Shaun Newman Podcast - #769 - Ron Butler

Episode Date: December 30, 2024

Ron Butler is the founder of Butler Mortgage Inc. He hosts the "Angry Mortgage Podcast," where he discusses real estate, mortgage trends, and industry issues. Ron is recognized for his deep industry knowledge, his outspoken nature on housing issues, and his commitment to providing consumers with information to navigate the mortgage landscape effectively. His approach is often described as no-nonsense and aimed at helping Canadians make informed decisions about their mortgages Cornerstone Forum ‘25 https://www.showpass.com/cornerstone25/ Clothing Link: ⁠⁠⁠https://snp-8.creator-spring.com/listing/the-mashup-collection⁠⁠ Text Shaun 587-217-8500 Substack:https://open.substack.com/pub/shaunnewmanpodcast E-transfer here: [e-mail] Silver Gold Bull Links: Website: https://silvergoldbull.ca/ Email: [e-mail] Text Grahame: [phone]

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Be responsible. Let's get on to that tale of the tape. He founded Butler Mortgage 28 years ago, and he hosts the Angry Mortgage Podcast where he discusses real estate mortgage trends and industry issues. I'm talking about Ron Butler. So buckle up.

Here we go. Welcome to the Sean Numa podcast. Today I'm joined by Ron Butler. Sir, thanks for hopping on. It's my pleasure, Sean. This is the first time you've been on this side, and I assume Western Canadians have been starting to see your content pop up on Twitter, probably other places as well. But in case they don't know who Ron is. Ron, give us a little bit of who you are so people can get a feel for you. Ron Butler, you can find me at Butlermortgage.ca for my business, also the angry mortgage podcast, and Ron Mortgage Guy all over X and other places. How long have you been in in dealing with mortgages? 30 years. Tell me, over 30 years, what have you seen? I mean, like, this week has been a little bit insane in the Canadian world with Freeland stepping down and other things happening. But I'm curious, if you go back 30 years and you lean on what you've seen through Canada, you know, I guess I'm kind of curious what sticks out.

Just like only really two, if you look at a whole theme of 30 years, just a few things. Number one, the prices of houses has gone bat shit crazy. that does not make any sense almost anywhere in Canada now. Maybe in, I don't know, maybe in St. Albert, Saskatchewan, it might be half as sensible, but otherwise doesn't make any sense anywhere else. Even the poor people in the Atlantic have had Toronto people move out there to completely destroy their price normality. So, yeah, ridiculously high prices, particularly in the last eight years. And enormous complexity in getting a mortgage compared to 30 years ago.

And for probably not many good reasons. It's just like everything else in our society. In 30 years, we've over-regulated every single thing we do in a ridiculous way, added costs everywhere, and destroyed Canadian productivity. So that's pretty common. Also, I've grown really old and decrepit, and it's terrible to be so old. It's just awful.

But those are the main three things. You know, before we get into enormous complexity and crazy prices and all the things, mortgages, I chuckled because I was listening to your podcast yesterday and earlier this morning, and you got talking about you're wearing a buttoned up shirt with no tie. And people, you're giving people shit because you're like, I get it. You don't like hearing about this. All you want to hear about is mortgages.

But I was actually fascinated by that. You can't tell it because I'm wearing a T-shirt right now, but I enjoy style and dressing up and all those things. What was it about the shirt you were told? Clearly not at work, Sean. Like, clearly not at work. What was it about the shirt? I was actually kind of curious about that when you were like,

you can't wear a tie with this shirt and people say you can and you can't. What the hell were you talking about? When you have a button-down shirt, you should not be wearing a tie. It's meant to, it's purposely designed to be casual. And you should not have cuff links on a button down shirt. You should have these, when you, when you have cuff links, it's like this, right? That's called it.

That's called a French, for some reason we called a French cuff, which is like back in the old days, like whenever there was any sort of STD, if you go back a couple hundred years, when there was an STD, when there was an STD, they would always call it the next country over. Yeah, that's the French disease or that's the Spanish disease or that's the, yeah, that's the German disease or whatever. And if you were in France, you'd say, yeah, that's the English disease or that's the Spanish disease. So I don't know why they call this a French cuff with a cuff link, but that's what you call it. And the cuffs with the buttons, you call a barrel cuff. And the concept is, no, you don't, if you have a button-down shirt, you don't wear a tie.

Lots of people don't know this and don't act on it, but this is actually the way the world works. Well, I mean, you know, born in 86 on this side and grew up going through the world of hockey where you have to get dressed up for games. I mean, you're pretty young when you start doing that, learning how to tie a tie and on and on. And it's certainly jumped in leaps and bounds from then on what you wear to different occasions, etc, et cetera. But when it came to you talking about different shirts and everything, I was like, you know, it's funny, you don't hear anybody talk about it,

unless you go into a tailor or a clothing store that's a little higher end, you don't hear anybody talk about it. So I just found that fascinating. So here's one listener telling you, I enjoyed the start when you were talking about a few different things other than mortgages. Now, flipping back to it, the enormous complexity. This seems to be a growing issue, not just in mortgages, but across the board. Is there any chance some of that gets, you know, wiped away and maybe some of the complexity starts to go away?

