BC get ready to pay 7% more for bike stuf- Mtbr.com
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  1. #1
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    BC get ready to pay 7% more for bike stuf

    Get ready for biking to cost more on July 1, 2010... got a cost over run on Winter Olympics? Just add taxes and stir, and then tell people it will make life cheaper for guys running a store because the paperwork will be easier.

    7% PST will be applied to bikes and bike stuff. That ought to help out the bike store industry a bunch.

    What's currently exempt from British Columbia's sales tax

    Goods
    • Residential fuels (i.e., electricity, natural gas) and heat (i.e., steam heat)
    • Basic cable TV and residential telephone
    • All food products
    • Non-prescription medications
    • Vitamins and dietary supplements
    • Bicycles
    • School supplies
    • Magazines and newspapers
    • Work-related safety equipment
    • Safety helmets, life jackets, first aid kits
    • Smoke detectors and fire extinguishers
    • Energy conservation equipment (e.g., insulation, solar power equipment)

    Services
    • Personal services (i.e., hair care)
    • Dry-cleaning services
    • Repair and maintenance services to household appliances
    • Household repair and maintenance (i.e., renovations, painting)
    • Real estate fees
    • Membership fees (i.e., health and fitness clubs)
    • Admission (i.e., movies, live theatre)
    • Tourism services (i.e., booking fees, tours)
    • Funeral services
    • Professional services (i.e., accounting, architectural, photography, graphic design, home care services)
    • Airline fares (within Canada)

    Exempt from the planned harmonized sales tax

    • Basic groceries
    • Gasoline, diesel fuel and other motor fuels
    • Books
    • Diapers, children's clothes and car seats
    • Feminine hygiene products
    • New homes up to $400,000

    ...oh yeah, that 7% tax will apply to the admission to the Whistler Bike Park and all bike guiding services too.
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  2. #2
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    Teh suxxorz! I guess I won't be shopping as much when I visit Nelson, Rossland, Golden, Revelstoke, the Okanagan and Fernie next year...

  3. #3
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    Weak! I don't want to have to go to Calgary, but maybe I will so as to cut 7% off my next bike. It will probably be worthwhile next time I'm riding in K-country.

    Actually, this is a strong argument to buy a bike sooner rather than later.

    Edit: I just wrote my MLA about this HST bidness...we'll see if he listens
    Last edited by D.Crank; 08-05-2009 at 11:01 PM.

  4. #4
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    The media spinmeisters sure seem like they're trying hard to make this sound like a good thing for everyone. Since it makes so many everyday items taxable that weren't before, the net result is that it will increase the cost of living by at least 6.99% (assuming the 0.01% cost of doing business saving is passed on to consumers). And in theory like with GST, a business can get an input tax credit to pass the PST they pay through to the consumer without adding more PST, but there's so many new taxable services and goods that will never happen. In reality, the cost of cashflow to business of having to remit more taxes will outweigh whatever might be saved in the cost of operating a business. My prediction is that it will raise everyday costs by more than 7%.

    For markets that have been tax exempt for years (like bikes and bike parts), this is going to be a real kick in the crotch to economic recovery. If you think of how many mountain bike related business are not taxable now, like bike park admissions and bike guiding, etc, this will impact a big market.

    There was that Tourism survey a couple of years ago that showed that the BC sea-to-sky corridor generated almost $30,000,000/year from MTB activities including Whistler bike park, that's an extra $2,100,000/year in taxes from MTB activities alone.

    Spread the word amongst fellow BC'ers, maybe the Lib's can be kneecapped before they do this http://www.bcndp.ca/stophst
    Last edited by rockyuphill; 08-06-2009 at 07:01 AM.
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  5. #5
    slaving away in paradise
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    I think what Cambell's group is not thinking about is, by increasing the taxes on these things,
    they are limiting the amount people can spend on things like bikes and magazines, so...instead
    of increasing revenue it might even go down.

