Toronto malls luring condo builders, Is fraud getting worse in Canada? No Mention of CMHC- July 25, 2019,
Condos near shopping malls, a no brainer right? Apparently, Toronto doesn’t have enough Condos, apparently, there’s a huge demand for expensive condos for mixed-use developments, online sales are taking over, a great way to combat it is a mixed-use Mall Condo? An interesting part of the thestar.com article I point to below is the section that reads the following:
“In most other parts of the world, including Canada, malls aren’t failing at anywhere near as high a rate as in the U.S.” he said.
That’s because in the U.S. the local planning system doesn’t seek to regulate commercial activity almost at all, he said. What you have there as a result is what Toderian calls “massive overstoring” — five times the retail as you have in Canada.
“In Canada we regulate and plan the amount of commercial space in a city. There is such a thing as too much retail. Because of this we don’t have the same rate of failed malls,” Toderian said.
An interesting observation, but the reality is in America shipping goods to consumers is whole a lot cheaper than it is in Canada, U.S consumers per capita also have way more options than do Canadians, plus America’s lack of regulations in commercial activity is why retailers tend to be more nomadic, whereas, in Canada where competition isn’t as fierce, retailers simply raise prices and Canadians pretty much pay for the inflation.
Canadians and we’re not alone in this are subsidizing failing malls and failing business. A major portion of what is destroying U.S malls is logistics. Canadian logistics revolves around Canada Post, U.S Logistics is far more competitive and diverse. This has a huge effect on the Canadian economy when you compare it to the U.S economy.
This is also contributing to rising commercial space prices in Canada (which is something I frequently point out) puts into play the Canada Mortgage and Housing Corporation (CMHC). Mortgage-backed securities in Canada, benefit the residential real estate market, it’s not like there’s a huge domestic demand for condos, but there’s a huge demand for money launderers for LIQUID prime Real Estate in Canada.
There have been quite a few failed Condo development projects in Toronto that I know of personally. In the 1990’s failed Condo developments would sometimes turn into Rental Properties, but this doesn’t happen much anymore because rental apartment buildings are looked at as a total liability in Canada. Most of the investors in rental properties in Canada are long term visionaries, $1500+ for a bachelor rental apartment in Toronto is cheap and is unaffordable for most renters, rental prices at $2400 for a 3 bedroom have a lot of people in Toronto simply not paying their rent on time if at all.
I know quite a few people who rent out their homes who have to deal with this reality frequently, it’s expensive to fight it and you can’t evict people during winter months, plus the judge will usually side with tenant in some way shape or form, in the end, if you’re a landlord whether the tenant pays or doesn’t pay, you as the landlord have to swallow the losses and if you as the landlord have a mortgage, energy and maintenance bills to pay, the tenant wins and you lose and eventually you’re going to look to flip your property, possibly at a loss.
The money launderers, well they simply have a family member, friend or partner check on the property every once in a while, the money launderer usually won’t rent out their space, because that’s what they’re using to wash their money a nice flip is all they need to legitimize their washed money and if the property goes up in value, even better!
You see in the heart of the CMHC created rental price inflation disaster is money laundering which is driving mortgage prices up. Being that Condo development is replacing rental apartment development the worse the problem gets the more creative condo developers are having to be. It’s extremely important to understand that Money Laundering is a huge part of Condo development in Canada. CMHC became a huge beneficiary in 1999, when Canada, dropped its version of Glass–Steagall legislation which is in simple terms was separating commercial and investment banking.
The main difference between investment banking and commercial banking is that investment banking typically deals with purchasing and selling bonds and stocks for companies, and also helping them issue IPOs, while commercial banks primarily deal with deposits or loans for companies or individuals
To get a better understanding of why Canada is a safe haven for money laundering consider this:
During the peak of the 2008 financial crisis, the Bank of Canada, along with the Canada Mortgage and Housing Corporation provided up to $110 billion dollars of liquidity support to Canadian banks. Of this amount, $69 billion was part of the CMHC mortgage insurance program, a facility set up in 1954 to handle such situations.
Now, allow me to give a brief timeline of CMHC intervening into the MORTAGE market in Canada.