Or that's not the way this is going to work? You need a new government. You need lots of new governments. You need something like Elon Musk and Vivek with Doge. You need people who are willing to say, this doesn't make any sense at all. And we're going to just shut it down. Now, that's hard. That is really, really hard.

So let me just sort of explain to you where complexity in our lives has come from. Complexity in our lives has largely evolved from fear of liability. If you really dig down deep, that's what you find out. It's fear of liability. That's why on, you know, on antifreeze, you know, if you buy a jug of antifreeze or windshield washer antifreeze, it says, do not drink. Like, what? Like, sweet Jesus, I know not.

Everybody knows not to drink any freeze, but it's right there. You know, or on ladders, you got these labels that say, do not put upside down. Do not try to go up the ladder up with the ladder upside down or something. Because it's all about liability. So if you look at what we do today about money laundering in the mortgage business, it's so wildly far out the amount of energy we have to pour into anti-money laundering for no rational reason, except that. that it seemed like a good idea at the time,

probably it started shortly after 9-11. It just seemed like a good idea at the time to try to prevent terrorism, money laundering to do with terrorism. And it just takes, because if you hire enough people to do the work, it just takes on a life of its own. So now we're at a point where none of it makes any sense. It's all totally stupid.

And the most fascinating thing is the money laundering, regulator in our country is called FinTrack. You probably heard of them. I heard that name in your life. FinTrack. And the interesting about FinTrack is even though it costs about a billion dollars a year to do this, both with all their salaries and all the salaries at all of the various financial institutions and even this piddly ass little mortgage brokers like us,

a billion dollars of expenses go up and smoke every year. Money spent, disintegrated for no real purpose because after all these years, after more than 13 years of FinTrack, prosecutions, arrests, like arrests and successful prosecutions for money laundering only coming from FinTrack, like FinTrack found them and passed it on to the RCMP. There's about eight of them in 13 years. So less than one a year.

We're paying a billion dollars for less than one a year. That's right. That's correct. Now FinTrack would stop and say, no, no, no, you're full of it. That's not how it works. You know, we've contributed enormous amounts of information to the RCMP and prosecutions that they started, you know, through other means, like found a guy with 25 bricks of fentanylite and then the FinTrack helped say, yeah, he was doing money laundering.

Or, you know, that you told banks they shouldn't do something and they stopped doing it because you saw something. But if we talk about the hard, cold facts of why we should worry about money laundering is because people are doing evil. We need to catch some of you to prosecute them. FinTrack has absolutely no impact on it whatsoever. Well, great. I mean, doesn't that seem, I don't know, maybe I'm wrong. But that's everything. It's everything we do. That's what I mean. Yeah. If you look at why the costs of why costs of building homes or building anything has gone up so extravagantly in the last 30 years, you always come back to liability. It's about, well, you know, we started digging and we found an arrowhead.

We found an arrowhead for the subdivision. So we had to stop. We had to bring in hundreds of thousands of dollars worth of archaeologists and try to figure out this whole arrowhead thing. Whereas, you know, prior to say, let's say in 1980 or 1970, people would just pick up the arrowhead, look at it and throw it away, okay? And just keep on building the houses. We don't do that anymore. We obsess with stupidity and foolishness. and spend billions and billions of dollars on it,

on things that aren't important. Because the only thing that's important about housing people is building the houses and making sure they don't fall down, burn down, or get flooded. That's about it. Like, nothing else is really important about it. Like, whether there's a purple-toed salamander in the area that needs to be protected and we need to spend, you know,

$8 million to do a study in wait two years, that's all completely stupid. Like none of it. It's absolutely ridiculously stupid. And yet we do it and it just keeps compounding. For instance, you might find this interesting. In most big cities in Canada, before you can build a condo building, you need to spend hundreds and hundreds of thousands of dollars on helicopter research. Helicopter research. Okay. You have to make sure that you're not on a helicopter route. You have to have engineers prove it. You can only go to a certain building height. I asked the guy once. I said, well, get the helicopter. just go over the building, he said, Ron, shut up. That's not how this works. It's like, you know, the helicopter people, you got roots to the hospital and not to the hospital. And God forbid that you delayed one person 15 minutes and they died.

And it's the building's fault at that point. So I'm not making any of this up, right? This is all true. I mean, at times nothing surprises me in Canada. You know, like, I mean, even what just went on with Freeland, and then what was it four different finance? I mean, between Freeland and the rest that kept going, no, I'm not going to be finance minister.

And then Strong Eagle Man being the next up and that not happening, you know, and you're like, how's Randy in line? Anyways, it doesn't matter. Just like to say, none of this really surprised me, but I find it hard to fathom that a helicopter can't, like, it's not like they're going, I don't even know, 11 times a speed of light or something where they can't dodge a building, right? I mean, it's pretty self-explanatory to be like, oh, there's, there's going to be, we got to fly at this height, etc., etc.

This doesn't seem like rocket science, but we seem to treat all these things like rocket science. And I go, is there no coming back to normality, to sanity, to, I don't know, as Pierre Pollyev would say, common sense. Like, you look at it, I mean, in the by-election that just happened, conservatives won handily. And everything points to whenever this next election gets called, they're going to win hand. Do you see like, oh, you know, once again, I lean on your expertise of 30 years. Is it something in the first four years where all of a sudden they can start to turn the corner and start to slide things in the right direction? You're like, oh, no, this takes decades.

