The Canadian Bitcoiners Podcast - Bitcoin News With a Canadian Spin - The CBP - Ben Rabidoux - Canadian Housing, Immigration, Bitcoin and More (Bitcoin Podcast)

Episode Date: October 31, 2024

FRIENDS AND ENEMIES Join us for some QUALITY Bitcoin and economics talk, with a Canadian focus, every Monday at 7 PM EST. This week we welcome first time guest Ben Rabidoux. Ben is the founder of Edge Realty Analytics, North Cove Advisors, and is a leading mind on the Canadian housing picture, household credit, as well as other economic sectors. From a couple of Canucks who like to talk about how Bitcoin will impact Canada. As always, none of the info is financial advice. Website: ⁠www.CanadianBitcoiners.com ⁠Discord: / discord (https://www.youtube.com/redirect?even...) A part of the CBP Media Network: ⁠www.twitter.com/CBPMediaNetwork This show is sponsored by: easyDNS - ⁠⁠www.easydns.com⁠⁠ EasyDNS is the best spot for Anycast DNS, domain name registrations, web and email services. They are fast, reliable and privacy focused. You can even pay for your services with Bitcoin! Apply coupon code 'CBPMEDIA' for 50% off initial purchase Bull Bitcoin - ⁠⁠https://mission.bullbitcoin.com/cbp⁠⁠ (https://www.youtube.com/redirect?even...) The CBP recommends Bull Bitcoin for all your BTC needs. There's never been a quicker, simpler, way to acquire Bitcoin. Use the link above for $20 bones, and take advantage of all Bull Bitcoin has to offer. D-Central Technologies - https://d-central.tech/ (https://www.youtube.com/redirect?even...) Your home for all things mining! Whether you need a new unit, a unit repaired, some support with software, or you want to start your own wife-friendly home mining operation, the guys at D-Central Tech are ready to help. With industry leading knowledge and expertise, let the D-Central team help you get started mining the hardest money on Earth.

friends and enemies welcome back cvp canadian bitcoiners podcast here tuesday night joined by ben rabidu i i was looking through ben's tweets earlier today and i you know kind of laughed at his feet i've heard ben on a number of shows uh he's done a few of the shows that you know i've done over the last year so ben is a gentleman in the streets but a freak in the tweets i haven't told him that yet uh he's having a laugh there in the green room. He's got a lot to say. I'm going to pull it out of him tonight. Canada in an interesting place, like I said last week to Mike Campbell, we've talked about this country and the place we're in economically, culturally with a lot of Canadians over the last little while,

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jonathan the boys will help you out for sure our bid axis should ship this month he tells us which is outstanding so we're looking forward to that no promo code go there support them you guys know the drill here's ben first time on the show well you know i was going through your tweets like i said uh you know there's not really much to say except like you've been writing about a lot of shit buddy over the last year or so so congratulations welcome and maybe we should start with how are you and who are you to the listeners? Thanks, Joey. That's good. You know, I've never been described. I've never heard it described that way.

A freak in the tweets. That's probably pretty fitting. Yeah, I mean, I would tell people don't take my Twitter feed too seriously. I just like to stir the pot and get discussions going. My name is Ben Rabideau. I run a couple of research firms, one focused towards institutional investors and one state professionals and so the institutional side is north cove advisors consistently ranked top five for from brendan woods international for canadian economic coverage

in canada and then the other is edge realty analytics which is exclusively available to real estate and kind of mortgage professionals anyone who's tangentially related to the real estate space can sign up. The only requirement is that you have a verifiable email address, not a Gmail or a Hotmail, just some sort of professional email address. We know who you are. That's it. That's great. That's a good idea. Actually, we should do that for people who sign up for our website. The sort of place I want to start, Ben, since it's your cup of tea, is housing. Big stuff in the housing portfolio the last six months, eight months, dating back to 2020-ish, let's say. You saw a crazy run-up in housing that followed what was another crazy run-up the four years before that, though for different reasons, I think. What role do you think uh the government has played

in the run-up in the cost of housing now i ask this for for one big reason and that is every time i turn on the tv it's not their fault every time i turn the tv it's someone else's fault that this is happening so there's three levels of government here in canada obviously where do you like where do you come down on the causes for this insanity? Yeah, I mean, there's no simple answer. And I'm glad that you highlighted the multiple levels of government because all three levels have a role to play. So, I mean, there's a lot that you could point to. Fundamentally, one of the issues, one of many, but one of the issues is that you have kind of the demand function controlled at the federal level. So the population targeting immigration

from kind of an arm's length of the Bank of Canada setting national interest rate policies, but then the supply side is dictated by municipalities. Right. And there you run into this situation where there's a lot of unwillingness to approve developments. It's very much in people's favor to kind of, you know, that whole not in my backyard thing. That's a real thing again. And unfortunately, it's been this thing where, you know, the boomer generation has sort of, they're the entrenched incumbents, and it's in their best interest to deny any additional housing supply,

because that increases their balance sheet at the expense of new entrants to the market. And that's kind of this perverse incentive structure where we've handed the controls over supply to the municipal levels, right? Now, those are just two of many dynamics that we could point to, right? I mentioned the population dynamics. I have a very strong view that the Canadian government at the federal level particularly

