Canada’s Tepid Future Needs Boundaries and Structure

Much of Canada was put on hold before the election. Last fall, the uncertainty of who was going to be in the White House made everyone very nervous. Then, when the result was finalized in November, it was like a great sigh of relief blew over North America. Just as things began to heat up on the path to economic “recovery”, President Trump announced tariffs, and Canada froze in uncertainty again. The panic spread to our own election and our original collective opinion spun around nearly a 180-degree change. We collectively swung from a big government mindset to a smaller government, then back to the idea that big government can solve all our problems. Vertigo Express!

When I first wrote about a possible Trump Presidency, I told everyone to hang on tight; the roller coaster is going to make us nauseous. I don’t usually make predictions but that one was easy. Even before Trump came down the escalator, I had read several of his books. I also knew of a guy from less than 50 miles away from my home who dealt directly with Trump on a bottled water deal. The deal attracted all sorts of local attention when the guy first talked about it on our regional radio station (this was back when radio was either AM or FM). Then months passed without any word until rumors had it that the owner of the well refused to discuss the event anymore. I met a neighbor of the well owner who discussed with his friend about his complete frustration with Trump. At first, his friend was dazzled by Trumps attention, but once he had to work with Trump directly, he found him to be much more erratic and contradictory than anyone he had ever dealt with before. Trump must have changed the deal a dozen times in less than two months, each time either reducing the offer or increasing the owner’s liability, reducing options or increasing the owner’s responsibility. The deal got worse and worse… without ever seeing a sight of closure. He finally gave Trump a piece of his mind and slammed down the phone… never taking calls from him again. I knew enough about the guy to believe him to be rather easy going. I assumed Trump was the primary instigator of the frustration. Trump never got a drop of his water, and I also never heard if the guy ever sold a drop of his. When it comes to Trump, my guess is… we got about 42 more months of this type of behaviour.

An uncertain and erratic environment is not a good place to invest (an over-regulated environment isn’t good either). If our partners change the rules every couple of months, or abandon agreements before their renegotiation dates, investing in the future ends up being more of a crap shoot than a series of responsible moves. These points are not just directed at our neighbors to the south. Trade rules are based on sound business laws and global/international laws such as Intellectual Property Rights. Agreements are made grounded in honesty and integrity. Kevin O’Leary has touted many stories of IP theft by Chinese companies with zero means of justice or recourse. Who cares if they make a fantastic agreement if they simply don’t follow the rules. Without predictable and fair rule application, agreements are basically useless.

Personally, this past winter, in a moderately related event, I bought four garage doors from China (CIF* Winnipeg). I followed the advice of a close friend who regularly purchases parts from China. I sent my money and waited. In the end I got my doors, but the two crates were held hostage in Vancouver by either a brokerage firm… a trucking company or… someone. In the end I had to pay an additional 20% of the cost of the entire order (above customs and brokerage fees) to get the crates released from the Vancouver Port. They charged me for things like forklift and storage costs “in China”, as well as several Alpha Numeric costs that nobody could explain. The more I inquired about the added costs the higher they became: $50 per day if memory serves correctly. My friend told me that you must pay the “Bull S**t” costs because it’s China… or Vancouver. In his business, he just adds it to his costs. Agreements mean nothing if they are not enforced.

Agreements may be made by private citizens or companies, but the rules are enforced or defended by Governments. Governments either stand behind rules (by enforcing them) or break down any opportunity for ethical long-term trade. Good long-term trade needs a sound long-term structure of ethics. Without rules and boundaries, things collapse into chaos very quickly.

Let’s not just look or count on our neighbors to the south or our trading partners on the other side of the globe for adherence to rules and boundaries. Maybe we should look at Ottawa for the basic MINIMUM requirements of a simple budget which records and reports our government’s fiscal boundaries. How can we have faith in future investing when our government hasn’t cared about balancing the budget… and now… not even bothering to CREATE one.

There is one narrow path to prosperity and many well-worn highways to chaos.

*CIF (Cost, Insurance, Freight) This term means the seller includes the cost of goods, insurance, and freight charges up to the named destination port in the price.

About the Author:
Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master’s degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars.

You can find him at www.makingyourmilescount.com or 1-877-987-9787.