*NEW IMPORT TAX ON HOUSES* - What does this mean for eCanada?
Day 525, 18:32
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Published in Canada 
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by
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by AugustusV
Written by Octavian_F, Chief Editor of eWorld Economy Magazine
A new, and controversial bill, gives the thumbs-up to foreign housing companies
A new law has just been passed by congress in eCanada, which will LOWER import taxes on foreign houses.
Although just a few hours old, the new law has already sparked a heated debate by enraged eCanadian business owners.
However in order to understand the motives behind this new law, we must analyze the possible pros and cons of this decision.
The reality is that Canada's houses are the 5th most expensive in all of eRepublik, an issue that the citizens of Canada have been complaining about for a long time.
The new law, which will probably result in an explosion of foreign housing companies buying export permits, and selling their cheaper houses in Canada, may in fact spark the long needed competition in the Canadian housing industry. There are only a handful of housing companies operating in Canada, and the previous taxes on imported houses ensured that there would be no competition from abroad.
Canadian Q1 houses are about 1-2.5 gold OVER the international average, Q2 houses are around 3-4 gold OVER the international average, and our ONLY Q3 housing supplier is about 9 gold over the international average.
Canadian citizens are suffering because they have to save up larger amounts of money for houses, money that could be used towards purchasing food, gifts, weapons, moving tickets, etc. Cheaper houses would mean that the not-so-rich citizens of Canada, will finally have easier access to higher Q houses, thus giving them easier access to higher wellness. Higher wellness would mean an increased national productivity rate, which would positively affect the rest of the Canadian economy.
Also keep in mind that eCanadian citizens were very ticked off that Canada had such expensive houses (while foreign countries enjoyed cheaper housing), and the old import tax (ensuring that they had no chance of buying abroad since no foreign housing company would sell in Canada), just worked to annoy them further. Buying a moving tickets to a another country just for a house, would be too expensive and would negate any savings they would make (however for higher-Q houses, buying two moving tickets could actually be cheaper than buying a house from Canada, however just the fact that they had to pay over 20 CAD extra, when other citizens were spared this extra cost, was still unacceptable, and contributed to the growing anger at the Canadian housing firms).
Canadians had two choices, stay pissed off and buy expensive houses in an industry where foreign competition is discouraged (thus allowing Canadian housing firms to set higher prices), or, leave the country for good.
Either way, it was up to the government to make their citizens happy, after all its the citizens, not the business owners who make up the vast majority of the population, and who have the real voting power. Therefore the government decided to help eCanadians be able to afford cheaper housing, even if it was at the expense of the Canadian housing industry, and possibly the lumber industry as well.
We also must remember that so far that in Canada, only six local firms, and one government firm, have been providing houses for Canadians. The Canadian housing market has inflated prices due to low competition. Some may say that this is unfair, and that the housing companies should be forced to face outside competition in order to have fair prices. However we must not forget that Canadian housing firms offer high salaries to their employees. Outside competition will force Canadian firms to lower prices, but that may mean lowering the salaries of their employees, or firing them altogether. Expensive Canadian houses paved the way for high salaries, and the employees themselves will also suffer under the new wave of foreign houses entering the market.
Another fact to consider is that the Canadian housing industry is the one of the biggest customers of the Canadian lumber industry, if Canadian housing firms go belly up, or cease production for a while in order to empty out their inventories and restructure the company, the Canadian lumber industry (which is fairly larger than the housing industry, and which has many more employees), may also see a decline in profits, and employees in that sector may also have something to worry about.
Indeed the new law may cause the Canadian economy to stagnate a little bit, while GM's desperately try restructure their companies and make them more competitive on the Canadian, and possible the global markets as well.
However it is true that a mere 5% of the population works in construction, and that most of those higher-skilled of those workers are currently employed by the state to produce Q4 hospitals, and Q5 defense systems. Also the state-run training companies would probably be able to absorb any other employees that have lost their jobs due to the new law.
The role of the Canadian government is to represent, and act in favor of, the ruling majority. Unfortunately the GM's of the housing companies, and all their employees, do not represent that majority.
In time the Canadian housing industry will restructure itself, and possibly even become a highly competitive industry, both on a national, and maybe even on an international scale, only time may tell.
But one thing is for sure, the Canadian government has shown us that it's committed to fulfilling their responsibilities to those who voted it in power, and will not collapse under the pressures set forth by the companies who fight for their own interests. So long as our government stays this way, I am confident that things will always turn out for the better.
YOUR AD HERE!