has completely screwed the immigration file i mean that's one thing we can talk about so um by the way joey i keep getting like a little spinny symbol on my is my camera cutting out at your end it's just you're you're like freezing up a little tiny bit but i can still hear you pretty well like i'm getting most of what you're saying oh weird okay i don't know maybe like a wi-fi uh you know issue i don't know strange okay anyway no continue no i well so you know there's a lot of low-hanging fruit right i mean you could as an absolute bare minimum like we should be tightening up mortgage underwriting to make sure there isn't document fraud which we know is a structural issue in this country. So implementing direct income verification

with CRA, simple, simple, right? But it would curb the demand function a little, right? I mean, so there's a lot of little things. There's no one silver bullet, but there's a lot of... I'm still here. Yeah, I see you. The question I have for you then, Ben, is, I mean, this is a pointed question, and it's probably good that we get to it early. There's a number of people in the Bitcoin space who have like a entrenched and I think well-founded distrust of government policymakers. not having direct CRA verification for income, the first thing that comes to mind is this has to be on purpose to stimulate demand because there's just no other good reason to have that set of rules or lack of rules in place over something like that. And when I look at some of the other policy decisions, I kind of come down on the same side of the fence. How is it possible that a government in 2015 or 16 saw a lack of investment in the country? And, you know, like I said, I've talked to a lot of people who are a lot smarter than me and they, you know, they all say the same thing.

The problem was clear, but the fix should not have been just emptying the cannon in terms of immigration, forcing stimulus and housing, forcing, you know, many different issues that we'll we'll get into tonight is there is there any thought on your part or people in your silo that this was done on purpose well i mean there was an element that was certainly done on purpose we had the the government come out and basically say that they'll do everything they can to protect house values because it effectively represents the majority of the net worth of their primary voter and see the problem is like i imagine and i'm i'm i don't know maybe i'm generalizing here but i imagine that you're that your listenership skews younger yeah right and the problem there is unfortunately or shows up to vote a lot more right and so you know they get to

set the policy and so lower house prices would benefit a lot more, right? And so, you know, they get to set the policy. And so lower house prices would benefit a lot of your listeners, I would imagine, at the expense of the older cohort. Well, who do you think the government's going to listen to, right? And so, you know, the message would be get out and vote, right? Like, make sure you guys vote, because then they have to listen to you. But to go back to your other point about the mortgage document fraud, and I don't know, you know, how much your would would be following this issue. But we have an issue in this country with with people falsifying their income, overinflating their income for the purpose of getting into the market.

And and it is a structural issue. And in the US, it's a very simple fix. They have a direct feed through where if you go in to apply for a mortgage, they can very easily verify that your stated income or the income that is shown on the documents, official tax documents from the equivalent CRA in the US. And so there's no reason functionally that we don't have an equivalent system here. And your point is bang on. It's like, it's such a simple fix that it's – and it makes so much sense that you're either left with one of two options, which is that this government is so incompetent that they just don't see it as an issue,

or that they perhaps are so fearful that that horse is so far out of the barn that trying to undo that would create all sorts of negative externalities. And I don't know what the answer is. And I actually don't know which one weirds me out more. Who knows, right? Yeah. It's funny to talk about these things in sort of a neutral environment. But the fact of the matter is there's a lot of evidence that points to governments knowing this is a problem, right? They see that rentals are going bananas. I mean, we've all seen pictures and videos of houses, most recently that one in Alberta, I think, 13 bedrooms and like a thousand square foot house. So you know that there's people there who are obviously contributing to a mortgage that they couldn't get on their own, even though somebody got it. That's number one. And then number two, when we talk about the horse being out of the barn, it seems to me that there's no, there's no interest in putting it back in

because I look at some of the policy and actually I said this to Mike last week, you know, it seems like the, the government is noticing at least a little bit that, yeah, there's a problem here in housing, a problem on the demand side and a problem with people not being able to get into the market. And so what we're going to do is make it easier by letting people leverage up more, right? Like if you're a first-time home buyer now, you get a little bit longer M, you get a bonus on new builds, get a bonus on a couple other things.

I'm sure I don't know exactly what off the top of my head. But like the question I sort of want to go to next then is these government policies, okay? Help me understand what they're thinking if you know. I get the feeling that maybe you don't have, like you have the same doubts I do what they're thinking. If you know, I get the feeling that maybe you don't have, like you have the same doubts I do that they actually know, but what is the thinking here? Is it just like, we got to get people into homes because we have to, at least on the surface, make it seem like the housing problem is not as big as it is, or is there more to it?

