6 ms·

"boring, stable governance" as an export industry is a good observation. I think this is true of other places too, for example in London both the top-end proper

by iguy 8y ago

"boring, stable governance" as an export industry is a good observation. I think this is true of other places too, for example in London both the top-end property market, and arguably the City, are doing exactly this. It would be nice if they could figure out how to export this with fewer side effects. I don't quite know whether a city-state Vancouver is the right measure though. What does this solve compared to the status quo? Living in Vancouver is already unaffordable, but other places are not. Would such a setup lower the barriers for Chinese businessmen to buy a flat there very much?

sonnyblarney 8y ago
" Would such a setup lower the barriers for Chinese businessmen to buy a flat there very much?" That's not a concern :) The issue is to provide 'stable governance' for those who need it, while protecting regular folks from massive inflation due to external factors. Vancouver's 'regular' (ie non construction) economy is being hurt by this - why? Because nobody can afford to live there on regular salaries. Very few entities would consider opening up an office where the 'prevailing wage' cannot attract people. Consider the 'cost' for buying property and who gains from it? The arbitrary owner. What if that 'cost' could be transferred by way of taxes, instead of property speculation? So a 'New Singapore' with land owned by the state and leased out for long periods, and a series of taxes to make sure the surpluses are mostly derived by the state and not property speculation. Surely it'd be expensive to live there, some kind of market function. But a small area could accomodate quite a few people. 90% of these major expenses are real-estate, and I don't mean development, I mean speculation. So this way - Canada can 'export' stable governance and protect local economies. If ex-pats want to move to Van they can get citizenship etc.. but that would slow down as it should be easier - and probably more convenient - to just move to the a new, well managed city state. A huge financial services sector would immediately pop up and there'd be tons of jobs there for those who wanted to work in that sector. Major private wealth management funds, with assets under Canadian domain, not PRC. Safe investments, safe place for domicile etc.. Great export :)
- ttul 8y ago
  The former Liberal government looked seriously at changing the tax code to attract financial services types from overseas. The idea was to establish BC as a “Singapore of the North”. I wish I had a citation for this - sorry.
- iguy 8y ago
  I guess I'm dubious that you can engineer "surpluses are mostly derived by the state" while maintaining the credibility that makes an apartment in Vancouver so attractive in the first place. Those apartments have secure title, under stable property rights, because they are under the same system as every ordinary Canadian voter's house. That's what protects them: there would be a revolt if you messed with all the ordinary voters. Would you be as keen to buy an apartment that instead fell under some special laws which are designed to squeeze you, the foreign investor, to the benefit of the voters? I think you'd be pretty worried that next time there's a pension crisis, or an oil crisis, they'll be very tempted to squeeze you a bit harder, and then a bit harder... I wish there were ways to exploit this export market with less side-effects. There are smaller ones, like Nestle's roaring trade in trustworthy powdered milk. But in general it seems hard.

by iguy 8y ago

sonnyblarney 8y ago

" Would such a setup lower the barriers for Chinese businessmen to buy a flat there very much?" That's not a concern :) The issue is to provide 'stable governance' for those who need it, while protecting regular folks from massive inflation due to external factors. Vancouver's 'regular' (ie non construction) economy is being hurt by this - why? Because nobody can afford to live there on regular salaries. Very few entities would consider opening up an office where the 'prevailing wage' cannot attract people. Consider the 'cost' for buying property and who gains from it? The arbitrary owner. What if that 'cost' could be transferred by way of taxes, instead of property speculation? So a 'New Singapore' with land owned by the state and leased out for long periods, and a series of taxes to make sure the surpluses are mostly derived by the state and not property speculation. Surely it'd be expensive to live there, some kind of market function. But a small area could accomodate quite a few people. 90% of these major expenses are real-estate, and I don't mean development, I mean speculation. So this way - Canada can 'export' stable governance and protect local economies. If ex-pats want to move to Van they can get citizenship etc.. but that would slow down as it should be easier - and probably more convenient - to just move to the a new, well managed city state. A huge financial services sector would immediately pop up and there'd be tons of jobs there for those who wanted to work in that sector. Major private wealth management funds, with assets under Canadian domain, not PRC. Safe investments, safe place for domicile etc.. Great export :)

ttul 8y ago
The former Liberal government looked seriously at changing the tax code to attract financial services types from overseas. The idea was to establish BC as a “Singapore of the North”. I wish I had a citation for this - sorry.
iguy 8y ago
I guess I'm dubious that you can engineer "surpluses are mostly derived by the state" while maintaining the credibility that makes an apartment in Vancouver so attractive in the first place. Those apartments have secure title, under stable property rights, because they are under the same system as every ordinary Canadian voter's house. That's what protects them: there would be a revolt if you messed with all the ordinary voters. Would you be as keen to buy an apartment that instead fell under some special laws which are designed to squeeze you, the foreign investor, to the benefit of the voters? I think you'd be pretty worried that next time there's a pension crisis, or an oil crisis, they'll be very tempted to squeeze you a bit harder, and then a bit harder... I wish there were ways to exploit this export market with less side-effects. There are smaller ones, like Nestle's roaring trade in trustworthy powdered milk. But in general it seems hard.