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

This is time of year, specifically for companies with a calendar fiscal year end, where housekeeping issues have to be completed.   For most companies it’s the time to close the books on the previous year, and ensure that T’s” are being crossed and the “I’s” are being dotted for the upcoming year.  Try as we might, but we have never been able to fully complete our budget, our plan, and our strategy prior to the New Year.  Revisions are required, and taking into account seasonality, mid-January is the time where we can exhale, for about a nanosecond.  Once everything is finalized, then the heavy lifting begins.

One thing that you cannot plan for is luck, good or bad, karma, fate, good fortunate or misfortune.  Irrespective of the comprehensive analysis, the business plan and budget, the organization goes about its business knowing that variables beyond your direct control will determine if you had a good year or not.  Luck plays a part in success, and anyone who suggests otherwise, well, eventually the hubris will catch up to them.

But just for a moment imagine if you could stack the deck in your favour to ensure you had a good year.  I’m talking about results beyond your ability or intellectual capacity to achieve your desired results.  I think we would all jump at the opportunity to be able have that type of influence. That’s why it is difficult for me to criticize the actions of the government when the do exactly that.

Loonie

Take the performance of our Loonie.  You’re probably aware the market has taken our Loonie to the woodshed and given it a good whooping.  Is something going on in shadows? According to the Globe, “To some observers, the currency’s recent sharp decline suggests the Bank of Canada is stealthily engineering devaluation – a gift to beleaguered manufacturers, exporters and domestic tourist operators, and a tonic for an economy suddenly grappling with disinflation“.  Poloz has an affinity for manufacturing, his previous gig was CEO/President for Export Development Canada, Carney’s comfort zone one was Bay St., as in mortgages. Is it a coincidence that we’re hearing less about mortgages and more about our dollar, inflation and manufacturing?  You be the judge.

Outlook on Real Estate

As for the real estate sector, some must be very satisfied with most recent trend. Real estate sales in Toronto, Calgary and Vancouver are skewing the numbers.  The reality is that over 60% of Canadian market place has seen a drop in the number of homes sold for three consecutive months.  At the highest levels of government, household debt is still being spoken of but in cautious terms.  Here’s what Prime Minister Harper had to say about house hold debt this week, “So look, it’s not a reason to panic; in fact, we’ve actually seen Canadian debt beginning to level off. But we would obviously encourage people to look at their debt levels carefully. Eventually, it may not be for two, three years, but eventually interest rates will start to rise. And Canadians should ask themselves serious questions about if interest rates came up significantly, would I still be able to afford my debt payments?“.  Interest rates will rise in about two to three years?  We should thank the PM for the specificity. I have to assume he’s in the know.  It might be time to dust off the variable mortgage pitch. In my case I may have to alter the distribution of volume between fixed and variable mortgages in our projections.  So maybe I’m farther away than I thought from being able to lock up the 2014 business plan and budget in the corporate vault.

One final note about the PM, he really is one of us.  Here’s what he had to say about his own personal mortgage, “in our case, my wife and I have never been big borrowers, but we have borrowed some money in the last few years because of the low rates, but we also know if the rates went up significantly we could still afford to carry that debt”.  It’s heartening that our Prime Minister is so connected to millions of home owners, who did exactly what he did, and just as responsibly.  One last thing about the Prime Ministers mortgage, I wonder if he got in before the changes to amortizations, and did he have to use rental offset to qualify?”.

Until next time

Cheers.

It’s the start of the New Year and I can’t wait to get going. I mean really going.  It’s a tad difficult to burst out of the gates when your body is frozen stiff, ultimately numbing the brain.  It has been suggested by some that I suffer from brain “polar vortex” in August.  Clearly the musings of the deranged – I digress.  No denying its bone chillingly cold in many parts Ontario, Quebec, and a large swath of the U.S.  The weather has caused havoc for many in the east, and introduced us to new terminology.

The term “polar vortex” is being used to explain this surprising and brutally cold weather front.  The technical definition aside, I’m fascinated that meteorologists are suggesting that this cold front was surprising.  Interesting, weather fronts come as surprise but we can predict the earth’s temperatures fifty years from now?  Damn, that “polar vortex” sure was a doozy. 

Many in Toronto, including my mom and dad, we’re convinced they were under attack this week because of what sounded like gun fire. Police we’re flooded with calls about this mysterious noise.  Well, chalk up to good old fashioned “cryoseisms”.  Evidently it occurs in extreme cold situations where there’s saturated water, like your rooftop. The ice expands and cracks.  It’s loud and frightening.  It’s kind of like the noise you heard as a kid while walking on a frozen pond.  To be precise it was the noise just before you said “oh, $&@$”.  My poor parents, they woke up to this noise at 3am last week.  They awoke startled and disoriented; for a moment they thought they were at the Eaton Centre.

January 2014 will be remembered for the frost quake.  That’s what they’re calling it, a frost quake.  That’s a new one.  It’s now a term that will be used, at nausea in Ontario, to described really, really cold temperatures. As is typical of the center of the universe, we always come up with term which captures the uniqueness of our experience.  “You think it’s cold where you are?  Well, we had a frost quake”.  There really was no need to create a new term to describe the extreme cold.  My friends in Regina have a perfectly acceptable word for it already, Tuesday.

Until next time,

Cheers.