It was a Mar-a-Lago moment. The president-elect said the border between our nation and his is ‘imaginary’ and the United States will use “economic pressure” – instead of the military – to hopefully bring about a union in which Canada becomes the 51st state. Wow. At least we’re not Greenland (a lesser Trump landed there yesterday) or Panama, where American troops may show up to plant the stars-&-stripes.

Well, it’s one of the risks you face this year. Not invasion, but coercion. Trump is sticking with his bully-tariff mantra and we’re now just over ten days away from the timetable he set out. If our stuff faces a 25% penalty we are, well, pooched. You can pencil ‘recession’ on the calendar for mid-year, with unemployment going up, along with prices. And then rates.

Apparently Trump’s moaning over migrants and fentanyl was mere diversion (which politicians in Ottawa, Alberta and elsewhere fell for). Our border is fine. Besides, it’s America’s job – not ours – to keep unwanted stuff out of that country. It was all a ruse. Trump wants our land.

While this won’t happen, it does underscore the growing realization tariffs are coming. The key question is how our government will respond. Roll over and negotiate, tail between legs? Or bite back with a snarly set of our own duties? Meanwhile our PM is hobbled, the government diverted with a leadership contest and the oppo guys yipping for an election. It’s confused. Bigger confusion coming.

What should you expect? What will be the impact on the dollar, rates and houses?

Nobody knows. Don’t put stock in any prediction. Just wait.

Economists figure if we don’t respond to Tariff Man our GDP will be hit with about twice the impact Covid had. That would chop it by maybe four points (huge), put a lot of people out of work, send the dollar into the mid-to-high 50 cent range US and cause the Bank of Canada to cut rates more than anticipated. If we do impose our own tariffs, it gets worse. Inflation goes up a lot – the combination of a very weak dollar and far higher import prices for US goods. Ultimately the CB has to decide to let consumer prices rip, or hike rates to support the dollar.

And how will Trudeau, or PM PP, respond. Fight? Capitulate? Real estate-killing 6-7% mortgage rates again, inflation doubling with grocery prices on fire, or both together?

Well, there ya go. Solid reasons not to sign any offer to purchase for a month or two. Or six. As this blog postulated even before T2 quit, it will be June or so before we have (maybe) a new government.

Meanwhile the real estate cartel just blathers on. In Toronto the house-floggers are calling 2024 “a transitionary year.” In Vancouver the local board says it was “a pivot year” for the housing market. In both key bellweather markets these are the facts:

• Overall sales in 2024 were up slightly. In the GTA, 67,610 properties changed hands, while in Van the count was 26,561.
• Listings have swollen steadily. In Toronto, 166,121 of them materialized during the year, a 16% jump. In Vancouver, new listings hit 60,388, up almost 19%.
• And prices flatlined. In the GTA, the average for all types of properties ended at $1,117,600, barely a 1% change. In Vancouver, the number finished at $1,171,500, also a deviation of less than 1%.

So, more buyers showed up. More sellers decided it was time to list. A huge jump in supply, however, did not knock prices lower because the cost of financing was chopped five times by the Bank of Canada. And as the year finished, new buyers got the option of taking 30-year mortgages, reducing monthly costs, while CMHC’s price cap change meant downpayments could collapse by almost 60%.

To the people in the real estate business, this is full steam ahead. More interest rate cuts. Reduced mortgage costs. Easier financing for new buyers. Lots of supply to attract bidders. And two full years of pent-up demand since there hasn’t been a decent spring market since 2021.

“All else being equal,” says the Toronto Real Estate Board, “further rate cuts in 2025 and home prices remaining below their historic peaks should result in improved market conditions over the next 12 months.”

But wait.  All else is not equal. It’s a mess.

Mar-a-Lago. Tariffs. Trudeau. Leadership. Election. And our imaginary border with a country now led by a man with territorial ambitions worthy of the 19th Century. Like Teddy Roosevelt, but weirder. And no horse.

So far there’s nothing good for us about the Trump presidency. And he’s not even president yet.

Get ready.

About the picture: “Dear Garth, you wrote recently that there were humans who lost their minds because they believed their city council’s 15-minute-city plans were plots to surveil and control them,” writes Joan. “Here’s a cat’s perspective on the issue – Lily, angry with her humans’ efforts to surveil and control her by making her wear an airtag.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.