- In 1996, CMHC introduced “emili”, an automated insurance underwriting system that moves application approval times from days to seconds—making it easier for Canadian homebuyers to obtain mortgage loan insurance.
- In 1999, the National Housing Act and the Canada Mortgage and Housing Corporation Act were modified, allowing for the introduction of a 5% down payment—a change launched as a pilot in 1992, extended and finalized in 1999—removing a significant barrier for first-time home buyers. CMHC also expanded its activities internationally and launched the Canadian Housing Export Centre (later renamed CMHC International) to share Canada’s housing expertise with the world.
- Housing affordability received a boost in 2001 through CMHC’s introduction of Canada Mortgage Bonds, aimed at ensuring the supply of low-cost mortgage funding and keeping interest low.
Canada is a safe haven for money laundering, I have to constantly remind readers that the Canadian dollar shouldn’t be as low as it is, especially if you look at Canada’s standard of living in comparison to America’s, why the Canadian dollar is low is that we have to subsidize our public sectors, in which CMHC a Crown Corporation of the Government of Canada plays a major role in assuring that public debts are properly serviced, how are these debts serviced you ask? silent taxation, known as the inflation tax. It’s simple to understand once you understand what makes Canada a money-laundering paradise.
The precedent has already been set of what will happen if there’s a market crash in the Canadian economy. I don’t even hear Maxime Bernier talking about housing affordability in Canada. I’ve never worried too much about immigration because once you remove government welfares, people that don’t want to contribute to Canadian society will self deport. The problem, that will become a major problem in Canada moving forward is the cost of living, Canada has a lot of land, there are a lot of rural communities already suffering and it’s going to get worse as the blue-collar classes opt to avoid smaller towns and cities because of inflation.
In Nova Scotia as an example, the financial numbers don’t make sense, so places like New Brunswick, Nova Scotia, and others are not only experiencing a brain drain, they’re also experiencing a dwindling of their blue-collar classes. I’m not a fan of minimum wages, I’m anti-minimum wage, however, that will be the only way to correct this and worst than that is minimum wages chase away jobs. Again I remind the reader that the Canadian dollar shouldn’t be as ow as it is.
Per Capita Canada does not have as much debt as the United States, the U.S is the worlds most indebted nation, there is absolutely no reason why the Canadian dollar should be so low, but it is, it’s low because Canada is subsidizing its public sectors, it’s also subsidizing its big corporations and most importantly as it relates to this article Canada is subsiding money laundering via taxpayer-backed Insured MORTGAGES!
The breaking point is coming closer, the wage and price controls stagnating the Canadian economy are going to be put to the test. In the U.S, I’ve been saying for 3 years now, that Donald Trump’s second term as President will include a market crash. I’m a firm believer that the market is waiting for Trump’s second term to force a U.S debt renegotiation. When the U.S crash hits, the Canadian dollar, as well as other currencies, might see their purchasing power rise, the way the current Canadian economy is constructed this will prove DISASTROUS for Canada.
If the U.S renegotiates its debts it could equate to the normalization of interest rates, 3-7% possibly, what will that do to interest rates in Canada? This is the dilemma if rates go down in Canada, the cost of living will rise, if rates go up, the cost to service debt will rise. The middle in this scenario is stagnation which again will do great harm to Canada’s blue-collar classes and help to fuel the brain drain.
With an extremely high cost of living it’s very hard to attract the top talents from around the world, also the world is becoming more competitive, Canada isn’t getting its pick of the immigration litter like it used to. Recently basketball player Kawhi Lenard picked high taxation in California over high taxation in Toronto.
When it comes to top talent and attracting highly skilled immigrants quality of life and cost of living play a major role. Being that Canada has a lot of tariffs at the U.S-Canada border, consumer choices in Canada are not only more expensive but they’re also scarce in many respects and although the housing talk is Toronto and Vancouver, the problematic areas are the smaller cities all over Canada, higher cost of living hits those smaller towns in a major way, especially like I said when it comes to lack of competition in Canada’s logistics sector.
Condos instead of much needed Rental Apartments and worsening fraud conditions in Canada’s financial sector, 2 things I’d pay close attention to in Canada if I were you!
One-stop shops: Toronto malls luring condo builders for mixed-use developments – TheStar
Interesting times ahead