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Post COVID Economy


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#41 spanky123

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Posted 23 February 2021 - 08:14 AM

I admin watching long bonds is only marginally more interesting then watching paint dry but they are up again today. Short term interest rates are going to have to increase sooner rather than later if this keeps up.


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#42 VIResident

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Posted Yesterday, 07:36 AM

Comment: Be wary of wonky and wicked municipal taxation

"......In our view, we don’t need to pay more municipal taxes post-pandemic to balance the books, deal with increased debt and retain quality services. A much better alternative is to aggressively consolidate services to get better value for our tax dollars.

 

It’s municipal budget time across the region, so be wary of how many pockets your local politicians decide to pick to pay the bills."

Be wary of smaller municipalities that are subsidized by next-door neighbours in larger municipalities.

 

We all love Metchosin, but their big city cousins support that bucolic charm.

As a community of less than 5,000, total policing costs amounted to $240,000 in 2019, thanks to subsidies. That’s four per cent of their total budget, the lowest in the region.

By comparison, nearby Victoria spends $48.6 million, or 23 per cent of their budget, on policing, Saanich spends $32.2 million or 16.0 per cent, and Esquimalt spends $8.2 million or 22.9 per cent.

In 2019, Metchosin received about $1.1 million (for municipal purposes) in lieu of taxes, most of which is for federal government properties including William Head prison, Rocky Point Ammo Dump (DND), Mary Hill Battery (DND), and Mount Helmcken Radar Site (MOT).

It also received a provincial Small Community Grant which is unconditional, intended to augment the operating budgets of small municipalities in B.C. It received $526,241, or 9.6 per cent of 2019 expenditures of almost $5.5 million.

This is all about to change: The province is gradually shifting all of the cost for E-Comm 9-1-1 service to RCMP-serviced municipalities like Metchosin. Now that the RCMP is unionized, staffing costs are also increasing substantially.

Be wary of the wicked taxation brought on by the new assessment policy in B.C.

It uses the “highest and best use” approach in determining property value. If for example, you own a corner store downtown — where a skyscraper would fit in nicely — your property taxes are closer to a skyscraper than a corner store.

The concept of valuing properties as if they are ready for development tomorrow is inappropriate for property taxation purposes. It has been a wicked windfall for the municipality.

The province finally understood the implications of this taxation policy and provided a partial solution through the interim Business Property Tax Relief Exemption. ­Owners, though, have had to pass on substantial tax increases to any tenants.

Read entire article at Times Colonist https://www.timescol...tion-1.24287381


#43 Mike K.

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Posted Yesterday, 07:48 AM

I chatted with a local business owner yesterday, who runs dining establishments in downtown Victoria and on the West Shore. He says the way the government monies are being distributed puts businesses like his into a limbo state of having to maintain depressed incomes in order to qualify for subsidies. He says if he starts making too much, he'll lose his subsidies, while staff remain reticent about going back to more normal levels of patrons and output.

 

He has also said that there is a plethora of money available to him, and he has surpassed well over a third of a million dollars thus far, most of which will not require repayment.


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#44 spanky123

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Posted Yesterday, 08:23 AM

^This is the point I made a few months back. Smart business owners can make FAR more money now running reduced hours and wages then they ever did previously. All they need to do is open during their most profitable times and close as soon as they hit 70% of the income threshold. Most can do that with about 40%-50% of normal hours and costs. Many staff don't care because anything they lose with shorter hours can be topped up with the CRB. Another screwed up Liberal disincentive to work strategy. 

 

Here is the rub though. In June it all ends (except CRB which is extended). I can't see the Liberals extending the CEWS (unless hyper focused) as the rest of the country is well into vaccinations. In addition, the 5 year bond rate I keep harping about has added $6B+ a year in debt servicing costs to the Feds in the last 30 days alone.