    For instance; If I have to pay 7% more for food and heating oil/gas, then I may not buy some
    of the non-essential items like bikes/parts etc. In the end I will come out ahead $$-wise since
    I will be limiting my spending in other areas to compensate (my monthly essentials may go
    up by say...$100, but I may not buy the $200/mo...averaged over the year... in bike/theater/
    magazines/flights/etc). So, I'll save $200/mo but I'll be a less happy person, and then if the
    total population of BC follows suit then violent crime will rise (no one can afford to have a good
    time), and basic civil unrest will ensue and cost the Gov more in the end to control the
    people.
    Ok, maybe a bit overboard, but it could happen.

  6. #6
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    Here's the nutty thing, they are claiming that the cost to business will go down because they can pass all the HST input tax paid through to the end user with the the new scheme. But PST is a business expense now, so it is a tax writeoff to a company now anyway. It would only impact cashflow a bit. Business is interested in improving profit, anything that actually increases the margin, they'll happily keep, there will be no drop in what the consumers pay.

    But the fact that they are leaving it at 7% PST and adding more categories makes it a tax grab. When they brought in GST, it replaced a 12% import/wholesale fed sales tax that consumers didn't see, and it was supposed to revenue neutral, but it wasn't, they made a killing by increasing the taxable items to include everything.

    If they dropped the PST rate to 4% or 5% and increased the number of items that are taxable I could see this being revenue neutral, but this is an out of the blue tax grab to pay for the billion dollar convention centre and the Olympics.

    Most people are going to balk at seeing a 7% bump in cost on many of the thing things that have been tax exempt, in an already tight economy, people will just spend less money, they don't have an extra 7% cash in the bank.
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  7. #7
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    In all fairness 95% of peoples bicycle spending is luxury spending not necessity. I'm sure bicycles were exempted to get people to ride for transportation, not to upgrade to XTR.

    Where this is going to hurt people immensely is in the food department. I spend about 10K a year on food for my family of 4, add 7% and I'd be looking at an additional $700. That would be the $700 that would not get spent on luxury goods like bicycles.

    I just spent 2 weeks in BC (with a few days on the AB side) and while I appreciate the natural beauty of BC, and the all around awesomeness of Nelson, it made me thankful to be a Saskatchewanian. I honestly have no idea how people afford to live in BC. The cost of housing is astronomical, taxes are high (and getting higher) and jobs don't appear to pay any more, if anything they may pay less as people will sacrifice pay to play.

  8. #8
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    The cost of living out here is nuts, where else would an entry level house be $850,000. Even into the interior towns like Revelstoke and Golden, house prices are chasing the values in Kelowna and Vernon.

    Basic groceries will still be PST exempt, so that's unprepared foods, bread and milk, but almost everything else will have tax applied.

    And whether the bike shops are selling commuter bikes or DH/FR rigs, that extra 7% cost on the top may be enough to get people thinking they'll keep whatever they have now for another season, or buy the next model down. The budget people have for recreational stuff won't go up 7% so they will spend the same money, it's just that the bike shop keeps 7% less and the government gets it instead. That's going to hurt a lot of industries out here. It sure seems that the government is trying to kill the golden tourism goose.

    The thing is that 7% is a bad psychological number, for most people that registers as almost 10% instead of 5%, even though it's closer to 5%. If the HST rate was 10% instead of 12% more people would be able to cope with it, as 12% still sounds closer to 15% than 10%.
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  9. #9
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    Quote Originally Posted by Kris
    In all fairness 95% of peoples bicycle spending is luxury spending not necessity. I'm sure bicycles were exempted to get people to ride for transportation, not to upgrade to XTR.
    I disagree that 95% of bicycle spending is on luxury. Maybe the people that hang out on these forums are all about high end bikes, but take a look around you at the local bike rack in Saskatoon or Regina, and you will see mostly inexpensive commuter bikes or CCM mountain bikes. The high end full suspension bike market is a small percentage of the overall bike market, without a doubt.

    Yes, Saskatchewan is affordable - it has the lowest sales tax in Canada after Alberta. Also, their crown corps have a mandate to provide basic services at affordable prices (i.e. car insurance, electricity, sasktel). So, it's not a bad place to live really, from a certain perspective. But, real estate in Saskatoon is the same or more expensive than my hometown in Interior BC. And as much as I like Saskatoon, I'll let you guess where I'd rather live.

