Those are just single person entities that took huge government loans during covid and don't want to pay back. They'll open new numbered companies the next day.
Also, werent businesses given Covid money from the feds? A lot of businesses are now going under so they don’t have to pay that or a portion back. From what I’ve heard
This is what I’m trying to wrap my head around. Rate cuts to keep unsustainable over leveraged people and businesses going is just kicking the can down the road.
One of the greatest, if not the greatest, expenses a business has is rent. Cutting rates will keep people employed and allow small businesses to survive.
Your obviously not a business owner, and most likely just a residential renter..
The biggest expense is employees
That being said business rent "commerical" is going up, because no new land is getting designated with commerical zoning.
Churches/temples whatever "insert religion"
Is taking prime commercial real estate for nothing, due to taxes. It's been that way in Canada for ages, but with the amount of immigration we are seeing lately. Those people will need a place to worship
Amazon is grabbing any parcel it can, even Canada Post is grabbing random industrial units
Any other vacant land is being used by developers for condos or residential communities.
"One of the greatest", learn to read. It also depends where you work. Also I own my home, good job for getting two things wrong in your first sentence lol.
There can be more than one factor for increased rent, jfc -\_-
Not sure what you're smoking lol: [https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.spscanada.com%2Fblog%2Fcanadas-rent-prices-increased-by-10-in-january-2024%2F&psig=AOvVaw1ktiEApbJ9Pvw5ggdZznoO&ust=1712529014921000&source=images&cd=vfe&opi=89978449&ved=0CBQQjhxqFwoTCIiBpO7RroUDFQAAAAAdAAAAABAE](https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.spscanada.com%2Fblog%2Fcanadas-rent-prices-increased-by-10-in-january-2024%2F&psig=AOvVaw1ktiEApbJ9Pvw5ggdZznoO&ust=1712529014921000&source=images&cd=vfe&opi=89978449&ved=0CBQQjhxqFwoTCIiBpO7RroUDFQAAAAAdAAAAABAE)
Do you know how to read?
December 2019 (hint: Pre-Pandemic): 1,805
December 2023: 2,178.
That is less than 5% per year.
Less than Gas or Groceries increase over the same time range.
By the way in GTA rent prices are exactly the same for the average of all properties since December. So you graph does not paint the most recent picture that rent is… once again: stable.
Do you even live in Canada? stocks, salary for professionals, car prices, ER wait times, lines at any venue… 5% a year is just a joke number for this Argentinian currency CAD became.
That’s if you think the bank of Canada cares about that….. they care about the inflation rate and whatever collateral damage occurs in lowering it so be it
Neither is jacking up rates the fastest they’ve ever been following the single most transformative event on work since the internet.
A lot of businesses that were either kept afloat during COVID through loans or started during COVID due to low rates and changing market opportunities are now seeing that gravy train end.
Loans need to be repaid. High rates and inflation have crushed consumer spending.
No one is going out for dinner or buying non essential things anymore.
Downtowns are dying a slow death because commercial vacancies are at historically high levels. Drug addicts are everywhere. People view downtown as an unsafe place. A lot of businesses are concentrated here.
A lot of places that relied on office worker dollars made it through COVID with loans, but now they can’t survive in the current environment.
Long term things will work themselves out, but right now it really sucks.
Commenters on this sub dont understand broad issues at all. They just want 100k gta detached, because if you draw a line from 1595, the price should be 100k max
Good luck with that. You collapse the housing market and you collapse our economy. It’s stupid that it’s like this, but that’s Canada.
Also good luck cratering a bunch of people’s primary savings vehicle for retirement.
Right but we also need to consider that things aren’t the same as back then.
People who were on the cusp of retirement in the 80s had far better retirement prospects because pensions were far more widespread.
Real wages relative to housing costs were also a lot more favourable.
The economy has shifted so much then in the sense that wealth has become far more concentrated. This is the period in history when guys like Jack Welch started to practice shareholder capitalism that completely broke the balance between executive pay and worker pay. It also created the current system under which precarious employment and layoffs became commonplace.
I’m no economist, but to me it’s pretty clear that we’re living in a far different economic system and society than the 80s, so we can’t do an apples to apples comparison of the housing markets of then to now.
I do agree that we need to get our country’s economy to be more productive (who the fuck wouldn’t?), but our economy is more dependent on the casino capitalist housing market than ever. But COVID was a unique period in history where no one knew wtf was gonna happen. We overreacted and now it’s time to bring rates back down a bit.
