Don’t expect anything to change after the election
BRIGHTON, Ontario – As I write this, my fellow Canadians are heading to their local polling station to cast their ballot in this country’s 44th federal election. At least, I hope they are. But whatever the result, this citizen is not entirely convinced the next Government of Canada will be able to find and execute reasonable solutions to the problems our society faces, particularly those impacting the country’s furniture, mattress and major appliance industries.
I am often asked why Home Goods Online faithfully reports on the state of the housing market in this country. That’s simple, housing remains the single largest driver of consumer demand for furniture, mattresses and major appliances. For example, it’s estimated every house sold through the Multiple Listing Service generates between $6,000 and $8,000 in furniture, mattress and major appliance sales over the first three years after the deal closes – at least, it was the case before the pandemic. Considering the number of units changing hands each year, this means about one-third of all retail sales are directly tied to the housing market.
Affordability and the state of the housing market have been much discussed over the course of the 36 days prior to the election. All three major parties expressed concern but its highly unlikely they can change anything should they form government. They have also promised to build as many as one million new homes during their first mandate.
Looking back over the past hundred years, government has little or no impact over the price of housing. The free market has been the driver. Over the past 18 months, we’ve seen house prices rise to record highs – driven mainly by people’s reaction to the pandemic and the lockdowns introduced to combat the spread of COVID-19.
As we all know, household incomes haven’t kept pace and not just the price of housing. As most of you know, I live in Ontario where gas prices average $1.40 a litre. Granted, that’s not the highest in the country but it’s the highest I’ve seen in my 40-plus of owning and driving a vehicle.
In August, Statistics Canada reported inflation rates for furniture and appliances this industry hasn’t seen in decades. This is a direct result of heightening consumer demand coupled with diminishing supply which, in turn, is the result of pressure on the price and availability of components and freight.
This is why we shouldn’t expect too much from the 2021 federal election, no matter which party forms government or which leader becomes prime minister. Its highly unlikely any serious action to improve the economy and the standard of living for Canadians can even be contemplated until the COVID-19 pandemic has been declared over. There seems to be little consensus has to how long it will take the pandemic to burnout, it has already been around longer than the Spanish Flu pandemic that ended the First World War.
From where I sit, the primary job of the next government is to end the spread of COVID-19 in Canada and then aid in bringing about the end of the global pandemic. Our economy is so tied to that of the rest of the world, we can’t begin to rebuild at home until all of mankind has passed through this particular trial by fire.
Until then, we have to be patient, safe and kind and use to every bit of our experience and intelligence to keep our businesses alive and our team members employed. We can’t depend on the politicians for any of that.