    Straight article on HST

  10. #10
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    D Crank, I hear you on bloated Sask real estate prices. I've looked at homes in Nelson and they look to be right on par with Regina, unless you are talking lake front mansions, we don't have those here! The only difference is that in Regina/Saskatoon there are actually jobs that still pay enough to scrap by if one was a first time home buyer now. Vancouver/Victoria have the vast majority of the "office professional" type jobs but living there is totally out of reach for a guy like me (family of 4, IT developer job) unless I was willing to live in a "box in the sky" or commute 2.5 hours a day. I'm not.

    Back to the topic, I guess Gordo is tough to get rid of, what's the alternative? NPD? My hunch is after the tax rises and the post-olympic crash BC's might be ready for something different. Who knows what though?

  11. #11
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    Quote Originally Posted by Kris
    Back to the topic, I guess Gordo is tough to get rid of, what's the alternative? NPD? My hunch is after the tax rises and the post-olympic crash BC's might be ready for something different. Who knows what though?
    Maybe it will pop the real estate bubble and we'll get the price correction that has been coming since 1997. Whatever happens it is not likely to be good for anyone but Gordo's buddies who fund the Lib's.
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  12. #12
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    See, I thought the prices here were not too bad. Maybe, living in Hawaii since I was a kid
    has skewed my viewpoint, but...I picked up my house for 419k, 2500 sq/ft, 5 bed, 3 bath,
    9600 sq/ft property, 100 yrds from the beach, newer house, nice area etc.

    The house I sold on Kauai was 3b/2b single wall construction built in '75 1500 sq/ft home
    8000 sq/ft property, 5 miles from the beach, no view and it was considered a "cheap" house.
    I got 519k for it. There's a reason most people in Hawaii work two jobs (both husband and
    wife) some work more than that. I know I worked 6 days/wk 14-16hr/day for ten plus years
    just so I could afford to buy the house I had.

    I'm not sure if I'd wait too long for the "correction". In the 1980's, the Japanese went to Oahu
    and bought up land like it was going out of style. In some areas they were buying whole neighborhoods.
    There were big purchasing companies in Japan, where a Japanese investor would go and give
    money to them for "A" house. These guys were going to Oahu and paying double the market
    value so they could get the ones they wanted. Housing went through the roof, houses went
    from 80-90k or so and shot up to 160-200k in about a year. Everyone said, oh, it'll come down,
    there'll be a correction etc. Well, it never did happen. What happened is that houses in other
    areas started to match the "expensive" areas. Before the recent "bubble" the typical house
    was around 250k (what we paid for our house 8 years ago), now they're over 500k. I don't
    see them going below 450k or so before they go back up...unless inflation kicks in hard, which
    it might do and money becomes real expensive. The Canadian gov said it won't raise interest
    rates much for the next two years or so, so what that will do in other areas is a question to
    me.

    I think what I'm trying to say is, I wouldn't wait till housing prices go down more than 10-15% more.
    I don't think we'll see a 50% drop in housing prices. The sad reality, is that as the houses
    get more expensive that will kill a large percentage of the populations hope of buying a house,
    and as the gov. taxes get higher (I can't believe how much property tax is here and the stupid
    house purchase tax...$6000!!! WTF!?)...more people will get forced out of the homes they
    have.

    With all these taxes, that sure does buy a lot of needles and crack pipes for the drug addicts
    down on Pandora. I think we should start a movement saying how addictive biking is and
    that we need bike parts all the time to feed our addiction and keep us mentally fit.

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    ^^^haha. Biking is addictive, we need something like a safe-injection site for mtbers, where all necessary supplies are provided for an afternoon to indulge in our addiction.

    I think some correction is happening, at least in the interior, but I hear you that the big correction may never happen. People are just now used to crippling mortgages. The concept of housing is slowly starting to change, I predict that more families will start living in apartments, like they do in Asia, just because a mortgage on $600,000 isn't realistic for the average BC family, which isn't any richer than any other Canadian family.

