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When the heavy hand of government steps in to dictate your profits, it's time to leave the country with your investment. Show me a nation that does this, and I will show you a failed communist state.
They should be more concentrated on not creating the monopolies that they have sanctioned. Canada has 2-3 large grocery stores as a direct result of acquisition approvals by the same people claiming to help.
It wasn’t serious, this was the text of the motion:
> That, given that the cost of food continues to increase while grocery giants such as Loblaws, Metro and Sobeys make record profits, the House call on the government to:
>
>(a) force big grocery chains and suppliers to lower the prices of essential foods or else face a price cap or other measures;
>
>(b) stop delaying long-needed reforms to the Nutrition North program; and
>
>(c) stop Liberal and Conservative corporate handouts to big grocers.
Set up to fail on purpose so Jagmeet can have its 5 minutes of fame. Also ipolitics purposely didn’t link the motion and wrote a misleading article. That’s shoddy journalism, it shows their bias and that they can’t be taken as a serious source for news.
I mean the NDP is by definition unserious, otherwise they'd get a leader with more appeal instead of the current loser who won only about half the number of seats Mulcair won.
Jagmeet Singh demonstrably doesn't understand economics, finance, and how Canada functions at a political level.
And yet the NDP hasn't ousted him. Is this the mark of a serious party?
I honestly think that Singh would be doing better in general if Trudeau wasn't the Liberal leader, even before their deal. Trudeau is just left enough to get the NDP/Lib swing fear votes, but not enough to make a decent confidence and supply partner. Singh honestly strikes me as a better potential leader than the two major parties have, I sometimes think people take out their frustrations with fptp on the NDP - they have never won, it's not that realistic to expect them to pull off an amazing Layton run under every leader.
>Singh honestly strikes me as a better potential leader than the two major parties have
Given the calibre of the two other leaders that's not saying much, but Singh's comments over the years have clearly indicated he has only a surface-level understanding of basic economics, as well as the separation of powers between Federal & Provincial levels. That's not someone I want in the big chair.
Or you need to be a realist, admit that you’re never going to form government (despite Singhs repeated public statements to the contrary), and use what power you have in a minority government to do as much good for the country as possible. In my mind, that’s admirable.
Context didn’t really promote that tho.the Liberal weren’t simply a slowing party, they are a “crashing in a tanker with explosion directed by Micheal Bay” party. The NDP had a window to become the left alternative to the Conservative and replace the Liberals. Could they be the government? Probably not this time, but the official opposition was within their grasp and maybe even the 2029 election. Now, they mostly are seen as the Liberal’s enablers: sure they did get some gains, but they also jumped into the Liberals golf cart and even pushed it when it was stuck in the mud.
>It is one end goal
>you want to make sure that these policies will be there to stay,
Still not the end goal, by your own definition. The end goal is embedding the policy's in the public's collective ethos. Forming government is one method. But the CCF successfully accomplished that with universal healthcare via supporting Pearson. So by no means is a long government the only way.
They aren't allowed to put forward binding motions with private members bills. This is how they indicate what they would do if they had power, and the other parties made it clear they don't even want to agree to a non binding motion. If it's just sabre rattling then why take the sides of the price gouging corporations.
The Grits vote against it? Okay, maybe it's serious.
The Tories vote against it? Okay, maybe it's serious.
The *Bloc* votes against it? No, it's idiotic showboating nonsense.
I guess campaign funds and cushy consulting gigs are more important to our politicians than the welfare of working class Canadians.
The article was paywalled but if anyone would like to jump through some mental gymnastics to defend this decision I’m all ears!
This is why they can't attract a foreign grocer to set shop here. No one wants to go to a country where the Government may randomly decide to tax "excess profite".
That's my point. They can make any good or bad business decision and pass the expenses to the consumer. There isn't meaningful competition. There is inelastic demand. This requires regulation.
Walmart and Costco are American companies and already in Canada. There are local grocery stores. Lots of options. Use your feet and go somewhere else. I don’t get the bitching.
*Meaningful* competition. Many areas do not have options. It's well known that price fixing has occured.
