To the governments credit, they have invested time to learn about the “smaller” players in the financial space, and have committed to learn more about their needs and to balance the playing field.

The 2014 budget is a prologue to what really matters to the Fed’s – the 2015 Federal Budget.  Canadians are about 15 months away from the next federal election. Time flies when you’re having fun, and the 2015 budget will lay the groundwork for the next campaign.  When the next budget comes down we will all hear about a surplus rather than the deficit.  There will be a lot of chest bumping among the Conservatives about the estimated $6 billion surplus in 2015/2016, and over $10 billion by 2018/2019.  The message will be clear, “we’re the fiscally responsible ones, and the only party qualified to justify over taxation”. Maybe they’ll omit that last part, but please, I wish they would stop making it sound like the government is a corporation that went and earned a $6 billion profit… I feel better now.

Image Source: THE CANADIAN PRESS/Sean KilpatrickIf http://business.financialpost.com/2014/02/12/federal-budget-offers-tax-opportunities-for-private-companies/

The Federal Budget is first and foremost, politics.  It’s an extension of ideology, and in an election year, a party platform.  Early in a mandate, the governing party may deviate to do what’s right.  But the last budget going into an election year is about drawing lines in the sand, and establishing the battle ground.  The Federal Budget preceding the budget that really matters? Yawn. In that regard the 2014 budget did not disappoint.

There are some elements of the budget which we have all come to expect, especially if the government is looking for cover – example, smokers.  I don’t know why the government doesn’t amend our constitution that smokers must pay more, every year.  Smokers will now pay 24% more in taxes for a carton of cigarettes.  Another automatic is to take away some money from the evil wealthy people.   Loopholes are now plugged for wealthy Canadians and their family trusts.  Those are two safe groups to go after, and let’s face it, when was the last time you saw a headline which read, “Poor Smokers” or “Government takes too much from the wealthy?”  Nice and safe.

It was encouraging to hear comments made by the Minister of Finance about smaller banks and monolines in Canada.  To the governments credit they have invested time to learn about the “smaller” players in the financial space, and have committed to learn more about their needs and to balance the playing field. How that all shakes out? Time we’ll tell, but at least they know we’re here and we provide consumers choice, beyond the big banks.

For now, it’s steady as she goes, and we only have 364 more sleeps before we get a budget that we can sink our teeth into.  To help us pass the time we can visit the brewer’s retail and liquor store.  The government is removing some of the red tape to make it easier for more brands of beer to come to market.  This should help some of the smaller brewers in this country.  Maybe the Fed’s jumped the gun on this one and they should have waited until next year.  Think of the campaign slogan, “More Beer”…Um, nice and yummy.

Until next time,

Cheers.

Not sure if you heard but Facebook celebrated its 10th anniversary this week. In digital terms that’s a lifetime. Maybe it’s the speed at which things change these days that makes me take the “let’s see where they are next year” approach when it comes to the social media world. There’s no denying the influence and success that Facebook has had, and their success means they have a target on their back. To date no one has figured out a way to dethrone the king, but it’s not from a lack of trying.

So who’s gunning for Facebook? The creators of mobile messaging apps. If you just caught yourself thinking, “great…just what the world needed…more social media” you’re not alone. But for those of you who tend to view social media platforms as fads, well, I encourage you read on and have a look at these stat’s. Mobile messaging apps are the newer players on the scene, and they have some legs.

LINE is a mobile messaging app whose registered users went from 80 million to 300 million users in just twelve months. Wanna raise the other eyebrow? WhatsApp’s monthly active users grew from 350 million users in October of 2013 to 400 million users by December 2013. A 50 million bump in active users in a two month period makes for a happy board meeting at WhatsApp. Active user levels are exploding in Asia, Southeast Asia and Europe. Are mobile messaging apps going to make their way to our shores? Well, there’s some evidence they’re already here.

Data today suggests that Facebook may have thwarted the latest attempt to supplant the giant. That being said I’m not sure if the folks at Twitter are feeling as comfy as Facebook. There’s no doubt Twitter has enjoyed tremendous commercial success but it looks like there might be some dark clouds on the horizon. Timeline views is everything for Twitter. That’s THE measurement for them, and the recent plunge in their timeline views has surprised many. In the US views went from 43 billion to 41 billion in the last two quarters of 2013. The same trend held for international users. Timeline views went from 116 billion to 107 billion.

Look, I get it. There’s no reason to dust off the trumpet and start playing taps. Maybe there’s a perfectly plausible explanation. All it would take for a few extra billion timeline views is for Lindsay Lohan and Paris Hilton to go on a drunken binge. But Twitter can’t depend on them so what’s causing the decline? Maybe it’s the malicious and nasty use of Twitter. Clearly unintended by the creators of Twitter, but nevertheless a problem for them. Of all the social media tools out there it’s the one I stay away from the most. I have a twitter account, and apparently I have followers. But I don’t tweet regularly because I really don’t think anyone cares what I had for breakfast. And I really don’t want to attract anonymous haters because I had regular coffee versus decaf.