It's really hard. You can always make a start. I mean, you know, I don't believe in giving up hope. That's not a good idea at any kind of a country or any kind of a civilization. Never give up hope. But it's deeply entrenched. And it's multiple levels of government. If you think about it, there's more people working at CRA than there is in the Canadian Armed Forces in a job which is obviously easily digitalized.

I mean, like, it's just reviewing tax returns. I mean, shouldn't there be some AI that could maybe do that a little bit, like help out so there wouldn't be so many people? I mean, like in other countries, they actually do your tax returns for you and then show them to you so you can question them if you want to. But we can't, I mean, we're just, we're ridiculous. We're literally ridiculous here. We have more people per capita looking at tax documents than virtually every country on earth. I give you an idea, the ratio here is quadruple, the United States. At one point, it was five times, but now it's only quadruple. Quadruple, the people per capita, the CRA employees per capita versus IRS per capita. Like, everything we do is kind of crazy.

I mean, it's, it's, but it's hard to fight because you've got to lay people off. Lay people off is not an easy, pleasant or, you know, positive thing. And in the states, they're talking about closing whole agencies. Elon's talking about looking at an agency, asking, going in there for a day, asking them all what they do. And if they can't really explain what they do, he's just going to recommend shutting the entire agency down. Like just let them all go and close the place and let lease it out to somebody else and forget about it. Now, that's hard. That's really, really hard.

It's controversial and it's difficult. So it's hard to do here. It's hard to say it's hard for P.F probably have to get elected. And then, you know, four weeks later say, yeah, we got to, we got to let 5% of every human being in the federal government go. 5% of all, everybody has got to go. That's hard. That's thousands and things. thousands and thousands of layers.

I just look at what Malay's done in Argentina is probably a good example. I'm sure there's others out there. And you go, it's hard. But like, I mean, where we're heading is, I don't know, seems like an even darker future. Maybe I'm wrong on that, Ron. Certainly I don't want to, you know, paint anything too dark. But because I'm an internal optimist on this side. But you look at it and you go, like, I mean, they just release the, well, what is it?

The deficit's going to be $62 billion now, and we're just going to continue to print money. You know, this thing that we're going to build, I forget what it is, is it a million homes? But then any home builder I talk to, just laugh at that. I'm like, so they're talking over here in Fantasyland and the real world saying, no way is any, like this, we've got to get things to mash and they're not. Like they're talking about something way over here. They're saying we won't go past this number. Then they go blazing past it on and on and on. And I guess I just look at all this and I'm, I'm shocked.

And although I understand it'd be tough to get rid of people, I mean, the other alternative, I don't know, is it any better? We don't know yet. We don't know yet. I mean, obviously it's not working for many people. You know, when you really carefully study what's going on for the average working person in Canada, they are worse off than they were 10 years ago. There's a bunch of economists that would step forward and say, no, no, no, you're wrong. I mean, wages are keeping up with inflation, blah, blah, blah. But when you really have really wise and honest people dig into it, they say, no, that's not true.

I mean, if you are somebody who bought a house before 2015 or 2016, you're in pretty good shape compared with everybody else. But if you're a renter today or you are somebody who bought their house in 2021, you're in terrible shape compared with the past in terms of your own personal wealth, your own chance of growing wealthy, your own, you know, how your income can keep up with rents or keep up with the mortgage payment. It's all bad. None of it's good. No matter.

And again, there's a lot of people who have invested. an interest in pretending that's not the case. Pretend they're saying, no, no, no, it's a, it's just a vibe session. Well, let's see what happened to her. But anyway. Can you tell, in your 30 years, do you know what a vibe session is? Yeah, that's something an economist in the United States invented in 2022. That's a term an economist in the US invented.

That's a real term. And it's all because you can make up a lot of. lot of crazy BS if you want to. I mean, like, I mean, if you got some time in your hands and people are paying you a grant and you can sit around, dreaming up silly stuff, yeah, you can do that. But anyway, like, you know, I also like to point out that I'm not actually angry at any of these people. Like, I'm not, I reject the idea of hating politicians. I mean, I think, and I reject the idea of being abusive to politicians. I believe that all of these people, including the prime minister, including all the people who just quit, they really believe in what they're doing.

They're just radically wrong about what they're doing. They're radically wrong in their policies. They're radically wrong in their decision making. They're just completely factually wrong about what they're doing. But they don't, they're not, they're not trying to harm the country. I mean, that's just a misunderstanding that a lot of people do have. because I've actually met them and talked to them and I've I've talked to people within government and they believe they're doing good and they want to do good they're just stuck with bad policies

which create bad outcomes it's as simple as that when when we get into mortgages you know variable versus fixed and maybe there's some other things in there that you can tell us all about like you know, if you're sitting here and you're, you know, like I'm married to an American. So like one of the things that I've had lots of discussions with my father-in-law about, right, is they can basically get in fixed 25-year mortgage, off they go running and they don't ever think about it. Whereas, you know, like, why would you do five-year fixed? That makes zero sense. Why would you do this?

Why would you do that? We got listeners across Canada into the United States. Not to bring it too simple, but at the same time, I'm pretty much illiterate when it comes to all this stuff. other than I certainly know a few differences between the U.S. and Canada. You know, to a new home buyer, when they're looking at this, variable versus fixed, what do you see currently and maybe you can just break it down for us? Well, I'll address the 25 and 30-year mortgage in the United States first, is that we don't have any market for it here.