Well, I think part of it, you're right, like the hard work is trying to address the fundamental issues that we discussed, which is, you know, excess supply from irresponsible immigration policies, which I'm sure we'll talk about. It's the law at the municipal level, right? Those are tough questions. Those are not easy to unwind. But if you're the finance minister, you can unilaterally change CMHC rules and you don't have to ask anyone's permission. And, you know, to the extent that you have this view that lower mortgage payment equals more affordable and yeah, like allowing someone to extend their amortization for 25 to 30 years is an affordability fix, but that's a stupid way to think about it. Like,

yeah, from a monthly payment perspective, that helps, but that's not fundamentally addressing the issue. You know, and then with regards to raising the CMHC cap to 1.5 million, I'm actually not fundamentally opposed to that. I just think that, you know, in the U.S. they have mortgage insurance as well, but the limit is geographically based. So if you're in a high cost of living area it's you know 700,000 us if you're in a lower cost of 450 but the point is it's it's tailored to the expenses of that area

and so you know where i live um a million and a half dollars buys you a hell of a lot of house yeah right and if you if you know the history of cmhc and government-backed mortgage insurance. It was created after World War II with the intention of helping soldiers returning from the war to access entry-level affordable housing. And it was very much geared towards that entry level. And then over time, you've had this tremendous mandate creep, some of it very helpful socially, but some of it just like kind of, you know, just, just way beyond the original mandate. And I would just suggest to you that $1.5 million in most of Canada is a hell of a lot more than a starter home. Right. And so there's just, there would have been ways to have

gone about that a little more thoughtfully. I totally agree. I said this to a few people last few weeks that the implication here is not that things are going to be more affordable. The implication is that the starter home in Canada is a million million and a half dollars and it just cannot be that way that's a huge jump from probably what the mean is now i want to ask a bit about this idea of new builds adding more doors as the government likes to say i i gotta tell you i fucking hate that term because as someone who's you know starting a family i'm in my mid-30s when i when i think about like adding did you look like you're like 21? You're in your mid thirties? Everyone says this, Ben, the secret is lots of water.

You must have like a killer skincare routine or something. Lots of water, lots of sleep and a good woman will do you wonders. I say that to everybody. The, the, the thing that, you know, bothers me the most is that I keep on hearing that we're bringing in new, new population to the country because we have a fertility problem. We're not reproducing, right? We're under replacement. Fine.

But then I keep hearing as well, and I've heard this from people who do a lot of research in birth rates. We've had some people on this show who of homes, and on and on we go. What you actually need are single-family dwellings. And the term I've heard is gimby. You need grass in my backyard to start a family and have a proper home. Right. And I'm wondering if in your research, you know, you've obviously given a lot of thoughts of population growth and things like this. And because housing is your, your wheelhouse, do the guy who might be best suited to answer the question is adding doors really what the country needs. Number one.

And number two, is there anyone at the federal level, I mean, you've spoken to these guys talking about how adding apartments and condos doesn't actually solve the problem of replacement rate fertility. No, it's a great point. And unfortunately, the way that we build in this country incentivizes people to build the wrong type of housing, right? So what do we mean by that? So if you think about it, if you're trying to build a condo, for example, you have to pre-sell 70% of the units typically to get your bank financing to build. Well, no one's going to buy a unit that is off a floor plan, but that won't actually be a livable unit for five years if you're an end user. Like no end user is going to do that when they can walk across the street and buy an existing unit in an existing condo.

So consequently, they have to skew heavily to investors, they need to have typically 70% of that building bought by investors up front. Well, what do investors want? Investors want lower price point, they want something that's that's liquid and marketable in the rental market tends to skew towards like smaller one bedroom units. And so consequently, you look at all these condos that are under construction Toronto, and two thirds of them are one bedroom orroom or one-bedroom plus den. So to your point, like, we're not building family-friendly units, but that's partly a function of the kind of the financing structure in Canada. With the single-family stuff, it gets a little bit trickier.

I do think that we need to be thoughtful around like slightly higher density single family. So I agree with you and I, and I agree that we should have, you know, more single family, more green space, but, but maybe not the massive lots that maybe we've been used to because the

reality is like the green belts is, is an artificial constraint in Toronto, but it's a real constraint that you have to operate within. And there's just only so much buildable room until they're, they're willing to, you know, get a little more accommod accommodating which doesn't look so yeah there's there's no easy answer there but i i understand what you're saying

and part of that also comes back down to the municipal level which is just that municipalities are really loathe to allow a lot of single family construction for whatever reason. They really love having these increasingly scarce assets being these single family homes where no one else can get into them. So it just drives up the value. Is it because I think they must collect a shitload of taxes and dev fees on huge condos. That's got to be part of the reason, no? Well, no, that's part of it. But what I'm talking about at municipal level is you got to be part of the reason no well no that's part of it but what i'm talking

about at municipal level is the municipal you gotta remember the municipal counselors are just kind of your everyday joe blows in the community and they got to listen to their neighbors being like man i don't want that new subdivision we got more traffic we get more and it doesn't complain about these new developments and so it's just easier to be like, okay, fine, we'll throw up some roadblocks. And every existing homeowner is incentivized to try to push back against new development because it increases the value of their home if it's more scarce. And that's like this perverse incentive. And the feds have to figure out how to incentivize municipalities to pull in the same direction. And what role do rates have in all this?

