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Bank of Canada is more worried than usual about debt loads

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The Bank of Canada is more worried than it was last year about household debt loads, and is concerned about the abilities for households to stay on top of them in the coming years once mortgages renew at higher rates.

That’s one of the main takeaways of the bank’s Financial System Review, an annual assessment of various risks the bank deems to be of concern to the stability of Canada’s financial system.

While the bank highlighted the risks of cybersecurity attacks, the ongoing global banking crisis and climate change, the risk presented by growing mortgage debt was a recurring theme throughout the document.

After slashing them in the early days of the pandemic, the Bank of Canada raised its benchmark interest rate aggressively last year.

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While the move appears to have achieved its desired effect of bringing down inflation, it came with the collateral damage of walloping variable rate mortgages, as the bank’s rate moved from barely above zero in early 2022 to 4.5 per cent presently.



While only about one-quarter of mortgage holders have a variable rate loan, the effect of rate hikes has been dramatic, adding thousands of dollars to the periodic payments in many cases and extending the life of the loan by years if not decades.

In 2019, less than one-fifth of new mortgages were amortized for longer than 25 years. Last year, almost half of new loans were stretched out over a longer period.

Existing mortgages, many of which have been insulated from rate hikes so far, will start to feel their impact in the coming years as they renew, and the bank is worried about what might happen when they do.

“The decline in house prices has also reduced homeowner equity, and some signs of financial stress — particularly among recent homebuyers — are beginning to appear,” the bank said.

By the end of 2026, nearly all mortgage holders will have seen their payments increase. The bank says if rates evolve the way financial markets expect, the typical mortgage payment will be about 20 per cent higher over the next three years.

Financial stresses appearing

The numbers show that the financial stresses on households that the bank is worried about are already starting to appear.

The average debt service ratio — the percentage of a household’s total income that goes toward paying their mortgage — rose from 16 per cent to more than 19 per cent last year. That’s the highest level on record in at least a decade.

And the percentage of all mortgages where the DSR is in excess of 25 per cent skyrocketed, from 12 per cent in 2021 to 29 per cent by the end of last year.

 

Rising mortgage rates ward off potential homebuyers

4 months ago

Duration 2:04

Higher mortgage rates are dissuading potential homebuyers across Canada, according to new housing numbers from the Canadian Real Estate Association, while some sellers are failing to turn a profit on previously high-priced properties.

Given the amount of money it’s taking to cover the mortgage, it’s no surprise that many of those households are having a harder time staying on top of their other debts.

The bank says that households that took on a mortgage since 2020 are carrying about 17 per cent more credit card debt on average than those that took out a mortgage in the three years leading up to the pandemic. Arrears on credit cards have also been rising and are close to pre-pandemic levels.

Royce Mendes, an economist with Desjardins, recently warned about the looming risk of mortgage debt, calling it a “ticking time bomb” in a report last week. It’s clear the central bank is thinking the same thing, he said Thursday.

“The Bank of Canada is worried about the same thing we are: mortgage renewals a few years in the future.”

Robert Kavcic, an economist with Bank of Montreal, said in a report to clients that while debt loads of all forms are indeed ticking higher, he doesn’t expect it to become a major shock to the system because higher rates are being absorbed slowly.

“The characteristics of the Canadian mortgage market have been extremely important in containing the early damage from the tightening cycle (e.g., the lack of immediate payment shock is a key reason we are not seeing forced selling in the housing market),” he said.

“It buys households and the economy time to absorb higher rates … the mortgage market is not a time bomb, but more of persistent headwind that will blow for a few years going forward.”

 

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Manufacturers Blues: Staffing Not a Problem, But their Inadequate.

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We have been experiencing staffing problems for some time. Finding skilled workers within the manufacturing sector has been challenging but these past 2 years most difficult, not because there are no workers being interviewed, but because there are many showing up for their interviews and testing. The interviews go well, with their enthusiasm showing. We appreciate that a lot. But when they do their actual testing it’s another story.