You know, that if we were to show us up, we could theoretically, we have a 10-year fixed. You could have a 10-year fixed if you want in Canada. it's about one and a quarter percent more expensive than a five-year fix. So whenever you tell somebody about it, they tell you that's ridiculous. I don't want it. So a 25 or a 30-year fix, we'll be about two and a half percent more expensive, and everybody would tell you they don't want it.

So, I mean, I've been doing this for 30 years. Everybody, when you tell them the 10-year fixed rate, they say they don't want it. Like, it's 3% of the market for the 10-year, right? So I'm in a very small portion because I got a 10-year fixed. Yep, you're in a tiny portion. Okay, like a ridiculously small number. Because everybody, when confronted with the difference in rate and the cost difference, say, no, I don't want it. I want the cheaper one.

That's just a universal truth in the mortgage business. But today you would take variable. Variable is the best deal today. And that's because the rate's going to continue to come down. It'll come down in January 29th. It'll come down the next time the bank meets. It'll eventually, if your rate will go down to somewhere between 395. and 3.7 and could conceivably even go lower.

You will also get a chance at some point in this Lake Springer summer to lock in, if you wish, to a lower five-year fixed rate that you can get today. You're probably going to be able to get a five-year fixed rate for about 389, 399, 379, something like that. So the future, if you're at a point in time when you absolutely positively know variables going down, you might as well take variable because this is what we know. The balance of probabilities is insanely high that variable will come down. Why is that, Ron?

Sure. We had an announcement today. Canadian inflation is down. Canadian inflation came in below consensus. The Bank of Canada also knows that the Canadian economy is circling the bowl and will get worse and worse over the course of the year. And they have to take action because if inflation is beat, they're supposed to get to what's called a neutral rate. The bank of Canada is supposed to get to a neutral rate.

The neutral rate right now looks like it's somewhere between two and two and a half percent. So we're above that right now. They're going to have to keep on cutting. And then I'm curious, like, as they cut rates, what, what, I don't know, is it ripple effect, domino effect? Pick your, pick your poison. Do you expect to come out of that, right? You're like, well, it's going to continue to go down. So if you're buying a house, if you can hold off, you're going to get a better rate here the further we go into 2025, essentially. No, don't hold off. You can just take you.

You just buy now. Or get a variable. Yeah. Yeah, fair. What are the ripple effects of rates going down? Well, the concept is always if rates go down, then house prices go up because more available credit creates higher prices. We saw that in 2021.

Throughout most of Canada, rates were down fixed rates. You get a five-year fixed for like one, six, nine. So very, very inexpensive. The Bank of Canada went to effectively zero. They were only a quarter of 1% was the Canadian bank rate, the Bank of Canada rate. So it was ridiculously low. And the real estate market exploded across Canada. People overbid on houses, ended up with paying way too much for houses.

So that's also come home to roost and some people have lost a lot of money. But the reality is that when rates go down, house prices tend to go up and certainly sales, unit sales, the number of sales in the country of real estate go up. Now that's going to be a little different this time because we're headed into a very tough economic time in Canada, particularly in Ontario and British Columbia. And that's going to affect people. If you just heard your sister dog got laid off or you know that your hours got cut on your job or you know the bone. was smaller this year. You tend to put off large purchases. So that's probably what is going to temper even though the rates will come down and people might think this is time to buy a house.

They might also feel that the economic pressures are such that they probably should. So we'll see. You're sitting in Ontario, correct? I'm not wrong in that. I'm right in the part of the city. When you say, you know, the economy in Ontario is basically going into dark days or tough times, what are you looking at from Ontario's perspective? Because here in Alberta, obviously, we have different factors happening all the time compared to Ontario. What's happening on Ontario that looks like tough times are ahead or that you're in the middle of tough times? What do you got? We got everything going wrong here.

We have a decline in manufacturing. We have a collapsing residential construction market. We've got financial companies laying off people or continuing with hiring freezes. like you pick your poison. Everything that could go wrong in Ontario is in the process of going wrong. Is that led to like a mass exodus as well of Ontario? Because one of the things we've been seeing out here, I think I speak for a lot of Albertans, is a ton of Ontario folks moving here for, you know, brighter days, brighter future,

opportunity, etc. I mean, I know the government of Alberta's brand ads basically saying, hey, come to Alberta, there's opportunity out this way. has have has have is that factor into it as well um it's a factor okay the one thing about Ontario is nearly almost exactly 50% of all newcomers to Canada come to this province so we've added three million people from outside of Canada in the last three years so about a million and a half have come here then some of them leave again sure to your point and some people born in Ontario have left for Alberta, but when you have this sort of bizarre level of immigration

that we've experienced for the last three years, your population doesn't decline. As a matter of fact, if it wasn't for the vast influx of people, the Ontario economy would be much, much worse. I mean, you know, just if you bring in one and a half million people over the course of three and a half years, you just got a certain amount of work you have to do to keep them fed and clothed and housed and all that stuff. I mean, you know, they just, they create their own economy. by bringing in so many people. And, you know, that's what we've experienced. So by the way, in Alberta, even though your economy is running much, much better than Ontario's,

you still have a relatively high unemployment rate. So the unemployment rate in Ontario is 7.6. I think you're like 7.2. Can we just, before we go to unemployment rate, I got to, did you say Ontario brought, and it's funny, I've heard these numbers lots, but every time I hear them, I'm like, man, that's a lot of people. Did you say 3 million people, roughly 3 million newcomers to Canada landed in Ontario over the past three years? Is that how?

