Average Canadian richer than average american

[shalab]

Median wealth is the right indicator - how is the person in the 50th percentile doing. Aggregate wealth is misleading as the USA will still come out ahead at 1/5th the median Canadian income and wealth.

 

Regarding Canada doing its "fair share", I don't think it is for illegals. I think it is cruel for a government to deport people who lost toes to frost bite to get into your country. Why  In the USA, the estimate is that there are ~10 million people that are illegal. Canada's share of this would be about a million.

 

Looking at this graph of where people to Canada are coming from, it under represents people from South America and Africa, especially Mexico. Why is that?

 

https://capitalnews.ca/coming-to-canada/project/coming-going/

 

My points are:

 

Canada is wealthier than the US - on median income and median wealth.

  - the usa government (and companies) are full of hubris, Canada is in a position to provide "aid" to usa

Canada doesn't welcome illegal migrants.

Given its wealth, Canada and its citizens can do more for illegal migrants.

Ok, well I don't see what Microsoft's recruiting practices have to do with any of that. But let's put that aside for now.

 

Firstly, your use of statistics is wrong. Canada is not a wealthier country than the US. The US is in aggregate wealthier than Canada. Median wealth and income are merely just one measure of the distribution of that wealth and income. What you're effectively saying is we have more money that you guys, but because you guys have less income inequality you should contribute more because we don't wanna bother our rich folks. In addition as others have pointed here wealth statistics are distorted by a bunch of things and should not be taken at face value.

 

Secondly, Canada doing something for illegal immigrants is an oxymoron. A government exists for the purpose of the enforcement of laws. No legitimate government will stand for or encourage the violation of its laws. So Canada cannot actually encourage illegal migration.

 

Thirdly, migrations do actually happen for reasons outside of a country's control. This is why we have asylum and refugee programs. In those areas Canada punches above its weight and above the US. This is despite the Unites States' larger income and wealth. If the US was to proportionally take in as many refugees and asylum seekers as Canada, the US should take in 300,000-450,000 per year. That number is greater than the US's refugee quota plus the illegal immigration into the US. So I'd say that Canada does enough.

[DTEJD1997]

Hey all:

 

I would not be surprised at all if the AVERAGE Canadian is better off than their American counterpart.

 

I simply marvel at how modern, clean and prosperous Windsor Ontario looks.  I have not been there for quite a while, but I frequently see it when I go downtown, especially to the main post office.

 

There is also another interesting observation that I have...

 

3-4 years ago I knew some young Canadians (mainly from Windsor area).  They were ALL bitterly complaining about how bad the economic situation was for them.  They would come over to Detroit and would try and work "under the table", would look for legitimate jobs, and would run all sorts of hustles.  For example, they would buy cigarettes, LCD TV's, computers, and expensive consumer items to resell on Kijiji (sp?)  They would also stuff their cars full of food items. 

 

One dude even went so far as to wear 2 pairs of pants and several shirts (that he bought in MI) when crossing the border.

 

I always joked with these guys that if they are coming to Detroit for work...things must be catastrophically bad in Canada.

 

So could it be that if you are ESTABLISHED and have a job/experience/wealth, things are generally pretty good for you in Canada?

 

If you are young, fresh out of university, and have no job/experience/wealth, things are pretty tough for you in Canada?

[augustabound]

I simply marvel at how modern, clean and prosperous Windsor Ontario looks.

 

Are you sure you're talking about Windsor, Ontario??? I grew up in the Greater Toronto Area and we avoid Windsor.  I used to subcontract for a friend and had some service calls there a few times, general retail renovations in malls and power centres. (maybe 5-8 years ago)

 

We found Windsor the opposite of what you describe.

[augustabound]

I think it is cruel for a government to deport people who lost toes to frost bite to get into your country.

 

Who's losing toes getting in to Canada? 

[rb]

Short version:

 

For the CPP part, Canada is slightly ahead but in the grand scheme of the underfunded retirement liabilities, this will be a marathon and we've barely scratched the surface.

 

Long version:

 

It is true that the CPP program was improved, starting in the 1980's, through a collaborative effort. Interesting to remember that the concerted effort involved many steps including setting aside funds and incorporating an arm's length aim at improved returns but also included policies to increase immigration with a priority to young independent immigrants.