Initial Interview usually goes without a hitch.
Testing shows us their capabilities and possible potential should we be willing to train them further.

We test these individuals as welders, sheet metal workers, press brake operators, plastics, and millwork specialists.

The problem we face is threefold. 1st off they have no real experience like they just graduated from welding school. We ask them to weld their name onto a plate, which is easily done if you have the experience. Many burn through the heavy plates or handle the equipment not very well. The secondary problem is their extensive demands from private washrooms, when they are willing to work(not our scheduled period), excessive wages far beyond the average wage. Over time employment is haphazard at best, nonexistent as they refuse. They even want schooling in the trade, while letting it be known that the wage they receive will always limit their loyalty to the firm. A buck or two elsewhere and bye, bye. The third problem is that most want to unionize, and have been told to demand the most up front even though they have not proven themselves worthy of advanced pay. For most private firms unionizing will kill the firm, with excessive costs dragging down any form of profitability. We have 15-25 laborers at a time with the option of doubling that when business gets busy usually in spring-summer-fall.

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Strange things that happen are the employees showing up with a six-pack of beer, taking 1-2 hour lunches, and often going to management asking for wage advances even when they have not been with us but for a few weeks. The provincial and federal government agencies who have these individuals trained seem to be the people indoctrinating the workers with unrealistic expectations and demand formulas.

There are many choice employee’s out there, but their wage/salary demands remain extremely high for an industry that is just surviving in North America. The pandemic and people leaving their jobs to become self-employed or simply home bodies until they find that perfect job with a perfect wage have driven up our costs drastically, and all the while we are trying to compete with foreign exporters.

Our Provincial and Federal Governments seem unwilling to assist us in finding excellent experienced employees, instead having people trained in the basics, and relying upon private industry to train these people, who will in a short matter of time leave us and go to someone else who will pay them more. The expense, time, and effort of our firm run at a loss when we train someone, but this gamble pays off occasionally. Our governments are staffed by unionized personnel, who will push unionization onto anyone they come in contact with. Not neutral, or objective, but actual union recruiters and propagandists.

Our firm has looked at moving to friendlier regions down south, but the nationalist within us persists in our Canadian Financial Adventure in Ontario.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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The FDA says people are confusing poppers with energy shots, and dying. Experts want proof

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It’s not unusual for the packaging of one product to resemble that of another, potentially leading to mix-ups. But the U.S. Food and Drug Administration (FDA) has warned people who drink energy shots to make sure they’re not accidentally chugging a bottle of poppers — or they might end up sick or dead.

“Don’t be fooled. These poppers, often purchased online or in novelty stores, are unapproved products and should not be inhaled or ingested, regardless of how they are packaged, labelled or displayed,” the FDA notes in its online warning shared in recent social media posts.

But those who work in LGBTQ sexual health say the FDA’s warning that people are confusing poppers with energy shots, with sometimes dire consequences, may actually be doing more of a disservice.

Such messaging “borders on inflammatory” and may contribute to the “the stigmatization of the product [and] the stigmatization of the person who’s using poppers,” said Rod Knight, an associate professor at the at Université de Montréal’s School of Public Health, who has also conducted research on poppers.

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Poppers are a chemical substance that belongs to a class of drugs known as alkyl nitrates. When they’re inhaled as vapour, from a small liquid-filled bottle wrapped in a colourful plastic label, the user can almost instantly get the short-lasting, light-headed sensation of a head rush, Knight explained.

He explained they also relax the sphincter muscle of the anus, making receptive anal sex more comfortable for some people. Poppers have been popular among gay, bisexual and other men who have sex with men for decades.

 

 

Knight acknowledges that there are sometimes side effects, which may include nausea, headaches, reduced blood pressure — alkyl nitrates are vasodilators, meaning they open blood vessels — and even vision issues. But he suggested such side effects “can be remedied through change of usage patterns.”

