In the last couple decades, it's become affordable to mine tarsands. The oil boom has meant people in those places make a lot more money. Naturally, they are making more money than their parents did.
The other green area is Toronto. If you're 40-50 in Toronto today, you probably bought a house in your late 20s or early 30s, which has now quadrupled on value.
All of that to say, many of the places where mobility is rising may be short lived. In reality, we may be an entire country of low mobility, except for the few lucky areas.
This makes no sense. Every large city is dark green (the best.) Vancouver, Calgary, Edmonton, Toronto, Ottawa, Quebec City. Even Montreal is light green. Most smaller cities—like Halifax, Winnipeg, Saskatoon—are also dark green.
A city is defined as 100,000 population or greater in Canada, none of the cities you mentioned are small given that context. A good example of a small Canadian city is Thunder Bay. I'd give you more... but I'm from the GTA. ;)
You're right, there probably are other factors in play here. But there is almost certainly not one reason to explain everything. Oil looks quite likely to be a major reason, but we should find out what the other reasons are.
If by a lot you mean 1 province (alberta) out of the top 10 urban centres in Canada ... oh hell i'll just say it, no alberta is not the engine of the Canadian economy, the golden horseshoe is. Oil prices are at rock bottom and Canada is still doing fine.
One chart towards the end mentions that in most cases, children earn more than their parents; it would be interesting to compare the affordability of housing across generations. It seems that even as if children earn more (in inflation-adjusted dollars), their dollars are worth less for housing due to housing prices increasing faster than inflation.
Out of curiosity, what makes it outrageously high? It seems to be around 67% [1], while our neighbors to the South have somewhat similar numbers (between 63 and 68% in the last decade) [2].
Considering the meteoric rise of housing prices in Canada, coupled with the increase in the percentage who own a home, that spells disaster if housing takes a downturn which appears to be happening in Vancouver and now Toronto.
Your link to US data shows just how far home ownership fell during the financial crisis. Canada is close to the same peak as the US.
Which says to me that the overwhelming majority of Canadians do not live in the GTA or the GVA. The average home price in Canada, as of May 2017, is $401,594 USD[1]. The average home price in the US, as of May 2017, is $406,400 USD[2]. Given that the latter has already gone through a correction, it seems like the current level is typical.
Exactly. 3 out of 4 Canadians are in 'normal' housing markets and have nothing of particular concern on the horizon. To frame it as a Canadian issue, where 75% of the population are seemingly unaffected, seems disingenuous. As we see from the average figures, the US market has surpassed (granted, only just) the Canadian market. If the US market is only close to overheating, Canada lags behind that.
What do the numbers on the Y-axis represent? Thousands of dollars? But that doesn't seem right. I don't think you would hear too many complaining about even a $180,000 home. $180,000 in 1975 dollars is $788,000 2016 dollars (or $803k if we use the US rate of inflation), which doesn't add up either. Housing is nowhere near that expensive. You can build a brand new mansion for less than that.
Canada is lagging behind the US in average home price. As shown above, the average US home price is $5,000 more. As you can also see from the links I provided, Canada's housing market grew by 4.3% YoY (May 2016 to May 2017), while the US market grew by 16% in the same period.
The US housing market appears hot, Canada's not so much (outside of Toronto and Vancouver).
The following chart is drawn from the Federal Reserve Bank of Dallas’s International House Price Database. It’s an index (100 = prices in 2005) of real, or inflation-adjusted house prices, and it drives home just how much more inflated Canadian house prices are than at the U.S. bubble’s peak. The chart also includes Japan and its mammoth housing bubble of the 1980s—which is more akin to what’s gone on in Canada.
> Housing is nowhere near that expensive. You can build a brand new mansion for less than that.
I doubt you can build any house, let alone a mansion, anywhere in Canada for that price. At least anywhere a person would want to live. From what I've read, permitting alone would cost that much in Vancouver before you even break ground.
> Canada is lagging behind the US in average home price. As shown above, the average US home price is $5,000 more.
I wonder if this is apples vs apples? Is "home" the same for both? Also, one has to consider earnings - affordability is what really matters (well, to local buyers anyways).
Housing in all of Canada has been in a massive bull market for 20 years with the only noteworthy correction being the short pause after the 2008 crisis. Based on local earnings, a house is going to be historically expensive anywhere, and batshit insane in some places.
> I doubt you can build any house, let alone a mansion, anywhere in Canada for that price.