    Quote Originally Posted by Kris
    D Crank, I hear you on bloated Sask real estate prices. I've looked at homes in Nelson and they look to be right on par with Regina, unless you are talking lake front mansions, we don't have those here! The only difference is that in Regina/Saskatoon there are actually jobs that still pay enough to scrap by if one was a first time home buyer now. Vancouver/Victoria have the vast majority of the "office professional" type jobs but living there is totally out of reach for a guy like me (family of 4, IT developer job) unless I was willing to live in a "box in the sky" or commute 2.5 hours a day. I'm not.
    Yep, depends on your profession big time. This is one reason I picked the profession I did; it gives me the opportunity to potentially live in most decent-sized towns. I got out of the old cubicle jockey life I was living before exactly because it was restricting where I live (I was young at the time so it was an easy transition).

  14. #14
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    Quote Originally Posted by D.Crank
    ^^^haha. Biking is addictive, we need something like a safe-injection site for mtbers, where all necessary supplies are provided for an afternoon to indulge in our addiction.

    I think some correction is happening, at least in the interior, but I hear you that the big correction may never happen. People are just now used to crippling mortgages. The concept of housing is slowly starting to change, I predict that more families will start living in apartments, like they do in Asia, just because a mortgage on $600,000 isn't realistic for the average BC family, which isn't any richer than any other Canadian family.



    Yep, depends on your profession big time. This is one reason I picked the profession I did; it gives me the opportunity to potentially live in most decent-sized towns. I got out of the old cubicle jockey life I was living before exactly because it was restricting where I live (I was young at the time so it was an easy transition).
    Guys the real estate bubble burst in the Golden valley, won't be much longer...same thing in the Shuswap area.

  15. #15
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    Quote Originally Posted by jeffscott
    Guys the real estate bubble burst in the Golden valley, won't be much longer...same thing in the Shuswap area.
    I'm not arguing the bubble won't/isn't/hasn't burst, I just don't think there will be any huge "correction".

    Something, D.crank brought up. In Japan, not very many people own a house. Most people
    either rent or own a apartment/condo. Land is just to sparse and expensive. Same thing is going
    to happen in BC in town centers and surrounding suburbs.

    Problem is, everyone wants to live in N. Van or Oak Bay kind of communities. Go out to bumble
    [email protected] interior BC or up north some where and you can still get in cheap...real cheap. But, there's
    either no jobs, or the place is just too far "out there" for 99% of the population.

    I hate to say it, but you won't see anything less than 400k anywhere near the nice areas of
    Vancouver or Victoria again for a normal nice house.

    Unlike the states where you had a lot of houses purchased on air and a prayer that it would
    sell quick, Canada didn't have as much of that kind of stuff going on.

    IF...

    Interest rates go through the roof (say 15%) then that will force the market down.

    I think....

    Most people selling are selling because they are either moving (from one place to another
    probably chasing a job) or wanting to upgrade. While motivated, they won't sell for a loss.
    The first group will rent (lots of people can't afford to buy and need to rent right now), and
    the second group will just wait it out.

    As soon as the job outlook gets better, and if the Canadian gov keeps it's promise of low interest
    rates for the next two years, housing prices might even go up a bit.

  16. #16
    Bring on the Funk!
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    Gordo needs more money to party in Hawaii and for lawyers to get him off future DUI charges. This cat is a scumbag supreme.

  17. #17
    slaving away in paradise
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    Quote Originally Posted by jazzboy
    Gordo needs more money to party in Hawaii and for lawyers to get him off future DUI charges. This cat is a scumbag supreme.
    And yet he's still in power. That kind of thing always confuses me. We had a guy named
    Fasi who would get elected year after year. He changed parties, became governor and mayor
    of Honolulu, crazy $hit...