I've had on all three Looney Hour guys. They share some of the same thoughts on rates that I do. I'm curious to hear what your thoughts of them are. I look at my own situation. I'm not rate agnostic, but once you're in a home, the rates don't affect you too much. And so short of really being on the rates don't affect you too much. And so short of, you know, really being on the outer limits of what you can afford, I get the feeling that it doesn't stimulate demand quite as

much as the realtor side of Twitter wants me to believe. But where do you come down? You got to shake your head. Where do you come down? Well, I mean, I'd say that, you know, when we had fixed rates in the 1.6% range at the dead lows, yeah, man, that stimulates a hell of a lot of demand. Like when we saw it, we saw just an insane amount of activity. Now that was like, look, listen, if you're going to give mortgage rates at a point and a half below inflation, so you're getting like negative real rates on, like who wouldn't take that? You'd be an idiot not to take that, right? So the government, the bank cannon effect was incentivizing you to take that right so the government the bank

cannon effect was incentivizing you to take out a massive mortgage it was massively similar now once you once you're in the market i understand what you're saying you've kind of like you've locked in your price point you've hopefully locked in your rates for a few years and you're a bit a bit agnostic around it but yeah make no mistake man those low rates were crazy for demand right and we got a long ways to like i i would be shocked if we see those low rates again you know it for for a generation well let's talk about it because you know friend of the show keith thicker i think you've been on that show as well you know he's he's tweeting every day about the race to zero and you know i i don't know if he's actually talking about

zero maybe he's talking about something close to zero, but I get the feeling, Ben, that the Canadian electorate is not going to be satisfied with rates in the threes or fours when their 1.6 fixed expires next year. You know what I mean? What is the pressure point? What is the pain threshold for the government and what is the pain threshold for the homeowner? Renewing at 5x your rate or 4x your rate, not exactly palatable, but you tell me what you think. Well, so here's the right way to think about it. You've got the equivalent of one third of the outstanding mortgage debt in the country was originated in an 18 month period between late 2020 and early 2022. One third? One third. And it was originated at an average interest rate of just under 2%.

So now you can do a really simple math and you can look at, well, what's the lowest available One third. One third. And it was originated at an average interest rate of just under two percent. So now you can do a really simple math and you can look at, well, what's what's the lowest available rate today that those people would be renewing into? And it's about four, a little little over four, if you assume that most of those were uninsured. Right. So, you know, that's. Increase in mortgage payments like it's a big jump. So the bank has work to do now where I land on this and where i would disagree with keith is i so first of all i think the bank can it has to get rates a lot lower um i do think that the economy is is very weak um much weaker than we're than than is being suggested in the data um and i think we're starting to see that um and for the record i know you you had kevin muir on i was on his

podcast earlier in the year and i remember telling him back then and that was like in the spring i said by the end of the year we're going to be talking about whether 25 base points at a time is enough and he was like no but i but yeah like we just had a 50 bit cut and and i think they're going to go 50 again in december wow yeah i do i do but but but see here so here's here's so i understand where keith's coming from he's like they're in a race to get to the point where those mortgages that are renewing are not going to be devastating for the economy yes and so that's that that's the pinch point that's the race that they're against and thinking going into 2025 is going to be we need to get our overnight rate back down basically below three percent okay

so they got at least another hundred base points to go okay the issue is going to be come the middle next year the the u.s federal reserve is so much more constrained by the strength of their economy in the sense that if you look at a chart of like the debt service ratio for households between canada u.s it looks like alligator jaws right so like at a chart of like the debt service ratio for households between Canada and the U S it looks like alligator jaws, right? So like Canada record high and household debt service ratio is just the share of income nationally that's being diverted towards debt servicing. So we're at record highs in Canada. They're at like record lows in the U S because everybody's termed out their debt.

They, after the financial crisis, they went through the leveraging households, paid off debt. They defaulted on a bunch of debt. And they've got 30-year mortgages. So everybody termed out their debt at the lows. Here in Canada, we never went through deleveraging. Our debt is a lot of floating rate, a lot of short-term fix. So we're massively interested in the future. Come next year, we're going to get to the situation where the Federal Reserve is going

to be forced to be tighter than they want, and the bank can is going to have to be looser than they want. And the bank can is going to be going to confront a situation where the currency is going to start taking on the chin. And I've said for a while that I believe that, you know, we're going to test the lows, the all time lows in the Canadian dollar versus the US. And I think we're going to test the lows, the all-time lows in the Canadian dollar versus the US. And I think we're going to see that in the next couple of years. And the risk there, so I think the discussion come the middle of next year is going to come to how low can we push rates before we start importing inflation via weak currency? And so there's a fundamental constraint there because we can't go that much lower than the US.

So we need to get rates low. I don't know that they can get much below 2% of the overnight rate, which is still going to be a limiter on growth. So I don't think they're going to zero. Keith and I might disagree there. I don't think they're going to zero. You guys can have a Twinkie bet about it. I was thinking about some of the stuff you're saying. I had here in my notes that the differences between the US and Canadian housing markets and broader economic picture. It's funny. One thing I've given some thought to and talked about on our show a few times, although it's

a bit out of my wheelhouse, is this idea that as our economy moves further away from productive value and more into financialization, real estate, things like this. And as our population ages, the idea that our currency would be weak in an economy that demands imports at some unprecedented level is a disaster for people on fixed income. And we've already talked about, and we were tweeting about this today, we've already talked about how the government basically under the guise of night stopped issuing treasury or GICs that are adjusted to inflation. And it tells me, all these things tell me there's obviously an understanding at the Bank of Canada that something is wrong. We don't cut 50 unless there's a problem. You're

saying there's going to be another 50 in December. And I worry that for people who are not financially stable, they're maybe living paycheck to paycheck, They're in precarious situations in terms of their cash flows. The idea that the currency suddenly would be an additional pressure point that, by the way, most Canadians can't get their head around, right? Not necessarily because they don't have the mental capacity or the firepower or whatever, but more because if you get in that situation, the idea that you're going to take time away from figuring out how to put food on the table to understand the overnight rate and the difference between currencies internationally is laughable. This brings me to my next point. How much of a sort of cultural issue do you think we're walking into here?