For $800k? What are you spending your money on? A modest home should be nowhere near that much, at least where the majority of Canadians live.
> At least anywhere a person would want to live. From what I've read, permitting alone would cost that much in Vancouver before you even break ground.
The vast majority of Canadians do not live in Vancouver. Nor do they live in Toronto.
The fastest growing community in Canada is Warman, SK[1], with 55% growth from 2011-2016. If that impressive influx of people doesn't indicate desire to live in the location, I don't know what does. I'll grant you that mansion is subjective, and it is difficult to link to something that hasn't been built yet, but here is a recently built large (2800 sq. feet), stylish home in the region listed at under $800k[2].
> Housing in all of Canada has been in a massive bull market for 20 years with the only noteworthy correction being the short pause after the 2008 crisis.
Are you still conflating the Canadian housing market with the Toronto and Vancouver housing markets? There are several provinces where the average home price is in decline.
> Are you still conflating the Canadian housing market with the Toronto and Vancouver housing markets? There are several provinces where the average home price is in decline.
These discussions are ridiculous. Other than a few isolated places, housing across all of Canada has been going up substantially for well over a decade. That the entire country has not gone parabolic like Toronto and Vancouver does not mean it is not outpacing inflation substantially.
Continue to deliberately misunderstand at your leisure.
> Other than a few isolated places, housing across all of Canada has been going up substantially for well over a decade.
The average Canadian home price in 2005 was about $250,000 CAD. The average home price today, excluding Toronto and Vancouver, is about $300,000 CAD (in 2005 dollars). That is 1.6% average growth per annum.
1.6% real growth is substantial? It is not nothing, but I think you're being a tad overdramatic. If any other asset class only returned a measly 1.6%, we'd call that disappointing.
The story is, of course, quite a bit different once you include Toronto and Vancouver. But that's been the entire discussion up to this point, so I'm sure I don't need to reiterate that yet again.
Average national home price as reported by CREA. And, as we already discussed, real growth from May 2016 to May 2017 was just 2% including Vancouver and Toronto. Several provinces are seeing real decline in home prices. I'm not seeing where this substantial growth across the entire country is hiding...?
"While that might put peak price growth behind us, the question is how much the market will cool from the unsustainable 30-per-cent-plus pace, and how long the adjustment will persist,” he said in a statement."
How the country is growing 2% overall when the most populous region by far grew at 30% last year, and nowhere noteworthy is going down. 6.5M/36M x .3 = 5.4% national growth just from the GTA. We also have no inflation in Canada despite housing affordability being a major issue.
What 30% pace? Real growth has been 1.6% per annum. Now I'm absolutely certain you are confusing Toronto with the rest of Canada. The vast majority of Canadians don't live in Toronto. It is not representative of anything related to Canada as a whole.
> How the country is growing 2% overall when the most populous region by far grew at 30% last year
You're going to have to ask CREA, the official source for home prices in Canada. That is what they have reported. I can only go by what they have given.
If we can believe Zolo, who isn't exactly official but provides more comprehensive data: Toronto has declined by almost 8% in the last quarter and is barely up at all over the past year. Are you sure about this 30% YoY? Perhaps you're looking at the wrong period?
Agreed. The Canadian market has a few hot spots where a small minority of the population live, but much like NYC and SF do not represent the US, Toronto and Vancouver do not represent Canada. Overall there does not seem to be much issue in the housing market on either side of the border.
Yeah, but trying to say they represent Canada is a great way to get punched in the face from the rest of Canada! I grew up in North Western Ontario, the worst mobility region and where most people hate Toronto and if they end up moving to the "big city" it's to Winnipeg, which we can see also sucks for the most part. Living up there, yet being in the same province as Toronto and all the surrounding successful places in South Western Ontario (where I live now), makes for a bad time as everything done for the province is generally about South Western Ontario or Toronto. People live all over, it's a big and diverse country, but people only ever focus in on the big two that are practically their own worlds.
Those places have insane, ridiculous housing costs. People keep moving farther and farther away, even commuting 1-2 hours just because of that, which then drives up housing costs in the next sets of cities and towns. Many other places are much more affordable.
This generalization doesn't make a lot of sense. What does "Downtown Canada" even mean? We are talking about a vast country that is larger than the United States but has 10% of the population. I'd bet there are many downtowns that are not rising at all.
It means downtown Vancouver and downtown Toronto but not downtown Montreal nor any other "downtown" apparently (Ottawa, Calgary, Edmonton, Hamilton, Quebec City, Saskatoon, Halifax, etc. come to mind) since Toronto and Vancouver are the two metro areas with outrageous housing prices.