 

THERE ARE ALMOST 500K businesses in Canada collecting the CEWS and 25% OF THE WORKFORCE being paid by it.  There is going to be a huge sucking sound come late June when those businesses and employees now have to fend for themselves.


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#45 Mike K.

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Posted Yesterday, 08:33 AM

A classic example of bureaucrats meddling in the market. There are businesses that are being lost in translation or falling through the cracks because they are not setup the way Ottawa requires them to be setup. In serious trouble are going to be independent contractors, independent suppliers and the nuts and bolts of our industries who contract their services and fill important roles that we don't normally see, but which are essential for business to thrive and grow.


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#46 Matt R.

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Posted Yesterday, 02:01 PM

I chatted with a local business owner yesterday, who runs dining establishments in downtown Victoria and on the West Shore. He says the way the government monies are being distributed puts businesses like his into a limbo state of having to maintain depressed incomes in order to qualify for subsidies. He says if he starts making too much, he'll lose his subsidies, while staff remain reticent about going back to more normal levels of patrons and output.
 
He has also said that there is a plethora of money available to him, and he has surpassed well over a third of a million dollars thus far, most of which will not require repayment.


I think most businesses would rather be back at 110% and not eligible for subsidies, I know I sure would! The only way you lose subsidies is by having 100% of last years sales in the given period.

Now what I want to know is how the feds plan on calculating subsidies going forward, as we enter year two of this. Right now, you base your claim on how much your sales have decreased in the same period last year. What happens in April when everyone is UP over last April? I hear they will be clarifying this on Monday. I’m hopeful we are able to compare to 2019. :)

I’d say that $300k isn’t that big of a sum for a business with multiple outlets.

Matt.
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#47 Matt R.

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Posted Yesterday, 02:04 PM

^This is the point I made a few months back. Smart business owners can make FAR more money now running reduced hours and wages then they ever did previously. All they need to do is open during their most profitable times and close as soon as they hit 70% of the income threshold.


Why would they close when they hit 70%? Asking for a friend.

Matt.

#48 VIResident

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Posted Yesterday, 03:12 PM

 

 

THERE ARE ALMOST 500K businesses in Canada collecting the CEWS and 25% OF THE WORKFORCE being paid by it.  There is going to be a huge sucking sound come late June when those businesses and employees now have to fend for themselves.

 

THIS.



#49 VIResident

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Posted Yesterday, 03:16 PM

A classic example of bureaucrats meddling in the market. There are businesses that are being lost in translation or falling through the cracks because they are not setup the way Ottawa requires them to be setup. In serious trouble are going to be independent contractors, independent suppliers and the nuts and bolts of our industries who contract their services and fill important roles that we don't normally see, but which are essential for business to thrive and grow.

 

Mike, for the sake of having historical content around this post-COVID econ topic,  would you mind adding a few of the types of indy contractors/suppliers, nuts & bolts, that fill important roles that are essential and are in peril?  



#50 Victoria Watcher

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Posted Yesterday, 03:29 PM

THERE ARE ALMOST 500K businesses in Canada collecting the CEWS and 25% OF THE WORKFORCE being paid by it.  There is going to be a huge sucking sound come late June when those businesses and employees now have to fend for themselves.

 

i think you might be surprised.  people seem to adapt.



#51 spanky123

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Posted Yesterday, 04:09 PM

Why would they close when they hit 70%? Asking for a friend.

Matt.

 

As you know my friend the original cut-off for CEWS eligibility was a 30% decline in revenue. 29% and you got squat. That has since changed to a declining scale but there is a point where it makes sense to close and take the money then stay open and pay people for a small incremental increase in revenue.


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#52 Mike K.

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Posted Yesterday, 04:10 PM

Mike, for the sake of having historical content around this post-COVID econ topic, would you mind adding a few of the types of indy contractors/suppliers, nuts & bolts, that fill important roles that are essential and are in peril?


Oh sure, people like consultants, owners/operators of niche businesses, professionals who contract to businesses, even independent operators of logistics operations, etc.

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