And I know you've tweeted a bit about this, the demographics of immigration. I've talked a lot about the problems that happen when you don't have people moving into homes and starting families. Japan, China have both been great stories for this. When you have a predominantly male population that is quote unquote desperate or has no behavioral controls, I mentioned a good woman earlier, who knows if I was to look 21 without a good woman, God only knows. But the whole point here is that you end up with different behavioral incentives when you don't have a home and a family. And I am very concerned that we're hitting a threshold here over the next little while. And by the way, this is not speculation on my part. When I look at Toronto, when I look at Vancouver, when I look at the big metropolitan areas, I live just outside

of Hamilton. It's not where I am, but it's very close to my door. And it's getting to be a problem that's not easy to be kept under wraps. And by the way, police also talking about a bigger problem is for maybe the first time. What are your thoughts on all this? You've done research on this in the past. You've talked about it on Twitter. I want to know where you come down on sort of the cultural fault lines that we're going to expose here if we don't get housing under control. So, I mean, there's a lot there. Let me first off pull on, before I answer the bigger question, let me pull on that thread about real return bonds, because I think you touched on something that's important. So you're right, the government kind of quietly, these inflation linked real return bonds, which is a way of protecting Canadian savers from the bad grades of inflation. Why would they do that? You just kind of asked it like it was such a

simple question. Why do you do that unless you expect that you're going to have to run inflation a little bit hot? There's no two ways about it. So I think what the government is realizing, what the bank is realizing, is that we are facing a serious debt issue at some point and the reality is every time an over levered economy gets into a debt financing issue you either have to do kind of grind your teeth and go through a painful deleveraging where people you know pay off that debt and they allocate more of their income towards servicing that debt that you just grind through this painful process or you just make old people poorer by slowly raising inflation.

Right. And like, and you just, you just let inflation run a little hotter than it should. And you sort of grow the economy. That's always, I mean, it's throughout history. That's always what they've done and so you like you're you're bang on there and it's one of the reasons like look i'm not a i'm not a bitcoin expert by any means but i certainly get the thesis around you know having an asset that is it cannot be inflated away in terms of of its scarcity in an era where the

government certainly looks like that's the direction they're leaning, right? So I'm with you on that. Now, as it relates to your broader question, I mean, the social impacts of what we've done with immigration is a big one. And I want to be really careful. I mean, I think we're going to have to preface this discussion with this because it feels like we're just being totally- We prefacing insinuates that you are going to say something that is incorrect or not thoughtful that is not the case i only bring thoughtful people on the show i think about things before i say them i don't need to tell other people that i've thought of them if they take offense that's their problem it ain't mine it ain't yours that's how we do things here yeah i appreciate that i i do appreciate and i but let me say that I did testify

for the Standing Committee of Finance twice. And I raised this issue twice with them back in 22 and 23. And I said specifically that if we don't get the immigration piece right, we are going to foment anti-immigration sentiment and we will ruin the consensus that we've built around immigration in this country that has served us well for like literally generations.

And we've seen in the last 18 months that that consensus has come apart. And the reason it's come apart is because we haven't been thoughtful. And when I say we, I mean the federal government has not been thoughtful. You cannot take 1.3 million people and drop them into the Canadian population in one year and not expect there to be all sorts of issues around availability of rents, availability of housing, rising homelessness, rising crime as a consequence, inability to access basic medical system needs, right?

So all of that, I hate to oversimplify, but a lot of the issues that we see today, I believe stem from not thoughtful around this particular file. Now, to put a finer point on it, so 1.3 million in the past year, a little more close to 1.2 now as of the latest data, but call it 1.2 million in the last year. About 800,000 were temporary residents, so overwhelmingly international students, temporary workers. They skew massively towards men. The data shows about two-thirds of that cohort is men

now why that matters is because we're at a point now where you have over a quarter of a million more men in this country age 20 to 29 than women now i just before like that to your point if you get a bunch of young single men who have no prospects for marriage and not great prospects for employment, and then you're also now we're tightening the PR range. So now all of a sudden they're here in Canada. They thought they were getting PR. Now maybe they won't be. Like, they're going to be in a social situation i've actually said like i mean again it's not a popular thing to say but like we need to think about the national security implications of having now we're up to three

million temporary residents in this country three million non-canadian citizens yeah all of them expecting well the vast majority expecting a permanent residency many of them were lied to about you know the prospects of getting permanent residency and now they're seeing these dwindling prospects of actually getting that they're not going to be happy have we thought about the implications of having a couple of a million foreign foreign individuals on our country that are angry at the government in the same like four cities by the way it's all like very condensed right they're all they're very they're very close together the density of these these issues potentially coming around is significant. I wouldn't even go to a bar with that ratio, let alone hope that my country would be okay.