According to the FDA’s website, they are usually purchased in sex shops or online — often labelled as other products such as leather cleaner or deodorizers — even though the agency recommends against using them. Alkyl nitrates as poppers are unauthorized in Canada and Health Canada has cracked down on the sale of them since 2013, though they’re not necessarily illegal to purchase, possess or consume.

Does the FDA claim pass the sniff test?

Energy shots are flavoured beverages containing some amount of caffeine, and vitamins or other natural substances that purportedly boost your energy, like ginseng or ginkgo biloba. They’re sold in small bottles with colourful plastic labels. They’re commonly found at convenience stores, supermarkets or bought online.

If by some chance you had both products side-by-side and didn’t realize your mistake by the time you peeled off the plastic and cracked open the bottle, the distinct smell of poppers should be a red flag, explained Adam Awad, the communications manager for the Gay Men’s Sexual Health Alliance in Toronto.

“If you’re about to drink a 5-Hour Energy drink [a popular energy shot brand] and it smells like nail polish remover, you know, maybe you should ask yourself some questions before touching it to your lips,” he said.

Awad said he isn’t aware of any cases of people dying from a poppers-related mishap like the FDA described — a claim the agency previously made in 2021 — but he said he “would be very keen to see any evidence that they’ve got or reports on the actual number of cases.”

A box containing small bottle wrapped in colourful plastic sits on a counter with a man, seen, out of focus, in the background.
The U.S. Food and Drug Administration has not revealed the number of deaths related to the mistaken consumption of poppers. But in 2013, the agency claimed to be investigating 13 deaths and 33 hospitalizations, over four years, related to related to popular 5-Hour Energy shots. (Spencer Platt/Getty Images)

CBC News reached out to the FDA for data on injuries or death related to the accidental oral ingestion of poppers and an explanation for the social media warning, but did not receive a response.

In 2012, however, the agency stated that it was investigating 13 deaths and 33 hospitalizations related to the consumption of 5-Hour Energy drinks.

But if serious or fatal mix-ups with poppers and energy shots are happening, it would certainly be a dangerous situation, said Knight. He said he’s curious to know in what context such a serious mistake might have happened and whether there were other contributing factors to these incidents.

There is also a flip side to poppers, Knight said, that health agencies like the FDA and Health Canada do not mention in their cautionary messaging.

“This drug is being used by gay and queer men for very therapeutic reasons,” Knight said. “[Poppers] can prevent muscle spasm and injury during receptive anal intercourse.”

The Early Edition7:57We discuss what ‘poppers’ are, and the ban of them in Canada

The sale of poppers was banned almost ten years ago by Health Canada. Recently there has been push to overturn the ban. We learn more about what poppers is and the history of the ban.

Should Canada ease its restrictions on poppers?

Health Canada states alkyl nitrites can only be used when prescribed by a doctor, but there are currently no approved products sold as poppers. In a statement to CBC News, the agency said “there have been no submissions filed by any company [or] manufacturers for authorization of a popper product.”

Knight said it would be difficult and unlikely for many producers to go through the clinical trials and regulatory processes needed to get approval for prescription use and, even if that did happen, it would only create other barriers to accessing the drug.

“This drug is not really well known among a lot of clinicians, except for those who specialize in sexual health,” he said.

He said the current restriction has done little to prevent people from acquiring poppers one way or another, whether it’s ordering them online, buying them over the border in the U.S. or procuring them by some other means.

A smiling man stands in front of a glass pane, with a building in a background, wearing glasses and an orange sweater over a collared shirt.
Rodney Knight, an associate professor at Université de Montréal’s School of Public Health, says he is skeptical about claims people are confusing poppers with popular energy shot drinks and falling ill or dying. (Submitted by Rod Knight)

He noted a survey from the Community-Based Research Centre that showed only a slight drop in the percentage of people using poppers, after the ban on sales, and had little effect on regular use.

“If this was a drug that was being used among, for example, straight guys at a rate of 30 per cent of straight guys across Canada, there would be a very different approach to how the drug would be treated,” he said.

