‘Very concerning’: Canada’s standard of living is lagging behind its peers, report finds. What can be done? (poor gdp per capita)

[I am Groot]

1 hour ago, Moonbox said:

and that's one of the biggest problems we have with productivity.  When real-estate speculation is more profitable for people than business/enterprise investment, that's where the money goes.  If was all going to building new places, that would be one thing, but tying increasing amounts of money up into an existing residential market isn't doing anything for productivity.  

If you go on the Globe and Mail site and look up some publicly traded companies you find their return on investment is sometimes in the low single digits. Loblaws, for example, who everyone loves to hate, has a 3.38% profit margin. It does have an 8.85% return on investments, but heck, you could just fire everyone, put that money into buying and selling expensive condos, and almost certainly make more.

[I am Groot]

My sense of the problem is that business is drowning in red tape. Every regulation the government passes not only hems them in but results in a cost. That cost often includes the cost of not only doing what the government wants, but documenting it and filling out forms for the government to prove it. And the forms and regulations keep multiplying. The regulations on natural resources industries are enormous, complicated and expensive. And adding in the mess of climate change has only made it worse. Often much rose.  A big chunk of the costs and delays in building BC's LNG plant, for example, is that BC insisted the power it used must be 'green'. So they had to build a dam first to power the LNG plant.

The ever-increasing costs of satisfying the government's climate reduction demands are scattered and hard to assess, probably deliberately. It's not just the increased cost of energy. And even the tax breaks offered by the government for carbon remission is still a cost added to the economy because it comes from taxes, which are too high. The government giving billions to foreign countries to help them with their climate education is another cost to the economy, because again, it comes from taxes. Or, in the case of the Trudeau government, from borrowing. And, of course, the furious pace of government borrowing has a cost on its own, in increasing interest rates. Not to mention increasing debt servicing costs, which are going to suck going forward.

Why would anyone invest in Canada's resource industry when the same resources are available elsewhere, including in the US, with cheaper labour, fewer laws and regulations, and lower taxes? The answer, of course, is they don't. As for Canadian business, it has come to learn that it doesn't have to invest in new technology. Unless, of course, the government provides subsidies for it. The government will protect inefficient oligopolies like our terrible airlines and worlds-most-expensive internet companies. It will make sure badly run companies like Bombardier never go out of business, and maintain high profits for our big banks - higher than American banks that have much more competition.

Immigration is not the boon to the economy the government keeps suggesting. It brings in raw numbers but not the people who would really help boost our economy. Every poor immigrant means lower GDP per person, and we have a lot of them. We don't validate their credentials or skills nor their claims to language abilities. They submit forms which we accept unless they look too obviously fake. It's not a coincidence that the countries whose immigrants here have the most economic success are those who come from nations with a tradition of English knowledge like India, the Philipines, and of course, much of Europe. But we've made no effort to prioritize applicants from these areas nor discourage them from areas that produce the least economically successful immigrants.

To put it bluntly, if all the people coming in were skilled Europeans or Americans we'd be a helluva lot richer than we are now. Why not the Filipinos and Indians? Because a substantial chunk of them don't plan to stay here. They are not committed to this country. And they plan to take the money they make "home" once they've accrued enough of it. They also have a habit of sending money home, billions of dollars every year, rather than spending it here.

[CdnFox]

39 minutes ago, Aristides said:

As recently as the eighties a home in the burbs on one income and stay at home moms were the norm, not the exception.

Agreed. In fact i would suggest that even in the 90's it wasn't bad, till the tail end.

It really seemed to me that i first noticed things were getting out of whack in the early 2000's, and it was pretty mild. But it just didn't really seem to get better, it just very slowly got worse. I remember around that time hearing realtor friends talk about getting asking and then above asking price on homes more than once for the first time and they were quite surprised.  There was a dip in the recession perhaps but then it was right back to multiple offers, how much OVER asking do you want to put in, etc.

Around 2018 it seemed to get to the point where a lot of people were starting to be permanently locked out of the market. And now we're at a point where probably less than half of the people could afford a home without substantial help from family. Now it's insane.