If I run that ratio and you know, when I see, you know, and you're bringing it up, the anger is real and it's at some level it's deserved. Okay. These people were sold a false bill of goods. I think in a lot of cases, the question is, what are we going to do about it? And so you mentioned earlier, like, you know, we got to vote for things.

And do you really think that we can vote our way out of this? Or like, is this, is the inertia too much on the damage you do? No, I 100% of you. Why do you think the federal government has suddenly found religion on the immigration file?

Like, why do you think, like, let's be honest, a year ago, if we said that the federal government's going to cut back their pr target i would say you're crazy yeah and yet you have the government coming out announcing massive changes around temporary residency massive change around pr targets what drove that it's the decimation in the polls and you'll notice that that happened right after a major cabinet retreat, right? Or

caucus retreat, I should say. And I believe what happened is Trudeau got together with all of the MPs, and they all were like, listen, man, we're getting complaints constantly from our constituents around this issue. And if he isn't under control, none of us will have a job after the next election. It is the issue of the next election. And it's no, it should not be a shock that immediately after that meeting, which evidently was pretty tense. He comes out with one of the biggest changes to immigration policy in like decades. Right. So, so, so I would, I would push back. I would say, absolutely. The polls are forcing their hands here.'s about damn time okay tell me

why you think he's found god i look at the numbers they're dropping to what is like 20 21 levels i'm i've not heard i have heard that the number of people coming in will drop fine yeah what about what about the like the sort of classification of the people who are already here is it you know is there any truth to this idea that I've heard a number of times, you know, that, that what's going to happen here is there's going to be a bit of a shell game.

There'll be less temporary foreign workers, but they will become permanent residents or they will become citizens. They'll be granted pathways, whatever. This doesn't really solve the problem. And in fact, it tells me that maybe God was not found. No,

I disagree. I disagree. Tell me why. Okay. So, so this gets into the complexities of the immigration file. So I mentioned earlier that you've got multiple forms of immigration. What we typically think of as immigration is permanent residency, people coming here on a permanent basis. The federal government had a 500,000 cap. And that's been raised over the years.

It used to be like 300, and then it kind of got ramped up under Trudeau. And so on any given year, typically you add kind of 400,000 permanent residents. You have, you get 500,000 additional permanent residencies. You lose a hundred thousand people from people who go to Costa Rica or wherever, just don't come back. Right. So next I have to call it 400,000 a year. So how do we get to 1.2 million? The answer is 800,000 additional temporary residents. Now, it's really important that people understand that cohort is super volatile. On any given year, they're either adding a ton to the population or they're subtracting a ton because it's a rotating door. Students are coming and going, but a few of them stay. And so, so in any given year, like this is really important to understand, like in any given year you might have 800,000 temporary residents coming 700,000, 50 or 750,000 leaving. So like on net, you're adding maybe 50,000. That's like a normal year, 50,000, 800 coming, 750 leaving. So you got a lot of churn in that population.

And so what I want you to think of is as soon as you start like crimping the inflows, but the outflows continue that cohort drops the growth in the cohort drops really quickly so so so in other words and i know that's that's complex way of thinking but if you look at their math and i'll just tell you what the federal government is targeting they've told us that we will have two years where the canadian population actually declines you believe that a hundred? A hundred percent. You do? Okay. Well, again, listen, I don't trust Trudeau as far as I can throw them,

but I absolutely trust their instincts for self-preservation. And when the electorate stands up in the polls and say, if you don't get this shit under control, let's put it this way. Population growth is going to slow a lot. Whether it goes negative or not, in my point, it's moot. It's going way down. Now, to your point, so people will say, well, do you really think they're going to leave? They don't have to leave. Nobody has to leave.

Population growth is going way down. Here's why. I just told you we have 3 million temporary residents in this country. We have a permanent resident target now of call it 400,000. So we could, as you said, play a shell game where we just give PR to people who are already here. We could do that for the next eight years. What does that do to population growth, Jerry? It goes to zero. We can have zero population growth for eight years by simply giving PR to people who are here. So do you understand that? So it doesn't matter if they're here. The growth is going to drop to zero.

And we're going to have a much lower number of years going forward because of these changes. They're very significant changes. Let me ask you what you think about the uptick. I uptick a too generous a term, this, uh, sort of new insane traffic on the asylum side. Uh, we covered on this show a little while ago that there's a huge uptake in asylum claims coming from Mexico, which, you know, it's unclear to me exactly what that means. Did you come from another country? And then Mexico was your last hop. I don't know, but it's like my, my big concern, Ben is not that the math is wrong. Your math is right. I looked at the chart you posted. I agree with the math is fine with me. I get that there's fluctuations

and that if you tighten the hose on inflows, eventually things will level out. Perfect. But there's always another classification of incomings. And know so far so far there's been a lack of willingness to address the fact that i think most canadians just want the number of new people to drop significantly for a while and you know there's i think there's there's been very careful words from mark miller even in the face of uh my media crush uh vashi Capello, trying to get out of him. She's great. Yeah, she is great. And trying to get out of him that he's going to actually reduce

the nominal number of newcomers. No one seems to be able to do it. Do you have a view on this? Is this something people should be concerned about? I don't understand. The policy projections are very clear. They're targeting a reduction of 400,000 annually in the temporary resident cohort. They're telling us that's what they're going for.