No, there were a total of 3 million newcomers to Canada in the last 3 and a half years. And 50% of them came to Ontario, 1.5 million. Okay, fair. Okay, so 1.5 million new faces in Ontario in the last three years. Curious. Because there's, you know, like there's debates all over the. the place, you see videos on social media, et cetera, et cetera. You're in the heart of the city. What is that done to Ontario or to Toronto or to, you know, just what have you seen?

Having that many newcomers, different cultures, everything, has it been a clash as experienced on social media or is it something different? Yeah, it's a big clash for racists because they see problems at every turn, right? But the reality of life is, is Toronto's an extremely, has always been an extreme for 30 years. It's been extremely multiple. cultural city and people are fine with it. Like, it's all fine. What's not fine is creating a housing problem. What's not fine is creating a healthcare problem.

And all that kind of systemic difficulties from not having enough infrastructure that handle that many people. But, you know, no, I mean, Ontario, people in Ontario are used to people from other countries. I mean, very used to it. completely normal for us. What's not normal is the fact that you got 1.5 million people and not enough houses essentially to go around to give them a place to rent, et cetera, et cetera. I can imagine what that does to the housing market on how much it costs to rent things, buy things,

etc., correct? Yeah, or hospitals or doctors or all those things, yes. So for critical infrastructure that humans need to use, yeah, it's a problem. I mean, you end up with rents being impacted. You end up with wrong kind of property use. You end up with 30 people in a house in a single family house, all renting futons in a basement. I mean, you're going to do a lot of really stupid things that have poor economic results for everybody, but mostly for those people. Mostly for the people who came here are the people on false promises. They're the people who are abused the most. Absolutely they are. You'd, you know, like I think, I don't know about, no, I'm pretty sure. Lots of my listeners have stumbled upon you. I was, I was, I put it out on X,

like, hey, I want to talk some mortgages. Who should I get? And your name came up an awful lot. So I assume, you know, lots of people have been following along there. One of the things that I was interested by was when they cut the rates by 50 on December 11th. Basis points. I don't know why I didn't say that. Regardless, you were talking about the next moves would be driven by events and different things. And you've talked. about how like over, you know, the course of the coming months in the spring, you can expect rates to continue to drop. What are their events, you know, because like you're seeing all the stuff out of Donald Trump, right? You're seeing all these different things happening worldwide.

What are their events do you think people should be paying attention to as we move, you know, we're a few weeks away from the end of 2024, 2025 on the horizon? When you look into the next year, what are some events you think people should pay attention to when it comes to the housing market. Okay. So the first event is that because the current, soon to be gone, federal government approved all this huge immigration level. They pretend it was just accident and they didn't understand why it happened. But obviously they saw it while it was happening. So you can't get off the hook. So there's going to be no more. I mean, immigration is going to fall off a cliff in Canada, it's already in the process of falling off the cliff. Many people are going to return.

There's going to be effectively zero population growth by 2026. 2026 might be a full year of no immigration at all. So all of a sudden, people who had sort of based their economic plans on very high rents in BC and Ontario, we're going to find out that didn't work out for them. Because if you believe in what a government tells you, it may not always happen the way it should. Okay. So that's an event and that's an event that's an event that's absolutely going to happen. When the government changes either in the summer, probably in the summer, when there's a change of government, the new government, the new conservative government in Ottawa will do the same thing. They'll say, yeah, we have because the policy that they've discussed is we can have immigration, but only when there's enough houses and doctors and hospitals and everything, only when there's adequate infrastructure to handle that immigration, which is, of course, a rational policy. You know, they also want to return to the old point system that we had previous to all this foolishness,

which was the best immigration system in the world. Everybody in the whole damn world agreed we had the best immigration system, a point system based on a number of things that had to do with selecting a great candidate to be a new Canadian. So all that's going to continue under the new government, which will occur, new government will occur relatively soon, six months is in a long time. So we are sure, the event we are sure of is less new Canadians, that's for sure, compared with the last three and a half years, four years. So that's an impact on housing because people who thought they were going to make a fortune on student rents, people who thought they were going to make a fortune on filling their basements up with students on laying on futons, they're all going to get wiped away because those people just won't be there in a year by 2026. the lobby gone. Another thing we can be sure of is that the U.S. government will reduce corporate

taxes. That's one. Like I don't want to lean into the tariff thing because who knows, like, you know, those of us who were around through the first Trump presidency and paid attention to it also realized that about 60% of the stuff he said he never did. I mean, I don't think the Mexicans ever actually paid for that wall that's still not finished. Okay. So some things don't happen. He brought in tariffs, by the way. He brought in tariffs on aluminum, on steel. It was sort of negotiated away eventually. I mean, we shouldn't lose our minds because one of the things that happens with a lot of people in Ontario is when Trump says something, their minds explode. Their whole heads blow off their necks, which is crazy. I mean, he says all kinds of wild shit. So we shouldn't think about that.

