25 Replies to “It’s Probably Nothing”

      1. One of the graphs further down does measure the effect of government by the amount of increasing regulation, showing a 36+% increase over the last 20 years, but doesn’t measure the increase in business costs complying with the regulations.

      2. But it is a result of irresponsible government and bureaucratic inefficiency feeding our productivity collapse.

  2. “This cannot occur absent a competitive system of infrastructure, regulation and taxes to support growth.”

    No kidding.

    I was thinking about the car business the other day, and it occurred to me that if you can’t make any money without selling -millions- of cars, then your costs are out of control. So what are those costs?

    Once upon a time I heard that General Motors US spends more on employee healthcare insurance than they do on steel. I also heard one time that Stelco spent more on their retiree benefits than anything else, and it was getting to the point where the company couldn’t turn a profit because of paying retirement benefits.

    Stelco and Dofasco (ArcelorMittal, these days) provide automotive-grade steel to General Motors, Ford, Toyota, Stelantis etc. for North American production.

    The costs are incurred all the way down the chain from digging iron out of the ground to the guy who polishes the car in the showroom. Tax, regulation, fees, licenses, etc.

    So it is both possible and reasonable to think that a company could make a car for the Canadian market, and turn a profit selling hundreds to thousands of units -in- Canada. I mean, we used to do that, right? Cars made in Canada for Canadians were a thing, once upon a time. There used to be four North American car companies running in Ontario.

    Or a house! Why does a house -cost- $400K-$500K to build in Canada? FEES. TAXES. LICENSES. PERMITS. REGULATIONS. We have a “housing crisis” but nobody is building this year because there’s no money in it. There’s no money because no one can afford to buy the new house. No one can afford it because -government- taxed it out of reach. That’s the bottom line right there. (Oh, lumber you say? Why is lumber so expensive? In -Canada- where all we have is trees? Hmm? How did that happen? Taxes. Fees. Permits…)

    1. Cars are not ‘made’ in Canada. They are assembled in Canada with many parts coming from the U.S. or elsewhere. Canada is a very tiny market. There are not enough cars sold here to make a truly Canadian built car profitable. Note that in the early days of the Ford Motor Company the entire production of Model T’s came from the famous Rouge factory beside the Rouge river in Detroit. Ford owned all of the materials that went into building the Model T. They owned forests, mines, and even rubber tree plantations etc and shipped all of the raw materials to the Rouge plant to be made into cars. That was cost effective in the United States at that time. It would not be cost effective in Canada unless we planned to sell vehicles to the whole world.
      In some particular cases companies cease to sell their product in Canada because it is no longer profitable to do so. Think of bilingual packaging and the other red tape that Canada is famous for. Just a couple of examples are Nissan and Stouffer’s frozen foods. Nissan is struggling to avoid bankruptcy and stopped selling the Titan truck in Canada after 2021. Stouffers left the Canadian market in 2023 but still sells their product in the U.S.. Canadians tend to think that we are a big market that other countries want to access. We’re not and now that our economy is falling apart we will be buying even less products than before. Thank Liberal and NDP voters. In some ways we should be thanking Donald Trump for waking us up from our stupor and forcing us to become a serious independent country with an effective military.

      2. Canada is the same population as Morocco
        It’s a kingdom too, just not Chuckie’s.
        Our economic performance is converging.

    2. Lumber/plywood/OSB is the cheapest component cost of a house. An average 1200 sq ft home uses around C $20,000 worth. Other than the shortage of private developable land around Canada’s most expensive cities and the cost of leviathan, it’s the finishings that really add up. Window coverings for example often cost more than the windows. Energy obsessed building codes add lots and the next iteration of the national building code alone will add twice as much as the cost of lumber.

      I built the last two houses I’ve lived in and excluding government and land costs and paying myself and a few subtrades and using a 12 year old building code, I could build a modest three bedroom home for under C$200,000.00

      1. Hauling lumber/OSB by truck adds to the cost. From/to:

        BC to Ontario.
        Ontario to Manitoba.
        Manitoba to Ontario.
        Alberta to Ontario.
        Many more. All provinces are involved.