- If you wish to advertise in the eWorld Economy Magazine please contact Octavian_F
- You can provide both pictures and text, and our marketing team can even help you design a custom banner to display.
- We can advertise companies, organizations, and even run political campaign ads.
- All fees are negotiated
A new, and controversial bill, gives the thumbs-up to foreign housing companies
A new law has just been passed by congress in eCanada, which will LOWER import taxes on foreign houses.
Although just a few hours old, the new law has already sparked a heated debate by enraged eCanadian business owners.
However in order to understand the motives behind this new law, we must analyze the possible pros and cons of this decision.
The reality is that Canada's houses are the 5th most expensive in all of eRepublik, an issue that the citizens of Canada have been complaining about for a long time.
The new law, which will probably result in an explosion of foreign housing companies buying export permits, and selling their cheaper houses in Canada, may in fact spark the long needed competition in the Canadian housing industry. There are only a handful of housing companies operating in Canada, and the previous taxes on imported houses ensured that there would be no competition from abroad.
Canadian Q1 houses are about 1-2.5 gold OVER the international average, Q2 houses are around 3-4 gold OVER the international average, and our ONLY Q3 housing supplier is about 9 gold over the international average.
Canadian citizens are suffering because they have to save up larger amounts of money for houses, money that could be used towards purchasing food, gifts, weapons, moving tickets, etc. Cheaper houses would mean that the not-so-rich citizens of Canada, will finally have easier access to higher Q houses, thus giving them easier access to higher wellness. Higher wellness would mean an increased national productivity rate, which would positively affect the rest of the Canadian economy.
Also keep in mind that eCanadian citizens were very ticked off that Canada had such expensive houses (while foreign countries enjoyed cheaper housing), and the old import tax (ensuring that they had no chance of buying abroad since no foreign housing company would sell in Canada), just worked to annoy them further. Buying a moving tickets to a another country just for a house, would be too expensive and would negate any savings they would make (however for higher-Q houses, buying two moving tickets could actually be cheaper than buying a house from Canada, however just the fact that they had to pay over 20 CAD extra, when other citizens were spared this extra cost, was still unacceptable, and contributed to the growing anger at the Canadian housing firms).
Canadians had two choices, stay pissed off and buy expensive houses in an industry where foreign competition is discouraged (thus allowing Canadian housing firms to set higher prices), or, leave the country for good.
Either way, it was up to the government to make their citizens happy, after all its the citizens, not the business owners who make up the vast majority of the population, and who have the real voting power. Therefore the government decided to help eCanadians be able to afford cheaper housing, even if it was at the expense of the Canadian housing industry, and possibly the lumber industry as well.
We also must remember that so far that in Canada, only six local firms, and one government firm, have been providing houses for Canadians. The Canadian housing market has inflated prices due to low competition. Some may say that this is unfair, and that the housing companies should be forced to face outside competition in order to have fair prices. However we must not forget that Canadian housing firms offer high salaries to their employees. Outside competition will force Canadian firms to lower prices, but that may mean lowering the salaries of their employees, or firing them altogether. Expensive Canadian houses paved the way for high salaries, and the employees themselves will also suffer under the new wave of foreign houses entering the market.
Another fact to consider is that the Canadian housing industry is the one of the biggest customers of the Canadian lumber industry, if Canadian housing firms go belly up, or cease production for a while in order to empty out their inventories and restructure the company, the Canadian lumber industry (which is fairly larger than the housing industry, and which has many more employees), may also see a decline in profits, and employees in that sector may also have something to worry about.
Indeed the new law may cause the Canadian economy to stagnate a little bit, while GM's desperately try restructure their companies and make them more competitive on the Canadian, and possible the global markets as well.
However it is true that a mere 5% of the population works in construction, and that most of those higher-skilled of those workers are currently employed by the state to produce Q4 hospitals, and Q5 defense systems. Also the state-run training companies would probably be able to absorb any other employees that have lost their jobs due to the new law.
The role of the Canadian government is to represent, and act in favor of, the ruling majority. Unfortunately the GM's of the housing companies, and all their employees, do not represent that majority.
In time the Canadian housing industry will restructure itself, and possibly even become a highly competitive industry, both on a national, and maybe even on an international scale, only time may tell.
But one thing is for sure, the Canadian government has shown us that it's committed to fulfilling their responsibilities to those who voted it in power, and will not collapse under the pressures set forth by the companies who fight for their own interests. So long as our government stays this way, I am confident that things will always turn out for the better.
YOUR AD HERE!