Most families when i was young had a home, a boat or recreational property or the like, etc.  If i'm being honest, i'd be hard pressed just to afford the fuel we used to spend boating up and down the gulf islands ever summer, the boat would be the easier part.

[CdnFox]

1 hour ago, Moonbox said:

and that's one of the biggest problems we have with productivity.  When real-estate speculation is more profitable for people than business/enterprise investment, that's where the money goes.  If was all going to building new places, that would be one thing, but tying increasing amounts of money up into an existing residential market isn't doing anything for productivity.  

No, that's not correct.  Ironically if it was it would automatically solve our housing crisis.  But in fact it's kind of that the opposite is true.

Despite the high profits available, there actually isn't all that much money going into real estate development in comparison to the size of the market and need.  This is for a number of reasons including it's a nightmare to navigate the red tape. 

But - the observed 'profits' are huge - and the reason for that is the massive price increases. It takes 3 years to build a complex - in that time prices have likely gone up 30 percent or so.  So even with the high costs you still see a very large return because we're not building enough and that drives the profits up.

For most people the real money is in buying the finished work and sitting on it - not building it in the first place.

If we had more money going into real estate development we'd have more homes and prices would be LOWER.

[myata]

2 hours ago, CdnFox said:

It doesn't matter what the work or product is, or it's quality. If it's value is x then x is what they're worth.

Right. Hans makes 10 milligibs in a shift, while Joe only two but has three productive meetings and two diversity sessions. Sell them for the same $100 (equivalent), Hans in his country and around the world because its competitive, Joe in his highly monopolized economy because he can. Another great import monopoly buys Hans milligibs wholesale in Burmany and and sells for 49.95 in Banada it just loves "free market". It doesn't matter at all, all is the same see? Great GDP growth, relative productivity you name it and everybody happy importantly.

I think that's how Canada politicians understand the economy. But the hard stop is there, and its looming. Based on that kind of thinking, difficult to avoid.

Edited July 26, 2023 by myata

[CdnFox]

2 hours ago, myata said:

Of course. You need to show one cut that didn't come back with a vengeance

Sure.  Firearms registry. We don't do that anymore. The billion dollar boondoggle is dead.

Or UI - the cuts to service there were never reinstated.

Medical - the federal medical transfers fell under trudeau - havne't seen them restored yet.

There's quite a few others.

 

 

[ExFlyer]

38 minutes ago, CdnFox said:

Sure.  Firearms registry. We don't do that anymore. The billion dollar boondoggle is dead.

Or UI - the cuts to service there were never reinstated.

Medical - the federal medical transfers fell under trudeau - havne't seen them restored yet.

There's quite a few others.

 

 

BS

"In 2023-24, the federal government will provide a total of $49.4 billion to provinces and territories under the CHT, an increase of 9.3 per cent, or $4.2 billion, from 2022-23"

 

[Michael Hardner]

3 hours ago, Aristides said:

You need $100K a year to afford the rent on a 1 bedroom apartment in Vancouver or Burnaby. In 1969 I was renting a one bedroom apartment in Vancouver for $95 a month. You will have a tough time convincing people they are better off now.

I didn't say we are better off.  We are richer though, on the whole.   

I know.  It's mind-boggling but I have been posting this fact for a long time and there's never been a dispute of the facts: GDP per capita was much much lower but equity was higher, that's the fact.

[myata]

1 hour ago, CdnFox said:

Or UI - the cuts to service

Bah can one really be that naive? A cut to the service has to mean a cut to the bureaucracy. Right? Right?!!! It just cannot be any other way, can it?!!

[myata]

Around the turn of the century my salary was just under 50K, gas was 45c bread $1 and I bought my first house for around 160K.

Today, gas is way more than x3, bread x3 at least, real estate probably way more than x3 but one thing I know for sure: no one in my position back then gets 150K now. No, actually you can see pretty close numbers, higher but nothing dramatic, 20-30%. I can almost bet that other than MP (no information) CEO and some other such, in no profession one can get now a triple of two decades back. Not even a double for large majority, betting. Anyone can do the math?