There’s no denying Twitter’s tremendous success and social relevance. See the Arab Spring. But meteoric growth can only be sustained for so long. The next new thing is always just around the corner. Now might be a good time to review your social media strategy and try to figure out where you need be. Your customers might already be there.

Until next time

Cheers

Who doesn’t like an underdog? I think we all do. Be it in business, sports or on the playground. The individual who defies the odds, the business which flourishes amongst the behemoths or the sports team deemed to have no chance, yet finds a way to victory. The underdog’s story can be compelling, can teach us life lessons, can shock us, and at times give us hope.

I was thinking about the lesson in perseverance that I learned from a Canadian downhill skier, Larisa Yurkiw. Larisa’s story came to my attention by way of Brian Nason, a respected broker, avid skier, and a good man. Brian was doing some shilling on behalf of Larisa. He asked me if MERIX would donate some prizes for a fundraiser to help Larisa realize her dream, to represent Canada at the Sochi Winter Olympics. We exchanged emails and spoke a few times about Larisa and I became intrigued. Like most people, if we were really honest, we only seem to pay attention to Olympic sports, other than hockey, once every four years. For two weeks we wrap ourselves in the Canadian flag and cheer on skiers, the maniacs who compete in the luge races, and every other Canadian athlete we pay little attention to during non-Olympic years. Our Olympic athletes can compete with the best in the world and many have to overcome insurmountable odds.

Larisa Yurkiw is an example of overcoming the odds. She suffered a devastating injury on the slopes, and she was cast aside and cut off by the Canadian Olympic Association. Wining can be ruthless, and no pun intended, a very cold business. There are only so many dollars to go around, and athletes that are hurt, and deemed not to have chance, well, they’re left to their own marketing abilities to raise money in the hope to represent Canada. In this day and age of mega professional sports contracts, billion dollar broadcast deals, it seems strange to hear an athlete ask for money so they can train properly. It’s jaw dropping when the same athlete says that depending on the amount of the donation she will personally knit you a toque. I’m not kidding.

It was a little over a year ago Merix decided to get behind Larisa’s cause. We reached out to our mortgage originators and asked for their support. Ahem, that’s code for money. Our combined efforts and generosity resulted in a five thousand dollar contribution so that Larisa could peruse her dreams. And that dream of representing Canada became a reality. Left to her own devices she not only qualified to represent Canada at the Sochi Winter Olympics, she is now ranked 6th in the world.

To all our supporters and staff who contributed and supported Larisa, thank you. A big thank you goes out to Larisa as well. Larisa, thank you for reminding us what perseverance can accomplish, that odds can be overcome, and that it’s cool to chase a dream. Here’s to gold, watching our flag rise, and singing our national anthem so loudly at the medal ceremony that you’ll be able to hear us in Sochi.

Until next time,

Cheers

And in the case of  Toronto’s Mayor, Rob Ford, we’re talking major inferno. I had no intention in commenting on the allegations, and now admission that has dogged the Mayor, and captured the imagination of the local populace and comedians worldwide.  The question of “did he or did he not” rendered every other issue irrelevant.  Now we all know.

Full disclosure, I supported Rob Ford, and encouraged family and friends to do the same.  Finally, there was a candidate I could support for policy reasons rather than packaging.  Let’s face it, central casting would never send a Rob Ford look alike to a movie set to play a mayor in a movie, Toronto voters learned a valuable lesson on voting for packaging rather than results (see Toronto’s previous mayor).  So, finally there was a candidate that spoke to the silent majority and who appeared not to be a part of the establishment and intelligentsia.  It worked; Ford got elected by a rather large margin. But his actions today amount to flipping the bird to all his supporters, including me.

From first day of the Ford administration, certain media outlets were determined to bring down the mayor.  Some of the media coverage was repugnant, they spoke in code.  They didn’t believe he looked the part, and they were vicious in their criticism.  But at the end of the day that wasn’t the reason for Fords eventual demise.  Was it because he FINALLY admitted to smoking crack? Don’t think so, and I’m basing that on the media coverage of other well know political drug users. Not much has been written about President Obama’s admission that he used cocaine while in college.  I guess the media gets a pass on that one because Obama’s cocaine use was in the past and not while in office.  Okay, what about the present?  What about Liberal Leader, Justin Trudeau, who admitted to sparking up and enjoying the odd joint while sitting as a member of parliament?  Where was the moral indignation from the press?  I don’t believe that Canada has legalized marijuana, yet. The press’s hypocrisy aside, Rob Ford’s eventual demise is not because of drug use; but the fact that he lied about it.

