Interest Rate Hike

July 12th, 2017

As anticipated, the Bank of Canada has raised it's benchmark interest rate from .50% to .75%, this is the first increase in seven years. Mortgage rates and home equity lines of credit are bound to climb.

The Bank of Canada's Governor Stephen Poloz justified the hike, stating he's convinced that the Canadian economy has "turned the corner" after a few false starts, such as oil price plunges in 2014 and 2015.

Borrowers will notice an increase in their rates as Canada's largest banks respond to the central bank's move by raising their prime rates . Rates are expected to increase by a quarter-percentage-point to 2.95 per cent. Prime rates influence the cost of borrowing on floating-rate loans, including variable-rate mortgages, credit lines and student loans.

“The very strong growth of the first quarter is expected to moderate over the balance of the year, but remain above potential,” a bank's spokesman said in a statement.

Support Small Town Economies

July 1st, 2017

As you head away from the city, to enjoy the best of cottage country, please try to remember how much your little cottage town depends on you. Generations of people in Ontario have vacationed in rural and small town places. Camping and cottaging are part of the very fabric that forms the Canadian cultural identity. Most of us have some attachment to the hamlets, villages and towns in those areas that embody an authentic rural stereotype: they possess a great sense of community, they're a place where every knows each other and they are a pleasant, social community, nestled in the beauty of nature.

What you may not understand is that it can be a challenge to live in cottage country. If you are notice that the roads are getting worse, shops are closing, or the buildings are looking tired, you need to stop and consider the reason. The typical cottage town is not situated far enough north to benefit from the grants and social programs offered to the near north, yet they face higher relatives costs due to distance from cities and a lower population. Rural Ontario has long been neglected in terms of the eroding community development base and the failure of urban-based metrics of efficiency to capture the net benefit of investments in rural infrastructure and services.

Small town places are becoming rundown, partly because of a lack of capital invested into infrastructure renewal, with the federal and provincial governments allocating funds into larger centers and placing a higher level of responsibility squarely upon the municipalities to provide for themselves. With a small and- in some cases, a declining tax base- rural and remote communities are scrambling. Rural dwellers become part of the natural environment and issues of sustainability, conservation and stewardship are a part of day-to-day life. In effect, this is an immeasurable service, that provides an immense social benefit for the greater region- yet it is under appreciated.

Every weekend, cars zoom along otherwise quiet country roads and toss refuse out their windows. While walking the dog, I have personally encountered dirty disposable baby diapers, disposable lighters, used batteries, empty cookie boxes, pop cans and bottles plus and an endless array of fast food wrappings and cups and a variety of other things. The garbage receptacles in our parks are stuffed with household garbage bags from visitors too lazy to go to the dump. And I say visitors... because most of the local people participate in clean up days, walking the roadways with plastic bags, picking the stuff up. We respect the country and its creatures and we prefer to leave a place in better shape than we found it.

And that goes back to part of the reason that people like to visit cottage country and some of us choose to make it our home. It's that quality of life that makes us passionate about our communities.

Many of our citizens are seniors and many are on small fixed incomes. Most of us volunteer and many of us, in more than one endeavour. Most of us hold more than one part-time job in order to pay things like escalating hydro costs that help fund urban transportation. We don't have public transportation and rely upon cars to get to most services, so we pull together and create car pooling and ride share initiatives. We hold fundraisers for food banks and kids sports and people who have lost their homes to fires and flooding. We encourage our artists and musicians and celebrate our Aboriginal peoples.

Place-based development and tourism based initiatives have been encouraged by the federal and provincial governments for the past decade or more but it is difficult to sustain an economy that is completely reliant upon optimization of existing assets as they naturally depreciate. Most rural areas want to create more and better employment to retain young people who are able to assist with the rapidly aging population and also, because children raised in these communities value the rural lifestyle and want to raise their own families there.

While we have a great deal of recreational activities, without employment opportunities and a reasonable quality of affordable housing, rural communities are hard pressed to attract new residents.
Our dentists and doctors are aging and we're constantly making efforts to recruit... but we need to retain the infrastructure in order to recruit them to a place they will want to live. While our little towns
struggle to keep up with snow removal, water, policing costs, garbage and sewage issues, they dream about community development and read studies that that inform of the need to make our towns attractive place for people to invest in, and live.

It's time for urban Canada to recognize that we need a collaborative approach and strategic investments from the federal, provincial and regional government. In the meantime, the businesses and services in rural communities need the support of their visitors. The next time you head up to cottage country, remember that whatever you need, you can likely pick it up at the local shop and they really are grateful for your business.

