Canada's economy sinking in red tape

[Argus]

 

Did you know our economy is expected to grow just 1.5% this year? The US economy is expected to grow by well over 3% and the EU by 2.5%. Why are we lagging? Because of ever increasing taxes, red tape, and governments that are hostile to business and throw up roadblock after roadblock to prevent economic development. Canadian business expects to invest less this year than last year, and new business startups are down 50%.

When governments raise minimum wages, add reams of new regulations, double utility rates and treat farmers, entrepreneurs and professionals as if they were robber barons, that discourages investment.

Add the uncertainty caused by our governments’ obsession with “green” policies and who is going to invest their life savings in a new business or their shareholders’ billions in a pipeline?

http://torontosun.com/opinion/columnists/gunter-the-canadian-economy-is-hurting-thanks-to-poor-government-decisions

[turningrite]

I think much of what you complain about could come under the heading 'these things too shall pass'. Ontario has elected a PC government, replacing 15 long years of bizarrely ideological  Lib governance, Quebec could soon have a more conservative and pro-business party in power, Alberta will likely change its government by next year and B.C.'s current government is hanging on by a thread. And a rational person would believe that by sometime in 2019 we'll have a different party in power in Ottawa. Unfortunately, Trump's Canada-bashing trade rhetoric may be giving JT a boost. Otherwise, the current government in Ottawa seems hopelessly unable to grasp the precarious circumstances the country faces and prior to the Trump-bump it was becoming increasingly clear, according to polling, that JT's crew was testing voters' patience. 

[Argus]

32 minutes ago, turningrite said:

I think much of what you complain about could come under the heading 'these things too shall pass'. Ontario has elected a PC government, replacing 15 long years of bizarrely ideological  Lib governance, Quebec could soon have a more conservative and pro-business party in power, Alberta will likely change its government by next year and B.C.'s current government is hanging on by a thread. And a rational person would believe that by sometime in 2019 we'll have a different party in power in Ottawa. 

The problem is most people don't make a quick connection between government policies on business and the environment, and the economy. That's especially so where government props up the economy with borrowing. How much have interprovincial trade barriers hindered our economies for years? But is there any pressure from the voting public to do anything about them? Nope. People like government which spends money and is 'nice' - which often are simply synonyms in their minds. Governments which slashes jobs and spending draw howls of protest and upset people. It's all too easy to just vote for the 'nice' people so that things are calm and peaceful, as they've been with Trudeau. 

If Ford actually tries to cut back in Ontario there are going to be mobs of screaming, angry people in the street, with sympathetic coverage from the media. We'll see how long the public is willing to support that... 

[cannuck]

Yes, Argus pretty much hit this on the head.   It is not just feds and provinces, muni governments have drifted far enough left in much of the country to become a huge impediment to doing business.  With today's world of capital mobility, the answer is often to do the bulk of the heavy lifting in another country (i.e. manufacture in China, source tech in the US, etc.).  Killing the entrepreneurial spirit of the country is far more damaging than most realize - it is THE only source of wealth creation.  Letting government build an economy run by the banksters serves only to ingrain wealth redistribution by institutions as the raison-d'etre of regalation.

On a personal level:  I have two manufacturing projects that have been developing over many years.  The off-the-shelf components are 100% NOT available in Canada (any more) and those things requiring development I can no longer find anyone in Canada capable or interested in providing or supporting.  Worse yet, the peculiar "North of 49 penalty" means that commodity content (steel, fasteners, concrete, etc.) all cost 50% more than I can source the exact same components in the US - and in other cases double the cost of getting them from China (at the same level of quality).

Edited June 19, 2018 by cannuck

[PIK]

On 6/17/2018 at 1:04 PM, Argus said:

The problem is most people don't make a quick connection between government policies on business and the environment, and the economy. That's especially so where government props up the economy with borrowing. How much have interprovincial trade barriers hindered our economies for years? But is there any pressure from the voting public to do anything about them? Nope. People like government which spends money and is 'nice' - which often are simply synonyms in their minds. Governments which slashes jobs and spending draw howls of protest and upset people. It's all too easy to just vote for the 'nice' people so that things are calm and peaceful, as they've been with Trudeau. 

If Ford actually tries to cut back in Ontario there are going to be mobs of screaming, angry people in the street, with sympathetic coverage from the media. We'll see how long the public is willing to support that... 

The unions will put of a fight over ford ,but the people are behind him. Anybody with a brain in ONT knows we have to change and change can hurt, and personally alot of us have been hurt because of the last 15 yrs and it is time for the unions to back the fuck off .

[paxamericana]

I see a lot of disdained in regards to business regulations. I can only say that we went through the same in America during the Obama era. Perhaps a tax cut similar to the US would boost spending or at the very adopt policies that encourages unilateral free trade allowing economic growth. Because if these trade tariffs are in place, your economy will be expecting a recession. 

Edited June 19, 2018 by paxrom

[Argus]

I continue to watch those 'searching for a home' type shows on HGTV, and be amazed at how low houses cost just about everywhere in the US compared to Canada. It seems like prices are, across the board, about half what they would be in most of Canada. Of course, when you get government regulations and surcharges adding an average of $168,000 to the price of every new house it's small wonder.

And btw, that's only the most obvious way housing is cheaper in the US. They can write off their municipal taxes on their federal taxes, and also write off their mortgage interest.

http://business.financialpost.com/real-estate/regulations-cost-single-family-home-buyers-an-extra-229000-on-average-study

[paxamericana]

1 hour ago, Argus said:

I continue to watch those 'searching for a home' type shows on HGTV, and be amazed at how low houses cost just about everywhere in the US compared to Canada. It seems like prices are, across the board, about half what they would be in most of Canada. Of course, when you get government regulations and surcharges adding an average of $168,000 to the price of every new house it's small wonder.