That's their stated policy. Now, we can, again, we can debate how serious they are around that. Here's the way I would frame it. They don't have a hope of winning the next election if they don't get this. This is the most important issue in Canada today. Agreed, yeah. And so ask yourself this question. Do they want to stay in power?

Because at some point, like, I'm telling you, man, like, you may have a strong conviction that we need immigration or whatever, whatever they're thinking in their mind. We should be helping, you know, with asylum claims. Whatever they're thinking, set that aside and ask yourself, are they willing to lose their jobs

over that particular conviction? I don't think they are. To me, it's still... ...probably trust their instincts for self-preservation. They have to do their best to follow through on this promise. I believe if they want any hope of winning the next election... By the way, I don't think they will win the next election anyway. I hope they don't. But this is the hill they have to die on they will lose the next election over this issue if they don't get this right okay let me let me ask you so this is kind of uh you know a good dovetail into this other question i want to talk about you know what should we talked

about lowering the number of new canadians that That's a positive in terms of the direction on house prices, I think. What else should government be doing? Should they be doing anything? Should they just stay out of it? Should they lower fees? Should they incentivize certain kinds of bills? You said this earlier. I'm not convinced they should do anything.

I don't know enough about the file to say that the stuff they're doing is working. It's working to get headlines and to get some part of the population to support certain policies. But in terms of medium and long term, I don't know if they should be doing anything. What should they be doing? Well, I mean, I would disagree. I do think there are things that they could be doing, right? So to the extent that we have money laundering that's driving up prices, to the extent that foreign actors view Canadian real estate as a safe place to park illicit capital, you got to get rid of that. Right. So that's to me, that's low hanging fruit.

And there's multiple things they can do there. National beneficial ownership registries. They can tighten up FinTrack. They can start, you know, you know, asset seizures. They can do in B.C. They've just started unexplained wealth orders, which is a really interesting concept. It's like, hey, man, you own a $15 million home, but your tax returns say you make $15,000 a year, which isn't even enough to pay your property taxes. Explain yourself.

And you put the onus on the individual to be like, well, no, this is how I'm doing it, or else you deem that to be the proceeds of crime. It's an interesting concept. So, look, there's some things they could do there. That's one area to the extent that there's illicit kind of, you know, borderline illegal activity in the mortgage space around a mortgage underwriting, like, God damn it. Like that's an easy fix. Like let's fucking do it. Right. So, so that to me, that just makes sense. But when it comes to bringing on new supply, you're right. It's more nuanced. But I'm still of the view that any way that you can get municipalities to pull in the right direction, because their incentives are not aligned with trying to bring more supply. You've

got all these rich boomers sitting on big real estate portfolios, and it's not in their interest to have more supply that diminishes the value of those assets. So that's not an ideal situation. So whatever the government can do to incentivize municipalities to pull in that direction is absolutely warranted. So you tie transit funding to that. There's ways that you can use like a carrot and stick approach from the federal government. I think that makes sense, right? So, like, man, I wouldn't say that you should leave this entire to free markets because

like let's let's be honest the real estate market is government goosing demand with mortgage insurance like you got you got you know cdic backing on deposits right like you got there's a million ways the government's intervening in this market so you can't just be like oh let's just go hands off and let the government let you let the free markets it's not a free market. So for better or for worse, this is the market that we have. So we got to try to find solutions to get more supply. Are you worried about, I should ask you, I mean, if you're comfortable answering this, are you a real estate investor yourself? Well, define investor.

So you have like a residence that is not your primary that you spend time at that someone else would rather that someone else could use as a primary uh yeah okay so one of the one of the things we're gonna we're gonna transition into bitcoin here a little bit before i let you go one of the things that i've heard more and more over the last year and five years ago i would have said there's no way because i just didn't i didn't think it was possible but the overton window has been completely destroyed. There's a giant hole in the side of the Overton house now. Anything is possible. And I'm wondering from your point of view, and I've asked the Karadza guys this question. I've asked Ron Butler this question, among other people on air, off air. Is there a concern in your view that there is going to be an incredibly oppressive tax regime that shows up here in Canada over the next 10 years? Because it's actually in the interest of a vast majority of the voter base to just tax the shit out of you or even me. I have one residence, my primary, that's it. On some level of unrealized, on some level, like unused doors,

like you don't have enough units, like your house is too big for your family size, because they just want those houses back on the market and they don't care how they get them because no one's building. The reason I ask is because one of the things in Bitcoin is like, people talk about these homes as liabilities and I'm not of that opinion, but man, Ben, in two years or three years, I could honestly see myself getting there. If there's some kind of more oppressive tax regime, this is something you've heard, something you've considered something you're worried about or no. A lot. I think you're onto something. I think, you know, I actually had a good discussion with a good buddy of mine just this past weekend on this exact issue. And one of the concerns that I have is, you know, if you are supportive of the free market capitalist society to the extent, reasonable extent possible, not necessarily unbridled capitalism, but, you know, let good businesses flourish.

