Category Archives: Economics

CBC: Canada added 54,000 jobs last month. Reality: Canada lost nearly 100,000 productive jobs and replaced it with useless jobs

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CBC recently published an intentionally vague article over the latest StatsCan report to paint a rosy economic picture for Canada and its government.

What the article ignores is the quality of the jobs over the quantity of the jobs created, instead touting the jobs and employment numbers designed to obfuscate the real facts.

Here are some tidbits from the actual StatsCan report summary that gives a more clear picture of Canada’s economic outlook:

From December 2015 to December 2016, employment increased by 2.0% in the service sector, while it declined by 1.6% in the goods-producing sector.

[…]

In 2016, employment in information, culture and recreation rose by 6.5% (+49,000) […] employment also increased in accommodation and food services (+2.6% or +31,000), construction (+2.0% or +27,000) and wholesale and retail trade (+1.4% or +38,000) […] There were more people employed in finance, insurance, real estate, rental and leasing (+3.5% or +39,000) in 2016. […] employment in natural resources fell 8.3% (-29,000) in 2016 […] In agriculture, employment was down by 4.7% (-14,000) […] The number of workers in manufacturing declined by 3.1% (-53,000).

And the least surprising statistic:

[…] the number of public sector employees increased by 2.0% (+71,000), driven by gains in public administration; information, culture and recreation; and health care and social assistance. The number of private sector employees rose by 1.9% (+222,000), with increases across a number of industries in the service sector.

What the state-run CBC fails to address that many sectors that actually contribute to real growth and wealth have lost a significant number of jobs, and are instead being replaced with service industry and public sector bureaucratic jobs (jobs that ultimately rely on taxpayers’ money to fund their salaries). The public sector and service industries produce no tangible, exportable goods or technology. Shuffling paper money around the country does not lead to true economic growth, contrary to Keynesian theory.

In summary, big government in Canada just got bigger in the past year and shows no signs of stopping.

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Canada’s Carbon Tax: Pay up or freeze to death

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I am expecting fireplaces to gain in popularity as already financially pinched households attempt to keep warm in what has been a cold start to Winter for much of Canada.  Ironically, fires release carbon dioxide too. How will the government collect its tax for that?

Meanwhile, Australia, with a more temperate climate than Canada, has already ditched its carbon tax after a trial run of two years. Unlike Canada, they don’t need to run the furnace around the clock to prevent themselves from freezing to death, yet they still felt the negative economic impact enough to reverse their decision. The Wynne, Notley and Trudeau governments have made no assessment of Australia’s case and is going ahead with their robbery schemes anyway.

It is well known that any tax on businesses increase the cost of goods that are subsequently transferred to the consumer.  Just as likely, it causes businesses to move to a place where they are taxed less.  The net result: the government gets more of the taxpayer’s money, businesses head south (figuratively and literally), and global environmental impact remains negligible. If anything, the companies that move will just be moving their carbon emissions to the U.S, which will end up back in Canada via southerly winds.

Perhaps Canadians should start investing in U.S. fireplace manufacturing stocks to attempt to break even with the carbon tax.

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Rising Hydro: Wynne and Trudeau tag team to put Ontario into poverty

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Climate change, carbon taxes, green energy, rebates.  For a province and country so rich in natural resources, such that it has a large surplus to export to the northern United States, its own citizens are getting ripped off badly for using their own natural resources. The current government, with its entire arsenal of buzzwords to justify raking its citizens over the coals regarding energy usage, continues to demand more money in the form of carbon taxes and rising hydro prices, only to squander it on their ineffective green energy projects.  The cost has increased so much that in some cases, monthly hydro bills have exceeded monthly incomes:

Hucul’s monthly bill is $309, even though she doesn’t heat with hydro, doesn’t have a dishwasher, dries clothes by her wood stove and doesn’t leave lights on outside. Eight years ago her bill was $80.

Food bank users unable to afford hydro: group

While the government creates the problem, it simultaneously proposes itself as the solution to the problem — an effective strategy to stay in power and continue siphoning money from the peasants. Offering “rebates” and other forms of “tax relief” is a sick joke on Canadian taxpayers.

Man-made climate change, if real (and that’s a big “if” considering all the religiously fanatical environmental propaganda floating around), isn’t defeated with carbon taxes and levies on energy bills. Energy independence is best achieved if that money is kept by the people, energy costs are minimized, so that private enterprises have more finances and flexibility to discover sustainable, clean energy solutions.

Instead, everyone is forced into a rut, with all the cash of taxpayers and small, private businesses funneled through the incompetent, technologically inept and unskilled government that supposedly knows the solution to solving the problems of global warming (now known as climate change, or global cooling in the 1970s, or whatever they decide to label their fabricated problems these days).

Canada, having a population of less than 3% of China’s, shouldn’t even be meddling with carbon taxes and higher electricity prices. Focus on enterprise and sell the solutions to China. That would make a real impact both economically and environmentally. Canadian taxpayers are now encouraged to live a 19th century lifestyle to make ends meet, and any reduction of so-called “carbon emissions” and energy usage achieved is infinitesimal compared to China’s daily environmental impact.

Canada, and Ontario particularly, needs to take a stand and tell the government to take a hike on their tax hikes. Stop feeding the monster before it demands more.

