Mortgage 101 – Spring into Homeownership

Todd Veinotte and Clinton Wilkins discuss the potential economic impact of tariffs on the Canadian housing market, noting the uncertainty caused by political volatility in the U.S and highlighting the importance of employment stability.

Todd Veinotte
Welcome to Mortgage 101. Your guide to home ownership with me, Todd Veinotte and my pal, my partner in crime, Clinton. Welcome mortgage guru.

Clinton Wilkins
I can’t believe we’re back. I love it. Spring is right around the corner.

Todd Veinotte
Well, I don’t know. It doesn’t feel like it yet.

Clinton Wilkins
It’s very cold here this week anyway. But I think it’s going to start warming up. I am very optimistic.

Tariffs and their potential impact

Todd Veinotte
Now, it should be known that, and people probably listening to the radio today may or may not realize this, but we pre-recorded the show, so we may be a little behind on some of the very pertinent news of the week. It’s early in the week when we’re recording this, but I still think that we should discuss tariffs and what’s going on in the United States, and how that is challenging the economy, and I’m sure the housing market.

Clinton Wilkins
I think it’s certainly going to have some impacts on the housing market, for sure. In March, we’re talking about spring and home ownership. Spring is right around the corner, but what impact are potential tariffs going to have on the housing market? I think it’s certainly going to have an impact. I think there’s a couple of considerations here. I think one thing, what’s going to happen with employment, if we start getting into a recession. There could be some businesses that go out of business, they just can’t operate anymore. I think that might happen. I think what we need to think to ourselves is those very early days, five years ago, during COVID, the uncertainty. I think that’s how we need to approach the situation. I can tell you that the federal government stood up for Canadians during COVID, between the programs, between the bank account, and lowering the key overnight rate – it went to zero. The cost of borrowing went down, and that helped to boost the economy, making sure that there weren’t mass bankruptcies and people weren’t losing their homes. It may be a very similar situation here, with the environment that’s being given to us by our friends here south of the border.

Todd Veinotte
Yeah, that said, though the government can only do so much, and we experienced a lot of inflation after that as a result of a lot of government infusion money. And so I think that we need to be careful. We don’t want to create another inflation cliff.

Clinton Wilkins
That’s certainly true. I think inflation is something to be very cognizant of. We did such a great job, though, the last year or so, beating inflation down. I wouldn’t want to see a situation where we’re just pouring money on the fire. It needs to be very planned and planned out. I think we will see the bank lower the key overnight rate. And Todd, I know before our show, you thought it’s happening, and by the time our listeners are listening to this, I think they’ll probably know more.

Todd Veinotte
Well, obviously. But I mean, again, the tariffs may or may not even occur, and even if they turn on.

Clinton Wilkins
They may do it, it may be done in a week. We don’t know.

Todd Veinotte
But this is Trump’s modus operandi, is its volatility and this unpredictability and this bombastic nature. And this is what we’re dealing with. And add to that, of course, we’ve got a government. The Liberals are choosing their leader this weekend. And so we’ve got a rudderless government right now, which is trying to negotiate in Washington these deals, and we’ve got Trump with his 51st state routine, and it’s just, it’s insane. It’s a calamity right now.

Government leadership in Canada

Clinton Wilkins
It is. I can tell you, I think Canadians, by and large, have the love for Justin Trudeau certainly has increased a lot more since he said that he’s stepping down as leader. I would say, even for the last few weeks, it’s just been a big shift in the environment. But what we need to remember is that we can certainly have a change here and a government in Canada, and that can have a big impact as well. That can impact policies, which could impact the markets, that could impact the Bank of Canada. There certainly can be a lot of changes that happen with a change in government here at home as well, not just what’s happening in the US.

Todd Veinotte
So Mark Carney has a lot of experience in the banking world. Worked for Goldman Sachs. He’s got some investment companies. He was, of course, the governor of the Bank of Canada and England. And is that a good thing? Do you think it would be helpful to have somebody with that type of skill set in times like this?

Clinton Wilkins
I think he’s the most skilled of anyone. I think the challenge that he might have is that he is not as popular. I think it’s hard where the liberals were down in the polls. I think it’s hard to build it back up. But I can tell you the last, the last few surveys that have been coming out, certainly their population has been soaring again. I think it’s going to be very interesting to see what we have here between now and the next couple of months. I think we will be in an election situation. I think that if Mark Carney does become the leader of the Liberal Party, I think that he’s one that a lot of people are going to be watching. I think that Canadians can see Mark Carney as a leader. I think they can see him as someone who can take on Trump, at least from an economic policy perspective. He has the most experience of anyone. But we don’t always make logical decisions when it comes to politics. Sometimes, we just want to have a change, but we also need to watch really what we might get? That’s the challenge. We don’t want Trump 2.0 necessarily, in Canada.

