Ben Rabidoux, who runs the Canadian housing and credit research service Edge Analytics, and Ron Butler, a Canadian mortgage broker, join hosts Dan Foch and Simon Bélanger in back-to-back segments on the Thursday livestream. They cover the K-shaped consumer, the escalating Canada-U.S. trade fight, whether Canada's banks are the next pressure point, the state of the housing bottom, mortgage delinquency, and where Canada's real retaliation options sit.
Guests: Ben Rabidoux, who runs two Canadian research services tracking housing, credit and macro trends, one institutional and one for real estate and mortgage professionals under the Edge Analytics name; and Ron Butler, a Canadian mortgage broker
Hosts: Dan Foch and Simon Bélanger
Published: 29 August 2026 on The Canadian Investor feed
Apple Podcasts | Episode page | 1 hr 26 min
✅ Time saved: 56 min
Key Takeaways
Every automotive supplier leaves Ontario by 2029 if the auto tariffs keep climbing
Butler: "it's literally every automotive supplier leaves Ontario, the manufacturers, the OEMs, the parts people, everybody's gone by 2029. Literally everybody. That's a quarter million jobs."
Stellantis has already pulled 3,000 jobs out of Brampton and Oshawa and is retooling for the Canadian market only
Canada's banks are the cheapest piece of leverage Washington has, and it would not need to prove anything
Rabidoux's Edge Analytics piece connects the new Iran sanctions package, the threat to cut entities off from U.S. dollar clearing, and Canadian banks' money-laundering history
"the point here is not that they're going to do it, but that it's a threat. It's a leverage piece in a future round in negotiations"
The housing bottom is a process measured in years, not an event
Rabidoux: "I think we're at the point in the cycle where this is going to frustrate bulls and bears"
He expects prices roughly where they are three or four years from now, with affordability repaired by time
New supply has collapsed, and that is what is tightening the market
The lowest level of completions for homeowners since the 1990s, especially in Ontario, and new listings down almost 20% year over year in Toronto
Consumer confidence had started to turn right before the tariffs landed
The July reading was the strongest increase in three years, then pulled back in August
The K-shaped consumer is visible in company results before it shows up in the macro data
Tim Hortons same-store sales up 0.1% in Canada against Canada Goose store sales up 11%
Butler guarantees no Bank of Canada move on 2 September, and no cut this year
"The Bank of Canada's declared neutral range is 2.25 to 2.75, so we're at the bottom of the neutral range"
Canada's real retaliation options are oil and potash, not Treasuries
"You sold Treasuries, it would be a big deal for four days and then nobody would talk about it again."
Household distress is only halfway through, and falling home values have closed the escape hatch
"If your house value has dropped, you can't do the refinance."
Borrowers are moving from fixed to variable, and 75 basis points is the trigger
"once the delta goes beyond 75 basis points, variable just keeps taken off"
There is no home equity tax coming, and Butler wants the conversation to stop
"There is only one way to destroy Mark Carney's popularity is a home equity tax or some kind of capital gains on the sale of primary residence."
The K-Shaped Consumer Shows Up in Company Results Before the Macro Data
Bélanger opened on the gap between the reported numbers and what listed companies are saying on their calls. He said there is a myth that the U.S. consumer is strong, and that Walmart, Home Depot and Lowe's are all saying otherwise.
Walmart posted its lowest comparable sales since January 2020, at 2.6% — Bélanger's point being that the prior low was also January 2020, and that there is nowhere to trade down to from Walmart
Foch said the Canadian readings had been reasonable — CPI softening, GDP good, jobs good — but that the Ontario concentration in the jobs number "felt kind of like a FIFA bump to me"
Rabidoux said he triangulates Statistics Canada data against what public companies report, because "oftentimes the practitioners on the front lines have a better feel for what's really happening with consumers"
The K-shape is legible in the same-store sales line, one company at a time
Tim Hortons same-store sales up 0.1% in Canada, which Rabidoux called a signal for low-end consumption
Pizza same-store sales falling 5%, and Leon's Furniture skewing the same way
Canada Goose store sales up 11% year over year, with Aritzia in the same direction if not the same price bracket
Foch's label for the luxury end: "That's the Becky trade"
Canadian Tire, which Rabidoux uses as a proxy for discretionary spending, commented on a real push toward value and away from discretionary items
Foch's own contribution to the Tim Hortons line was a digression about their new protein lattes, which he called "absolutely insanely good"
Anything Over $1,000 Gets Postponed
Bélanger said Home Depot and Lowe's both described the same split in the U.S.: "Under 1,000, they are spending. Over 1,000, they're postponing large discretionary project was what they said on the call."