He believes the restriction has done more harm than good, pushing poppers into a form of “illicit market,” making it unclear what ingredients they may contain because manufacturers aren’t “incentivized” to label their products with accurate health information.

There is also the possibility poppers may be packaged in a way that resembles other products in order to “disguise them” because of the restriction, added Awad, potentially setting up that very mixup scenario.

Poppers, a common name for the drug alkyl nitrite, have been essentially banned in Canada since 2013. Despite that, they’ve thrived in the grey market and are an open secret within in LGBTQ communities. Earlier this month, Conservative Party Leader Erin O’Toole made headlines when he hinted that his government would be open to legalizing poppers. Writer and LGBTQ history podcaster Adam Zmith explains the drug’s history and why in many cases, even people who use poppers don’t know much about them.

 

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Why are mosquitoes so bad in 2023?

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Mosquitoes.

They’re thirsty bloodsuckers that annoy those who cross into nature, feasting on their salty life source while leaving behind red, itchy bumps.

And this year across Canada, it seems the pesky insects are worse than ever.

Those who’ve wondered about an increase in mosquitoes may be right, according to Laura Ferguson, assistant professor of biology at Acadia University in Nova Scotia.

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“It’s definitely been a trend to some extent that people are noticing anecdotally,” she told CTVNews.ca in an interview on Friday. “New Brunswick, in particular, over the last couple of years, has noticed big bursts in mosquito populations, especially in this mid- to late spring.”

Why mosquitoes may be worse than normal in some areas has more than one answer.

WHY MOSQUITOES ARE SO BAD THIS YEAR

Ferguson works with a team to study mosquitoes, understand the different species and track their abundance across North America.

“It’s for a few different reasons why we’re seeing more mosquitoes than we may have at least in the past couple of decades or so,” she said.

The first contributing reason is that there are more species of mosquitoes than in years past.

Different species travel with human goods across the world. They then breed in their new homes, creating populations of specific types of mosquitoes where they’d never existed before.

“Here in Nova Scotia for instance, we didn’t have a (species) a couple of decades ago — it came over from Japan in tire, we think — and it’s just exploded across the province and you can find it anywhere now,” Ferguson said.

Additionally, Ferguson said, warmer winters caused by climate change allow mosquitoes that would die off in the winter to survive and continue reproducing.

Along with being able to survive the milder weather, some types of mosquitoes are able to reproducer faster in warm temperatures because of the type of insect they are. Ferguson says mosquitoes are ectotherms, meaning their regulation of body temperature depends on external sources like the sun.

Precipitation also plays a factor in how well mosquitoes can survive, because they lay eggs in stagnant water.

Ferguson said if it’s a particularly dry spring there may be fewer mosquitoes around, depending on the species. Others lay eggs in the fall, so there would only be a large drop in mosquitoes if the previous year was dry.

Another theory that needs more research, Ferguson said, is the waning effects of the chemical Dichlorodiphenyltrichloroethane (DDT), which was used in the past to control insects in crops, but was phased out in the 1970s due to its harm on other species.

Despite this, the chemical can still be found in water and is circulating in ecosystems.

“Those kinds of holdover effects from these really persistent insecticides may have also suppressed mosquito populations for a few decades,” she said. “And now we’re experiencing a bit of this rebound of these populations as these insecticides and their effects start to wear away in the environment.”

WHAT CAN BE DONE ABOUT MOSQUITOES?

Unfortunately, all these factors lead to an increase in mosquitoes, a problem without fast solutions.

“I think for the most part, what we need to do is just figure out the ways to protect ourselves from contact with mosquitoes because they are a part of the ecosystem,” Ferguson said.

“On a regular basis it’s going to be things like hanging out in a screened porch instead of right outside, making sure that you dump standing water anywhere in your yard.”

Using repellents like DEET and some natural oils can help when out in the woods, Ferguson said.

“Wear light colours, long sleeves, those kinds of things to reduce the area of your body that’s exposed to potential bites,” Ferguson said. “That kind of thing is sort of our best bet of that trying to sort of prevent our contact with them as much as possible.”

 

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