There are lessons to be learned by the Ford fiasco, like what not to do in a crisis. Ford’s struggle for political survival today can be traced to hubris.  If an individual or a business, believes they’re above the rules and arrogant enough to believe they’re immune from fallout,  might as well start writing their professional obituary.  When Ford stopped listening to his handlers and their recommendations, it was the beginning of the end.  When your inner circle jumps ship because you’re on a path of ruin, and you’re still adamant about doing it your way only, the inevitable results will follow.  In politics and business there’s a play book to follow in times of crisis. In politics when you get caught with your pants down, or in Fords case a crack pipe in his mouth, you follow the tried and true methods.  He holds a press conference, uses his family as props in the in the background, looks straight into the camera and admits he lied, and promises to get help. If he can muster up tears that really works well.  He comes back in sixty days and it’s all behind him, But if you lie about it for months, daring the police to release the video, and you only come clean because you realize there is no out, it’s too late.

My heart goes out to Ford’s family.  They’re the innocent victims in all of this, and I struggle to rationalize why politicians do this to their families. But we’ve seen it before, and we’ll see it again.  Here’s something to ponder, the guy who smoked crack and was inebriated many times while on the clock, brought fiscal responsibility to City Hall, eliminated wasteful spending and ensured there was a budget surplus.  His predecessor other hand had the right look and pedigree, nearly drove Toronto into bankruptcy.  Go figure.

Until next time,

Cheers.

It’s amazing how many thoughts can race through your mind in a matter of seconds.  The images are vivid, yet vanish in seconds.

I had such an experience earlier this week.  There I was, about to start a meeting with the Minister of Finance, Jim Flaherty and my mind went racing down memory lane.  For a split second, I found myself recalling the very first mortgage application I ever filled out. This was twenty five years ago.  I met my first customers on a Saturday morning, but as it was my first deal as a mortgage broker, I would have gladly have met them at 3:00am.  Oh, the knowledge I had back then.  For example, I was aware that mortgage’s was spelled with two “g’s”.  I was so wet behind the ears that I had to keep a drawer open in my desk so I could refer to an old Statement of Mortgage.  I wanted to make sure I didn’t miss anything, so I kept taking a peek at a completed Statement of Mortgage.  I had to resist the urge to laugh at the memory.

In a couple of nanoseconds I also thought about the first time a fledgling national association called CIMBL made their way to British Columbia to pitch brokers on why they should become members.  I was in attendance at the pitch. I remembered standing at the back of the room listening to CIMBL’s talking head, saying without embarrassment, “if you do not become members of this association lenders will not pay you a finder’s fee.”  I couldn’t help but think, “you fool, you just set this new association back by three years in British Columbia”.  I was wrong, it was five years.  There were many other thoughts that kept running through my head, especially about CAAMP, and how far we’ve come as an association.

But I had to clear my mind and prepare for the meeting with Mr. Flaherty. Jim Murphy, CAAMP President, Daryl Harris, CAAMP Chair, and myself were given the opportunity to meet with the Minister of Finance this week.  The purpose of the meeting was to share our thoughts and concerns for the mortgage broker market.  Both Jim and Daryl did an outstanding job, laying out the facts in a balanced and measured way.  It was our hope that the Minister of Finance would view our positioning points through the lens of consumer choice and the important contribution the mortgage broker channel makes to the Canadian economy.  Jim Murphy has done yeomen’s work on behalf of our industry in Ottawa and this most recent meeting added another layer to the relationship foundation between CAAMP and the Finance Department.  Kudos to both Jim and Daryl.

As for my role at the meeting?  I spoke briefly about the important role that mono-line lenders, like MERIX, play in the mortgage broker channel.  Most importantly, the choice we provide for Canadian borrowers.  I also spoke briefly about the contribution that mono-lines make to Canadian tax role.  Mono-lines provide greater choice for borrowers but they’re also job creators.  I made it very clear that we ask for no favour.  The mono-lines are prepared to compete but the nuances and difference between mono-lines and banks should be factored when making decisions which impacts funding for the mortgage broker channel.  The Minister of Finance stated that his office would consult with our industry about all the recent changes and what our needs might be going into 2014.

One of the things I am most proud about during my time on the CAAMP Board is the relationship which has been built with Ottawa and the regulators.  I wasn’t too long ago when it was difficult to get a phone call returned from the powers that be. Today, the calls are being returned and we have an opportunity to sit at the adult table. Influence cannot happen without dialogue.  I believe CAAMP’s efforts are being noticed.  It’s why we don’t hear the “cash grab” argument with the frequency we once did.  Today, even the haters have some difficulty arguing that the nominal cost to be a member is not worth trying to protect our collective wallets.

Until next time,

Cheers