CANADIAN SNOWBIRDS LIKELY RICH CANADIAN FAMILIES FINANCIALLY DISADVANTAGING SINGLES AND THE POOR
These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.
Who are the Canadian Snowbirds (Canadians who spend winter outside of Canada)? They are Canadians who spend up to approximately 182 days or six months out of Canada and in the United States each year usually during the winter season.
A new system is being implemented whereby Canadian snowbirds will be able to be tracked more easily for financial fraud during their snowbird stays. Some snowbirds think they should be able to stay longer than six months in the USA.
According to MoneySense, ‘Follow the Flock South, October 8, 2013 moneysense more than one million Canadians age 55 and up lead lifestyle of snowbirds.
‘Avoiding the Snowbirds’ Trap’ thestar article states:
- ‘that the study by the University of Florida Bureau of Economic and Business Research revealed that Florida’s five-million population over 55 swelled by more than a million people every winter, and 82 per cent of these snowbirds came from Canada. The study stated that not only are the number of snowbirds continuing to increase, encouraged by the dollar and cheaper real estate, they are getting younger as baby-boomers retire.
- There are trade-offs that have to be made. The winter snowbirds have a large impact on life in Florida. One of the complicating issues is that those people are only in the state for part of the year.
- State and county governments responsible for roads and transportation are often caught in a quandary of whether or not to improve infrastructure to cope with the winter traffic jams, or plan around the six summer months when the snowbirds have left and roads, public transit, even retail malls are relatively deserted. One key finding of the study was that 81 per cent or 500,000 snowbirds spending their winters in Florida actually own their secondary home in the sunshine state.
- Canadians are the biggest foreign purchasers of U.S. residential real estate and own an estimated $50 billion worth in Florida alone.
- There also has been talk about proposed USA legislation creating a Retirees Visa, increasing the current six-month limit on a winter stay for snowbirds to eight months.’
Canadians snowbirds make their presence felt: spending $5 billion in 2012, just in the big-four sunshine states of Florida, Arizona, Texas and California alone according to the Canadian Snowbird Association. snowbirds
The following article give some interesting facts of Canadian real estate purchases in the USA: ‘2015 Profile of Home Buying – Activity of International Clients (Residential) in USA-April/14 to Mar/15′ realtor.org
- In April, 2014 to March, 2015 homes estimated to be sold to foreign buyers were approximately 209,000 with total sales estimated to be $104 billion.
- Fourteen per cent were from Canada (29,260 sales) with sales of $11.2 billion ($382,775 per sale). About 47% of Canadian buyers bought for vacation properties and 12% for vacation and rental. Types of housing purchased include 46% detached homes, 35% condos, and 12% townhomes. Remaining 7% were commercial, land and other purchases. On average Canadian buyers purchased properties valued at $380,000 and about 73% were purchased on an all-cash basis.
- Dollar value of Canadian sales for 2009 $8.9 billion, 2010 $17.1 billion, 2011 $13.0 billion, 2012 $15.9 billion, 2013 $11.8 billion, 2014 $13.8 billion.
- Fifty per cent of sales were in the four states of Florida, California, Texas and Arizona.
- Foreign buyers tended to be upscale buyers (all buyers, not just Canadian) who paid overall USA average house price of $499,600 compared to average USA house price of about $255,600.
- An average of 8% of USA residents were interested in buying in Canada in 2015.
SO WHO CAN AFFORD TO BUY SECOND PROPERTIES OUTSIDE OF CANADA AND RESIDE THERE FOR SIX MONTHS OF THE YEAR?
According to Statistics Canada there were approximately 5 million seniors age 65 and over in 2011. About 47% are in family unit of two or more persons, the rest are singles and widowers.
One could probably estimate that most of the Canadian snowbirds are families as singles are less likely to be able to purchase a second home and stay in the USA for six months of the year. (See MoneySense All-Canadian Wealth Test below). Forty-seven per cent of the 5 million Canadian seniors equals about 2,350,000 family units. If 80% or 500,000 Canadians own second homes in Florida alone, that is a lot of money flowing out of Canada to the USA (another 20% of Floridian snowbirds do not own second homes in Florida).
WHERE IS ALL THE WEALTH GOING?
While wealthy Canadians are able to buy second homes and spend six month of the year outside the country, singles, poor families and the poor are left behind to support the country with money they don’t have.
One could say that if Canadian governments placed financial values for the country as one of their priorities, they would certainly not give future approval for outside the country stays over six months and they would maybe even shorten the stay to three or four months (added Arpil 26, 2016).