 

....

 

In many countries, retirement liabilities are significantly underfunded and the challenge is set to increase.

 

Reference:

http://www3.weforum.org/docs/WEF_White_Paper_We_Will_Live_to_100.pdf

Figure 4 on page 7 summarizes well.

 

"Steady-state" funding for CPP or not, developing and developed countries will need a lot of "bipartisan" compromises to meet presently unrealistic objectives and to prevent funds set aside to be used for "general government purposes". And, proportionally, Canada is in the same kicking the can down the road scheme.

 

I think it is reasonable to expect: increasing retirement age, increasing contributions and decreasing benefits. And for the people participating on this Board, it is reasonable to expect zero retirement contribution fom public sources.

This is nonsense from the point of CPP and Canada. You can see that with some simple excel modelling.

 

Let's look at a simplified example that can be sketched easily. Maximum CPP. CPP deposits and payout get indexed with inflation. Let's assume that inflation will be 2% over the period.

 

In order to get max CPP you need to contribute the max for 40 years. Currently max contribution is $5,128. Current max payout is $1,134 per month, or $13,608 per year. In 40 Years max payout will be $30,047 per year. Current blended life expectancy at 65 is 20 years. In 40 years you'll maybe get 4 years more. So lets assume life expectancy at 65 in 40 years is 24 years.

 

The breakeven rate of return to make all of this possible is 3.9% per year*. CPPIB's 10 year rate of return was 8%. Is there anything unattainable in all this that requires great sacrifices to be made in order to keep the system going? What will happen in actuality is CPPIB keeps up the good work is that CPP will need to increase payout or cut contributions.

 

* The breakeven rake actually will have to be somewhat higher than that because CPP is tasked with paying some other benefits than just CPP pension. But not substantially higher. Again this was a stylized model. I didn't really feel like building a full actuarial model for a post.

[DTEJD1997]

I simply marvel at how modern, clean and prosperous Windsor Ontario looks.

 

Are you sure you're talking about Windsor, Ontario??? I grew up in the Greater Toronto Area and we avoid Windsor.  I used to subcontract for a friend and had some service calls there a few times, general retail renovations in malls and power centres. (maybe 5-8 years ago)

 

We found Windsor the opposite of what you describe.

 

I am 1,000,000% sure that I am looking at Windsor.  I have been to Windsor more times than I can count.  I have not been into Windsor for maybe 15 years though. 

 

Perhaps it is only the waterfront and maybe 1 block in that looks prosperous?

 

You can easily look into Canada from downtown Detroit.  From what I can see from that limited perspective, it looks great.  MUCH better than Detroit (even with Detroit's recent good fortune).

[augustabound]

Having said that, the view of Detroit from the Windsor side looks fantastic.  Downtown looks very vibrant.  :D

 

I haven't been to Windsor in a few years but I always avoided it. 

 

My uncle goes to the casino there every couple of months and front what I can tell it's like you said, near the water and around the casino is pretty nice but once you get a couple of blocks in, it gets sketchy from what they tell me.

[Cigarbutt]

Short version:

 

For the CPP part, Canada is slightly ahead but in the grand scheme of the underfunded retirement liabilities, this will be a marathon and we've barely scratched the surface.

...

This is nonsense from the point of CPP and Canada. You can see that with some simple excel modelling.

 

Thanks for the time taken to dispel the nonsense.

I respect what you describe and understand that CPP funds are "segregated".

 

But the reference provided about the retirement shortfall is based on the three-pillar concept and:

-the premise that funds will remain segregated is an assumption that can change

(I remember that this was a big issue with excess federal insurance employment funds when rating agencies felt that the books should balance)

-the old age security schemes are pay-as-you-go in a historical context of an increasing burden going forward

-in 1989, the universal OAS program lost its universality for some with the clawback provision

 

I remember discussing this topic with uncles who suggested that I should not rely too much on the government for retirement since I wasn't born at the right time.

 

Born at the Right Time: A History of the Baby Boom Generation. Owram, Doug  Toronto: University of Toronto Press, 1996.

 

[rb]

Short version:

 

For the CPP part, Canada is slightly ahead but in the grand scheme of the underfunded retirement liabilities, this will be a marathon and we've barely scratched the surface.