"No, we have to be a lot richer now look the paper says so".

[Aristides]

1 hour ago, Michael Hardner said:

I didn't say we are better off.  We are richer though, on the whole.   

I know.  It's mind-boggling but I have been posting this fact for a long time and there's never been a dispute of the facts: GDP per capita was much much lower but equity was higher, that's the fact.

Equity isn't higher if it is mortgaged to the hilt and can never be paid off. It's an illusion.

[CdnFox]

2 hours ago, ExFlyer said:

BS

"In 2023-24, the federal government will provide a total of $49.4 billion to provinces and territories under the CHT, an increase of 9.3 per cent, or $4.2 billion, from 2022-23"

 

Ooo - sorry, but i'm afraid not.

You WOULD be right - if the population hadn't increased.  But the cost of health care goes up when that happens. And guess who's been bringing in more people than any other prime minister in history

The federal component of per capita health care funding was actually higher under harper. So he hasn't even restored it to harper era levels.  And NEITHER of them ever got anywhere close to the 50 percent it was originally started at by justin's daddy - remember it was supposed to remain at 50 percent.

So no - you're wrong. Again.  Did you get your answer from ChatGTP? 

[Michael Hardner]

2 minutes ago, Aristides said:

Equity isn't higher if it is mortgaged to the hilt and can never be paid off. It's an illusion.

When are you talking about ?

[CdnFox]

1 hour ago, Michael Hardner said:

I didn't say we are better off.  We are richer though, on the whole. 

Ok, so your argument is that we're poorer, but we're richer.

Unrelated question - would you have to give any notice to your therapist before you fire them?

[Michael Hardner]

11 minutes ago, CdnFox said:

Ok, so your argument is that we're poorer, but we're richer.

Richer on the whole but poorer because of reduced equity.

[Moonbox]

3 hours ago, CdnFox said:

No, that's not correct.  Ironically if it was it would automatically solve our housing crisis.  But in fact it's kind of that the opposite is true.

It's not wrong.  This is something the Fraser and CD Howe Institutes have been warning about for years, along with economists across the country, and even the newspapers have been all over it recently as well.  

You even highlighted one of the primary problems:

3 hours ago, CdnFox said:

For most people the real money is in buying the finished work and sitting on it - not building it in the first place.

Which as far as productivity and GDP goes, it does little/nothing for the economy.  Near-free borrowing costs made real-estate speculation safer, easier and more profitable than investing almost anywhere else.  If you could make money doing that, capital business investment ends up being unattractive and we've seen the rates of both get increasingly unbalanced over the last 15-20 years.  Unsurprisingly, it's come with decreasing labor productivity growth compared to our peers.  

[Aristides]

1 hour ago, Michael Hardner said:

When are you talking about ?

That in the 70's you could pay off a mortgage in 10 years if you really tried. Now a lot of people realize that they will never be mortgage free and actually own their home. In other words, the bank owns most of the equity.

[CdnFox]

1 hour ago, Moonbox said:

It's not wrong. 

I"m sorry but it is.  there has not been a corresponding increase and decrease in other investments and real estate.

In fact at the moment housing starts are down  and new home construction has been fairly stable despite the decrease in business investment.

It's demonstrably wrong.

1 hour ago, Moonbox said:

Which as far as productivity and GDP goes, it does little/nothing for the economy. 

Well - yes and no. They'll be rented out so Technically it does help overall productivity in the sense the word is used economically because the owners of that property will be generating revenues and that means they're worth more per hour than they were without those properties. So it will show up on gdp.

But in the real world - it's not really the kind of 'productivity' we're looking for in the end.

1 hour ago, Moonbox said:

Near-free borrowing costs made real-estate speculation safer, easier and more profitable than investing almost anywhere else.

Not really true. GIC's would be safer and easier and potentially more profitable as we saw during covid when many landlords got their clocks cleaned.