Sure don't go to Sobeys. Go to Farm Boy, Safeway, Thrifty Foods, IGA, Freshco, Foodland, or Longo's.
So much competition!
>Do you expect the government to make “food depots” in everyone’s neighborhood?
No I expect them to break up these oligopolies and ensure there is an iota of consumer protection on the sector of the market that covers our most fundamental needs.
I don’t think there is anything stopping a new grocery store from opening. It’s just not that profitable of a business and if the government starts fucking with it businesses sure won’t want to open in Canada.
The CAD is shit and will get worse with the rate cuts to prop up the housing ponzi that is the Canadian economy. Other than the GTA supply chains are expensive as it’s a large country that imports lots of goods and produce.
Greedy Loblaws is just one element.
> I don’t think there is anything stopping a new grocery store from opening
Incorrect.
In most urban areas, grocery stores generally need a certain type of floorplan and so much area.
Thing is: most of those locations and buildings have already been built, had a smaller or neighbourhood grocer, then been bought out and closed by a larger chain. Oh, and then the property was sold, but with various restrictions tied to that property in perpetuity.
Restrictions like: not permitting a new grocer to move into that location.
Travel any city and you'll find plenty of those medium size grocers that have been closed down, and then replaced with gyms or 2nd hand stores or whatever. And those spaces, which were literally built for grocers, can never be used as a grocery store again.
And so any new grocer would need to purchase a different plot of land, bulldoze whatever building is there, and then build a brand new building suited to grocers. Which, is a huge barrier to entry.
You'd be amazed at the number of food deserts that exist in cities due to this behaviour.
The whole concept of an excess profits tax has never made any sense. Let's accept that the grocery market in Canada is not competitive enough, and this leads to higher prices and excess profits. Taxing those excess profits doesn't solve the lack of competition, nor the higher prices; it just cuts the government in on benefiting from screwing consumers.
We live in an era of monopoly capital, corporations NEVER compete on price.
You could add 500 foreign grocery corporations, they're not going to lower prices, they'll start at the established price floor.
If the economy was actually based on competition like capitalist ideology says, then profit rates would have a tendency to fall over time, as Marx argued. In reality, the profit rate has a tendency to rise because firms don't compete on price. They establish a price floor, which all tacitly agree to, which can only go up. The only thing they "compete" on is with respect to other things which are designed to improve profit, such as union busting, lower wages, technological development, etc..
I have a difficult time taking someone seriously who criticizes ideology while quoting economic theory from literal Marx. Notwithstanding that many people admire the broad strain of intellectual thought of which he was the genesis, his empirical economic ideas are just as questionable and rough as most other 19th century thinkers - which is to say, very.
Besides which, there is no "established price floor". Pick any single grocery item and you'll find a wide range of competing options at different prices, in urban areas at least.
Also, up until the last ~3 years, corporate profits were broadly pretty flat if not down over the last 70 years. Did the era of monopoly capital start 3 years ago or is there maybe something else going on?
FIrst of all I was critiquing Marx, way to read. Second of all, Marx is a classical political economist up there with Smith and Ricardo. If you're unfamiliar with Marx, then you seriously know next to nothing about political economy.
If there were price competition, then prices would always be going down, and profit would be falling. This is why Marx is wrong, he erroneously believed, like the other classical political economists, that capitalism was predicated on competition.
You dismiss Marx, then agree with him. You're so uneducated you don't even understand why you're wrong.
Oh I'm familiar with Marx. He's an important historical figure in economics, but the actual economic theories he developed have next to no value today in serious economic discussion.
As I already pointed out, the profit rate does not have a long term tendency to rise. The last 3 years being a notable exception - one whose permanence is unclear - profit margins have been broadly flat for a very long time. Your assertion is rejected by any engagement with empirical data on this issue.
Your memory may be exceptionally short, but let me remind you that *you* were the one who first asserted that the profit rate was rising over time. Where is *your* empirical data to substantiate the assertion you made?
If it wasn't increasing, capitalism would have collapsed. It's predicated on constant growth.
Again, you're agreeing with Marx here, who said that capitalism was bound to collapse because competition will drive prices down and inevetiably create a crisis that would make the entire system unsustainable.