Home Depot's Canadian business outperformed its American one — about 15% of revenue comes from Canada and Mexico combined, with Canada the larger of the two, and the company saw more strength there than in the U.S.
Bélanger also flagged Rabidoux's finding that Canadian homeowners are tapping their HELOCs again
The Theatrics Are the Escalation, and Both Sides Are Playing the Media
Rabidoux said the substance is less dangerous than the performance around it. "the problem is the theatrics escalate it," he said.
Foch wanted the rhetoric dialed down and singled out Doug Ford, saying Carney had walked him back once already over the Super Bowl and before that over electricity
Rabidoux pointed at Toronto mayor Olivia Chow's CNN appearance supporting curtailed electricity exports to the U.S., calling it "an enormous escalation that risks putting U.S. lives at risk"
Rabidoux said Canadians are spending down goodwill they will need
"And I think Canadians need to be mindful of the fact that most Americans are not in favor these tariffs."
That support stateside for a better deal, he said, is what gets risked when Canadian politicians go on CNN to talk about cutting energy exports
Foch's own view was that counter-tariffs are the wrong instrument: "you get tougher and you win the next fight by going back to the gym." He would rather Canada spend the energy making the domestic economy less exposed
Rabidoux disagreed on method, not on temperature — Canada has to respond, he said, and has done it selectively: "we target some of those swing states in particular industries that will hurt him at the midterms"
He gave Carney credit for being thoughtful through most of it
Foch conceded he might be too much of a pacifist, and that his instinct with people who want attention is to ignore them
Bélanger expected a deal because he thought Trump needed a win before the midterms, with the Iran war going badly: "remember when it started? It was like, oh, it'll be done in a week."
Both sides are using the media to push a narrative, Bélanger said, and the truth is probably in the middle — he pointed listeners to the CBC interview with U.S. trade representative Greer, which Foch said everyone should watch
Why Buyers Stay on the Sidelines Even as Affordability Improves
Foch's case is that the trade war is one more switch flipping on and off in front of people making the largest financial decision of their lives.
He walked through the sequence: the rate-hiking cycle took volume and price down, then the U.S. election produced "our first really big year over year volume drop" in November, then April brought a Canadian election and the slowest April since COVID
On top of that, war in Ukraine, war in the Middle East, and what he called a looming and underpriced threat of cost-push inflation from diesel and fuel prices
"we're not buying houses until we have some certainty" was how he put the state of his market
Rabidoux's data says confidence had already started to turn — consumer confidence has been plumbing recession lows for a couple of years, but "if you look at the July reading, registered the strongest increase in three years, just ahead of the announcement of the new tariffs", before pulling back in August
He thinks the low is in, barring a catastrophic outcome, because people go numb to the noise: "There's so much trade talk for so long that people just kind of get used to it and they go on with life"
Rabidoux's Call: Sales Grind Higher Because New Supply Has Collapsed
Rabidoux said he flagged the second half of 2026 as the pivot point "like two years ago", working forward from permitting activity through starts, units under construction and now completions
"now we have the lowest level of completions for homeowners that we've had since the 90s, especially in Ontario"
The second-order effect is the one he says people miss: completed new homes push resale listings onto the market, because buyers of new builds have to sell what they own
New listings are down almost 20% year over year in Toronto, with the same pattern across most big Ontario metros, and active inventory now falling just as demand stabilizes
The blocker is psychological, not financial: "Nobody wants to catch a falling knife." Buyers do not want to be down 10% or 20% a year from now
Three months of a rising seasonally adjusted house price index in Toronto is his evidence that has changed — "We haven't seen that in four years."
He is not calling a V: "could you see sales up five or 10% from here and we're still at shitty levels? Like, absolutely."
Demand is at "early 90s recession levels" and has been for three years, which he says cannot hold indefinitely
His base case is a long flat stretch: "I think we're at the point in the cycle where this is going to frustrate bulls and bears" — prices roughly where they are three or four years out, with affordability fixed by time rather than by price
Foch pushed back on the mechanism rather than the conclusion. He sees the market balancing from the supply side, because sellers who do not have to sell are simply withdrawing: they have equity, they can carry the mortgage, and if they do not like the price they exit
Inflation, Not Nominal Prices, Is What Erases Housing Wealth
Foch's worry is the 1990s comparison, which he thinks is a better analogue than others allow.