We should think about the thing that we know he will do because he has the power to do it. because Republicans control all the levers of government in the United States. So the one thing we know will happen is there will be reduced corporate taxes in the United States, which will make their corporate taxes much less than ours. So if their corporate taxes are much less than ours, why would anybody invest in Canada from another country or from the U.S.? Like it just means unless we make massive tax changes in our corporate taxes, we won't get any investment.

So that's bad news for the Canadian economy. It's not a good news story. So those are the events that we know will happen. They absolutely will happen. And how do they affect housing and mortgages? It points that rates will probably be less, particularly on variable rates. And it points that people who are depending on rentals to make a fortune are probably going to be in trouble. And it also points to the idea that there will be continuing problems with employment because if there's,

There's no reason to invest in Canada because the US is a much better place to invest in, then the little bit of foreign investment we're getting will dry up to zero. I'm just curious in your thought, watching what Pierre Poliab says and different things he does, is that something he can change, you know, relatively quick, right? He walks in, he does three, four steps, you know, because one of the things I agree with you on Donald Trump is like, he says a lot of things. and part of it's just, you know, the businessman and him wanting to get things done and move the needle and on and on and on. And he's an expert at it.

But as you've correctly pointed out, it's like, but he doesn't follow through on 100% of what he says. Some of it is he's just saying to get the reaction. So when you look at Pierre, you know, like that's a pretty bleak outlook for for the next year on Canada. To be honest, right, as soon as Trump's in, which is not that far off, is you're looking at things not getting. better any near in the near future except we're going to have our own election you know if jagmeet sing would just really he's not going to but if he did you know then we'd have an election real fast but it looks like you know sometime in 2025 no matter what we're going to have an election is that something he can change once elected comes in and maybe start to steer us in the right way where you know

you can compete with what the u.s is doing from a you know an investment standpoint etc etc cetera. Well, I'll give you a little scoop. Jagmeet's not in control of that thing anymore. Like, people in his own party have decided that they are not going to support the next, they won't save the liberals in the next vote of confidence. That's coming from his own members. Like, he's, he's at this point slightly lost control of his own party because it's just been too much. And there's, there's members in his party realize that, if they continue to prop up the government, they're going to lose their seats. So the next vote of confidence will go against the government.

The highest likelihood right now is they're going to prorog parliament, they're going to suspend parliament. They're going to create like a three or four month gap, sorry, yeah, three to four month gap before they have to return to a sitting. But nothing can save the government now. The government's doomed. There's no hope. There will be an election.

The Conservatives will win the election. What can Pierre do? You know, I'm not going to pretend that I know Pierre Polyev, but I am in communication with some of the people who work with him and some of the people who are his lead critics in the house, the people who are the finance critic and the housing critic and these individuals who are, they are not going to, they're not going to fool around. they're going to take action. They're going to have a large majority. They're going to beat the Senate into submission. And unless judges stop them, they're going to make changes, like significant changes. I mean, the House of Parliament is the sole arbitrator of corporate tax in Canada.

If they vote for lower corporate tax, there will be lower corporate tax, period. They control it. They're 100% in control of it. If they vote to change the federal criminal code, it will change. And it will no longer be, crime will no longer be a free for all in Canada. They're committed to these things. I mean, these things are going to happen. So can he fix everything?

Can the new conservative government fix everything? No, that's crazy. No. But you just pointed to two that I find very fascinating because I'm like, you know, like, if you're not for Donald Trump, you probably don't want them to reduce corporate tax and everything else. But you just said maybe there's a way that that could happen in Canada. You think that corporate tax could actually go down under the next government here in Canada? Sure.

I mean, it's their call to make, period. They also are in a position to say we're going to reduce the Canadian civil service. I mean, it's hard. It's politically difficult. But they've got five years. So if they do it right off the bat and they say, well, we just got to reduce, we got to reduce all the employees. by 10% or 5% or 7% we've got to we've got to terminate every contract with a consultant tomorrow because they're all like sort of day-to-day or month-to-month or

quarter-to-quarter so if you say like every consultant in Ottawa bye you got to go home now and you're off the payroll I mean they can do it I mean it's it's doable the parliament has Canada has control of that so if they reduce expenses they can cut corporate tax it's that simple and the second when you mentioned which i think a lot of people have been like this is we are going like this is insane has been this catch and release this like system of criminals getting to do whatever the heck they want to do um i don't know i can't speak to ontario i can just speak to things going on here around our neighborhoods and it's pretty wild stuff Do you see them, you know, following through on that?

Because I don't know. Do Ontario folks, are they talking about this, right? Like, is this a Canada-wide issue or is this just something Sean sees over here? We have the highest rate of car theft to North America in Ontario. Like every human being in Ontario has a family member who has his car stolen. Every single person in this province does. My son's car was stolen. It's infinite.

It's an endless list. Like everybody knows somebody very close to them. If they haven't had a car stolen themselves, they know an immediate relatives at a car stall. Or the neighbors had a car stolen. It's just endless. Yeah, I can tell you this. I don't think I'm revealing any secrets.

