Condo Fees market in crisis for Some B.C. condo buildings, who are unable to buy insurance, The Problem with ICBC – February 15, 2020,
Western Canada, in general, hates the Liberal Party of Canada, British Colombia isn’t fond of the Conservative Party either, B.C is anti-establishment, the problem is B.C is also opened to Democratic Socialism, which in reality is rearranging of laws to serve the Commune. By this I mean, there are a lot of laws in British Columbia which are anti-free-market. Do this day a smile comes over my face every time I think of ICBC.
Now, for those of you who don’t know what ICBC is, well it’s a Provincial Crown Corporation, created in 1973 by the NDP government of Premier Dave Barrett. The original purpose of ICBC was to provide universal and affordable compulsory public auto insurance in British Columbia by operating on a non-profit basis. Now, although many people in B.C, want to frame the modern-day disasters of the ICBC on Christy Clark’s BC Liberal government, the reality is that because it’s was anti-free-market it causing a plethora of economic problems, that in times prior were being covered up by B.C’s prosperous Private Sectors, namely their travel and tourism.
The problem with Socialism is what happens when there’s an economic downturn, with Democratic Socialism, there’s an assumption by its believers that the Government has the power to attract capital by simply snapping its fingers. Unfortunately, investors and the private sector doesn’t operate this way, the private sector operates based on historical context. If during periods of economic hardships, it’s likely that the Government will Nationalize or “provincialize” an industry, smaller companies that won’t profit leave ahead of time.
With that said, I want you to take a look at the regressive taxation schemes that currently exist in British Colombia
Climate Change Taxes – Here’s a list of all the taxes people pay on a litre of gas in B.C.:
- Provincial motor fuel tax (Metro Vancouver) — 1.75 cents
- Provincial motor fuel tax (everywhere else in B.C.) — 7.75 cents.
- B.C.’s carbon tax — 8.89 cents.
- The B.C. Transportation Finance Authority tax — 6.75 cents.
- TransLink tax (If you live in Metro Vancouver) — 17 cents, increasing to 18.5 cents on July 1.
- Transit tax (If you live in Victoria) — 5.5 cents.
- Federal excise tax — 10 cents.
- Finally, pay the five per cent Goods and Services Tax on top of the total price.
Climate Change, Democratic Socialism and The NDP Government
Now, if you’re one of those people who believes in Climate Change, you do understand, that apartment buildings a Condo is a major contributor to carbon dioxide emissions annually? Now, the difference with Condos as opposed to rental units is the condo boards ability to reject certain proposals to raise strata fees. You’lll notice that if you read the vancouversun article at the bottom of this posts, that they use, the elderly as their example, guess which demographic operates on fixed incomes? Now, try to comprehend how the climate change agenda with all the added regressive taxes in B.C clashes with potential challenges in the heavily regualted B.C insurance market.
What is the carbon footprint of a building?
Buildings and their construction together account for 36 percent of global energy use and 39 percent of energy-related carbon dioxide emissions annuallyHow do buildings contribute to climate change? | curbed.com
Now, as an investor, you have to look at the future outlook for what it is and not what you imagine it to be. As the cost of living rises, there will be calls from the Democratic Socialist voters for the Government to do something about it. Now, when the government makes changes, the institution that get’s hurt the most is usually the insurance companies. When more and more people call the insurance company to make a claim, there has to be money there to pay out the claim.
Now, you might not see or understand the correlation, but in a simple to understand terms, insurance companies don’t have an unlimited supply of income, real insurance companies are for-profit and have to find ways to make a profit in order to meet the demands of their claimants as well as their shareholders. The real problem with an Insurance Corporation of British Columbia is what it does to its insurance market as a whole.
So, as an example in Ontario, Allstate can offer Rental and Car Insurance, this would basically be illegal or uneconomical in British Colombia, so because Allstate doesn’t or has a small foothold in B.C, they’re obviously going to limit their exposure to other areas of the B.C insurance economy which are potential ticking financial timebombs waiting to explode.
In Venezuela, their Democratic Socialism model wasn’t instantly authoritarian, it was a slow PROGRESSION into State-owned enterprises and things were good until the Price of Oil went on the decline, because you see Venezuela had become dependent on imports, so when it’s export oil lost its value, there existed no other industry to pay the public sector bills, all of a sudden private companies began rejecting their currency which was pegged to oil and the Venezuelan government and the people who supported Democratic Socialism, early on, assumed that this was an easy problem the government could fix, which the Venezuelan government did try to fix by nationalizing private companies.
But before the Venezuelan government id this, the Venezuelan government made sure it demonized its private sectors, by saying private businesses were putting profits before the people and therefore it was in the Governments right to nationalize private businesses, well once word spread that the Venezuelan government was doing this, more and more private companies stopped doing business in Venezuela.
Now I know this because I’m an investor, however, what is often the case is that the Venezuelan story is framed in conspiracy theory terminology, because the Commune wants to believe that Socialism works, which is fine, to me, but understand, that the NDP government has historically taken the wrong approach to economics and B.C unlike other provinces in Canada, has actually been able to prosper better than most under NDP leadership, being that their trave and tourism industry along with manufacturing and energy industries have been profitable enough to pay those massive public sector bills.
However now, there’s a Climate Change agenda in the air and this climate change agenda is not only taking jobs away in key sectors of the B.C economy, it is also eating public sector funds while at the time complicating their financial markets. I’m not entirely sure what to make of this Condo fee crisis, but knowing what I know about the insurance market, the Climate Change agenda clashes with their ability to make a profit, especially in B.C, where IBC isn’t an aspiration, it’s the reality!
‘Strata market in crisis’: Some B.C. condo buildings unable to buy insurance | VancouverSun.com
Interesting times ahead!
Thank you for the sensible critique. Me and my neighbor were just preparing to do some research on this. We got a grab a book from our area library but I think I learned more clear from this post. I am very glad to see such fantastic information being shared freely out there.