Central banks look too comfortable letting inflation run hot — with nominal price recovery of 1% or 2% against 3% inflation, the middle-class wealth stored in a house is quietly inflated away
"real house price recovery from 1989 took till 2012. Nominal was 2002"
His concern is that people read a rising nominal price as being fine while losing ground against the rest of the economy, and housing has been the country's main wealth-creation vehicle
What an Equity Correction Would Do to Housing, and the Rent-Versus-Buy Math
Bélanger asked whether equity markets at all-time highs are an underrated variable for housing, since sidelined buyers are not all sitting in cash.
Foch's answer was that a correction would hit the investment side "infinitely", and reach first-time buyers too
The spread between renting and buying a two-bedroom condo in Toronto and Vancouver is now wide enough to beat the house, using National Bank's housing affordability monitor as the source
Dollar-cost averaging the difference into ETFs, Foch said, means "it's not that hard to outperform the primary residence"
The caveat he put on his own argument: "most Canadians suck at saving money and suck at investing money", which is why owning a home has done the job for them and why they will keep doing it
Rabidoux agreed and added nothing: "I think you're bang on there"
A Housing Bottom Is a Process, Not an Event
"when we talk about a housing bottom, it's a process. It's not an event" — Rabidoux's contrast is with equity markets, where bottoms are sudden and the bounce is sharp
Major housing cycles bottom over years, and he thinks Canada is at the start of a multi-year version of that
He split the country: Ontario is probably close to a bottom, and he is less optimistic on British Columbia for different reasons
He then narrowed the claim himself. Prices can still go lower — 6% mortgage rates would do it, and so would an amplification of the trade war
What has changed is the default direction. From the 2022 peak, every month brought falling sales and rising inventory
"you need an external shock now to push them lower. And that's fundamentally a different setup than it was even a year ago."
Nobody Is Moving, and Realtors Don't Get Paid on Prices
Foch said the transactions that should be happening — boomers downsizing, late Gen X and elder millennials stepping up — are not happening, largely because of restrictive monetary policy. In the U.S., anyone who locked a 3% 30-year mortgage is not moving
Rabidoux's three-word amendment: "Unless they're forced."
Foch's complaint about his own industry is that agents cheer the wrong number — "realtors love to cheer on house price growth. It's like we don't make money on house prices"
A 10% price rise on no deals is nothing; the 5% commission only matters if there are transactions
He said his brokerage made a call two or three years ago to push agents toward rental transactions, for the shorter sales cycle and because that is where the money was, and it proved correct
He thinks the market settles back onto the pre-2020 trend line rather than to any recent benchmark — people anchor to the 2016-17 foreign-buyer market or to COVID, and he says a return to that activity would mean bigger problems. He called the current adjustment "a very good healing process for Canada's housing market"
The Mail-In Ballot Clock: Two Weeks, or After the Midterms
Bélanger raised a piece of timing he said gets ignored: "I think a deal has to be done in two weeks. If not, it's going to be after the midterms, because we tend to forget, but about 30% of votes are mail-in ballots."
The earliest state starts roughly 60 days before the election, so an administration that wants credit for a deal has to bank it before ballots go out
Rabidoux had not considered it: "That's a really interesting point, Simon."
The Tinfoil-Hat Piece: Canada's Banks as the Next Point of Leverage
Foch pulled up the Edge Analytics report headlined on Canadian banks being the next target of the trade war. Rabidoux was careful about the register: "the piece opens up with we're putting on our tinfoil hats. So this is meant as a thought piece."
The dots he connects: the U.S. announced its largest sanctions package against any entity associated with Iran, and it carried a threat to strip entities of U.S. dollar clearing access
Bessent said publicly that a major financial institution would be sanctioned within a week, which sent Rabidoux looking for institutions with both a money-laundering history and heavy U.S. exposure
"What banks internationally have huge U.S. exposure that would really stand to get pain from being cut off from U.S. dollar clearing, it's the Canadian banks."