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Black Friday as an economic indicator, mainly because only garbage is on sale

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The iconic sight of long lines at 5 am, filled with desperate consumers looking for a deal marks Black Friday, the day immediately proceeding U.S. Thanksgiving. It is on this Black Friday, and every other Black Friday, where consumers get a hold of substantial discounts … on garbage stores are desperately trying to get rid of.

A lot of the electronics on sale are of the refurbished kind: initial product failures and returns that have been cleaned, repackaged, sometimes re-branded, and sold at a deceptively deep discount, if you compared the price to a brand new non-refurbished version of the same product. Carried by the hype of Black Friday, these inferior products, which would normally be passed by more cautious consumers during almost any other time of year, sell out quickly.

Other products, not just electronics, show MSRPs well above what it should be outside of Black Friday. A normal, if not mediocre sale price, gives an illusion of a deep discount. Again, carried by the hype of Black Friday and signs promising “50+% off”, items that would normally be passed by more cautious consumers during almost any other time of year, sell out quickly.

Currently both the Canadian and U.S. governments paint a rosy picture for the economy and Black Friday sales will test the health of the consumer-based economy. Disposable income will dictate how much garbage these stores can unload to the blind consumer. If sales are good, then it’s safe to say that people are still feeling somewhat confident of the economic situation, and can afford to be reckless with their money. If sales are in decline, then consumers are probably pinching pennies. In today’s low interest rate environment, if it is indeed the latter, it is safe to say that in the economy is doing much more poorly than imagined.

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Canada’s phony housing-based GDP paints a bleak picture

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What can you get for $500,000 today?  You could buy one “cozy” shoe box condo in the sky in a gentrified neighbourhood in chilly Toronto, or two detached houses on huge lots beside a golf course in sunny Florida. The strange thing is that Americans think that their prices are reminiscent of 2008 and they think that they are back in a housing bubble.

That’s a scary thought.  Here’s an equally scary graphic:

Housing is by far the largest contributor to Canadian GDP, and that’s a bad thing.

 

Houses, which generally produce nothing in the long run, is the largest contributor to the government’s phony GDP numbers. Of course Canada’s economy looks great, if you base it entirely on housing, a sector propped up entirely by artificially low interest rates leading to massive speculative bets that even your risk averse grandmother takes part in.

Real economic growth comes from producing wealth from close to nothing or very little. Extraction of resources, research and development, and then production of goods is what leads to real growth. It leads to real exportable technology and products that can be traded for other goods not easily manufactured in Canada. It results in money being made, and time being saved. Houses trading for higher and higher speculative prices do none of that, and do not belong in the government’s GDP report.

Couple the phony inflation numbers with this phony GDP report and the reality is that Canada is not doing as well as the government says. Until that speculative housing money is pushed into real industry, Canada will not see a real booming economy any time soon. The more the housing bubble gets inflated, the more capital that is squandered and put into the hands of global lenders through future interest payments on giant loans, rather than to local industry.

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Vancouver Passes Tax on Empty Homes, Canadian Annual Inflation Rate Reported at 1.5 percent

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Despite the Canadian Press reading more like opinion pieces than objective news nowadays, these two articles are objective enough, and when taken at face value, paint a picture of the government supposedly doing their job.

Annual inflation rate 1.5 per cent in October, in line with expectations: http://www.thecanadianpress.com/english/online/OnlineFullStory.aspx?filename=DOR-MNN-CP.d6fa08c6972f4982a6d273c258d0dcfd.CPKEY2008111303&newsitemid=39501401&languageid=1

City of Vancouver approves empty homes tax: http://www.cbc.ca/news/canada/british-columbia/city-of-vancouver-approves-empty-homes-tax-1.3853542

1.5% inflation already sounds like B.S. to most Canadians. The government alongside the Bank of Canada does its best accounting to manipulate the numbers so that it gives the impression they know what they’re doing with regards to interest rates. Reality paints an obviously different picture. The cost of housing and rent, excluding some parts of hard hit Alberta, have skyrocketed throughout most of Canada, with double-digit percentage increases being posted in the Toronto and Vancouver areas. The rising cost of groceries ($8 cauliflower?), have been popular water cooler talk, particularly at times when the Canadian dollar hit new lows against the U.S. dollar. Oil, despite trading in the 40 USD range, pegs the cost of gas nowhere near where it should be during similar times in the 1990’s when oil reached a similar level.

This is thanks to even more government intervention in the form of taxes and regulation in the past two decades. Its interference with the free market has lined the pockets of bureaucrats with taxpayers’ money. Trusting the government with its inflation reports is like trusting a mischievous student that wrote his own report card. There’s more intervention in the works that will continue the current trend of bad economic policy: carbon taxes and this new “empty homes tax”.

Rather than addressing the root cause of skyrocketing house prices, that is low interest rates backed by taxpayers’ money through the CMHC which allow banks to lend recklessly, Vancouver has decided to add a new tax. Despite the mayor saying the tax is not a cash grab, like any drug an addict gets his hands on, the government will not be able to let go of the tax so easily, even after a correction in housing prices. It figures any new “sin tax” becomes permanent once their budget revolves around the added income collected from the new tax. Get rid of artificially low interest rates, get government out of the way of the free market, and have prices correct to where they belong. At the moment the only winners to come out of this bubble are the banks and the government. Taxpayers will be left holding the bag.

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