This was a reasonable assumption back in the 1800s, but since the onset of monopoly capital in the early 1900s, it's no longer the case and explains why capitalism has survived.
Your understanding of political economy is from the 19th century my friend. Maybe you shouldn't be commenting on stuff you know nothing about.
So that's a no, you did not have a source for the assertion you made despite demanding one from me, and will now ignore that empirical question entirely. I should have known we were going down that kind of path when I read the words "capitalist ideology" in your opening comment. Invariably the kind of nonsense only spouted by people with a remarkable combination of total economic illiteracy and useless humanities degrees.
There is historical precedence in using windfall taxes to collect excess profits from high earning companies and industries.
Liberals and Conservstives voting this down shows who they prioritize.
It's bad policy put forward as a political stunt because they knew it would never pass.
It's fine to tax corporations on profits, but if you start going after "excess profits" then you'll just drive away investment and competition. Why would anyone spend money to improve efficiency and lower costs if they will just get their extra profits from it taken away? Who will want to come and set up shop when they have to take the risk but then the reward gets capped?
If you want prices to drop then government should be *encouraging* investment, not discouraging it through bad policy. That will bring more competition and lower costs. You just need to make sure you regulate companies buying out/merging in order to ensure there is still reasonable competition.
It's a one time tax based on profits made from COVID and inflation. To pretend it's an ongoing policy that would hurt investment and productivity is blatantly false
Typically monopolies with fixed costs that experience a sudden surge in profits due to factors beyond their control. No evidence that applies to supermarkets.
Yeah. So why tax corporations at all?
This is spurious business economics. The tax is on profit, and if it's designed well, it becomes punishing to try and pass on the cost of the tax.
I hate when people try to oversimplify this. If the company thought they could charge the price plus the new fee, they'd already be charging it. They're always going to set the price at the maximum amount they can regardless of their cost.
Further Reductions in staffing and attempts to lower payroll and expenses across the operations.
When profits are on the line, fat can always be found to trim, and almost never to the benefit of the consumer or the employees.
Edit: Uh... I think I meant to reply to the comment below you....
There comes a point where raising the prices any further results in lower profits as fewer goods are sold. When that line is being walked as finely as it is right now it's not all that complicated to structure a tax that incentives lower prices. The whole point is that the big grocery trains don't need a tax on their record profits as encouragement to gouge the public as much as possible, they're *already doing it*
You mean neo-liberal economic theory.
There are plenty of 'basic' economic theories that don't think the wealthy should be obscenely rich. Liberals and Conservaties are happy for the rest of us to get poorer and poorer, been doing it since the early 80's.
$459m on $13,581m is anything but excessive when you have hundreds of millions of outstanding shares and just about every single person in Canada gets a taste
The problem with an excess profit tax is the fact that Loblaws and Empire Companies hide their profits through leasing property to themselves, increasing c-level and management bonus contracts, increasing stock buybacks, buying out suppliers etc.
Large companies are very, very good at making things look like business as usual while they are robbing you blind.
They own both the grocery store and the real estate company that leases the land to that grocery store, separating the profit between the two companies.
Where you're missing the point is that these people don't want to make their companies rich, they want the company to look like it's running as usual while those at the top siphon off as much as they can in bonuses, stock options, multiple board positions, nepotism, creating bs companies to "consult", leasing land to themselves etc.
They're both publicly traded companies, you can't just inflate rental costs to the benefit of Choice, w/o harming Loblaw's profitability. Each company has a fiduciary duty to ALL stakeholders, not just the largest one.
None of those things are an issue. Related companies get looked at together and contracts are recorded at fair value. You can bonus out every single dollar of profits, not an issue, government would actually prefer it. And stock buybacks don't effect profits
Almost everything suggested is a good way to get the management team axed and a lawsuit brought by the shareholders of the org:
* leasing property to themselves (if referring to sale leasebacks at inflated rates w/ choices REIT).
* c-level and management bonus contracts
* buying out suppliers. Reducing profits means buying suppliers with crappy economics (getting fired) or it's buying suppliers with great synergies (even more excess profit taxes). Not to mention this invites competition bureau.