  18. #18
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    I still think Canadian property prices are poised to crash. Yes North Van and Oak Bay are fabulous places to live, so is San Francisco, yet the prices there have crashed over 50% from the peak. The high desirability places will always be expensive, but I don't think they will always be as high as they are now. Historically the average house in Canada cost 2.4 times the average family income, currently it is running over 7 times! That is not sustainable. A high desirability place may be closer to 4-5 (rather than 10) while a low desirability place (like my hometown of Regina) will be around 2. So a person in Regina making a upper middle class wage can have a nice house, a fancy car, nice annual vacations, etc. Whereas the person in Vancouver just has the decent house. Difference being from now is that both people can actually AFFORD their lifestyle.

    Either way, I guess I'm just hoping housing becomes affordable for my kids when they are ready to buy in 20 years. I think the key for that to happen is for us to abandon our ridiculous "growth" paradigm. Not that I'm expecting that to happen, "growth" is what keeps the elites getting richer and the rest of us getting poorer.

    Cheers,
    Kris

  19. #19
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    On a positive note, Gordo's party posse has dropped 12% in the polls since they announced the HST, the NDP is actually ahead. They might not even be able to keep their party in line if this tax change gets voted on as a lot of Liberal back benchers are not going to be popular with their local population if it happens.

    The whole super-inflated real estate values (instead of basic stupor-inflated values) in BC happened as soon as the interest rates dropped super low, then the real estate market began feeding on itself. A $750,000 or $800,000 mortgage doesn't seem as crazy when the interest rate is under 5%. But it still is crazy.
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  20. #20
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    Kauaibullit;
    It just happens that not everyone wants to live in N Van or Oak Bay. There's a definite migration of well-educated AND smart folks heading for, as you call 'em, "bumble [email protected]" BC interior towns, and finding the exact lifestyle quality they're looking for. We're finding affordable housing, income opportunities, no traffic worries, and high quality recreational opportunities of all kinds. If that's bumble [email protected], bring it on!

  21. #21
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    Quote Originally Posted by kauaibullit
    I'm not arguing the bubble won't/isn't/hasn't burst, I just don't think there will be any huge "correction".

    Something, D.crank brought up. In Japan, not very many people own a house. Most people
    either rent or own a apartment/condo. Land is just to sparse and expensive. Same thing is going
    to happen in BC in town centers and surrounding suburbs.

    Problem is, everyone wants to live in N. Van or Oak Bay kind of communities. Go out to bumble
    [email protected] interior BC or up north some where and you can still get in cheap...real cheap. But, there's
    either no jobs, or the place is just too far "out there" for 99% of the population.

    I hate to say it, but you won't see anything less than 400k anywhere near the nice areas of
    Vancouver or Victoria again for a normal nice house.

    Unlike the states where you had a lot of houses purchased on air and a prayer that it would
    sell quick, Canada didn't have as much of that kind of stuff going on.

    IF...

    Interest rates go through the roof (say 15%) then that will force the market down.

    I think....

    Most people selling are selling because they are either moving (from one place to another
    probably chasing a job) or wanting to upgrade. While motivated, they won't sell for a loss.
    The first group will rent (lots of people can't afford to buy and need to rent right now), and
    the second group will just wait it out.

    As soon as the job outlook gets better, and if the Canadian gov keeps it's promise of low interest
    rates for the next two years, housing prices might even go up a bit.
    Doh, check out the invermere condo market, that is where Vancouver is going after the Olympics.....or is it time to buy now????

  22. #22
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    Buy dirt, not boxes in the sky. It turns out they leak too.
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  23. #23
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    Quote Originally Posted by rockyuphill
    Buy dirt, not boxes in the sky. It turns out they leak too.
    Yeah right turns out dirt erodes into the Columbia, and also falls in price usually the summer after the condos tank....

    Course we are running out of dirt????

    You know all the dumb ****s that paid too much will never sell.

    Take a drive if 1/3 of BC is for sale then all is good, if 2/3 for sell then look for a rather large correction.

