Multiple reasons To Be Optimistic About the Canadian economy, The cost to service Canada’s Public Sector is What’s Worrying Investors – October 21, 2019,
By almost every metric Canadians in 2019, have a better standard of living than Americans, however, under Justin Trudeau, Canada has been having a harder time attracting new investment. Cheap money slushing around via historically low-interest rates don’t tell the full story of the Canadian economy, actually cheap money is going to make the problem in Canada extremely hard to pinpoint in the event the United States has a recession. Geographically, it’s very hard for Canada to have a recession if Canada has a recession, you’d have to point to policies.
In Canada, we fear a higher valued currency net to the Greenback primarily because in the event Canada’s currency becomes too high, the benefits for a lot of businesses to be here start to dwindle, most Canadians didn’t understand what the Trump Steel and aluminum tariffs were all about, sure the CBC told one side of the story, but the reality is that lot of companies that are located in Canada are here primarily to sell into the United States, this of course with a lower loonie equates to Canadians taking away U.S jobs unfairly.
Now, what’s actually happened under Donald Trump is that in the event a moderate Democrat takes the office in the United States, that individual at their disposal will be able to impose tariffs on Canada to appease the blue-collar American workers. Currently, American Democrats are going through a Socialist faze, ut if Trump wins a second term, chances are the Democrat Party will shape up and get back to speaking common sense to the American voter. With that said, if Trudeau wins the election tonight Canadians better pray that America doesn’t go through an economic downturn because the costs to run this country are exploding.
Public Sector workers DO NOT WORK FOR FREE
There’s a cost that the private sector in Canada has to pay for in order to keep Canada’s Public Sector solvent. In Canada, we have something Americans don’t Equalization payments, Ontario as an example is in more debt than California, however, if a person were to come to Ontario or to a major city in Ontario and compare it to California, a person could easily make the argument that it sure doesn’t look like Ontario has more debt than California and the reason for this is that Canada’s public sector, which includes construction workers, waste management etc.
Now in Ontario and Alberta unlike most of the other provinces, the government even owns the electricity sector, what’s hard for people to grasp when a government opts to indulge in deficit spending is the cost pay for PUBLIC SERVICES. If the U.S goes through a recession, it has to be noted that it’s not guaranteed that interest rates will go negative, furthermore just because interest rates go negative doesn’t mean that lending will be more lenient, banks can always raise fees, to adjust for losses they’ll occur. Banks might actually start to have more stringent lending policies in a negative interest rate environment, in countries like Switzerland where it’s illegal for a politician to run a deficit, an economic downturn is simply, the people simply consume less, but because their government isn’t deficit spending Switzerland doesn’t have to worry about servicing debt in the event of an economic downturn.
Canada, on the other hand, does have to worry about servicing its debt in the event of an economic downturn and this is where regulations and expensive Unionized Public Sector workers become extremely problematic. Sure, Prime ministers and Presidents can bail out big corporations during an economic downturn, but you see the market can change how it values your currency or how it calculates it’s future projections for your countries ability to pay back debts. This is, of course, is what led to the Canadian dollar at one point being half the value of the U.S Greenback.
The Jean Chretien Liberals had to make cuts to almost everything to bring the Canadian economy back and truth be told, in their effort to make the economy better, they allowed banks and insurance countries to operate differently. CMHC wasn’t always involved in Mortgage Insurance, now Canada has a Crown Corporation central bank and a Crown Corporation mortgage insurance facilitator, most people have a hard time comprehending the problem this causes.
However, if you read the article written by Don Pittis, he like many other people who don’t understand the disaster that’s coming gloss over the fact, that the Canadian housing market is artificially propped up, meaning that real market demand isn’t the actual driver of housing development in Canada.
1. Housing
After a slow patch Canadian houses are selling again. And while they may have reconsidered for a while, there are signs that the condo builders who have filled skylines with cranes are making too much money to stop. Some have pointed to the recent slump in New York condo prices as a warning, but there are reasons why Canadian cities are different.2. Immigration
One of the differences between Canada and many other places is that the country’s welcome mat means the population, housing demand and economy continue to grow. Many of those people come with money in their pockets, feeling Canada is a safe place to keep it. A report last week showed that one in five homes in Canada is bought by someone who arrived in the last 10 years.7 reasons Canada could escape economic doom: Don Pittis | CBC
Do people remember when immigrants or foreigners purchasing property in Canada was a conspiracy theory? So I ask you the reader, do immigrants have the same creditworthiness as Canadians, do they also know the importance of paying their mortgages in the event of an economic downturn? Now, the reason why I brought up the words demand, is because Don Pittis, similar to most politicians, prefer to pick winners and losers, so because housing all over Canada isn’t meeting the demand of what people want, renters are getting the shaft, during an economic downturn, the forgotten Canadians, as I’ve been saying for years now, are simply going to have to learn things the hard way.
Investment in Canada is drying up and this is concerning, because, investors look at the long term outlook of a country, immigrants come to Canada with expectations and there’s a myth brewing that all of these immigrants aren’t a strain on Canadas Public Sector, anyway, I’m being as optimistic as I can be, but let’s pray there’s no economic downturn on the horizon. Because if there is, a lot of unexpected problems are going to occur and they won’t be easy to fix.
Has Toronto’s rental market hit its limit? | CityNewsToronto
People in Toronto are afraid to move as rent prices skyrocket | blogto.com
Interesting times ahead