And btw, that's only the most obvious way housing is cheaper in the US. They can write off their municipal taxes on their federal taxes, and also write off their mortgage interest.

http://business.financialpost.com/real-estate/regulations-cost-single-family-home-buyers-an-extra-229000-on-average-study

Yes i. thought it was nuts you guys take 20 plus years on a mortgage. In the states we finish a mortgage in about 7 years and move on with our lives. 

[Argus]

34 minutes ago, paxrom said:

Yes i. thought it was nuts you guys take 20 plus years on a mortgage. In the states we finish a mortgage in about 7 years and move on with our lives. 

Well, if I could write off my municipal taxes and mortgage interest that would save me about $10,000 a year. That's on top of the fact my house would cost a couple of hundred thousand  less than what it did. I owe about half what my house sold for now, after 4 years. But that's because of a 25% down payment and multiple extra payments over the last couple of years. Most people don't have that much disposable income, though.

Edited June 19, 2018 by Argus

[turningrite]

Housing prices in the U.S. are very much dependent on where you're buying, as is the case in Canada. If you want to live in a small town or city in Canada, particularly in Atlantic Canada, you face housing prices at levels comparable to those in many relatively inexpensive American locales. On the other hand, if you want to live in or near cities like New York, San Francisco or Los Angeles, you'll probably face housing prices very near to those seen in places like Vancouver or Toronto. I guess the biggest difference is that wages in the U.S., at least for highly skilled professionals, tend to be higher than is the case in Canada. The U.S. features generally lower taxes and a lot more variety in terms of cities to which one might move and it has more employment options as well, so overall many people could be better off living south of the border, if they're legally able to do so. But people often choose to live where they do for reasons other than mere financial considerations, including political culture, crime rates and, of course, being close to social and family support networks.

[paxamericana]

1 hour ago, turningrite said:

Housing prices in the U.S. are very much dependent on where you're buying, as is the case in Canada. If you want to live in a small town or city in Canada, particularly in Atlantic Canada, you face housing prices at levels comparable to those in many relatively inexpensive American locales. On the other hand, if you want to live in or near cities like New York, San Francisco or Los Angeles, you'll probably face housing prices very near to those seen in places like Vancouver or Toronto. I guess the biggest difference is that wages in the U.S., at least for highly skilled professionals, tend to be higher than is the case in Canada. The U.S. features generally lower taxes and a lot more variety in terms of cities to which one might move and it has more employment options as well, so overall many people could be better off living south of the border, if they're legally able to do so. But people often choose to live where they do for reasons other than mere financial considerations, including political culture, crime rates and, of course, being close to social and family support networks.

Yes I agree, the housing prices can be comparable in places but generally speaking the salaries are higher in those areas of high housing cost down south.  

You are also right, there is a non financial cost attributed to living where you choose to live. 

In the states, we are more financially minded in that a lot of us coming out of school with huge student debt want to chase the opportunity available. That usually means uprooting to a new area and taking a job offer that allows us to advance our career. There is a opportunity cost associated with choosing to stay in one place such as  growth opportunities. I suspect the issue is similar for  Canadians as well. 

[bush_cheney2004]

5 minutes ago, paxrom said:

...In the states, we are more financially minded in that a lot of us coming out of school with huge student debt want to chase the opportunity available. That usually means uprooting to a new area and taking a job offer that allows us to advance our career. There is a opportunity cost associated with choosing to stay in one place such as  growth opportunities. I suspect the issue is similar for  Canadians as well. 

 

Agreed, but Canadians have much less opportunity across the country compared to the U.S.    That's why many Canadians go to the USA for employment/growth (so called "brain drain").   Alberta is only now recovering from the oil price shocks of 2014, forcing more diversification from the "oil patch".

Edited June 19, 2018 by bush_cheney2004

[paxamericana]

2 minutes ago, bush_cheney2004 said:

 

Agreed, but Canadians have much less opportunity across the country compared to the U.S.    That's why many Canadians go to the USA for employment/growth (so called "brain drain").   Alberta is only now recovering from the oil price shocks of 2014, forcing more diversification from the "oil patch".

I was going to not say that to spare their feelings.... now we look like them with the smugness.... sigh.... 

[bush_cheney2004]

3 minutes ago, paxrom said:

I was going to not say that to spare their feelings.... now we look like them with the smugness.... sigh.... 

 

No worries...this has been discussed at length here many times.   Canada's economy presumes unfettered access to the U.S., and that includes labour.

[Argus]

 

1 hour ago, turningrite said:

Housing prices in the U.S. are very much dependent on where you're buying, as is the case in Canada. If you want to live in a small town or city in Canada, particularly in Atlantic Canada, you face housing prices at levels comparable to those in many relatively inexpensive American locales. 

compare these. This is the average housing price in the 100 biggest US cities. Only NY and LA are high, and their averages are likely thrown off by the number of super rich homes there. https://www.kiplinger.com/tool/real-estate/T010-S003-home-prices-in-100-top-u-s-metro-areas/index.php

This is not as complete but you'll see there is no city they list with an average house price lower than $250k

https://www.cbc.ca/news/business/crea-house-prices-1.4487522

 

[bush_cheney2004]

Housing prices in Canadian dollars are not directly comparable to housing prices in the USA/U.S. dollars.