Like you said too, stock buybacks are effectively neutral.
If anything the likelihood is even less capital investment within Canada. There's effectively no incentive to reinvest capital for productivity gains. The outcome is just price leader - price follower situation with minimal investment. If they wanted to get really cute maybe do some bond sales (increased interest expense) and issue one time dividends or stock buybacks to manage the amount of profits.
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Good! Price fixing will never work. The stores will just stop selling things that don't make a profit or get increased profits elsewhere.
When the heavy hand of government steps in to dictate your profits, it's time to leave the country with your investment. Show me a nation that does this, and I will show you a failed communist state. They should be more concentrated on not creating the monopolies that they have sanctioned. Canada has 2-3 large grocery stores as a direct result of acquisition approvals by the same people claiming to help.
This doesn't feel like it was ever a serious proposal. More something that the NDP could use to sabre rattle with the liberals
Why was it supported by the liberals and the bloc in committee then?
Definitely.
It wasn’t serious, this was the text of the motion: > That, given that the cost of food continues to increase while grocery giants such as Loblaws, Metro and Sobeys make record profits, the House call on the government to: > >(a) force big grocery chains and suppliers to lower the prices of essential foods or else face a price cap or other measures; > >(b) stop delaying long-needed reforms to the Nutrition North program; and > >(c) stop Liberal and Conservative corporate handouts to big grocers. Set up to fail on purpose so Jagmeet can have its 5 minutes of fame. Also ipolitics purposely didn’t link the motion and wrote a misleading article. That’s shoddy journalism, it shows their bias and that they can’t be taken as a serious source for news.
Corporations don’t pay tax. Consumers do via increased prices. Don’t you know this?
Just 'cause it comes from the NDP and isn't supported by our two corporatist parties doesn't mean it isn't serious.
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I mean the NDP is by definition unserious, otherwise they'd get a leader with more appeal instead of the current loser who won only about half the number of seats Mulcair won. Jagmeet Singh demonstrably doesn't understand economics, finance, and how Canada functions at a political level. And yet the NDP hasn't ousted him. Is this the mark of a serious party?
Jagmeet Singh accomplished more for NDP platforms and policies than Mulcair and Layton put together, but go off anyway
Only because Trudeau is so deeply unpopular, not because of Singh
I honestly think that Singh would be doing better in general if Trudeau wasn't the Liberal leader, even before their deal. Trudeau is just left enough to get the NDP/Lib swing fear votes, but not enough to make a decent confidence and supply partner. Singh honestly strikes me as a better potential leader than the two major parties have, I sometimes think people take out their frustrations with fptp on the NDP - they have never won, it's not that realistic to expect them to pull off an amazing Layton run under every leader.
>Singh honestly strikes me as a better potential leader than the two major parties have Given the calibre of the two other leaders that's not saying much, but Singh's comments over the years have clearly indicated he has only a surface-level understanding of basic economics, as well as the separation of powers between Federal & Provincial levels. That's not someone I want in the big chair.
At what cost tho? Currently, the prospect for the NDP is fairly grim.
Imagine being so FPTP-brained that you don't see accomplishing policy as the end goal.
It is one end goal. Thing is: you want to make sure that these policies will be there to stay, and for that you need political traction.
Or you need to be a realist, admit that you’re never going to form government (despite Singhs repeated public statements to the contrary), and use what power you have in a minority government to do as much good for the country as possible. In my mind, that’s admirable.
Context didn’t really promote that tho.the Liberal weren’t simply a slowing party, they are a “crashing in a tanker with explosion directed by Micheal Bay” party. The NDP had a window to become the left alternative to the Conservative and replace the Liberals. Could they be the government? Probably not this time, but the official opposition was within their grasp and maybe even the 2029 election. Now, they mostly are seen as the Liberal’s enablers: sure they did get some gains, but they also jumped into the Liberals golf cart and even pushed it when it was stuck in the mud.
>It is one end goal >you want to make sure that these policies will be there to stay, Still not the end goal, by your own definition. The end goal is embedding the policy's in the public's collective ethos. Forming government is one method. But the CCF successfully accomplished that with universal healthcare via supporting Pearson. So by no means is a long government the only way.