Let bad businesses get taken out, let small government as possible to ensure services, etc. If you have that view, then you have to recognize the side effect of that is that you do end up with an accumulation of wealth at the high end. And if that goes unchecked, if there is not a redistributive mechanism at some level, then it does lead eventually to a, like a more socialist bent within society from people who are pissed off at the status quo. And I, I agree with you.

I fear that's where we're going. I had this thought brought in a, you know, some sort of a luxury home tax. Yeah, that would suck, you know, for a lot of people. Like there's a lot of ways they could do this and it would be politically appealing.

So I think that the people in this country that have assets do have to recognize that man, like there has to be some means of distribution, redistribution, right? So, I mean, I have my own thoughts on what that should look like. Tell me, what are they? I mean, you're probably around maybe a little older than me,

but like, you know, we're, we're not boomers. We're not thinking. And like, I, I don't want to, I hate villainizing boomers because I think about what the incentives told them to do. And they did it. Like what, why would you do anything else? And now you're going to pull the rug on these guys. I don't know. So, okay. You tell, I'm not that you're going to do it. I don't, I don't have a rock solid plan, but I think the broad sketches should be something like if you earn good income, if you build a successful business, man, you should enjoy all the trappings of wealth. You should absolutely have that. But at some point, we should have a discussion about whether kids should be allowed to inherit enormous sums of life changing money, just just for being

yanked out of the right crotch, like for doing nothing to society. So my perspective would be, there should be some sort of a limit on how much wealth you can pass to your kids. And that should be the redistributive mechanism. I know there's a lot of issues around that. So I don't know, I don't know, you know, specifically what that would look like. And this is from somebody that, yeah, my kids would probably stand to do, do pretty well, you know, but, but I, I don't think, like, I think that if we're not careful around that idea, you will foment a lot of, you know, just anger and bitterness from a big chunk of the population that will inevitably lead to these kind of like hard left socialist redistributive policies that are not good for anyone. So I don't know what the answer is, but the answer is not to do nothing because the reality

of our system isn't wealth. This is interesting. You know, you're saying things that I would not have anticipated you were going to say, which is good. That's a good thing in a guest. Now, I want to ask you one or two more questions here. You've been fantastic so far. So I anticipate that you'll somehow fuck this up on the Bitcoin stuff. Do you hold any Bitcoin, number one, and tell me why you do or why you don't? I do, but I did it the boomer way. So I've got the Bitcoin ETF and my kids already got fees because they wanted it. I'm a believer in Bitcoin. I do not have a problem with Bitcoin. I actually think that at this point of the cycle, it looks really primed to move.

Like we're 18 months after the halving. You could probably tell me exactly. There's normally the time in the cycle. Wait a minute. It's just like March. It's like March this year. You got lots of time. It was only March this year.

See, that shows you how much it but I know that we're saying with the window from the halving cycle where normally it gets a bid and it really starts to rip and you're at that point where the reduced supply and you know, constant demand or in some cases, generally the part of the cycle where Bitcoin does really well. So I actually think it's going to do great for a couple of years. Like everything else, it's cyclical and it's going to boom for a couple of years and you get some nasty 40%, 50% retracement. And that's like the normal thing that you shake out all the holders, all the weak hands. And, you know, you concentrate rough, right?

So, yeah, I own it. I own it for my kids mostly because they wanted to have some of their RESPs and I like them having a bit of a say in what, you know, what their, their money is invested in. So I'm like, good on them. I think it's going to do fine. I don't, I don't fundamentally have an issue with Bitcoin. Do you, in your travels as a professional, I don't want to call you a professional wealth manager, but you're at least a professional analyst. How much do you hear from people who are talking

to you? Do you hear them asking you about Bitcoin? Is there some wins in the sale? What are you hearing on your side of things? No, I actually think that's a good thing. I don't hear people. I don't hear the froth. I think this has been like the quietest bit. Fanfare, which if you're a fan of Bitcoin, if you own Bitcoin, that's what you want,

is this quiet accumulation. You know, you want it. You want prices to move without all the froth and the speculation, all the headlines and all your buddies being like, hey, man, is it good? Like when all your buddies are like, Hey, do you think I should get it? And it's ripped 150% last year. Like that's when you gotta be like, okay, okay. We're probably wrong on the two. So the fact that you're not hearing that, I think is probably a good sign and tells you that we're probably pretty early in this, in this, this move, this cycle. Totally. Totally. Okay, Ben, that's it. We're done. Do you, do you want to tell people where

they can find out more about you if they want to get freaky with you on twitter yeah i mean i'm on twitter you know whatever ben rabidu um just one word is my twitter handle um and then if you're if you happen to be in the real estate space a lot of the guys that you mentioned um you know they all subscribe to edgy analytics you can check it out, sign up free for a month. You've got to have a professional email. I just can't be like, you know, Joe Smith at Gmail. You can get booted out. But, yeah, you know, do research, a couple of research reports every month,

quarterly Outlook calls, market. Free for a month, cancel. If you don't like it, you know, get billed. You're a busy guy. Thanks, everyone, for listening, watching. Make sure you go find Ben on Twitter. He's always looking for more fun. Until next time, we'll see you later.

Well done. Way to go. Good job.