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Life Real Estate Wealth

Canadians are Not Happy

A recent global happiness survey conducted by the World Happiness Report has shown that Canadians now rank 15 on a country by country scale. This is a 5 place drop from Canada’s previous rank of 10.

On an absolute and relative level, the conclusion is simple: Canadians are not happy.

You might argue that Canadians are happier than people in Moldova or India, and you’re probably right. The thing is, people don’t measure satisfaction based on how bad things could be. They compare their standing against others around them. And against their own experiences.

The whole world has gone through lockdowns, Covid deaths and massive lifestyle changes. So if everything were equal, you’d expect the rankings to remain constant. Clearly, Canada is going through something other countries aren’t. The right will blame the left. Left the right. There’s so much subjectivity in these kinds of surveys that who’s to really know.

One thing is clear though. The countries with the happiest citizens are socialist paradises: Finland, Denmark, Switzerland, Iceland and Netherlands. These are countries that take care of their people. Indeed, 9 of the top 10 countries were European.

The anomaly was New Zealand – probably the most European country outside of the EU. Canada used to fit that description.

So what went wrong? The most objective answer I can provide is economic. A growing proportion of Canadians can’t afford one of the most basic of Maslow’s needs: Shelter.

Rents and home prices across Canadian regions with the most jobs are higher than almost anywhere else in the world, in relation to median incomes. Moreover, the unaffordability gap is widening. Every day, housing prices are rising faster than most individuals’ ability to save for a down payment.

It used to be that a nuclear family could live quite well off a single blue collar wage. Today, many Canadians are abandoning the idea of ever having kids – they have nowhere to put them.

I’m not saying these Canadians are living on the street. They’re living with parents and sharing apartments. But they’re doing so way longer than previous generations. With the light at the end of the tunnel shrinking, this dependency on the kindness of others to meet a basic physiological requirement is stressful, and unusual for most Canadians throughout modern history.

When basic physiological needs – like shelter – are not met, people are unable to pursue safety, belongingness, esteem, and self-actualization. They are unable to develop as humans, therefore limiting their capacity for happiness.

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Real Estate

Toronto Housing Bubble Shrinking Talent Pool

I recently hired two people to join my team, which is domiciled in Toronto. Both of my new employees live miles and miles away from the GTA. One jetted to Montreal when the pandemic started, and honestly I don’t know if he’s coming back.

Who can blame them? These are well-paid individuals, but who can afford to live in Hog Town? Certainly not people in the early stages of their career.

And those that do live in the GTA require a premium to make it all work. Wage growth overall has fallen behind housing price increases, but those in demand can hold out for higher wages. Want a highly-skilled Toronto employee? Then better be prepared to pay Toronto wages! Of course, it doesn’t work that way for all. Low-skilled workers are sharing apartments and living with their parents, as Toronto is now a city that is only accessible to the wealthy.

It’s a sad state of affairs. But one to which employers must adapt.

Highly skilled people are moving further and further away from the Big Smoke, simply because – even with decent wages – they can’t afford to live in Toronto.

If Toronto is to remain a business hub, three things must happen: 1) housing stock must increase to dampen housing price appreciation, 2) demand from speculators and money launderers must be squashed, 3) regional transit must improve to allow suburban dwellers to quickly commute to the city, 4) companies must embrace remote working beyond the pandemic, 5) companies must decentralize head office work by setting up offices across a wider region and 6) companies must raise wages to attract talent that is leaving for cheaper cities.

Hiring skilled employees is a highly competitive marketplace. If a prospect has multiple options, they will go with the company that is more flexible and willing to let them work from a location that doesn’t put them in debt for several lifetimes or pays them a premium for coming into a Toronto office.

Many companies are dealing with this problem by shoving their heads in the sand. Executives don’t realize how big this issues is because they tend to hire more senior employees earning $150,000+ salaries who have been on the property ladder for 10+ years.

For middle-managers and supervisors in the trenches, the prospect of hiring a junior-level employee for $55,000 is laughable. Anyone willing and able to accept that salary either lives with their parents or lives 100 miles away. And when a business is able to hire someone at this level – knowing the housing situation at hand – that person will quickly seek to move up the ranks. That means far less loyalty from junior employees than what companies might have seen in the past.

Due to the housing bubble, the war on talent in Toronto has evolved dramatically over the past year or two. Businesses that ignore the problem will lose talent. Businesses that embrace the challenge will become attractive places to work.

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Real Estate

List of Starbucks Imminently in Closing Downtown Toronto

Many of these locations previously had lineups 9-5, Monday to Friday (or at least during the peak times [morning and mid-afternoon]). What does it say about the long-term viability of downtown commercial real estate when dozens of Starbucks locations are willing to abandon prime locations?

Is Starbucks closing all these Toronto locations because it realizes office occupancy won’t recover for at least several months?

Or because it believes office occupancy will never fully recover?

Hard to say.

Still, one could argue that Starbucks had too many locations to begin with. However, the company is not known for being reckless with its real estate footprint. I would think this retreat is not caused by simple redundancy. Rather, I assume Starbucks believes the strategic long-term viability of its downtown presence has changed.

When we’re past Covid-19, life might look very different. And not just because your local coffee joint is gone.

Below is the full list of Toronto Starbucks locations that are closing imminently:

  • Bathurst and Fleet (600 Fleet St.)
  • Bay and Elm (686 Bay St.)
  • Bay and Grosvenor (37 Grosvenor St.)
  • Bloor and Bathurst (494 Bloor St. West)
  • Bloor and Gladstone (1090 Bloor St. West)
  • Church and Gerrard (66 Gerrard St. East)
  • Davisville and Yonge (1909 Yonge St.)
  • Dufferin Mall (900 Dufferin St.)
  • First Canadian Place (Sat)
  • Front and Jarvis (81 Front St. East)
  • Hillcrest Mall (9350 Yonge St.)
  • King and Peter (370 King St. West)
  • King and Sherbourne (251 King Street E.)
  • PATH Concourse, Royal Bank Plaza – closing Sunday
  • PATH Concourse, Richmond Adelaide Centre – Closing Sunday
  • Promenade Mall (1 Promenade Cir.)
  • Queen and Ossington (2 Ossington Ave.)
  • Queens Quay and Lower Jarvis (132 Queens Quay E.)
  • Scotia Plaza (40 King Street West) – closing Saturday
  • St Clair and Bathurst (504 St. Clair Ave. West)
  • Wellington and John (224 Wellington St. West)
  • Wellington and Simcoe, RBC (155 Wellington St. W) – Closing Saturday
  • Wellington and University (55 University Ave.)
  • Yonge and Wellesley (8 Wellesley St. East)
  • Yonge and College (450 Yonge St.) – Closing Sunday
  • Yonge and Queens Quay (1 Yonge St.)
  • York and Bremner (25 York St.)
  • York Mills Centre (16 York Mills Rd.)

List source: Blogto