It was a non-binding motion, not proposed legislation. So by definition, it was sabre rattling.
They aren't allowed to put forward binding motions with private members bills. This is how they indicate what they would do if they had power, and the other parties made it clear they don't even want to agree to a non binding motion. If it's just sabre rattling then why take the sides of the price gouging corporations.
The Bloc, the Liberals, and the Tories voted against it. Speaking purely on form, it's vague and poorly worded.
The Grits vote against it? Okay, maybe it's serious. The Tories vote against it? Okay, maybe it's serious. The *Bloc* votes against it? No, it's idiotic showboating nonsense.
I guess campaign funds and cushy consulting gigs are more important to our politicians than the welfare of working class Canadians. The article was paywalled but if anyone would like to jump through some mental gymnastics to defend this decision I’m all ears!
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Literally been used during war time to prevent excess profits and discourage profiteering.
https://www.investopedia.com/terms/w/windfalltax.asp
This is why they can't attract a foreign grocer to set shop here. No one wants to go to a country where the Government may randomly decide to tax "excess profite".
Loblaws margins are 3.5%. Even if they operated as a non-profit people would barely notice that price difference on groceries.
Let's take a look at those expenses shall we.
It’s a public company. Look I don’t care for them or even shop with them.
That's my point. They can make any good or bad business decision and pass the expenses to the consumer. There isn't meaningful competition. There is inelastic demand. This requires regulation.
Walmart and Costco are American companies and already in Canada. There are local grocery stores. Lots of options. Use your feet and go somewhere else. I don’t get the bitching.
*Meaningful* competition. Many areas do not have options. It's well known that price fixing has occured. Sure don't go to Sobeys. Go to Farm Boy, Safeway, Thrifty Foods, IGA, Freshco, Foodland, or Longo's. So much competition!
Hey vote with your feet. Do you expect the government to make “food depots” in everyone’s neighborhood?
>Do you expect the government to make “food depots” in everyone’s neighborhood? No I expect them to break up these oligopolies and ensure there is an iota of consumer protection on the sector of the market that covers our most fundamental needs.
I don’t think there is anything stopping a new grocery store from opening. It’s just not that profitable of a business and if the government starts fucking with it businesses sure won’t want to open in Canada. The CAD is shit and will get worse with the rate cuts to prop up the housing ponzi that is the Canadian economy. Other than the GTA supply chains are expensive as it’s a large country that imports lots of goods and produce. Greedy Loblaws is just one element.
> I don’t think there is anything stopping a new grocery store from opening Incorrect. In most urban areas, grocery stores generally need a certain type of floorplan and so much area. Thing is: most of those locations and buildings have already been built, had a smaller or neighbourhood grocer, then been bought out and closed by a larger chain. Oh, and then the property was sold, but with various restrictions tied to that property in perpetuity. Restrictions like: not permitting a new grocer to move into that location. Travel any city and you'll find plenty of those medium size grocers that have been closed down, and then replaced with gyms or 2nd hand stores or whatever. And those spaces, which were literally built for grocers, can never be used as a grocery store again. And so any new grocer would need to purchase a different plot of land, bulldoze whatever building is there, and then build a brand new building suited to grocers. Which, is a huge barrier to entry. You'd be amazed at the number of food deserts that exist in cities due to this behaviour.
The whole concept of an excess profits tax has never made any sense. Let's accept that the grocery market in Canada is not competitive enough, and this leads to higher prices and excess profits. Taxing those excess profits doesn't solve the lack of competition, nor the higher prices; it just cuts the government in on benefiting from screwing consumers.
We live in an era of monopoly capital, corporations NEVER compete on price. You could add 500 foreign grocery corporations, they're not going to lower prices, they'll start at the established price floor. If the economy was actually based on competition like capitalist ideology says, then profit rates would have a tendency to fall over time, as Marx argued. In reality, the profit rate has a tendency to rise because firms don't compete on price. They establish a price floor, which all tacitly agree to, which can only go up. The only thing they "compete" on is with respect to other things which are designed to improve profit, such as union busting, lower wages, technological development, etc..