Real estate is  a good investment and a lot of people choose it and wisely so for many, but like i said - it's not rising at the same rate other business investment is falling - nor does the idea that businesses are pullilng out of their industries and investing in real estate show any signs of being true.

Further - the decline in productivity began before the real estate booms we see today.

The problem of productivity has almost nothing to do with real estate i'm afraid. That would be an easy fix.

[Michael Hardner]

8 hours ago, Aristides said:

That in the 70's you could pay off a mortgage in 10 years if you really tried. Now a lot of people realize that they will never be mortgage free and actually own their home. In other words, the bank owns most of the equity.

I agree.  Maybe you think that I am saying that times are good.  I'm not.

[ExFlyer]

11 hours ago, CdnFox said:

Ooo - sorry, but i'm afraid not.

You WOULD be right - if the population hadn't increased.  But the cost of health care goes up when that happens. And guess who's been bringing in more people than any other prime minister in history

The federal component of per capita health care funding was actually higher under harper. So he hasn't even restored it to harper era levels.  And NEITHER of them ever got anywhere close to the 50 percent it was originally started at by justin's daddy - remember it was supposed to remain at 50 percent.

So no - you're wrong. Again.  Did you get your answer from ChatGTP? 

No but all you will get from now on is from ChatGPT

"I apologize if my previous response was not satisfactory. As an AI language model, I don't have personal opinions or access to real-time data, and my knowledge is limited to information up to September 2021. I understand that discussions around political figures and their policies can be complex and contentious.

If you have specific questions or points you'd like to discuss, I'm here to provide information based on my training data. However, please note that my responses are based on the information available up to September 2021, and I may not be aware of any developments or events that have occurred after that date. Also, I don't have access to my training data, but I was trained on a mixture of licensed data, data created by human trainers, and publicly available data.

If there's anything else you'd like to know or discuss, feel free to ask!"

[myata]

12 hours ago, Michael Hardner said:

Richer on the whole

That would be like in South America or Russia, right? They are quire rich there too... on the whole. Getting there, not too far.

[myata]

So in adjusted adjusted GNP:

minus inflation; minus real estate; and minus government spending; per capita how do we compare to one and two generations back?

Wouldn't it be a closer and more meaningful measure of real prosperity?

[CdnFox]

2 hours ago, ExFlyer said:

No but all you will get from now on is from ChatGPT

LOL - well at least you've admitted that you don't have the brains to actually debate me personally   ROFLMAO!!!!!

So let me get this straight -  You are so obsessed with me that you take the time to cut and copy my post, go to another website, put it in to an ai and then copy the result and come all the way back here, and reply to my post and cut and paste something a machine said?      

Wow! - I've certainly had my share of stalker types and obsessive types that spend a lot of their time on me but i must say you're setting that bar to a new height  

[CdnFox]

1 hour ago, myata said:

So in adjusted adjusted GNP:

minus inflation; minus real estate; and minus government spending; per capita how do we compare to one and two generations back?

Wouldn't it be a closer and more meaningful measure of real prosperity?

Well - you got a few of the minuses a little off     But in the end it kind of depends on how you want to look at it.

We have better health care than in the 70's due to medtech advances, we have cell phones and internet which is something they could barely dream of then, so does that kind of thing represent a better lifestyle? Are we richer?

On the flipside we can compare other variables.  For example  if we look at inflation adjusted dollars from 1976 to 2021, we're about the same, but there was a dip in the middle of those two as we recovered from the last trudeau's debt and inflation.   BUT - some costs like housing have scaled unevenly especially in some areas so for the majority of the population they're probably poorer.

Probably the best and most simple measure is to compare ourselves to other similar countries - england, japan, the us, france and germany, etc

And that paints a very clear picture.  We are falling very far behind.  We are worse off.  We should be doing much bettter but we're not. 

And the projections are that we're not going to be for at least 40 years.

[myata]

17 minutes ago, CdnFox said:

And the projections are that we're not going to be for at least 40 years.

In twenty to thirty years if nothing changes (any chance?) we will hit Mexico North and different assumptions and projections would apply.