He said this is not purely hypothetical: FINTRAC has laid out the mechanism by which Iranian money moves through Canadian currency exchanges and into the banks, which is the same mechanism Bessent was warning about
The claim is about leverage, not intent — "the point here is not that they're going to do it, but that it's a threat. It's a leverage piece in a future round in negotiations. Why wouldn't they lean on Canada in that way in a trade war?"
Foch noted the trade war was originally framed around fentanyl, and said national security could be the route back in, citing Sam Cooper's reporting. His own summary: "Canada is probably Canadian real estate and mortgages probably like top five place on earth to launder money"
TD's Asset Cap and What Canada Does About Mortgage Fraud
Bélanger said TD's U.S. assets remain capped: "I think it was capped at four, 450 or 500 billion." A bank that cannot grow assets is not growing
The precedent he pointed to is Wells Fargo, under the same kind of cap for years — "it took like six or seven years, if not more to get lifted"
Foch added CIBC's FINTRAC penalty and said Canadian regulators have started responding
His framing of the enforcement gap: the mortgage fraud "that we have made our national sport here, in Canada" is the kind of thing that puts people in prison in the United States
Rabidoux left at this point for a 12:15 call, handing off to Butler, who had just joined
Butler Arrives: Picking a Fight With an Economy Thirteen Times Your Size
Butler said it is too early to see mortgage volume fall, because the real estate market moves first, and mortgage volume is already down for unrelated reasons
His read on 2025 was that the worst stretch for new buyers was the period of pure uncertainty, which then petered out and let some positivity build early this year — "And boom, positivity gone."
He expects the same freeze again: "I've got to believe that it's going to pull some people back onto the sidelines in terms of home buyers."
Butler's objection to the counter-tariff strategy is arithmetic — the measures are designed to anger the U.S. administration, and "somebody needs to explain to Canadians that the U.S. is 13 times the size of our economy"
"You're not going to piss him off that much. Or you may piss him off, but you may not like the reactions."
Every Auto Supplier Gone by 2029, and a Quarter Million Jobs
Foch asked what happens if the threat to raise automotive tariffs another 50% on 1 January simply keeps repeating.
Butler: "The explosive nature of that idea in Ontario is off the hook."
"Like it's literally every automotive supplier leaves Ontario, the manufacturers, the OEMs, the parts people, everybody's gone by 2029. Literally everybody. That's a quarter million jobs."
His conclusion follows from it: buying time until the administration changes makes more sense than provoking it
Foch said the damage has already started — Stellantis has taken 3,000 jobs out of Brampton and Oshawa and is retooling to sell only into the Canadian market
He put an Oxford Economics graphic of tariff exposure by city on screen
Reading Bessent and Trump as mercantilists who want the jobs onshored and the tariff revenue, he thinks Butler's scenario is a likely outcome rather than a tail one
Bélanger said the threat alone does the work: at some point manufacturers choose certainty and move, since "Canada's not a big market for us anyways"
Twenty-Nine Countries Signed, and Canada Won't Be the Exception
Butler pointed out the tariffs are already on, and that plants are closing in Mexico with more to follow
"So 29 countries have signed a tariff agreement with Trump. That's reality. 29 countries, 29." The idea that Canada gets an exemption, he said, does not make sense
His larger charge is against the domestic politics: "The politicians in our country are making it very, very problematic for anybody to talk about this"
"they want to drape the country in patriotism" — question the government line and you are a traitor
He named the technique: "This is a very common technique in politics to what's what we call manufacture consent."
Doug Ford's Brain Trust, and the Beekeepers Selling Half Their Honey South
Butler's longest digression was a piece of Ontario political mechanics.
He said Doug Ford's strategist Corey Teneycke is the brain behind the operation, was paid to go to British Columbia to get Caroline Elliott elected leader of the Conservative party there, and "Failed by like one half of one percent to get his person"
While Teneycke was away, Butler said, Ford's popularity in Ontario dropped enough that "the Liberal Party of Ontario is no leader, was actually ahead of Ford"
The prescription on his return, in Butler's telling, was to go back to insulting the U.S. president — and the approval rating recovered
His tell that a deal had looked close: some LCBO stores were rearranging shelf space to put California wine and bourbon back
Butler's point is that the people in business have to live with the consequences of the act — "if you want to put on an act, that's fine. But we all have to live with the real economy"
The example he chose was honey: "Canadian beekeepers were selling 52% of all their honey to the United States." Half a market gone for the individual selling it
The chain he draws ends at housing: create enough worry about the future and "you're going to have a few less houses sold. That's just reality."