The conservatives have already drafted new legislation to be ready to go when they take over that will change all of this stuff. There will be no more catch and release. Now, I was going to ask if you leave your keys at the first. front door, right? Like, I'm like, some of the things that have come out over the course of, what has it been the last year, two years, take your pick, folks. It's gone longer than that, but I mean, some of the comments that have been happening with criminals in this country specifically has been pretty wild. In Ontario, obviously, was the famous story of just leave your

keys at the front door. So, you know, they just want your keys. Pretty, pretty wild statements. You said in there, you know, with immigration, you know, that's like a given. It's going to be a slow or quick weaning. Did you say in there like a zero percent or close to a zero percent population growth? I assume it wouldn't be zero, but close to that? No, no, 2026, zero. Zero. Zero.

Is that, forgive me. Maybe this is where I'm over my skis and I don't fully understand. I'm like, that's not good, is it? It's fine because the people are here already. So the way immigration works in Canada is that if you're a student who is here an international student permit or you're here on a temporary workers permit, that is the group of people who are expected to become permanent residents. That's 80% of all of those people.

And we have way too many of them. Some of them are going to absolutely have to go home. But they're here. So if they're here, you just have to convert. them from students or temporary workers into permanent residents and you don't have to have any new people come, period. I mean, I'm not kidding. I mean, even the liberals love immigration and their own, their estimate was actually for negative 20,000 people in 2026. So I can assure you there will be virtually no immigration to Canada by 2026, almost not. or conceivably quite possibly zero because the people who are going to become permanent residents are already here.

It's a little, it's a misunderstood thing about the way our immigration system works. But people come here under one type of visa and they're converted to permanent residents. So if three million of them are already here, we don't need, you don't need to bring in anybody new. Okay. So they will just, that's why it goes to zero. Yeah, the figure, forgive me the numbers, folks, and Ron, for that matter, like I remember looking at the, and obviously giant things have changed a lot, or things have changed a lot since they announced all the new things on immigration. But I remember watching figures like it was going to be 500,000 people in next year, and then a million the year after, and then the numbers and you're like, what is going on here? to hear that it's going to be, you know, zero or negative is quite the turn of events in a very short period of time.

That's because it was a mistake. You know, it was one of the many, many mistakes the government way. Like I said, I don't want to be angry to anybody. Yeah, yeah. I don't want to be mean to anybody. But at the end of the day, the mistakes were off the charts, crazy bad. And they've just had to face up to it. I mean, it's just they created an unmanageable completely.

monstrous scenario that had to be fixed. And the only way you can fix it is to stop it. So they stopped it. I mean, it's, there will be ridiculously fewer immigrants

to the point of zero by 2026. People, one of the things, you know, like out here, different business owners, small business owners, I might point out,

like not giant business owners by any stretch of the imagination. Tough times. Lots of debt. different things like that. From a standpoint of like defaults, is there anything, any reason to be concerned about residential like a personal or the business side of that, the commercial side and defaults over the next coming years on your side of things or from your view? On the business side, very concerning. Very concerning for small business. This year will end

as probably the highest small business receivership since the world financial crisis in 2008. It's just totally disastrous for small business. It's worse here than it is in Alberta. Ontario for small business is, I think, 25% of all small businesses in Ontario have closed over the last two years or gone into receivership. I mean, it's just a catastrophic mess. We have a combination of way too high taxes. and really crazy rent.

I mean, like, if you're running a small business and you're running it out of a commercial premises, your landlord just increases your rent to the point where you just give up and call it a day. It's bad. It's horrible. So, yeah, on that side, there will be continued problems for small business in Canada. No question.

It'll get a lot worse before it gets better. On the residential mortgage side, default rates have been really amongst the big banks have been incredibly resilient. In COVID, because of the sometimes you didn't have to make the payments, but in COVID by law, by regulation. But like if we coming out of COVID, 90 day defaults, that's how you measure defaults in the mortgage business. You say people who haven't made the full payment for 90 days. Because everyone can miss one payment, right? Like, who cares?

I mean, but at the end of the day, if you haven't made the great payment for 90 days, that's judged to be. be a default in our business. And the percentage of people in default in 2022 was about 16 basis points. So that's like not a half a percent, not a quarter percent, but less considerably less than a quarter percent of people who are in default. Now that's climbed today to be just under a quarter percent. It's climbed to about 22, 23 basis points, which is still ridiculously small. like the U.S. never runs less than 34 basis points in the whole United States. Even when the economy's, their economy is going great, they still have 34% default with their banks. So, sorry, 34 basis points.

Yeah. So we have tremendously great default. There's a million reasons for it. I won't bother with all of them. But it's not a problem. It's a hell of a problem for the person who's got to lose their house. Yes, that's a terrible, terrible, horrible problem. But in terms of statistically, no.

There's no, if defaults doubled, they'd only get to 46. And 46 is just considered a little bad in almost all the United States. In Alabama, they'd tell you that was good. Okay. In Washington, D.C., they'd tell you 46 basis points of default was terrific. But no, even if it doubled, it would still be absolutely manageable for the Canadian banks and not even as considered to be a serious risk. So you can make the point that Canadians manage their mortgage payments very well.

And that hasn't changed. Historically, have we ever seen something in Canada, I mean, in Canada, I mean, historically, have we ever seen anything that would cause concern? Like I always hear from the old timers here about the 80s and what went on during that time frame. And if you go way back when, you know, I've interviewed a few men that were kids, but grew up in the dirty 30s. And I mean, we're getting pretty far back, you know, to, to those stories. But I have interviewed a few. What would have been the default rates in those times where you,

you know, like the 80s specifically had like, what, 18 percent? And I mean, but in saying that, the mortgages were way less than what they are too today. Yeah. So if we look at default, the worst experience of mortgage default in Alberta was under remarkably. Justin's father, Pierre. I mean, he brought in something called the National Energy Policy. He completely destroyed the energy business in Alberta. I mean, absolutely destroyed it. Huge companies went bankrupt.