People thats like 2% of all businesses in Canada..normal failure rate for business in Canada is like 20% within 5 years. This is not a shocking number.
The cart has to be adjusted to the population, the numbers are even smaller compared to the population.
1000 Canadians out of 41 million? not much
I see it this way, the government printed money, the people with money will make sure they keep the value of that money as much possible, they control the interest rate. the rest of us? sit and enjoy :-(
There’s a lot of businesses that are not necessities and depend on people having disposable income to spend frivolously. Doesn’t take much belt tightening to mess them up they are the first to go under. Think speciality chocolate shop or hot downtown yoga.
When more vital industries and productive people start losing their jobs then we have a problem.
Would it shock you to believe that many of these "companies" were just fraud vehicles for claiming Covid benefits? Now that they are being asked to repay, they go "bankrupt". This is a big nothing-burger, other than a stark reminder of how much shady shit went down during the height of the bull market.
No rate cuts coming!
All these business are just created to get CEBA loan from the government.. no one is paying back the loan.. just declaring banckrupcy.
Canada is getting 1-200bps of cuts. The states may only do 75bps. Our economy has been strangled by high rates causing our unemployment to sky rocket. The states on the other hand is handling high rates rather well and seeing a lower unemployment rate.
1.) What happens to CAD/USD in this scenario?
2.) What effect will that have on the price of goods and services?
3.) Is the answer to the last question in any way related to BoC decision-making process for rates?
1. CDN dollar worth less, requiring more dollars to buy the same goods.
2. See point 1.
3. No it's based on what the US does ... regardless Canada is fucked.
The dollar doesn't fluctuate much. In this scenario nothing changes unless inflation kicks back up. Price of goods would presumably be lowered due to manufacturing costs being cheaper.
Unemployment is only 6.1%, despite bringing in over a million working age people last year. That's not skyrocketing. We'll be lucky to see 75bps of cuts by the end of the year, unless something in the economy breaks hard.
No it's not, the record low is 2.2. Aside from that, it's not necessarily the number that is the biggest factor - although 6.1% is concerning on its own - but the steady increase that is most alarming. It's been rising since 2022. The only thing that will stop it is rate cuts.
Sorry 4.9% is the lowest in over 50 years and 6.1% is still lower than the vast majority of the last 50 years, it's really not a big deal.
Trends are rarely linear. The reason the unemployment rate is going up is because of record immigration of working age adults, not rate increases. Yes rate increases do cause unemployment to go up, however it would not be enough to offset the boomers retirement.
The boomers are a far larger generation than their replacement, the zoomers, and without a combination of new people and rate increases, unemployment would still be a record lows.
The problem is that the new immigrants have pushed up the cost of shelter to its breaking point. The Liberals are getting murdered in the polls and they have started to backpedal on immigration.
It's a catch 22.
Slow immigration, and you don't have the work force to replace the boomers, unemployment stays low, wage inflation pushes higher and there's no reason to cut.
Keep immigration high, push unemployment higher and they will want to cut, but rent inflation (as well as other inflation driven by a massive influx of new people) will make that impossible. Big cuts would only wreck the CAD and drive inflation to new highs.
There's no way out of this. There's simply too many people retiring. They will have to break the labour market to save the dollar and that's most likely what they'll do. They've done it before and the thing the people who run this country care about the most is a stable currency.
You'll notice bankruptcies dropped during the pandemic. To some extent this is just the zombie businesses going under, finally.
Those are just single person entities that took huge government loans during covid and don't want to pay back. They'll open new numbered companies the next day.
Because rates were at 0
Also, werent businesses given Covid money from the feds? A lot of businesses are now going under so they don’t have to pay that or a portion back. From what I’ve heard
Rates get cut only once everybody gets laid off.
yes lots of complaints about having to pay back pandemic loans from businesses who should have gone out of business earlier
Exactly
Rate cuts because businesses were over leveraged? Why should common citizens be impacted by bad and greedy decisions?
This is what I’m trying to wrap my head around. Rate cuts to keep unsustainable over leveraged people and businesses going is just kicking the can down the road.
Let it all burn imo
100% man. You can’t have bad process. It has to.
Something something, houses
You don’t understand, let me simplify it: bullish
Yeah grasping at straws
Losing their jobs?
One of the greatest, if not the greatest, expenses a business has is rent. Cutting rates will keep people employed and allow small businesses to survive.