When You're In the Neighbourhood

June 29th, 2017

Looking for a cool place to explore this summer? It is always dry and, you will need a sweater because it's always a comfortable 10 degrees in the Bonnechere Caves. Canada's most extensive cave system, they were first mapped in 1853 but the caves have been a popular destination for over 55 years.

Located less than an hour and a half from Bancroft, the Bonnechere Caves are a geological wonder. Pack a lunch and enjoy an opportunity to explore underground pathways that transport you to another era. Embedded in the limestone walls, you will find the remnants of a tropical sea and fossilized creatures dating back over half a billion years ago, to the Ordovician Period - millions of years before dinosaurs.

The Ordovician Period is thought to have lasted for about 45 million years. During that time, most of the earth's land mass was part of a southern supercontinent called Gondwanda that included the modern continents of Australia, Africa, Antarctica, South America and Southern Europe. The area north of the tropics was pretty much ocean. The Ordovician Period is the second period of the Paleozoic Era.

During the first parts of the Ordovician Period, the climate was fairly warm and life was primarily underwater. Gonwanda is thought to have slowly moved south until it covered the pole. Once it stopped over the South Pole, glaciers formed and sea levels dropped and the climate began to change and there was a mass extinction.

Lights strung throughout the Bonnechere Caves highlight the rock formations and fossil remains of gastropoda (snails and slugs), brachiopods and pelecypods (which resemble clams), cephalopods (that look like squid), trilobites (a hard-shelled, segmented creature that was one of the earliest anthropods), crinoids (some that look like flowers and others that look like a feathery plant with tentacles- actually related to sea urchins), sponges, algaes, corals and primitive fish.

Take a flashlight to check out the stalactites (like rock icicles) hanging from the ceilings. They grow about a cubic inch every hundred and fifty years.

Bonnechere Caves
1247 Fourth Chute Road
Douglas (near Eganville)
(613) 628-2283
bonnecherecaves.com

Is the Market Really Cooling Down?

June 15th, 2017

There's a lot of talk about the real estate market cooling down but most of my colleagues refer to it as "softening". In April, the government instituted "The Fair Housing Plan", intended to cool the market. It was a 16 point plan and included actions to address the demand for housing, to protect renters, to increase housing supply and to increase information sharing. The annual growth rate in the Toronto housing market peaked at a whopping 30% in April this year.

More than ever, the government is taking an interest in gathering data about the Ontario real estate market, in order to circumvent practices that contribute to inappropriate speculation and tax avoidance issues that are thought to be a major cause of the housing dilemma- especially in Toronto.

The government has doubled the maximum Land Transfer Tax refund for eligible first-time home purchasers to $4000. Essentially, this means that eligible buyers in Ontario don't have to pay Land Transfer Tax on the first $368,000 of the purchase price for their first home purchase. They are funding this enhancement through a modernization of the Land Transfer Tax to increase rates on single family homes over two million dollars.

New rules also make it easier for non-profit housing to buy surplus government lands and municipalities have a new framework for including affordable housing in residential developments. In addition, the Planning Act and Development Charges Act to allow homeowners to create rental units in their primary residences. There are also freezes on the tax burden for multi-residential apartment buildings where the taxes are high.

More than these measures, however, GTA Realtors say that the biggest reason for the cooling is that so many homeowners are trying to take advantage of the high prices and the number of MLS listings are growing higher and higher... and the Sellers are demanding inflated prices. There are still properties selling and the population is pushing its way into more rural areas where there are far fewer properties on the market. For now, it seems to be keeping the prices fairly static and if you go by the number of emails I receive from blog readers asking questions about property they are contemplating purchasing... the market is picking up.

A Wet Spring

June 7th, 2017

With the serious flooding this spring, many cottage owners are finding out that their insurance isn't going to cover damage and Provincial programs are only addressing permanent residences. This is causing quite an uproar.

Apparently, there are two different kinds of flood insurance: regular and overland. Regular insurance may cover water damage from plumbing issues, but not weather related flooding. Overland flood insurance is quite new to Canada. Insurance companies began offering it, after the flooding in 2013. Overland flood insurance is a special "add on". It covers damage that comes into the home through doors or windows etc. This likely does not include water that leaks into a basement through a crack in the foundation, which is considered "seepage".

Many people are unaware of their insurance coverage and flooding is going to increase. It is important to check with your insurance provider and ask what kind of coverage you have. Be careful about language... and ask specifically about overland insurance.