What a Bank Investigation Would Do to the TSX
Bélanger said Rabidoux's piece was thought-provoking and the mechanism is cheap: the U.S. "would just have to say, well, we're opening an investigation"
With the TSX so heavily weighted to financials, that alone would be a tough blow to the Canadian market at least until it resolved, even if nothing was ever found
"RBC and TD are the two G-SIBs in Canada", and Bélanger would expect those two to be named first
The ripple effect he cares about is the household one — Canadians are heavily domestically biased when they do invest, the banks are always among the ten most held names, and a hit there feeds a wealth effect that reaches people saving for a house
Foch added that this sits outside the trade war framing entirely, which is what makes it hard to answer: Canada cannot tariff the U.S. for checking whether its banks follow the rules
Bessent's "Economic D-Day" and the Iranian Money Channel
Butler said he had spent a day and a half researching how the U.S. threat applies to Canada.
The principle behind what Bessent called economic D-Day: institutions that help Iran repatriate black-market oil money — chiefly China, less so India and some African countries — get punished. In Butler's words, "he's going to fry your financial institutions. And that's the threat he's using."
He says the cash-transfer system is visible from the street — strings of currency exchange shops along streets in Richmond Hill and along Marine Drive in West Vancouver, with "virtually no one in them any time at all, and yet they're paying high expensive rents"
The purpose, as he described it, is moving money out of Iran to relatives planted in Canada years ago, done for "colonels, generals and clerics who are in the government" for nearly 15 years, against the possibility that the regime falls
"They're running 50% inflation. It takes now two million rial to buy one U.S. dollar as of yesterday."
The historical examples he gave for why those officials plan an exit were Gaddafi and Saddam Hussein
His verdict on the banks themselves is that they are clean and self-interested about it — since the TD case they have rapidly upgraded their systems, and "We can make a fortune without the money laundering. We are rich as fuck."
The risk he does see is political rather than factual. Bessent, he said, only cares about institutions clearing billions in oil money, but a U.S. official could still reach for the Canadian angle because the currency exchanges are real
Foch's joke about lost demand — "Maybe that's why the real estate market's not doing any deals, Ron. We lost our best buyers" — got a straight answer: Butler said Vancouver genuinely lost its best buyers when the market in China turned, and those investors are "half broke down in China"
Canada's Nuclear Options: Oil and Potash, Not Treasuries
Bélanger floated an idea he does not endorse: Canada is "the fifth largest holder of U.S. Treasury bonds", ahead of the Cayman Islands, and selling into gold would send a message at a moment when the Treasury market is already strained
He does not think Ottawa would do it, because the response would be worse than the gesture
Butler's rebuttal was that selling Treasuries barely registers — a wise man once told him that when you sell, somebody buys — and "You sold Treasuries, it would be a big deal for four days and then nobody would talk about it again." Japan and China have been selling and the world did not end
"the real nuclear option is oil and potash" — "If you say, well, we're going to put an export tax on potash of 400 percent, that's a stake through the heart of U.S. farmers."
That, he said, brings massive retaliation, and Trump said at the outset that counter-tariffs get met with more tariffs in an endless escalation
Whether Carney Pauses the Public-Sector Purge
A listener asked whether the prime minister will stop cutting public-office jobs. Foch said no.
His read is that the spending is being moved, not cut — lay off public servants, scale back the bureaucracy, and route the capital into nation-building capital projects that come back as private-sector jobs when a contractor like SNC-Lavalin wins the bid
Public sector job growth is negative for the first time since around the turn of the century, on a chart from Rabidoux's Edge reports, and Foch sees no reason to stop something that is working in the jobs numbers
His one concession is that it could hurt the Ottawa real estate market
Butler confirmed the shape but complicated it. Unionized public jobs are down, CRA layoffs are real and federal retirees are not being replaced
But the consultant bill is rising: "the money spent on consultants is actually up. It's getting close to a billion dollars." Those are technically private-sector jobs
He also flagged the Crown corporations Carney has created and was unsure how they are counted
His observation from the market: "I noticed Ottawa real estate is not off. It's not very much off."
Real Rates, and Butler's Guaranteed Call on 2 September
A second listener asked whether the focus on nominal rates misses the gap between real inflation and nominal rates.
