THESE THREE ARE OUR ELECTION ISSUES; NOT THE LIBERAL, CONSERVATIVE OR NDP ISSUES: 1. RISING COST OF LIVING: WHO IS RESPONSIBLE?

1. THE RISING COST OF LIVING: WHO IS RESPONSIBLE? _ OUR VIEWPOINT: By Partap Dua

Our 3 political parties and their leaders are not worried at all about the most important issue that is affecting lives of Canadians. They are only talking lame about the rising cost of homes in GTA and Vancouver without providing the actual reasons or the effective solutions. They don’t talk about the rising costs of durable goods, non-durable goods & services, and who is responsible for the overall rise in prices, and if we should do anything to contain the prices. Did the Liberals TOTALLY fail in keeping prices under check? After all, Regulation of Trade/Commerce is the primary duty of federal government. When is the last time we saw our Conservative or Liberal Governments regulating businesses in Canada? They keep their hands off in the name of free economy, yet the secret reason is something else. The most honest politicians, once in power, forget about their fellow citizens and fall prey to greed and power of having control over bigger pool of cash as we will explain.

As we have previously said and we will say it emphatically again that the primary responsibility of any government in power is to keep prices and inflation under control. If the government fails in this primary duty, it has no right to govern and must abdicate. Liberals have lost that right and so did Conservatives. It is not only the cell phones and Internet that is expensive in Canada as the NDP is saying. EVERY DAMN THING HAS DOUBLED IN PRICE IN LAST 2-3 YEARS.

It is the Conservatives as well as the Liberals that have been responsible for the rise in prices. Canadians should be aware of the fact that neither Stephen Harper, nor Justin Trudeau ever commented on continuous rise in prices in Canada.  And it is strange that not even a single Conservative Premier has ever spoken against rising prices, although Conservatism claims to put more money in to the pockets of Canadians by cutting taxes and waste. They could easily put more money in pocket of Canadians by keeping a lid on rising prices. They don’t for a reason. Strangely none of the premiers or the Prime Ministers and the parties, including Ontario conservatives under our dear friend Doug Ford, ever spoke against rising prices. Does it appear strange to Canadians? It shouldn’t.

Who wouldn’t notice the following?

-Coffee has almost doubled in price. Some private stores are selling regular cup of coffee for $3.

-McDonald prices have skyrocketed.  

-Most fruits and vegetables have gone up in price. Apples went up from 99 cents a pound to $2.99 a pound (200% increase). Peeled garlic went up from 99 cents to $2.49 a pack (150% price increase)

-Fish is $6 a pound. A sub costs over $10 after tax.

-Gas prices are high despite falling crude prices.

-Plyboard, drywall and OSB sheets have doubled in price, and so have all Building materials almost doubled in price in last 3-5 years.

-Oil change has doubled in price and dealership hourly rates have doubled in price.

-Cleaning ladies have tripled their hourly rates.

-Impark Parking fees have gone up from $3 to $7.50 an hour in downtown Toronto.

-Ontario Court filing fees have doubled in 2019.

-The dollar commissions on sale of houses have grown exponentially right in our eyes without a check. An average seller loses around $50,000-70,000 in real estate commissions.

-The development charges of most municpalities have doubled (Toronto’s development charges went up from $18000 to over $50,000 and so did development charges of cities like Markham, Vaughan and Brampton more than doubled and keep increasing with impunity because there is no check at all).

-The Service hookups for water, sewers, gas and hydro have more than tripled in price in most cities. They have gone up from $10,000 to over $50,000 in last few years.

-It has become very common to tag $20, $30 or even $50 for opening or closing of accounts without even consulting the clients.-The banks have doubled their account fees.

The private lenders are charging horrendous interest from cornered borrowers.

-The dollar is losing its real buying power and no one cares.

-A household of 4 needs around $1200-1400 a month just for food and toiletries compared to $400 a month just few years ago.

-In cities like Brampton, a household spends $1200-1800 a month on car insurance.

-There is open ‘price collusion’ in each and every industry and our federal government conveniently looks the other way.

Everything is in a mess and Canadians are borrowing against their homes to survive.

Are we really a free economy?

Most politicians and leaders will tell you they let the market decide because they believe in free economy or Laissez Faire. Is Canada really a free economy and does Canada fully embraces capitalism and shuns socialism? The answer is no. The government not only regulates many industries and keeps prices artificially up like the egg and poultry (12 eggs sell in Canada for over $3 versus 95 cents in the US and a carton of milk or a jug of juice sells at less than half the price in the US), it distributes money to the needy in the name of Social welfare and disability payments. We also provide free health care to all, and dental and drug plan for seniors and children, and provide subsidized housing to the needy. We redistribute income. We practice all tenets of a socialist country and yet we don’t control the prices.