Todd Veinotte
What’s Trump 2.0?

Clinton Wilkins
It could be one of the other parties. I mean, not everyone’s gonna agree with me, but I think a lot of Pierre Poilievre policies and the way that they can conduct themselves are very similar to Trump.

Todd Veinotte
We’re delving into some politics, which is okay to do this. This is not a political show but still, it’s impacting our economy and everybody.

Clinton Wilkins
Exactly. Politics is trying to impact people’s bank account, I think it impacts the Bank of Canada and it’s going to impact our economy in general.

Todd Veinotte
But, Pierre Poilievre will have said that he would unleash similar to what Trump has done, energy projects, green line, pipelines, natural resources. Our premier here in Nova Scotia, Tim Houston, has said the same thing, and that might not necessarily be a bad thing, put the environment aside, not to say that it doesn’t matter, because it does. But for economy and jobs and a time in which we’re desperate to diversify away from the United States, I think perhaps it’s worthy of at least a conversation.

Support local businesses and Canadian-made products

Clinton Wilkins
I agree. And no matter which side of the ballot Canadians are going to be on, there are pros and cons to both choices. I think that’s the real deal. And in the US, there were pros and cons to both choices. I think Canadians, there are only cons. Well, I think Donald Trump, we’re seeing the cons right now. But the problem is that no one could even envision Trump going back in, at least. I think if you had surveyed Canadians, 90% would probably say they were shocked to see Trump go back in. But it certainly did happen. That doesn’t necessarily mean that was the best thing for the US. I think right now, from the clients that I’ve been talking to, even people don’t want to go on vacation, and there’s so much buy local, which I appreciate. I think we should be buying local anyway. Just like with the mortgage lending, when we deal with a customer, they’re supporting a small business, they’re supporting local. And I think that’s important, and I think that we’ve kind of turned that dial a little bit as Canadians. I think before, sometimes we thought it was better if it came from the US than if it was made in Canada. But now there certainly has been a big shift. Even when you go into places like the Nova Scotia liquor commission, for example, you’re seeing a lot of products that are Canadian made having a Canada flag on them. You’re going to the grocery store, we’re going to be able to more identify products that are made in Canada. And I think people are going to change their buying habits. I can tell you, I know there’s friends of mine that are probably not going to go to the US for the next four years.

Todd Veinotte
Well, it’s funny, because I have a wedding planned for Las Vegas for April, and the plans were at the Flamingo, it’s all set. We had everybody buy, and we seriously considered canceling, but then we thought – No, listen, this is going to be a great trip. Let’s not let Donald Trump sabotage our wedding, right? But the point is, we were going to then spend the week after that in California and Arizona, and we’ve canceled that. We’ve canceled that, and we’re coming home because, directly as a result of this. So that’s I’m just and some would say, Well, who cares? You’re one person, but you’re not going to spend those 1000s of dollars. We probably would have spent $7,000 more in the United States. I’m one example of that. So that has a spillover effect, and we can hope that it sends a message to this idiot in the White House, the orange man. I mean, it’s really and look, it’s sad. I mean, even the DEI stuff like the diversity, equity and inclusion hires, he doesn’t understand why that developed in the first place, and why that was necessary, why you had oppressed people in marginalized groups for decades who didn’t have an opportunity. It’s scary, really, and you can speak to that directly.

Clinton Wilkins
Totally, like it is scary. The challenge is that it’s not just a four-year period, because any of the changes that they do is going to impact the culture, and it’s going to impact the culture for the next 40 years. And I think that’s what we are very shortsighted to think about. It’s the same thing in Canada, when we’re deciding on who we want to be the prime minister in Canada, we want to take all of these things into consideration. We don’t want to be in the same situation that I think that. They’re in the US.

Todd Veinotte
I think you had wise words earlier, when we can see doom and gloom, and it can seem like the end is near, and all of that. But we were there with COVID, and it felt like that, yet we got through it. And I think that’s important.

Clinton Wilkins
We are very resilient, Todd, and I think we need to be planful. And again, when it comes to money, I think cash is going to be king and focus on your needs versus your wants. Let’s keep our spending down. We need to keep inflation down. These were going into uncertain times, and this is uncharted territory.

Todd Veinotte
We’ll march back into uncharted territory when we come back Mortgage 101, your guide to home ownership. We will be right back.