Foch credited Richard Dias's work on the question, and said Canada entered net negative real rate territory a few months ago
He does not think the incentive to lever up is anywhere near the COVID setting — inflation at 3% against a 4% mortgage is cheap, but nothing like transitory inflation at 7.4% with borrowing at 2.5% or 3%, when taking on debt to buy anything was the rational move
The purchases he remembers from that period: jet skis, boats, cottages
Butler's call was unqualified: "I've already called the September 2nd, no change, guaranteed it. Everybody wants to bet me money."
And no cut either — "The Bank of Canada's declared neutral range is 2.25 to 2.75, so we're at the bottom of the neutral range." Cutting from there, he said, is an admission that there is an economic emergency
On 2027 he refused to forecast, because the two forces cancel — trade war destruction of the economy is disinflationary, continued tariff escalation is inflationary. "we're going to have a bit of a battle on our hands by 2027"
He also recalled how long the last cycle took to bite: "it took months, but eventually everybody paid 7% interest"
Bélanger checked the market: "21% chance of a rate hike in 2026" on Polymarket
Foch's own view is that bond markets are always wrong because they price years of rates against variables that change, and that central banks are always late. He thinks any data from here over 24 months leans toward a cut rather than a hike
Groceries Hold Up, General Merchandise Does Not
Bélanger said the CME FedWatch tool has shifted from pricing a hike to undecided for the rest of the year
Walmart told investors it can see the moment U.S. gas prices hit $4 a gallon in its own data, when consumers start making tradeoffs
Food and groceries were the bright spot for Walmart and for Target; general merchandise is where the pullback shows
Canadian Tire is doing acceptably, Bélanger said, but off several years of declining sales, so the increase is from a low base
Foch's addition was that retailers cannot absorb fuel costs forever — they have said publicly they will not capitalize rising fuel costs, but "They're not in the business of losing money", and when goods prices escalate the demand destruction argument arrives
He thinks the top of the K has run out of room: the top 10% "is not just going to magically become 60 or 70 or 80% of consumption"
Butler agreed in his own register: "I think the top 5% of earners have just about maxed out all they can possibly piss their money away on." Everyone else keeps cutting back
The section ended in a digression about Great Value pickles, which Foch rates the best on the market
Deposits Cratering, Credit Card Utilization Straight Up
Foch put up two charts from Rabidoux's latest Edge edition and called them the worst pair in the data: Canadian bank deposits falling while credit card utilization and consumer credit facilities rise
"if personal credit utilization, consumer debt utilization is ramping up and savings rates are dropping. That's like that's about as bad as it gets"
He added rising auto loan delinquencies to the list, and described the deposits chart as "a steep decline" heading negative
His question is how long that pressure runs before it produces another down leg in housing or in the wider economy
The Two-Year Path to Delinquency, and Butler's "We're Halfway Through"
Foch built the section around the Bank of Canada's report on the consumer path to mortgage delinquency, which he said shows the slide takes two years.
The mechanics he traced from the chart: credit card utilization rises past 30%, the revolving credit and the HELOC max out, credit gets impaired, refinancing becomes impossible, and then a payment gets missed
He thinks Canadian households are early in that process, not late — people are still levering up on credit cards and drawing down deposits, on top of renewal increases of 300 or 500 dollars a month, with a household burn rate going from six thousand a month to ten
Asked how many distress calls he gets, Butler's answer was "The concise answer is many."
"I think we're halfway through the troubles." The end state is a power-of-sale disposition, and the process from the first worry about a payment to a sheriff at the door runs about two years, which matches what his own business sees
He noted the sheriff stage almost never happens, because rational people sell or leave first, and that the sheriffs do not carry guns and sometimes bring local police
He expects foreclosures, power of sale and bank-ordered sales to keep rising across Canada before finally leveling off
Foch's own book of business is now lender dispositions, and he brought in a partner from the debt side to run workouts as a special loans team
The bottleneck he named is the courts, which are behind on the legal files
Butler said debt consolidation is the universal request and the reason it fails is price — everyone at that stage wants to consolidate, and if they own a house it means refinancing it. "If your house value has dropped, you can't do the refinance. That's it."