The real inflation in Canada is around 50% per annum in the last 3-4 years (read our discussion about inflation on our party’s web page fourthfront.ca). Yer economists declare that Canada has only 2.4-2.8% inflation. The reason these economists and Stats Canada can project low inflation to dupe Canadians is that they keep removing expensive items from the basket of goods used to measure inflation, and replacing them with cheaper items.

Then how come our housing costs have tripled in last 3-4 years, our food prices have increased by 200-300% and our services have become so expensive? How is a family supposed to survive without incurring extra help from credit cards and lines of credit to meet monthly needs? Today an average family living in own house needs at least $8,000-10,000 a month hard cash to survive. That requires at least $170,000-190,000 in annual salary. The salaries did not go up that much; only the minimum wage went up for hourly wage earners. Neither Stephen Harper cared, nor Justin Trudeau cared and nor does Andrew Scheer cares because they NEVER talked about rising prices or plight of Canadians even during their election campaigns. They may now once we have spoken,  because these parties have the luxury to change their platforms with changing wind.

Who is Responsible for rising costs of goods and services in Canada?

The Governments and the political parties are directly responsible for the rising prices. At first we will explain the direct reasons of price increase. The very first reason is the sudden increase in minimum wage in Canada without adequate planning to keep prices under control. The minimum wage increase resulted in extremely high prices as businesses boosted up the price of their products unchecked by the government. The $14 an hour minimum wage is still worth only $9 an hour because of prices.

This was followed by unplanned imposition of carbon tax by Justin Trudeau. The carbon tax is 93% borne by homeowners/consumers and only 7% by the industries producing pollutants. The reason is that everything became further expensive and is priced in products- gas, diesel, home warming fuel, food, stationery, clothes, building materials, houses, transportation, fast food outlets, restaurants, travel, and so on. End users or residents of Canada have to bear the cost as consumers of products and services. Petrochemicals are used in manufacturing of many products, so the industries increased their manufacturing prices because of carbon tax and costs of items went up further because of increase in transportation costs to haul products from factory to distributors to retailers.

And here is the secret. The governments have let the prices go up and up because they make more money from higher priced products in the form of HST and tax. The higher the prices the higher the HST, and higher the big industry incomes higher the income tax and higher the wage, higher the personal tax. The Federal government collects around $35 billion just in GST. This has been only possible at expense of consumers who are not only paying more in buying products and services, they are also paying more in GST and PST. The Federal government makes over $7 Billion in gas tax alone so it has a selfish interest to keep gas prices high despite the fact that Canada one of the main producers of gas and propane. The higher the real estate commissions, the higher the HST on larger commissions so governments have no interest in capping commissions. Similarly, higher the 407 ETR rates (they have gone up from 11 cents to 63 cents per km and their transponder fees have gone up by 900%), higher the tax provinces and federal government collect. The governments have got used to easy money at expense of Canadians so why would they check the prices? Our GDP and budget revenues have almost tripled to $2.1 Trillion and $300 billion respectively since 1995. Do you think our labor force tripled or our actual salaries tripled? Canada’s work force has only gone up by about 5 million from around 14 million to 19 million in the last 24 years (which is roughly equivalent to our population increase of 6-7 million) and our salaries may have gone up by 10-20% only (in fact provincial employee salaries have stayed frozen for most part). So where did rest of GDP and budget revenue increase come from? It is not from efficiencies alone, it is from increased taxes and higher priced products.

The increase in house prices and rents

The municipalities have been ramping up development charges on new houses and commercial buildings with impunity. For example a developer has to pay $180,000 up front in development charges, levies and service connection charges to build a new house in Markham. This used to be around $50,000 in 2007. This increase does not match with the so called annual inflation rate of 1-2.5% published by Stats Canada.  In Brampton it is around $160,000. The higher the price of land the more the city makes in parkland fees. In Toronto one pays around $30,000-35,000 in parkland fee/lot levy alone for each lot in addition to development charges.