...

This is nonsense from the point of CPP and Canada. You can see that with some simple excel modelling.

 

Thanks for the time taken to dispel the nonsense.

I respect what you describe and understand that CPP funds are "segregated".

 

But the reference provided about the retirement shortfall is based on the three-pillar concept and:

-the premise that funds will remain segregated is an assumption that can change

(I remember that this was a big issue with excess federal insurance employment funds when rating agencies felt that the books should balance)

-the old age security schemes are pay-as-you-go in a historical context of an increasing burden going forward

-in 1989, the universal OAS program lost its universality for some with the clawback provision

 

I remember discussing this topic with uncles who suggested that I should not rely too much on the government for retirement since I wasn't born at the right time.

 

Born at the Right Time: A History of the Baby Boom Generation. Owram, Doug  Toronto: University of Toronto Press, 1996.

No it isn't. The reference you've quoted is absolute drivel from an actuarial perspective. It's basically a piece that looks and sounds smart meant for people that don't know what's what. It's marked right at the front that it is an opinion piece that is not endorsed by the World Economic Forum. The author is a US politico who has no experience is either investment or actuarial sciences. So it's not a reference for anything.

 

When it comes to your uncle he's entitled to his opinion. I have a fun uncle too. Love the guy to bits. He has lots of nuggets I enjoy. But I don't make financial decisions based on what he says. Similarly, your uncle's opinion isn't worth much in this context unless he was an FCIA or something like that.

 

Basically when confronted with mathematical facts your retort is basically that "anything can happen". Sure we could get hit by an asteroid tomorrow and we'd all be dead. But that's not the principle on how life insurance companies are run.

[bizaro86]

My understanding of the overcontributions made by current workers is that they're basically covering past shortfalls. Ie, they switched from mostly pay-as-you-go to a pre-funded model, and so current workers are paying for their own pension plus current retirees.

 

I do imagine if CPPIB continues to rock that eventually someone will conclude that lower premiums and/or higher benefits would be politically popular.

 

If they pick higher benefits I personally hope they only pay them for years worked past the switch to higher contributions in the 1990s.

[rb]

My understanding of the overcontributions made by current workers is that they're basically covering past shortfalls. Ie, they switched from mostly pay-as-you-go to a pre-funded model, and so current workers are paying for their own pension plus current retirees.

 

I do imagine if CPPIB continues to rock that eventually someone will conclude that lower premiums and/or higher benefits would be politically popular.

 

If they pick higher benefits I personally hope they only pay them for years worked past the switch to higher contributions in the 1990s.

I appreciate your indignation and I think it's warranted. But in my view your hope will not be realized. The "golden generation" has under contributed and will collect in full. Fair it is not, but such is life. I've become resigned to that fact.

 

Looking past that I think as a society we face another test in the future. Over the next 20-25 years CPP assets will grow to a level that's about double than what's required to service its liabilities. Right now we're in we'll all live forever and we're sure we're guaranteed to run out of money mode. But as assets grow and grow and grow I'm sure people are gonna start to notice. I'm looking forward to that conversation.

[SharperDingaan]

CPP 2018 A/R  http://www.cppib.com/en/ar2018/

 

Every generation in a DB pension plan bitches that the generations before it got a 'free ride'.

Until it's pointed out that were it not for those previous generations, there would not be a pension plan.

 

It is also pretty to hard to argue that the CPP will 'not be there' when the time comes. Every Canadian is guaranteed a minimum retirement income (CPP, OAS, GIS) by the federal government; the same guarantee that backs every fixed income obligation issued by the Bank of Canada. Uncles just didn't want nephews relying on it.

 

The major Canadian DB Pension Plans (CPP, CP, Teachers, OMERS, OPSEAU, HOOPP, etc) are also very well run, and currently are for the most part in significant SURPLUS positions.

 

Re centralized universities: http://www.electronicinfo.ca/universities

 

Agreed universities are in the major population centres, and most people live in the major population centres. Hence for most people there is a university within relatively easy commuting distance. But if you're from a rural area, from northern canada, or your university isn't very good, or doesn't offer your language (first nation, french, etc.) - you are going to have to travel.

 

Nothing wrong with that

 

SD