- If you wish to advertise in the eWorld Economy Magazine please contact Octavian_F
- You can provide both pictures and text, and our marketing team can even help you design a custom banner to display.
- We can advertise companies, organizations, and even run political campaign ads.
- All fees are negotiated
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Comments
This is an open topic for debate, any thoughts? Opinions?
I greatly appreciate ALL of your comments, for better or for worse, please voice your opinions!
Good article.
Voted.
And you know me, I'm against protectionist policies, especially in this type of situation.
-Ideology
Excellent article and well worth the read.
Much appreciated, I had similar thoughts and said so in other articles on this topic. Much appreciated Octavian, you clearly stated the problem and hopefully, the solution to both sides, producers and consumers.
@Everyone: Thanks for the feedback! I'm glad you enjoyed this article. 🙂
I will be writing a short article very soon, related to the same topic. Only this time I will show Canadian housing companies how to make the best out of a "bad" situation.
Sometimes in business, you have to keep pushing, if luck is not on your side, its up to you to try and tip the odds back in your favor.
Thanks again for the comments, and do not be afraid to voice your opinions!
Good balanced article. How many people work for in forestry?
Good article...but I'm not sure why there's such a fuss over a 20% import tax change. This is a routine change.
Interesting article - well done. One thing however...
"Canadians had two choices, stay pissed off and buy expensive houses in an industry where foreign competition is discouraged (thus allowing Canadian housing firms to set higher prices), or, leave the country for good."
I know it's an opinion piece and we tend towards the dramatic, but this is too reductionist. We don't want people to leave the country over housing. Is it better then to encourage people to buy private - through forum deals or brokerages? Yeah, that cuts out the taxman and eCanadian businesses, but really, it's better than having no one to tax on all the other things citizens buy.
There's a company out there called Canada Housing.
http://www.erepublik.com/en/company/canada-housing-153581" target="_blank">http://www.erepublik.com/en/company/cana[..]3581
It's run by the Cdn. Gov't. and they're currently selling Q1 homes for 218.36 CAD. If there were serious about wanting to give the Cdn. public access to cheap homes, then why are they gouging the same people they claim they want to help?
They've been selling over priced homes for as long as I can remember. If they were serious about fixing the so called housing problem in Canada, they would simply lower the price of the homes they sell. It appears to me the Gov't is made up mostly of hypocrites.
Isn't there such a thing as "too much" competition?
@MIB:
Canada Housing is a state company, it should NOT trigger war price, but allow market to have sufficient OFFER at natural market participant pricing. Canada Housing benefit of an unlimited bank account, the government's Ministry of Industries, wich make this company subsidised, wich in no way can be considered as healthy competition.
We just need to allow more people to have their house.
It will help the peoples and the economy later.
@Plugson: yes indeed I have have gone overboard with my comments, however I heard SO many rants and anger about the extremely inflated prices of the Canadian housing companies, so I thought that maybe some Canadians were just fed up and decided to leave.
Newer players haven't yet realized that you can avoid taxes and all that by privately trading, however with that in mind, houses are a big investment, and some Canadians might consider leaving instead of paying so much extra for a house.
I guess it was just a personal opinion, I guess i exaggerated it a bit too much there, good observation though.
@ozzel O'Dunn: Yes I agree as well, I think in the long run, better wellness will prove to be a much higher asset to our economy.
Well written and well thought out. This is a very good article. Voted and subscribed.
I enjoyed this article, well thought-out and written. Subscribed.
@MIB: "If there were serious about wanting to give the Cdn. public access to cheap homes, then why are they gouging the same people they claim they want to help?" In other words you are confirming that you have been, in fact, gouging the Canadian people for your product yourself since the Government company was simply pricing competitively compared to other companies in the market like yourself? How ever will you survive actually being competitive like every other company in every other market in eCanada? 🙂
Thanks for all the feedback!
Also keep in mind that if certain citizens realized that they could negotiate private deals with other companies, the end result would be that not only are Canadian houses not selling, but the government loses any profit they would get from the taxes.
You can still privately negotiate to buy a house and spare yourself of any tariffs, however maybe if the Canadian housing industry would become more competitive, there would be no more need to engage in such acts.
Excellent article! 🙂
@BradleyAT
Where did I confirm my company was gouging the Cdn. public?
Please don't put more words in my post that aren't there. Infact previously I've stated my company was selling homes for $15-20 cheaper than most of my competition.
Get your facts straight before sticking your foot in your mouth and then mis-informing the Canadian public about something you obviously know nothing about.