Canada’s Public Sector Job-Creating Machine won’t be put to any test until there’s a U.S economic downturn – January 6, 2020,
When I was growing up, the thought of a decade of near-zero percent interest rates would usually mean that there was some sort of economic depression. Fractional reserve banking operates differently when interest rates are normalized, even Keynesian economics operates differently in a market-based interest rate environment. However, there’s been a demand for a low-interest-rate environment and during this low-interest-rate environment, the Canadian government, namely Justin Trudeau’s government has deemed it wise to put the Canadian people in more debt in hopes that this investment will blossom into something beautiful later on down the road.
Now, let’s be honest, Canada is a beautiful place to live NOW, the fear for people like me, is not the here and now it’s the projections of the future. We’ve put a lot of restraints on the Canadian economy, there’s a new idea floating around Canada that fossil fuels are unacceptable in Canada, all fine and good if that’s what you subscribe too, but understand that the energy sector pays the public sectors bills.
Now, there’s a lot of talk about Canada being a hub for innovations, which is great, I hope we will be, the problem with this is that tech jobs aren’t entry-level, you have to be a highly educated person to land one of these tech jobs and with the wrong policies in place, Canada could end up with the same problems California currently has. Which are a lot of people that would have been regulated out of the job market and a government that will assume that in order to fix the problem they’ll need to grow the size of government via more Welfare programs?
So, minimum wages and rent controls, for the most part, are wage and price control ideas that aren’t even debated in Canada. Understand that regulations raise the barrier to entry in a job market and regulations similar to higher taxes actually benefit the job creators and Sellers and not the employees, buyers and consumers. The people at the bottom paying the retail prices while the people or entities at the top get the wholesale prices. As higher-paying jobs that people could start from at an entry-level position disappear, the middle class begins to change and being that Canada has a lot of wage-related regulation, it’s only natural that the Canadian voter will assume that raising the minimum wage and using the power of government to tac on more regulations will solve the problem, this is what worries me about Canada in the long term.
Because regulations hurt an economy the most once deflation occurs. In Canada, I have to remind the reader that we have a higher quality of life than America, yet the Loonie is devalued, why? It’s because primarily our economic system only works so long as we can take advantage of America on trade. Eastern Canada is broke, without Western Canada, Canada as a whole would have a currency crisis based on how our economy is structured today. Quebec runs a perpetual deficit and most of Eastern Canada is reliant on supply management schemes, Crown Corporations, and Public Sector jobs.
During an economic downturn when public sector services should be cut, chances are they won’t be, nor can they be in many instances because Canadian consumers who’ve become entitled to particular services will be shocked and dismayed once the word comes out that we can no longer afford it, now, in my opinion, the likely scenario is deflation of the Canadian dollar, the problem with deflation of the Canadian dollar is that it’s already been deflated, worse than that Canada has been losing its manufacturing at an alarming rate.
Losing manufacturing makes Canada more dependent on imports when Canada becomes dependent on imports, the Loonie can’t get too low, otherwise real inflation starts to hit Canadian consumers and there’s only one way to correct that, which is to raise interest rates, being that consumer debt is at an all-time high in Canada, all I can say is Canadians ought to be prepared because although Canada has a market economy, there are socialist elements everywhere. Even if you like socialism, realize that it’s expensive, universal health care for Grandma and your newly arrived refugees requires a robust private sector to pay for it all.
Canada is already living way above its means and sure things look and feel great now, but because of the prevailing politics in Canada and a lot of newly arrived Canadians, don’t be surprised if during an economic downturn that everyone assumes it will be an easy economic fix during an economic downturn. The article you can read below talks about Canada’s supposed job-creation machine? Please pay close attention to the types of jobs being created.
Certainly, business leaders have consistently complained that they have hundreds of thousands of jobs still vacant. And wages, rising at 4.5 per cent, or double the rate of inflation, seem to indicate workers remain in demand.
Some blamed the size of November’s job slump on public-sector workers who were no longer needed after the fall federal election.
Blip or trend? This week will test Canada’s job-creation machine: Don Pittis | CBC
Yes, in Canada high paying jobs are being left vacant, do you know why? If you’re highly skilled, Canada with its high cost of living might be last on your list as a place to live. If newly arrived highly skilled workers are using Canada as an entry-level country to go to America.
The Canadian dollar is lower than the American dollar and via equalization payments, the cost of living everywhere in Canada is more expensive than most U.S States. As bad as things are in California and New York, their real estate market is comparable to Toronto and Vancouver if you’re a person of means, a highly skilled worker, why would you settle for Canada, lower-valued Canadian dollars, that will get eaten by the high cost of living? Remember in America, health care is private and if you’re a highly skilled person making a lot of money, universal health care doesn’t serve you.
When you hear about the health care horror stories in America, it’s usually lower-middle-class or poor people. An engineer will be able to pay for Private health care and probably do so gleefully because they won’t have to worry about ridiculous wait times, that plague Canada’s universal health care system.
Smart people tend to make smart decisions, this is why it’s always wise not to over-regulate your economy. I’m not against regulations entirely, but Canada’s cost of living is high because we have to finance our growing public sector, making matters worse are crown corporations, which stifle competition in particular HIGH PAYING industries.
Thank God the American economy hasn’t crashed yet, people forget that the last time the U.S economy crashed, it spooked Canada’s financial sector, a lot of lenders left Canada and had to be drawn back with favorable lending conditions, which of course has led to more and more Canadians being stuck in the consumer retail lending trap.
Being that Socialist policies dominate Canada’s political system imagine what Liberal, NDP or even Conservative government might impose on Canada’s financial sector in the event a major economic crash happens? The writing is on the wall if Trump isn’t re-elected, the stock market will crash, if Trump is re-elected, the market might still crash, this time around Canada is on the wrong side of history, especially if we continue to punish western Canada for making money from oil.
Interesting times ahead!