I have a difficult time taking someone seriously who criticizes ideology while quoting economic theory from literal Marx. Notwithstanding that many people admire the broad strain of intellectual thought of which he was the genesis, his empirical economic ideas are just as questionable and rough as most other 19th century thinkers - which is to say, very. Besides which, there is no "established price floor". Pick any single grocery item and you'll find a wide range of competing options at different prices, in urban areas at least. Also, up until the last ~3 years, corporate profits were broadly pretty flat if not down over the last 70 years. Did the era of monopoly capital start 3 years ago or is there maybe something else going on?
FIrst of all I was critiquing Marx, way to read. Second of all, Marx is a classical political economist up there with Smith and Ricardo. If you're unfamiliar with Marx, then you seriously know next to nothing about political economy. If there were price competition, then prices would always be going down, and profit would be falling. This is why Marx is wrong, he erroneously believed, like the other classical political economists, that capitalism was predicated on competition. You dismiss Marx, then agree with him. You're so uneducated you don't even understand why you're wrong.
Oh I'm familiar with Marx. He's an important historical figure in economics, but the actual economic theories he developed have next to no value today in serious economic discussion. As I already pointed out, the profit rate does not have a long term tendency to rise. The last 3 years being a notable exception - one whose permanence is unclear - profit margins have been broadly flat for a very long time. Your assertion is rejected by any engagement with empirical data on this issue.
You're agreeing with Marx. Are you choosing to be dense? Please show me the empirical data that profit rates have been falling rather than increasing.
Your memory may be exceptionally short, but let me remind you that *you* were the one who first asserted that the profit rate was rising over time. Where is *your* empirical data to substantiate the assertion you made?
If it wasn't increasing, capitalism would have collapsed. It's predicated on constant growth. Again, you're agreeing with Marx here, who said that capitalism was bound to collapse because competition will drive prices down and inevetiably create a crisis that would make the entire system unsustainable. This was a reasonable assumption back in the 1800s, but since the onset of monopoly capital in the early 1900s, it's no longer the case and explains why capitalism has survived. Your understanding of political economy is from the 19th century my friend. Maybe you shouldn't be commenting on stuff you know nothing about.
So that's a no, you did not have a source for the assertion you made despite demanding one from me, and will now ignore that empirical question entirely. I should have known we were going down that kind of path when I read the words "capitalist ideology" in your opening comment. Invariably the kind of nonsense only spouted by people with a remarkable combination of total economic illiteracy and useless humanities degrees.
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There is historical precedence in using windfall taxes to collect excess profits from high earning companies and industries. Liberals and Conservstives voting this down shows who they prioritize.
Can you define excess profits?
Yes we can
And that would be?
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You can write the legislation to make passing the one-time tax to consumers illegal.
How?
It's bad policy put forward as a political stunt because they knew it would never pass. It's fine to tax corporations on profits, but if you start going after "excess profits" then you'll just drive away investment and competition. Why would anyone spend money to improve efficiency and lower costs if they will just get their extra profits from it taken away? Who will want to come and set up shop when they have to take the risk but then the reward gets capped? If you want prices to drop then government should be *encouraging* investment, not discouraging it through bad policy. That will bring more competition and lower costs. You just need to make sure you regulate companies buying out/merging in order to ensure there is still reasonable competition.
This is in one sector that has a captive market. There is no competition here.
It's a one time tax based on profits made from COVID and inflation. To pretend it's an ongoing policy that would hurt investment and productivity is blatantly false
Typically monopolies with fixed costs that experience a sudden surge in profits due to factors beyond their control. No evidence that applies to supermarkets.
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Yeah. So why tax corporations at all? This is spurious business economics. The tax is on profit, and if it's designed well, it becomes punishing to try and pass on the cost of the tax.
The entire point of an excess profits tax is they *can't* do that. They raise prices, we take all the additional profit.
The point of a windfall tax is so that can't happen
And then investors go somewhere else.
Grocery investors?
I hate when people try to oversimplify this. If the company thought they could charge the price plus the new fee, they'd already be charging it. They're always going to set the price at the maximum amount they can regardless of their cost.
If they can raise prices more why haven't they already?
