True North Commercial REIT T.TNT.UN

RE:RE:RE:RE:CANADA

[flamingogold]

All governments are starved for cash and they know exactly what they can dig into before they go back to any money printing.... residential real estate. Up to now, they have resisted. The BC gov't just opened the door to unwinding personal exemptions on principal residences. Do not be surprised if Ontario follows and Federal governments too. There is too much "gain" that can be tapped into.

20% tax rate for income earned from properties sold within 365 days of purchase

luscar99 wrote: It looks like people don't understand how this works.
THEY DON'T HAVE A CHOICE!

We're no longer in a situation where the Central Bank's rates are used for fine-tuning the economy or inflation. 
Because of the huge budget deficits and accumulated public debt.

Those rates you're talking about are correlated to the treasury bond yields.
Trudeau can't sell treasuries at lower yields than similarly credit-rated securities.
He can't sell 3months treasuries at 4.5% while the US 3months yields 5.5%.
He could try, but nobody will willingly buy them.

As we speak most- if not all-of the Central Banks print (some) money. Actually they don't need to even physically print them anymore. They simply create electronic money. Bits of information.
They always did and it got worse lately. And progressively much worse in the last few years.
But in most cases the amount of money they currently create still does not represent the majority of the funds needed to cover the ever-increasing budget deficits.
The bulk of the deficits is (still) covered by treasuries issuance.

And if Trudeau can't sell treasuries -because capital is flying to where it gets a better return- then his Bank will have to find another solution for covering his budget deficit. 
Tax increases ? Hard one. The capital is already flying away.
And that leaves full blown money printing.
Which generates out-of-control inflation.
And people instinctively know that's happening and about to get worse. That's why the bidding wars on real estate.

To make matters worse the size of the budget deficit is public knowledge. The treasury  actions are public knowledge. The tax collection could be fairly accurately calculated. Therefore Big Money (hedge funds, pension funds, sophisticated investors, etc) could quite accurately and quickly do the math and figure out the extent of money printing.
And when the money printing machine goes in overdrive...they run!
Avalanche effect. Weimar. 


That's why they can't lower the rates to a significant extent. It's not up to them. They are between a rock and a hard place.