Every home is owned by somebody. So, saying that ownership rates are outrageously high is the same as saying that there are too few people. How does that make sense in the context of a discussion of home ownership? How would someone decide on a theoretical optimum home ownership rate?
How does that apply to what I wrote? The discussion wasn't about low ownership rates but outrageously high home ownership rates and some amorphous optimum ownership rate.
It shows exactly how dependent we are on resourced-based economies. The west coast is all red, forestry and fishing crashed on the west coast, and the prairies are all green, oil boom from the last few decades. I'm a little surprised that immigration between provinces did not even out incomes between the two resource boom/bust cycles.
You raise a good point - I wonder where are people who changed province are shown on the map? That is, are they indicated by their current province or that of their upbringing (ie. their parents province)?
Coming from one of those rare spots surrounded by deep green of the rather populous southern Ontario, it's a lack of education and resources and connectivity.
Three of the schools I went to when I was young have been closed permanently and razed. There remains one because I switched high schools midway through by claiming I couldn't receive all of the courses I needed at my local school (which was true).
When I was in the second grade the school wanted to advance me by five years after comprehension testing. My parents declined because they were worried I'd become unsocialized and no other push was made. At that point the school essentially pushed me to the side and had me make up my own work to do outside of standardized testing and major projects. By high school severe apathy and boredom had set in. To get anything out of it I spent most of my time in the library or on the newly introduced internet. This is the late mid-late 90's.
Key points:
* no public transportation
* no private transportation connecting to cities
* low number of open jobs outside minimum wage for young people
* factories shuttered from the late 90s to early 2000s due to shifting tech and industry and slow adoption in this area
* low funding for schools, frequent closures
* public schools that remain tend to have lower resources rather than concentrated resources
I live in Toronto, now -- there have been times where I had to white knuckle my way through to get by here, yet. I'm working on it. That said, Canada (even my home county) is a great place to live and grow up, and its getting better.
It really depends on how you define social mobility. Immigrants in the US often jump from the bottom to top income quartiles within a single generation.
For those born in the US, there's less movement and that's exactly what would be expected in a system that has been relatively meritocratic for multiple generations. Regardless of whether of the previous generation excelled due to cultural or hereditary reasons, their children will likely inherit both. Children also inherit money, which is a factor. However, if money were the primary factor, poor immigrant families would tend to remain poor and they don't.
The times when there's a great deal of mobility between generations of native populations is when there's a change in structural obstacles (or benefits). This can be seen especially clearly in Jewish populations in the US when various discriminatory regulations were removed early last century or with (ethnically) Asian Americans later in the century. In both cases, many families made rapid gains in relative income and wealth. In the subsequent generation, children of the winners generally kept winning and metrics of "social mobility" displayed a decline, even though society had become objectively fairer than it had been two generations before.
This isn't to say society is "fair" now, only that simple inter-generational economic mobility comparisons poorly answer the question of where a conscientious person with no money would have the best chance of success.
Legally, no, but culturally yes - mostly because of family influence.
The immigrants children born in the US would be american. not immigrants. However, they are obviously going to get a lot of culture from their parents. They might get a second language when young, different customs, and more than likely different food. This was my grandmother. Most of her brothers were educated and lived decent lives, most definitely better than their parents.
My father - and his brothers and sisters - were split in how well they've done. The older children did just as well as the previous generation. They had less influence from the grandmother, but still carried a lot of traditions forward. The younger children had a rougher life after their father died (the older children were better able to cope).
My generation is likely the last that'll carry some of the traditions forward. We are basically normal folks. We have fond memories of eating Syrian food at Grandma's house, and most of us can cook a bit of it. It isn't often enough for our children to have fond memories of it. My generation really isn't passing that stuff along, even though it is part of our memory, our identities, and we might even talk about it in casual conversation. It just isn't a distinct enough part of our identity to pointedly pass along.
I agree, and believe that there is a strong case that the primary defining characteristic is cultural and skill-based. Which suggests that addressing the self-defeating culture and skills in the US underclass would be more effective in helping them than more direct methods of trying to prop them up.
Unfortunately as a society we are running in the other direction. :-(
> It really depends on how you define social mobility. Immigrants in the US often jump from the bottom to top income quartiles within a single generation.
If you read the FA, you see the same is the case in Canada. In general though the US has very low mobility for a developed nation. Canada is fairly average for a developed nation.