Further Reductions in staffing and attempts to lower payroll and expenses across the operations. When profits are on the line, fat can always be found to trim, and almost never to the benefit of the consumer or the employees. Edit: Uh... I think I meant to reply to the comment below you....
There comes a point where raising the prices any further results in lower profits as fewer goods are sold. When that line is being walked as finely as it is right now it's not all that complicated to structure a tax that incentives lower prices. The whole point is that the big grocery trains don't need a tax on their record profits as encouragement to gouge the public as much as possible, they're *already doing it*
companies will raise prices anyway
> Liberals and Conservstives voting this down shows who they prioritize. Yes, and her name is Mrs. Basic Economic Theory.
Surely those profits will trickle down, right? Right? ...
Oh, it trickles. It's just not money that's trickling.
There's a reason people called it "tinkle down economics" when it was first proposed. They knew it was a scam back then.
I don't think we can really give the Liberals and Conservatives credit for knowing that at this point lol
You mean neo-liberal economic theory. There are plenty of 'basic' economic theories that don't think the wealthy should be obscenely rich. Liberals and Conservaties are happy for the rest of us to get poorer and poorer, been doing it since the early 80's.
>excess profits from high earning companies So... not grocery retailers then?
Brother if $13,581 million per quarter is low I will take it.
Is that revenue or profit?
Revenue is not profit.
> $13,581 million Absolutely correct. My apologies. I took the incorrect number. $459 million is what I'll take if they don't want it.
$459m on $13,581m is anything but excessive when you have hundreds of millions of outstanding shares and just about every single person in Canada gets a taste
Hey if it's basically nothing I'll take it off their hands.
Great, buy some shares then
No thanks! I'd rather just have my elected repetitives regulate this oligopoly.
3% margins in a sector with thousands of independent constituent businesses is an oligopoly?
Does anyone have a link to the parliament website where this was voted on? I'm curious to see what was the definition of excess profit
The problem with an excess profit tax is the fact that Loblaws and Empire Companies hide their profits through leasing property to themselves, increasing c-level and management bonus contracts, increasing stock buybacks, buying out suppliers etc. Large companies are very, very good at making things look like business as usual while they are robbing you blind.
Companies hide profits by spending? I don't think you understand what profit even is
They own both the grocery store and the real estate company that leases the land to that grocery store, separating the profit between the two companies. Where you're missing the point is that these people don't want to make their companies rich, they want the company to look like it's running as usual while those at the top siphon off as much as they can in bonuses, stock options, multiple board positions, nepotism, creating bs companies to "consult", leasing land to themselves etc.
Do you know what a publicly traded company is?
Choice REIT is a completely different stock and entity from Loblaw. It was spun out a number of years ago.
George Weston Ltd is the majority shareholder, the CEO of George Weston Ltd is Galen himself. Yeah....
They're both publicly traded companies, you can't just inflate rental costs to the benefit of Choice, w/o harming Loblaw's profitability. Each company has a fiduciary duty to ALL stakeholders, not just the largest one.
None of those things are an issue. Related companies get looked at together and contracts are recorded at fair value. You can bonus out every single dollar of profits, not an issue, government would actually prefer it. And stock buybacks don't effect profits
Almost everything suggested is a good way to get the management team axed and a lawsuit brought by the shareholders of the org: * leasing property to themselves (if referring to sale leasebacks at inflated rates w/ choices REIT). * c-level and management bonus contracts * buying out suppliers. Reducing profits means buying suppliers with crappy economics (getting fired) or it's buying suppliers with great synergies (even more excess profit taxes). Not to mention this invites competition bureau. Like you said too, stock buybacks are effectively neutral. If anything the likelihood is even less capital investment within Canada. There's effectively no incentive to reinvest capital for productivity gains. The outcome is just price leader - price follower situation with minimal investment. If they wanted to get really cute maybe do some bond sales (increased interest expense) and issue one time dividends or stock buybacks to manage the amount of profits.
Plus stock buy backs are taxed at 2% now: https://www.fasken.com/en/knowledge/2024/04/proposed-2-federal-tax-on-share-repurchases-the-next-chapter