruined the Greek and Venezuelan economies.
Consider what would happen to the average mortgage upon refinancing if the interest rate went up by only one percent. A $250,000 mortgage would meant extra payments of more than $200 a month for those households. Combine that with the inevitable tax increases that the Liberals and NDP would bring in, and a vote for those parties translates into a vote to take more than $300 per month away from your ability to make necessary purchases.
Harper will do what he can to keep interest rates low and Canadian household debt manageable. The increase in interest rates that would follow Liberal and NDP governments would result in many Canadians losing their ability to pay mortgages and the loss of their homes.
We pay for our governments, in one way or another. In essence, by voting, we're making a purchase of services. With that in mind, we always want the best service at the best price from a vendor upon whom we know we can rely. Given the available options, the Conservatives are, by a substantial amount, offering Canadians the best deal.