Ontario Liberals have joined the NDP is calling for an end to For-Profit LTC in Ontario and will not renew licenses and look to buy out the For-Profit homes.   Another loopy liberal scheme to garner votes, but will just exacerbate the existing shortages, as it would provide a disincentive for For-Profit operators to build new capacity.  Furthermore, for a province already in horrible fiscal shape, where exactly are the billions required to buy out Private LTC operators going to come from?   This market needs to be able to access investor funds thru a REIT structure, whereby the somewhat predictable returns from operating an LTC (look at stability of margins in LTC for EXE prior to COVID) deliver attractive cash flow returns to shareholders in a tax effective manner for the operator.   A chunk of the historical capital raised by the LTC REITs comes from government employee pension funds (OMERS, TEACHERS, CPP, CAISSE, etc), among others.   Moreover, one of the govt pension funds actually owns one of the biggeset LTC operators outright.  So, if elected, the Liberals would turn their back on this large pot of liquidity by freezing out For-Profit companies????  Unlikely.

While the horrible liquidity in the equity markets is impacting everything, and higher rates arguably repricing dividend yields,  this latest piece of potential risk (Liberals buying out the sector) is likely giving already skittish investors just another reason to sell, despite the low odds of this ever moving forward.   RSI under 30 (now 26) has happened 3 other times in past 24 months, and made for good buying opportunities.  news report links below.   


https://www.cbc.ca/news/canada/toronto/ontario-election-liberals-home-care-profit-1.6431006

https://nationalpost.com/opinion/randall-denley-ontario-liberals-daffy-long-term-care-plan-wouldnt-add-a-single-bed