Yes, snowbirds still pay annual income taxes and property taxes, but their houses are likely sitting empty for half the year. Yes, they are not taking jobs away from USA citizens, but they also are taking their money away from Canada and spending it in the USA. Comments listed at the end of this post shows how entitled these rich snowbirds feel with no regard to what is happening financially to the country of which they are citizens. (The last comment is one of better ones).
‘Money Sense “All Canadian Wealth Test’ 2009’ moneysense – Quote: While incomes are far from equal, wealth is even more unbalanced. The richest 20% of Canadian households control about 69% of the wealth in Canada. The next quintile down possesses a further 20% of the net worth. Not much is left over for other people. The bottom 60% of households control only 11% of Canada’s wealth. In fact, the bottom fifth of the population possess no wealth and actually owe a few thousand dollars more than they own.
Families of Two or more Income 2015 MoneySense All Canadian Wealth Test (based on 2011 data) moneysense.2015
Upper-middle 20% quintile $88,075 to $125,009
Highest 20% quintile $125,010 and up
Families of Two or More Wealth 2015 MoneySense All Canadian Wealth Test (based on 2011 data)
Upper-middle 20% quintile $589,687 to $1,139,488
Highest 20% quintile $1,139,489 and up
Above amounts are misleading as they include single parents with children. If these persons are removed from the totals, net worth is probably much higher.
The Upper-middle 20% quintile of unattached individuals had a net worth of $128,068 to $455,876 and the Highest 20% quintile $455,877 and over. (Does this include widowers? If it does, they are more likely to have greater net worth than ‘ever’-never married, no kids singles or early in life divorced/separated singles.)
The number of census families in Canada—married couples, common-law couples and lone-parent families equalled about 9.4 million families in 2011.
According to Statistics Canada there were approximately 4,945,055 seniors aged 65 and over in Canada in 2011.
Senior families of two or more persons comprise about 44% of the population, singles 13% and widowers 43%.
Opinion comments submitted by readers in response to the articles
From “Crooked Canadian Snowbirds risk losing their benefits under new security program” bnn.ca/News
-’Crooked Canadian Snowbirds??? Gimme a break.. The snowbirds you are talking about worked hard, saved and now are just wanting to enjoy some winters away from the cold and wet before the rising cost of health insurance keeps them hostage in Canada. They are not taking any jobs from Americans and are not impairing the Canadian economy in anyway; cut them slack and stop making them out as criminals.
-By leaving the country for more than six months, you are spending your money elsewhere and not on the Canadian economy. You will also lose health benefits such as the provincial health care that is free to Canadian citizens. If you leave the country for more than six months, you should not be able to retain these benefits. These are all costly benefits paid into and by taxpayers that should not be taken advantage of by anyone…Winter is only for six months. I am one of those who runs away from winters, and that is more than enough time!!!’
From “Canadian Snowbirds Risk Losing Benefits under New Exit-Tracking System” snowbirds
-Snowbirds that spend six months in warmer countries pay for all year health care fees (British Columbia), income tax, property tax, but only use it for six months. The government should be happy with it. Nobody is exploiting the system. Seniors have worked all their lives to pay for what the younger generation has now, so now it is time for the younger generation to pay for the next one and leave seniors alone. They did their jobs and paid their dues.
-I used to work for (government) investigations and at that time we were uncovering $10 of fraud for every $1 spent on detecting it. So you would have expected that the Government would hire more investigators until the ratio became 1-1. However, it is difficult to convince voters that the government can save money by hiring more public servants.
-Provided they also go after rich tax cheats and their offshore tax havens, I’m fine with this. It’s a myth that if you pay into a program, you’re automatically entitled to a benefit. You’re only entitled to the benefit if you meet the criteria…in this case, the criteria is that you physically be in Canada for a certain portion of every year. The programs are most often income supplements…not ‘retire in the sun’ strategies. To think otherwise is the ultimate ‘entitlement mentality’.
-I will be judged for smamming my parents here, but this fits them to a tee. Many years ago retired…early. Moved from northern community to a border community. Shop over the border every single day for everything. They go to Florida 6 months a year. Then come home and complain about Canada for the other 6 months. We discussed (if one could call it) this once. My parents were once proud Canadians. Started with little, had children, used all the services available to them, for us. As soon as they got what they needed. BOOM. Repubs overnight. ‘Why should I pay for health care taxes for someone else? We are never here’. Reminding them that they were part of the systems they used, while they were a young family fell on deaf ears. Children are not born selfish and greedy. They are taught these terrible qualities. I do agree we should be going offshore hunting for tax evaders, but this is a serious issue as well. I remember suggesting to them ‘Why don’t you just move down there full time’? Verbatim – ‘We will lose all our pension and health’. Fools!’
End of comments.
This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.