Small Businesses in Canada want an ’emergency commercial rent relief program’ while the Bank of Canada and CMHC inflate real estate prices to combat COVID-19 – April 13, 2020,
Nothing depreciates faster than commercial real estate, commercial real estate typically has a lot of activity going through it, a lot of forced renovations happen in commercial real estate, the physical structure of commercial real estate is actually a liability if there’s no activity happening in it, commercial real estate gives residential real estate it’s value. I don’t know any person dumb enough as an example to buy a 1 bedroom condo at an inflated price in the middle of nowhere with no commercial activity nearby.
If there are no stores, no jobs, no market activity happening near where you live, in real terms your residential property is worth a lot less than then central banks would like you to believe. Now, the reason I point all of this out is that Canada’s retail sectors and this is true all over the world, retail sectors are hurting because of inflated asset prices.
The cost of inflated asset prices get passed onto consumers, but before that happens the costs get passed on to small businesses who are forced to pay premium leases and rents for depreciating commercial properties. I haven’t even mentioned the compounding damages of minimum wages in Canada and let’s not forget Justin Trudeau added a carbon tax.
Provinces that are excluded from paying Trudeau’s carbon taxes have already added additional energy costs to small businesses who by the way in actuality pay the bulk of taxes in Canada. Every time the Bank of Canada prints money or as they’re doing now, inflating asset prices small businesses feel the pain first!
When a consumer goes to a small business and prices go up, Canadian consumers don’t see the government as the problem, Canadian consumers assume the small business person is being greedy. As an example, Labour unions in Canada go by a mantra says if a business owner can’t pay the labour union wage then you the business owner shouldn’t be in business. A reminder that labour unions refuse to open a business in the private sector they’re protesting, why?
Because labour unions have no business skills, they know nothing about running an honest business, labour unions only know about the mob tactics of extortion and I bring this up, primarily because extortion is a carbon tax, extortion is the minimum wage age. Extortion is also the Bank of Canada printing money to save one section of the economy at the expense of another sector. Extortion is all Canadian taxpayers being on the hook for the CMHC mortgage insurance scheme, which is fueling all of this artificial government fueled asset appreciation.
I’ll put it to you like this if the demands of small businesses in Canada aren’t met, Canadian consumers better get prepared for real inflation! The purpose of money printing is to keep productivity going, printing money for hoarding or none productive reasons will lead to hyperinflation! Canada has a lot of non-competitive industries(Crown Corporations) whose non-market based pricing schemes actually make them a negative for tax collection.
When there’s no competition there’s no price discovery, if small businesses in Canada start to go bankrupt in record numbers, what actually happens is the size of government gets even LARGER! and the cost to finance Government becomes an even larger burden on society.
In Vancouver, their mayor is begging the B.C government not to force him to shrink the size of his local government, why?
Because when the size of government grows, things the private sector should have been doing, like garbage collection as an example, the government does and the government is usually paying an inflated price to do something the private sector would have done more efficiently, now when the government can’t do the things the private sector should have been doing and the government makes it too expensive for the private sector to take on the burden the government is forced to abandon, what you get is a domino effect, this is how economic collapses happen!
Canada, all I can say is prepare yourselves accordingly!
Interesting times ahead!