People were handing in their keys and going back to wherever they came from. I think default rate went to as high as 75 basis points in Alberta at that time. But it was horrible. It was a horrible experience for everybody. I actually lived there. I lived in Alberta at that time. Okay. So my wife's, I wet my wife in Edmonton. So I'm, I've spent, they spent off and on nearly eight years in Alberta. And I was there. It was horrible. It was ridiculously bad. But it, is it going to happen that way? Well, it's not going to happen in Alberta because the price of oil isn't going to go down to nothing again. It's not going to be like 2014, 15 where the price of oil just fell off a cliff. That's not going to happen. So, but in all, Ontario, yeah, we could get higher.

We will get higher. We could see defaults in the high 30s, but high 30 bibs, high 30 basis points. But yeah, no, that's not something that I lose sleep over because Canadians are just very good at paying their, very good at paying their mortgages. Curious, the eight years you were in, did you grow up in Ontario, Ron? I grew up in Vancouver. Oh, you're a Vancouver guy.

Yeah. So does that make you a leaf? fan, a Canucks fan, an Euler fan, not a fan of hockey. You'd have to have to have a mental defect to be a Leafs fan. You know, that is the losingest, losingest bunch of losers you could ever dream of. Okay. No, not, none of that. I guess the closest I ever kind of being a fan was an Oilers fan because I was in El, I lived in Evanton for a while when rescues winning all the cups.

And so, yeah, I guess that's the closest I get. Oh, cool. I appreciate, I appreciate you coming on. and trashing the Leafs all at the same time. It's just true. I mean, it's just true. That team is ridiculous. I mean, they're absolutely ridiculous. Every time the playoffs come around,

everybody in Ontario just looks at each other and says, yeah, they're going to lose again. That's it. We just, it's all baked in. I got a couple minutes before top of the hour. One last question. It was a comment.

I don't know, you know, when I see this, I'm like, oh, man, that seems, I don't know what to make of that. It was Justin Trudeau back on December 4th, Quoted, there are more than 200,000 short-term rentals across country like Airbnbs and VRBOs that could be turned into housing. So we're giving cities more resources to crack down on those rentals and unlock more homes for Canadians. Do you agree with that? Or should people be able to buy a house and rent it out?

Or where do you come down on that thought? Well, if you think about it, if the house next to you was bought by somebody who turned it into an Airbnb, And it was marketed exclusively as a party house for teenagers. That was how it was sold to people. And you're next door to it. Or you live in a condominium. You live in a tower and the unit next door to you is rented out as a brothel, okay, because that's a good short term, good revenue for short term.

Okay. So would you like that? Would you like that the house next door to your house was a exclusively a party house for kegars on the weekend, birthdays, prom, graduation, whatever, you know, big hockey game, and that's how it was. And when you came out in the morning on Sunday morning, there was just a whole bunch of beer bottles and the sidewalk was lined with vomit. Would you think that that was a good way to live your life in your house?

At my current stage of life, certainly not. At an earlier stage, I might have been like, oh, crap. You were in the kicker. You were in the cage. That's right. So I'm like, right now, no, with three young kids, no, I would certainly not be interested in either of those scenarios. Okay. So that's what's wrong with Airbnb.

Airbnb violates normal zoning. That's what it does. I mean, you bought a house expecting you to have a single family home and a quiet neighborhood or a reasonably quiet neighborhood where you could raise your three kids. But if your neighbor turned it into Airbnb party house, that's not what the zoning was. when you bought it. You understood it to be a single family home that a family, you could rent it. You could rent it to a family and that's fine. But no, running the Kegathon Airbnb next door to you, you wouldn't like that. So then you are for Justin Trudeau, just so I'm clear, of stepping in and saying,

like, listen, we're going to give more teeth to different cities and essentially to crack down on that specific example. Well, let's be intelligent about it. So if you're in Colonna and the entire lakefront is just for vacationers, then fine. Who cares? I mean, let's have Airbnb, let's have Verbo in those locations. But if it's a residential neighborhood in Calgary, or it's a condo tower with just working people in it, except one of the suites is operated by sex workers. Nothing wrong with sex workers.

Everybody needs to have a job. but you wouldn't like it, right? I mean, nobody would like that. So I'm fine with short-term rentals based on the rational use of the property. Okay. So if you're that lakeshore in Kelowna or you're someplace out in Canaanaskas country that wants to operate short-term ski chalet and everybody understands it, God bless. Go after it.

Okay. But not the kegger in the house every weekend next to your house, right? That doesn't make sense. That doesn't make sense. Ron, I appreciate you hopping on and doing this. giving me some time today. All the bestie out there. And if people want to find you, where can they go again? ButlerMorgage.ca is the company and Angry Mortgage or Ron Mortgage guy on social media, I will appear. You just type in Ron Butler and so any kind of social media.

I will show up. So that's for sure. Sounds good. Thanks, Ron. Thanks, John. Have a good one.