That is what he says is driving rising power of sales, foreclosures, homeowner bankruptcies, insolvencies and consumer proposals
Brampton Is the Epicenter of the Price Reset
Butler on what it now takes to sell in Brampton: "if you want to sell your house, you've got a price at 45% less than what the value was in 2021, which is staggering. It's just unbelievable."
Asked whether Brampton is the most pronounced case, he said yes, because it is the largest city affected, with very similar pockets in Niagara and in north Durham
"Any street that was mainly student housing anywhere in Ontario, is highly impacted right now."
There Is No Home Equity Tax Coming
A listener asked whether a home equity tax would drive prices to zero.
Butler's answer was that nothing drives prices to zero, and that the premise is wasted energy: "There is absolutely no capital gains tax on primary residence on sale coming. Everybody's got to stop talking about that because it's a waste of time."
His reasoning is electoral. He said Carney's popularity is off the charts and that "There is only one way to destroy Mark Carney's popularity is a home equity tax or some kind of capital gains on the sale of primary residence", because the voting bloc is people over 55
Foch's counter-example was behavioral rather than political — when the capital gains inclusion rate increase was proposed, commercial owners rushed for the exit and dumped assets before it took effect, and then it was rolled back
He also read Carney as deliberately distancing himself from the previous administration, including from the leftist positions he thinks nobody related to
Butler interrupted the drift-to-the-center thesis: "Mamdani is not getting away from it." And then: "Mamdani is pure Stalinist, okay?"
The Destruction of Homeownership, and Why Politics Follows Tenure
Foch's observation is that leftist politics work well in cities with low homeownership rates, and that this is a leading indicator for Canada: "don't expect politics to go more towards the right if homeownership rates continue to fall"
Butler: "My favorite subject is the destruction of homeownership, particularly for young people in Canada."
Foch's mechanism is incentives, quoting Charlie Munger — "show me the incentives and I'll show you the outcome" — and arguing that Canada has built its most compelling financial products for rental rather than for ownership
More rental supply makes renting more affordable, which delays ownership, and over a decade or two the ownership rate falls substantially
He tied it to the boomer exit: if ownership keeps falling, "who are they going to sell their houses to?"
Butler was unmoved: "Never worry about boomers. Never, never worry about boomers. Boomers will find a way for foreign buyers. They'll sell them to each other if they have to." His disclosure: "And I am one."
Fixed to Variable: Seventy-Five Basis Points Is the Magic Number
Bélanger asked whether borrowers are shifting toward variable rates on a bet the Bank of Canada holds or cuts.
"It is absolutely a move from fixed variable," Butler said, and it is happening even when brokers try to talk people out of it
Two forces are pushing it. By October the Bank of Canada will have gone a full 12 months without a change, which makes people comfortable, and the rate differential keeps widening
He gave the current spread: "So you had a 3.5, 3.6 variable, a 4.09, a 4.19 fixed rate." Bond yields, including five-year and three-year, rose sharply into the trade war blowup and pushed fixed rates into the fours, with a dip over the last three days that looks like it has flattened
"once the delta goes beyond 75 basis points, variable just keeps taken off"
Foch's historical warning is that the Canadian borrower is a contrary indicator — they piled into variable in January 2022, close to 60% of originations, at "the worst possible time in human history". This time he thinks they may be right
Bélanger noted borrowers are also picking three-year fixed over five-year, and asked whether that was a rate view. Butler said no: it is purely a price issue
A Rob Ford Impression, Declined
Asked in the chat for a Rob Ford impression, Butler delivered a Doug Ford one instead — "I am telling President Trump to kiss my ass" — then declined the actual request: "Rob Ford's dead. I don't do impressions of the dead."
His stage direction for a proper version: "You just got a pour a bottle of Crown Royal."
Why the Democrats Might Not Be an Easier Negotiation
With Butler gone, Bélanger closed on the risk Canada runs by escalating.
