WARNING TO CANADIANS: More Major Retailers are leaving Canada and They’re Taking Income Taxes With Them – August 19, 2019,
Although the minimum wages will be ignored as one of the root causes of retail store closures in Canada, the reality is Online Shopping, namely companies like Amazon have taken a huge slice of the retail market in Canada and Canada doesn’t have enough flexibility to adapt with the changes in the new economy. Small, medium and large businesses in Canada do pay fewer taxes than they would in other countries, however, these lower taxes don’t help much because businesses in Canada are often bombarded with higher fees.
In America what’s becoming the new normal for retail is offering its customers the ability to have their items shipped to their home, and even America’s retail sector is hurting. There is also the ability to order online and have their customers pick up their items. Well, in Canada this is a problem, shipping in Canada is problematic because there’s a lack of competition for Canada Post, so the unfortunate truth is Canadian retailers aren’t aggressively pursuing the Online market, because they’ll find themselves at an extreme disadvantage not only for shipping but also for advertising. Picking up online orders is also not that profitable as most customers don’t see the benefit unless the item they’re buying is something they’ve purchased in the past.
Selling online is extremely competitive and even a successful sale can cost a Canadian retailer additional capital because there’s the chance the customer will return their item, complain online, leaving negative feedbacks and plus their competitors might offer similar products. This problem is compounded with higher minimum wage costs, higher shipping costs and higher operational costs. Adding to the disaster is Justin Trudeau’s unfriendly stance towards business. You barely hear a peep out of Trudeau regarding Canada’s small, medium and large businesses?
The mainstream media got a bailout at the expense of the retail sector, what did the retail sector who employees most lower-income people with jobs, what did they get? Remember Income taxes and sales taxes, for the most part, give the Federal Government a huge amount of revenue. Minimum wages actually help the government to collect more revenue and businesses aren’t like the Government. The Government, especially in a fiat currency environment, can print money to pay bills, businesses don’t have that luxury, once their business credit cards or business loans are maxed out, they have to file for bankruptcy, its really that simple and once these retailers leave, the income taxes their employees used to pay, disappear with them.
This of course, eventually starts to eat away at the public sector and based on what I know about most of these public sector jobs, many of them have a pay structure that keeps up with inflation. So Canada enters into recession, things can very quickly spiral down into an economic depression. Based on what I know about Canada, Austerity measures appear to be off the table for most big-government loving people.
Why Are So Many Retailers Closing Stores In Canada? – huffingtonpost.ca
As the saying goes onto the next? Well, if you’re not paying attention, the new retail replacements tend to be appealing to the affluent demographics and because of the unnecessary lease price increases in the commercial space, retail is about to go through a serious restructuring, unfortunately, what appears to be coming out on the other end unless structural changes are made looks like it will be geared towards the upper-middle-class demographic.
The Canadian standard of living hs a serious problem, cheap money is making it easier for the rich to get richer and the rich tend to build things that cater to them and once this starts to become more pronounced to consumers, well, things will get very interesting. Canada is turning into a service sector economy and if our the Private service sector in Canada appeals to the upper classes, this will put a strain on the Public Sector as fewer people will be able to afford luxuries afforded to the middle class-poor that offered discounted prices for the majority. Walmart and Canadian Tire definitely had the proper long term vision of the Canadian economy. Being that most new retailers have to lease and rent space, I expect that new retailers will have to be creative to stay afloat in this very expensive Canadian economy that caters to the rich.
Leftism doesn’t work, corporate welfare doesn’t work, using the government to put insurer of mortgages doesn’t work and lower interest to appease one section of the economy doesn’t work. I guess Canada will have to learn things the hard way.
Interesting times ahead.