        Watch on a busy Trans Canada highway as the same quality/dimension lumber/OSB go past each other in the opposite direction.

  3. Come on … those are COVID numbers. And you’re simply in the process of 6uilding it 6ack 6etter …
    You’re in the throes of ending Canadian capitalism! Hoo Rayy! Socialists.

  4. “it still does not address the fundamental lack of motivation for businesses to invest in Canada.”

    I used to chase a revenue-based model for my business. The higher the revenue, the higher the profit (in an absolute sense, not by percent of revenue). In 2018 things started to change. Federal corporate tax rules changed dramatically including how dividends are taxed (hint: bad) regardless of who they are paid to. So I changed to a more “efficient” profit-based model of minimum effort for maximum profit. This model favors the lowest revenue you need (by eliminating costs such as insurance, rent, employees, vehicles, software licenses, inventory etc.) to maximize your after tax personal income.

    This makes me suspicious of productivity growth based on output per hour worked. For example, my productivity has gone through the roof (revenue divided by hours worked) but I doubt the government would see this as positive (much lower revenue, and much lower corporate taxes paid). Take an auto parts maker as another example. They substitute Chinese made parts for ones previously made by Canadians, selling the integrated part for a lower cost, thus increasing productivity. I can’t imagine the government sees this as positive either.

    Productivity has been dropping since 1973.

    https://www150.statcan.gc.ca/n1/pub/15-206-x/15-206-x2014038-eng.htm

    Which makes me wonder if they include taxes in the productivity equation.

    1. I presume they would never do that, as it would show how big the negative effect taxation has on businesses. And personal discretionary spending for that matter.

    2. I can’t imagine the government sees this as positive either. Not at all, Steve, no one in government would have understood you’re previous paragraph.

  5. “ Despite optimism around Prime Minister Carney’s investments in affordable housing, infrastructure and efforts to diversify trade, missing from this government’s competitiveness agenda is an in-depth discussion on the barriers to productivity growth due to Canada’s tax and regulatory regime.”

    Allow me to translate from Ottawash into the vernacular

    The government is desperate to spin this data, but can’t accept that the reason for the drop is the regulations and laws they created.

  7. Given that the current rate of theft by governments ,from the average wage worker is now 50% (I contend that the true rate of theft,damage and time wasted,is much higher),we can draw one conclusion about “tax reform” by government.
    It ain’t gonna happen.

    The thieves will never voluntarily stop stealing,any more that a tick will voluntarily left go.
    If we really want tax reform,we will have to impose it upon those who want to “help” us.
    Meh the parasites have been discussing tax reform since 1960 as they have increased the level of taxation on everything.
    And that temporary tax on income is sure working out.
    Have we paid off WW1 yet?
    The GST sure worked wonders,how is that “Just until the debt is paid” working for you?
    Our history is plain,everything our politicians say is a lie,every incremental theft has only one direction..upward.

    So we need to permanently cripple the parasitic overload.
    Reversing the tax structure would be a fine start.
    As in 10% maximum paid to your local government.
    10% max of that fund paid to the province.
    Then 10% max of the provincial take goes to the feds,only if they are doing their job.
    No borders,no military,no equality before the law?
    No pay feds.
    The added benefit of such a structure,is that local politics will matter again and the corrupting ability of “Federal Funding” is removed..
    We could finally identify the real thieves and reach out to touch them.

    This whole discussion is necessary with Western Independence,there is no point in splitting from Can Ahh Duh if we intend to keep doing the same old actions..
    State Welfare does not work.
    Giving career parasites a blank cheque is insanity.
    We ran the experiment.
    It killed the country.

  8. Still remember the arguments on the radio in 2020, You can’t have an economy without ‘healthcare’. Dumbest people ever.

  10. Why would anyone invest in a country that punishes success, and often is willing to fund your competitors after taking the money from your company?

    Why would you want to put up with excessive regulation and fascist demands from the government in power, such as only building and selling EV vehicles?

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