He said he took Butler's point about the better retaliation levers, but still thinks a Treasury sale would matter for the signal, pointing to U.S. intervention in the Japanese yen market as precedent for what Washington will do
The asymmetry he keeps coming back to is political support, not trade balance — public opinion in the U.S. is not favorable toward tariffs on Canada, and many states that export heavily to Canada matter for the next elections
"if the measures become too harsh to the U.S., public support might change", and once it turns anti-Canada a deal gets harder regardless of who wins
He challenged the assumption that a change of administration solves it: "there's a lot of people that have misconception that once the Democrats come in, it'll be much easier to negotiate" — Democrats may be more diplomatic without being softer on Canada
Foch agreed and gave the precedent: Biden did not roll back the U.S. tariffs on China
His closing speculation was structural — if the American public decides it likes lower personal taxes funded by foreign businesses paying for market access, tariffs stop being a negotiating tactic and become a revenue tool, which he called a possible seismic shift in how U.S. revenue and global markets work
The two closed on show logistics: the Thursday noon slot makes guests far easier to book, full episodes go up on the TCI stream on Saturdays, and this one would need a parental advisory. Bélanger recalled Butler having to testify to the Canadian government without swearing, and Foch said you can watch him catch himself in real time
Rabidoux's bottom line is that Canadian housing has stopped falling on its own momentum and now needs an external shock to go lower, with the trade war the most likely candidate; Butler's is that the shock is already being built in Ontario, and that Canadian households are only halfway through the deleveraging that started when rates rose.
Products, Companies & Tools Mentioned
Edge Analytics (Rabidoux's research service for real estate and mortgage professionals, and the source of the bank-leverage piece, the deposits and credit card charts and the public-sector jobs chart discussed throughout)
Walmart (Lowest comparable sales since January 2020 at 2.6%; told investors it can see the moment U.S. gas hits $4 a gallon, with food and groceries the only bright spot)
Home Depot and Lowe's (U.S. households spending under $1,000 and postponing above it; about 15% of Home Depot revenue comes from Canada and Mexico, which outperformed the U.S.)
Tim Hortons, Leon's Furniture and the pizza chains (Rabidoux's low-end consumption tells: Tim Hortons same-store sales up 0.1% in Canada, pizza down 5%)
Canada Goose and Aritzia (The other leg of the K — Canada Goose store sales up 11% year over year)
Canadian Tire (Rabidoux's long-standing proxy for discretionary spending; management described a real push toward value, and any improvement is off a low base)
Target (Same split as Walmart: groceries hold up, general merchandise does not)
TD Bank (U.S. assets still capped after its money-laundering case, which Bélanger said leaves it unable to grow; the case Butler credits for the whole industry upgrading its controls)
RBC (Pushing hard into the U.S. and, with TD, one of Canada's two G-SIBs — Bélanger's pick for who gets named first in any investigation)
CIBC (Hit by FINTRAC, in Foch's list of evidence that Canadian regulators have started responding)
Wells Fargo (The precedent for how long a U.S. asset cap lasts — six or seven years, if not more)
Stellantis (Already out 3,000 jobs from Brampton and Oshawa, retooling to sell only into the Canadian market)
Polymarket (Priced a 21% chance of a Bank of Canada hike in 2026, which Bélanger read out to check Butler's call)
CME FedWatch tool (Has moved from pricing a hike to undecided for the rest of the year)
LCBO (Butler's tell that a deal had looked close: stores rearranging shelf space for California wine and bourbon)
SNC-Lavalin (Foch's example of the private-sector contractor that picks up nation-building capital projects and converts public spending into private-sector job numbers)
Equifax (Quarterly credit trends report, due in September, which Foch uses to time the household stress cycle)
Books & Resources Mentioned
Edge Analytics report on Canadian banks as a trade war target (Rabidoux's "tinfoil hat" thought piece connecting the Iran sanctions package, U.S. dollar clearing and Canadian banks' history)
Consumer Path to Mortgage Delinquency - Bank of Canada (The study behind the two-year timeline both Foch and Butler use for household distress)
FINTRAC advisory on Iranian money movement (Laid out the mechanism of money moving through Canadian currency exchanges into the banks)
National Bank's housing affordability monitor (Foch's source for the rent-versus-buy spread on a two-bedroom condo in Toronto and Vancouver)
CMHC Mortgage Industry Report (The chart behind Foch's point that Canadians piled into variable rate mortgages at the worst possible time)
Oxford Economics tariff exposure by city (The graphic Foch put on screen to show where the auto tariffs land)
CBC interview with U.S. trade representative Greer (Bélanger and Foch both pointed listeners to it for the American side of the dispute)
Richard Dias's work on real versus nominal rates (Foch's cited source on Canada entering net negative real interest rate territory)
Sam Cooper's reporting (Foch's reference on money laundering and national security in Canada)
Episode page (The show's own page for this episode)
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