  24. #24
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    As Mark Twain said, "Buy land, they aren't making any more of it." Except maybe in Asia where they keep making islands.
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  25. #25
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    Quote Originally Posted by cdnblur
    Kauaibullit;
    It just happens that not everyone wants to live in N Van or Oak Bay. There's a definite migration of well-educated AND smart folks heading for, as you call 'em, "bumble [email protected]" BC interior towns, and finding the exact lifestyle quality they're looking for. We're finding affordable housing, income opportunities, no traffic worries, and high quality recreational opportunities of all kinds. If that's bumble [email protected], bring it on!

    Well, you can get 5b/4bt on really large properties in Quensel and Hixon for $125K. If you
    can get a job out there, go for it. Not sure if you're offended about my using bumble [email protected]
    but if you're idea of paradise is a place like Quensel and you can make money living there,
    good on ya. Now I do agree that well-educated and smart don't necessarily go hand in hand
    what does that have to do with living in bumble [email protected], and where do you think I think bumble [email protected] is?

    I don't want to live in any large city like Victoria or Vancouver either, it's just way too crowded for my
    liking. But, I also want to be close enough to a city where I can get a job or buy a toaster without
    ordering it from a catalog (been there, done that).


    Kris-
    I think we'll just have to wait to see. I remember my dad, mom, grandfather saying as
    I was a kid that they hoped home prices wold drop too, or at least stay low enough for me
    to buy a house. Well, a house 1/2 block from the beach in Hermosa Bch in 1978 was around
    $30K, that same house (it's still standing, built in 1932) is worth around 1.5 mil (still).
    That's the same from San Diego to Santa Babara. San Fransisco's crash was the result of
    so many people getting stupid loans trying to flip. You had/have too many people owning
    two or more houses trying to get rich. I honestly don't see the prices being that unreasonable
    here in BC (right now).

    My uncle looked at a house on the beach on the north shore of Kauai...one acre, 3bd/2b
    on the beach in 1980 was going for $35K, now 13mil. He kicks himself in the ass every
    time he surfs out there and looks at the house as he walks by. My wifes uncle used to own
    a house in Koloa (Kauai) and a business (Pineapple hut) on over 10 acres of land. He sold
    it in the late 80's for $70k because he thought that "there's no way prices can ever get any
    higher, because no one would ever be able to buy a house then". That property sold for over
    $10M ten years ago (it's no where near the beach on a busy road).

    I've been looking at housing in BC for only 5 or so years, but even then I thought
    the prices were really low (one of the reasons I moved out here). I'm not a trustafarian, not
    rich, hell, I don't even have a job right now (first time since 1982), but I was able to buy a
    house and I only have a high school education (couldn't afford college making $3/hr working
    at Jack in the box).

    End result, I didn't buy my house for speculation, I bought my house because this is where
    I wanted to live and this is what I could afford. If I lowered my standards a bit more, I could
    have bought for $100K less, but would I have been as happy?

  26. #26
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    Quote Originally Posted by cdnblur
    Kauaibullit;
    It just happens that not everyone wants to live in N Van or Oak Bay. There's a definite migration of well-educated AND smart folks heading for, as you call 'em, "bumble [email protected]" BC interior towns, and finding the exact lifestyle quality they're looking for. We're finding affordable housing, income opportunities, no traffic worries, and high quality recreational opportunities of all kinds. If that's bumble [email protected], bring it on!
    Yep, living in Fernie rocks I have to say - no traffic, trails outside my door, world class flyfishing 2 blocks from my house, ski hill is 5 minutes drive (with real powder, not west coast stuff and no crowds), cheap alcohol and no PST just across the border in AB, low crime rate, no pollution, etc, etc. Bumble [email protected] living rules!

  27. #27
    slaving away in paradise
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    Quote Originally Posted by MartinS
    Yep, living in Fernie rocks I have to say - no traffic, trails outside my door, world class flyfishing 2 blocks from my house, ski hill is 5 minutes drive (with real powder, not west coast stuff and no crowds), cheap alcohol and no PST just across the border in AB, low crime rate, no pollution, etc, etc. Bumble [email protected] living rules!

    Fernie isn't too out there. I guess my definition of bumble [email protected] is different than some on here.
    My wife used to go there all the time as a kid.

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