So the Direct cost input induced by municipality to the price of a house is $160,000-180,000. Then the construction cost has almost doubled due to unchecked prices from $80 a sq ft to $160-200 a sq ft taking the average construction cost to $360000-400,000 for a small, 2000 sq ft home. On top is the land cost that has also risen due to lack of federal oversight from a mere $250,000 to around $700,000 in cities like Toronto. The average land price is around $500,000 per lot. And the builder also has to factor the net HST on construction cost that is required to be included in cost of construction. So when we add up all costs, we are already sitting at around $1 million base cost of a small house in cheapest locality. This cost used to be only $350,000 in 2007-2008. Today we are at almost 3 times that cost. The Provincial governments and cities have a further vested interest in high prices because they make more money in land transfer tax when a property is purchased. In Toronto land transfer tax for $1 Million house is around $32,000 after all rebates of which $16,000 each goes to City and province. This is easy money for the governments and Federal government and provincial governments make further $60,000-70,000 in HST on new houses. The higher the sale price of a house, the more the HST and more the land transfer tax and more the development charge and more the lot levies and service hook-up fees. The governments and politicians have got used to easy money because Canadians don’t raise a voice. The governments also make tax on commercial rents. The higher the price of a house, the higher is property tax a municipality makes. Average property tax has doubled in last 7-8 years. The population of cities did not double in last 10 years but the city revenues doubled. How??

So if a landlord has purchased a house for $1-1.2 million, the landlord’s monthly carrying cost is around $5,000-6,000 including mortgage payment at low rate, property tax, maintenance and utilities. The landlord has to make at least $6,000 from rent to breakeven. So an average room in a 4 bedroom house has to yield $1,500 a month which puts pressure on renters. If mortgage interest rates go up to say 5%, the landlord needs at least $2500 a room to break even. In a free economy rates are decided by the market.

OUR SOLUTION

The Federal Government has to play an active role and has to fulfill its obligation of regulating trade/commerce in Canada. The Governments cannot become rich at expense of citizens. The citizens are crumbling and our future looks bleak. How would a young person buy or rent homes in future? There are no jobs that pay so much. Our debt levels are increasing. Lot of debt and borrowing is unreported as people borrow from private sources and friends. And most people are forced to work for cash to save their tax and are discouraged from operating small businesses due to excessive gouging by the governments.  Canadians are just living off the equity of their homes.

The very first thing needed is to have a Federal Department that monitors pricing in Canada. The government MUST intervene when it sees a general collusion in pricing as has happened in food industry where the prices have gone up by 100-300% on most items. As a starting point, we need to have an immediate Commission of Inquiry in to rise in prices after the increase in minimum wage in major province, Ontario. We need to analyze every industry and conclude how far out the price increase has been in relation to minimum wage increase and carbon tax. Every industry has an acceptable retail mark up of 10-35%. If any big chain store has increased its prices of food, clothing and various products without rationality, they need to be clamped back or even forced to pack up. We cannot call it socialism, but we can call it as responsible capitalism to rein in the abusers of free economy. And the foolish carbon tax needs to be scrapped as there are better solutions, which our party has to offer to contain global warming and meet global emission targets. Surprisingly Conservatives and NDP have offered no alternative at all. We may lose certain government revenues but it would be a healthy economy where citizens are not stifled and living under stress.

We ask Canadians to repose their trust in our party and vote for us to enable us to do things for Canadians. We want young Canadians to join us. The world is changing and traditional parties are being booted out all over the world. We have to bring a marked change in Canada’s politics. If these three parties had any real intention, they could have done it while in power or spoken up in their platforms. We did not need Canada’s Fourth Front to wake them up.  If they speak now, it would be half-hearted

KEY FACTS

Some of Federal GST sources

Residential Construction $5.2 Billion + (why would Govt want houses to be cheaper?)

Real Estate Brokers $1.3 billion against $27+ Billion annual sales (why would Govt cap real estate commissions?)

Prepared meals $2.4 Billion +

Insurance $2.6 Billion

Cell Phones $1.8 Billion

Non-Residential rentals $370 Million

Gasoline and fuel tax $2 Billion +. This is in addition to $5.7 Billion Federal Gas Tax (why would the government want gas to be cheaper, although it consumes almost 15-30% of household budget depending on number of vehicles)

Ontario

Collected over $25 billion Ontario Sales Tax in 2017-18

Collected over $3.7 Billion in health premium in 2017-18 (a temporary tax has become a permanent tax now)

Collected $3.65 Billion land transfer tax in 2017-18 (why would Ontario Govt want houses to be cheaper?)

Municipalities collected over $1 billion in land Transfer tax in 2017-18 (why would Municipal Mayors want houses to be cheaper?)

Average $1 Million price of a 2,000 sq ft home in Markham or near Toronto, comprises of around $200,000 in government and real estate costs. Around $200,000 is due to increased costs of products and labor. This is an artificial increase in pricing. If prices are checked, the home prices will be controlled as builders will be able to build cheaper homes.

THEY ALL PUT BLAME ON FREE ECONOMY!!!