Why would you say social mobility is better in Canada vs. the US? Do you have any data to back that up?
You also have to remember that social mobility can be skewed by wealth distribution. Let's say a person goes from earning $75K to $100K in Canada. That might mean you moved from the 3rd quintile to the 5th quintile. But the same person moving from $75K to $125K in the US might only move from the 3rd quintile to the 4th, even though the US person overall improved their situation more.
The US does not do well on social mobility. Generally, poor families stay poor and rich families stay rich.
Also to be clear, the problem you cite does not exist. This is a percentage relationship between father-son earnings and doesn't have anything to do with quintiles or the magnitude of those earnings.
No offense, but that seems like a really odd way to measure social mobility because it's not measuring the resulting income level.
And after a few google searches, it appears that others have called out the challenges as well[1] and tried to work with other data sets. This analysis found very little different in income mobility between the US and EU and overall...
Canada has the most downward mobility while the U.S. has the least, with Sweden in the middle. We find some differences in upward mobility but these are somewhat smaller in magnitude.
It was a tidbit that I ran across in https://www.youtube.com/watch?v=A9UmdY0E8hU which had some other interesting data points as well. Such as the fact that when you look at rich people per capita, it seems that social democracies like Canada, and Scandinavia create rich people more easily than the USA does.
For example if you look for people worth $30million+ per million people, Canada has 186 while the USA has 126. That's about a third more per capita.
And watching the video, you find that 42% of the children of the bottom 20% in the USA wind up in the bottom 20%. Very little of Canada does anything like that poorly.
Not really, a lot of the income inequality comes from having a large underclass stuck in a cycle of generational poverty for various reasons (often/mostly related to structural racism).
There's plenty of "data to back that up," and the delta is getting bigger every year. Fire up any search engine or look on any reliable media source (doesn't have to be a Canadian one). They've even talked about it on CNN (if you consider that journalism).
I'd be interested to see that, and another axis for race. I'd imagine the opportunity for social mobility for most Canadian First Nations people, for example, is pretty grim.
What is it with this idea that things are always better in Canada? Without any data to back it up? Considering Canada has been blamed at the UN for their treatment of First Nations, I wouldn't race to this conclusion. Considering how terrible it is in Canada, it would be good to question what can be done in Canada instead of trying to diminish the problem by "betting" that at least we are better than Americans ??!
I live in a heavily native populated area in Canada, the anecdotes I hear from them is it is far better to be an American Native than a Canadian one because of the Indian Act which doesn't grant them title to their lands, so they legally can't own a house on a reserve and use it for collateral to obtain loans or pass it to another generation as a way of transferring wealth. Americans also have much more freedom to do what they want on their own land such as building casinos or whatever they want, here it requires navigating the ancient Indian Act.
I vaguely recall learning that the collective ownership of the First Nations lands was at their own request. Before Europeans, First Nations had no concept of individual land ownership.
Your point still stands of course, I just thought that should be pointed out.
Anecdotally, I had high school friends in rural Oregon who were something like 1/4 native American, and they all got a free college education because of it.
It's hard to draw such conclusion without data. My income more than doubled after moving from Toronto to NY. Adjusting for cost of living, the gap is paradoxally, even larger. I'm not extraordinary, bit the opportunities in the States are just better (for me).
The charts in the article are pretty interesting. In some provinces the income mobility of the bottom fifth is better than some of the middle three groups (data which is hidden in the article but can be inferred). The article mentions immigration as a potential cause of this, but it would be interesting to figure out if there are other reasons why there isn't a general trend line here.
Are you referring to the fact that if the region is dark green (more than 20%) for moving into the top quintile from the bottom, it necessitates that another quintile has a rate less than 20%?
The income quintile boundaries are set nationally, but the movements are divided locally, there is no such requirement for balancing in a single area. In theory, a single location could have 100% of people moving into the national top quintile.
edit: I'm referring to the chart called Rags-to-riches income mobility
They also pick different comparison groups for the projected income -- likely to give the appearance of linearity where there is some evidence the predictions aren't actually linear over the quintiles.
That map showing the different areas of Vancouver describes the likelihood of children to exceed their parents income. Since that's a very wealthy area, the target is higher there.
While I don't approve with the way you expressed it... I agree that people could be a little more considerate of colorblind readers. I almost immediately give up once I see a scatter plot with red and green. It tends to get worse the smaller the dots are.