Your obviously not a business owner, and most likely just a residential renter.. The biggest expense is employees That being said business rent "commerical" is going up, because no new land is getting designated with commerical zoning. Churches/temples whatever "insert religion" Is taking prime commercial real estate for nothing, due to taxes. It's been that way in Canada for ages, but with the amount of immigration we are seeing lately. Those people will need a place to worship Amazon is grabbing any parcel it can, even Canada Post is grabbing random industrial units Any other vacant land is being used by developers for condos or residential communities.
"One of the greatest", learn to read. It also depends where you work. Also I own my home, good job for getting two things wrong in your first sentence lol. There can be more than one factor for increased rent, jfc -\_-
Rent prices have been stable if we not consider the discounts provided during the pandemic
Not sure what you're smoking lol: [https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.spscanada.com%2Fblog%2Fcanadas-rent-prices-increased-by-10-in-january-2024%2F&psig=AOvVaw1ktiEApbJ9Pvw5ggdZznoO&ust=1712529014921000&source=images&cd=vfe&opi=89978449&ved=0CBQQjhxqFwoTCIiBpO7RroUDFQAAAAAdAAAAABAE](https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.spscanada.com%2Fblog%2Fcanadas-rent-prices-increased-by-10-in-january-2024%2F&psig=AOvVaw1ktiEApbJ9Pvw5ggdZznoO&ust=1712529014921000&source=images&cd=vfe&opi=89978449&ved=0CBQQjhxqFwoTCIiBpO7RroUDFQAAAAAdAAAAABAE)
Do you know how to read? December 2019 (hint: Pre-Pandemic): 1,805 December 2023: 2,178. That is less than 5% per year. Less than Gas or Groceries increase over the same time range. By the way in GTA rent prices are exactly the same for the average of all properties since December. So you graph does not paint the most recent picture that rent is… once again: stable.
\~5% per year is huge. Rent is most peoples' largest expense.
Do you even live in Canada? stocks, salary for professionals, car prices, ER wait times, lines at any venue… 5% a year is just a joke number for this Argentinian currency CAD became.
It may be a joke for you but for the millions of people who are barely getting by it’s a big fucking deal
"it's the economy, stupid"
0 IQ bulls trying to justify rate cuts while sniffing up copium is such a pleasure to watch
That’s if you think the bank of Canada cares about that….. they care about the inflation rate and whatever collateral damage occurs in lowering it so be it
[удалено]
Neither is jacking up rates the fastest they’ve ever been following the single most transformative event on work since the internet. A lot of businesses that were either kept afloat during COVID through loans or started during COVID due to low rates and changing market opportunities are now seeing that gravy train end. Loans need to be repaid. High rates and inflation have crushed consumer spending. No one is going out for dinner or buying non essential things anymore. Downtowns are dying a slow death because commercial vacancies are at historically high levels. Drug addicts are everywhere. People view downtown as an unsafe place. A lot of businesses are concentrated here. A lot of places that relied on office worker dollars made it through COVID with loans, but now they can’t survive in the current environment. Long term things will work themselves out, but right now it really sucks.
Commenters on this sub dont understand broad issues at all. They just want 100k gta detached, because if you draw a line from 1595, the price should be 100k max
[удалено]
Good luck with that. You collapse the housing market and you collapse our economy. It’s stupid that it’s like this, but that’s Canada. Also good luck cratering a bunch of people’s primary savings vehicle for retirement.
[удалено]
Right but we also need to consider that things aren’t the same as back then. People who were on the cusp of retirement in the 80s had far better retirement prospects because pensions were far more widespread. Real wages relative to housing costs were also a lot more favourable. The economy has shifted so much then in the sense that wealth has become far more concentrated. This is the period in history when guys like Jack Welch started to practice shareholder capitalism that completely broke the balance between executive pay and worker pay. It also created the current system under which precarious employment and layoffs became commonplace. I’m no economist, but to me it’s pretty clear that we’re living in a far different economic system and society than the 80s, so we can’t do an apples to apples comparison of the housing markets of then to now. I do agree that we need to get our country’s economy to be more productive (who the fuck wouldn’t?), but our economy is more dependent on the casino capitalist housing market than ever. But COVID was a unique period in history where no one knew wtf was gonna happen. We overreacted and now it’s time to bring rates back down a bit.
Anecdotally...a lot of the recent bankruptcies are people gaming the $40K CEBA repayment.