The guy who made the charts is an acquaintance of mine and I've passed along your feedback. He wasn't aware of the issue and will keep it in mind for future work.
Just wondering - can you get a display filter for your OS or browser to do a colour substitution? Like make everything that's red into blue? Does that exists?
Just having dragged the scroller for the embedded sample for Halifax, N.S. a simple, idle question occurs to me: I presume that this is all not just regression to the mean? Is there something deeper than that demonstrated here?
This is actually more likely the "law of small numbers". The lower population areas have high variation, because there is lower statistical significance to their resulting "mobility"
I would like to see what it is like for a small sliding scale. Give me the same data with the ability to slide it over a 10 year or 10 month period. Do the smaller population areas flip back and forth between "mobile" and "immobile"?
This is a good presentation, finally something digestible I can point people to when I tell them that there is only about a 1/3 chance of a generation remaining in their income quintile on either end of the spectrum.
Interesting, the more (socially) right wing your neighbourhood is, the better the economic mobility.
What gets lost in the statistics is how many people ran away screaming from these places and now live all over the world making far more money than their parents or neighbours dreamed of.
It is interesting to run into people during Christmas and find out where they live and what they do now.
How on earth was this your takeaway from the article? The impact of social political views wasn't mentioned once, and Dr. Corak clearly explains the actual reasons.
Even a glance at the map disproves your point. BC outside of Vancouver and Victoria is relatively socially conservative, but it's a sea of red due to the lack of labour demand in those rural areas.
> How on earth was this your takeaway from the article?
Perhaps he looked at a map[1]? I have to admit, while there are some clear deviations, as I flip between the two images the areas with the highest mobility do seem to follow the Conservative-leaning areas. It is definitely not a perfect 1:1 mapping, but interesting nevertheless.
What really stands out to me though is that the areas with arable land[2] (and oil) generally have the most mobility. Makes me wonder if the food and energy commodities boom from a few years back has skewed the numbers?
The issue is that the map doesn't account for population density. Toronto has high population density but it shows up as a very small dot compared to large country-side-right-leaning regions that will take half the territory of a province.
I'm not sure population density matters here. The GTA clearly shows up as red on the political map and green on the mobility map. As mentioned, there are plenty of places where it does not hold true. In fact, some of the largest ridings of all (Northern Quebec, Yukon, NWT) are not Conservative leaning, yet are on the green side for mobility. But there still does seem to be a trend towards the mobile regions leaning to the right.
The point is that that "dot" of Toronto GTA represents more human beings than all of Alberta.
You're judging by "geographic space taken up". Your conclusion is actually that geographic land area leans to the right, or more prosaically, that liberals move to cities and that coincidentally, oil was found in a right-leaning province.
The original assertion referred to neighbourhoods, which do tend to grow inversely to the population density. In my experience, a resident of Toronto might consider their neighbourhood to be just a block or two. While rural residents think of their neighbourhood as a many kilometre wide radius. Census/electoral divisions are a decent proxy for what we are trying to measure here, I feel. Certainly for the medium-sized rural divisions that are most relevant to the discussion.
I believe I understand what you and the parent are getting at, but it appears to be of a different discussion.
Not to mention the Sudbury and Waterloo area which is super left-wing and unionist. I mean, anecdotal, but I feel like it's okay to counter an anecdote with an anecdote in this case? Further analysis would require access to the data being shown here and cross referencing it with the outcome of past elections.
As well as how well your parents do. I know a ton of people that averaged their way though school and a career, but were given help early enough from parents that even in mediocrity they are doing magnitudes better than people who grew up poor and worked hard.
I think its because coastal BC is very resource heavy. It use to be fishing and logging (think bumper stickers with the slogan timber dollars feed my family). Both of those industries pay well but have been in decline for the last few decades.
Very interesting - the situation they describe for those born in Southwestern Ontario is exactly what happened to me. I was born there, went to a local university, then moved to Toronto and now make more then my parents do. But many people I went to high school with that didn't get post-secondary education remain there, and don't make significantly more then their parents, and sometimes significantly less.
In the last couple decades, it's become affordable to mine tarsands. The oil boom has meant people in those places make a lot more money. Naturally, they are making more money than their parents did.
The other green area is Toronto. If you're 40-50 in Toronto today, you probably bought a house in your late 20s or early 30s, which has now quadrupled on value.
All of that to say, many of the places where mobility is rising may be short lived. In reality, we may be an entire country of low mobility, except for the few lucky areas.