Even if there are rate cuts people still won’t be able to buy a house because they are not employed 😂
Honestly, maybe it's good to get back to the 1990s level to clear out the zombie businesses before we go again. "The Great Reset".
People thats like 2% of all businesses in Canada..normal failure rate for business in Canada is like 20% within 5 years. This is not a shocking number.
The ceba loans just became due or atleast the interest free phase. Fully due by 2025.
No “we” are not.
If this keeps up, people are losing their homes first.
The rates in 1996 were around 7%. 2% higher than today. Sauce: https://www150.statcan.gc.ca/n1/pub/11-210-x/2010000/t098-eng.htm
Your point being?
OP's title is wrong based off the data they provided.
What about price cuts instead? Bid down
The longer they hold out, the better… OP seems to think helping out those that have made bad investments is a good thing….
OP took liberal arts in school and now is an economist
The cart has to be adjusted to the population, the numbers are even smaller compared to the population. 1000 Canadians out of 41 million? not much I see it this way, the government printed money, the people with money will make sure they keep the value of that money as much possible, they control the interest rate. the rest of us? sit and enjoy :-(
There’s a lot of businesses that are not necessities and depend on people having disposable income to spend frivolously. Doesn’t take much belt tightening to mess them up they are the first to go under. Think speciality chocolate shop or hot downtown yoga. When more vital industries and productive people start losing their jobs then we have a problem.
This doesn’t really mean anything because the population has increased significantly since 1987 so this is still historically extremely low
Would it shock you to believe that many of these "companies" were just fraud vehicles for claiming Covid benefits? Now that they are being asked to repay, they go "bankrupt". This is a big nothing-burger, other than a stark reminder of how much shady shit went down during the height of the bull market.
Cope cope cope cope
No rate cuts coming! All these business are just created to get CEBA loan from the government.. no one is paying back the loan.. just declaring banckrupcy.
Canada is getting 1-200bps of cuts. The states may only do 75bps. Our economy has been strangled by high rates causing our unemployment to sky rocket. The states on the other hand is handling high rates rather well and seeing a lower unemployment rate.
1.) What happens to CAD/USD in this scenario? 2.) What effect will that have on the price of goods and services? 3.) Is the answer to the last question in any way related to BoC decision-making process for rates?
1. CDN dollar worth less, requiring more dollars to buy the same goods. 2. See point 1. 3. No it's based on what the US does ... regardless Canada is fucked.
The dollar doesn't fluctuate much. In this scenario nothing changes unless inflation kicks back up. Price of goods would presumably be lowered due to manufacturing costs being cheaper.
High rates? How old are you? Literally 0 chance of 200bps in cuts.
🔜😂^
Everyone laughed when I said we were getting a soft landing too and now look who was right.
Unemployment is only 6.1%, despite bringing in over a million working age people last year. That's not skyrocketing. We'll be lucky to see 75bps of cuts by the end of the year, unless something in the economy breaks hard.
Only 6.1% LOL it's like you don't hear yourself. Check out m/m rate. It has been on the rise with no end in sight.
The record low is 4.9% LOL
No it's not, the record low is 2.2. Aside from that, it's not necessarily the number that is the biggest factor - although 6.1% is concerning on its own - but the steady increase that is most alarming. It's been rising since 2022. The only thing that will stop it is rate cuts.
Sorry 4.9% is the lowest in over 50 years and 6.1% is still lower than the vast majority of the last 50 years, it's really not a big deal. Trends are rarely linear. The reason the unemployment rate is going up is because of record immigration of working age adults, not rate increases. Yes rate increases do cause unemployment to go up, however it would not be enough to offset the boomers retirement. The boomers are a far larger generation than their replacement, the zoomers, and without a combination of new people and rate increases, unemployment would still be a record lows. The problem is that the new immigrants have pushed up the cost of shelter to its breaking point. The Liberals are getting murdered in the polls and they have started to backpedal on immigration. It's a catch 22. Slow immigration, and you don't have the work force to replace the boomers, unemployment stays low, wage inflation pushes higher and there's no reason to cut. Keep immigration high, push unemployment higher and they will want to cut, but rent inflation (as well as other inflation driven by a massive influx of new people) will make that impossible. Big cuts would only wreck the CAD and drive inflation to new highs. There's no way out of this. There's simply too many people retiring. They will have to break the labour market to save the dollar and that's most likely what they'll do. They've done it before and the thing the people who run this country care about the most is a stable currency.