Chapter 3 (Going once..Going twice)

Others cry foul at Calgary's Efforts to Recruit Nurses

Calgary Health Region ad campaign to recruit nurses has created an outrage across Canada. Alberta has a shortage of nurses in the area and is in demand for 500 registered, licensed nurse practitioners. The ads target the market by offering permanent nursing positions in both urban and rural communities including excellent benefit packages and salaries. Other provinces like Saskatchewan with a less blooming economy cannot compete with the recruitment benefits and bonuses offered in Alberta. Hamilton Health Sciences in Ontario and Nova Scotia’s Nurses’ Union cannot afford to lose their pool of nurses. Canada is quickly entering a bidding war with the shortages of registered nurses.

For the past decade, provincial governments in Canada have been dealing with shortage of medical assistance from the health system. All Canadians have felt the decline but none more so than the nurses. Alberta is extending their recruitment to other provinces because they are currently short 2,000 nurses. Alberta provincial government has been instrumental players in recruiting nurses in the labour market. The information provided has extended details of job opportunities as well as created competition among the other provinces. This effective competition offered nurses the best benefits for working more overtime. Although this bidding war has created a positive third-party effect in Alberta, other provinces are facing negative third-party effect. The federal government has to undertake action to prevent further shortages of nurse in Canada by extending learning opportunities and benefits of nursing schools. It is vital for the government to attract nurses into the labour market in Canada since health care is an essential good. United States, our neighbouring country attract majority of the labour force in the medical industry especially from Canada because of their higher salaries and benefits. Privatization allows medical clinics to present the best offer to nurses under the tight demand. Health care is a public good that could be control by a company. However, if health care were privatized, would private companies have the best interest of the public under this shortage of nurses? Health care is not unmet good so private companies can take advantage of this situation and easily overcharge patients for the beneficiaries. The Alberta provincial government have become involved in the problem that arose in their health care system. By continuing their procedure in recruiting nurses, they will slowly diminish their shortage. The federal government must slowly regulate the procedure of the provincial government to prevent an extensive national shortage of nurses. Government officials must create a mandate to eliminate the current price ceiling on salaries offered to health care workers to reduce the current shortages. Price ceiling result in shortages that force the federal government to deal with rationing health care among the provinces.

In British Columbia, nurses are offered a $10,000 bonuses and Alberta has created a bidding war for British Columbians. I hope the shortage is temporary and the federal government will take proper initative to reduce the problem. Education is a key factor in eliminating this shortage because "education supply has not kept pace with the demand". The government must help rebuild the profession and not steal from one another. Because of these circumstances, governments must intervene in our free-market system.

Stop “Poaching” for Nurses!!

http://www.edmontonsun.com/News/Alberta/2007/01/22/3424613-sun.html

Chapter 2 (Up, up Supply)

New housing supply outstripping demand

Extra, Extra! The Canada Mortgage and Housing Corporation announced that new housing construction has cooled down the market in British Columbia. There is enough supply of houses to supply the large demand. They predicted that 36,900 new housing would start in B.C. this year and diminish off to 35,300 in 2007. Currently, there are a large number of projects launched in Richmond and New Westminster. These projects need time for the market to absorb. Overall, this allows prices and sales to slow down which is good thing for the market. Economists state that the main factors that reduce housing are the combination of rising prices and moderately higher interest rates. This factor is going to slow the demand and have a huge impact on monthly mortgage payments. Presently, in the housing market supply has outpaced demand in some areas of Greater Vancouver.

In the last few years, the housing prices in Vancouver increased immeasurably. A number of factors combined to increase the supply for houses are prices, production costs, and psychology of owner. Due to the increased prices of housing along with a high demand, suppliers are able to receive a profit for their product. The higher the price, the more the supplier will offer the product onto the market and hence there is an increased in construction of residential areas. They suggest that in the future, cost will increase so the supply of new housing diminishes too. Demand for workers and materials for housing will be increased due to higher cost because the only way suppliers are willing to supply the new housing after granting a wage increase is if higher prices for the product is received. The quantity supplied of housing to the market increases when the price of housing is also higher. The additional costs of supplying more housing in Vancouver is beyond the certain level of output. People have other choices such as living in the suburbs or alternatives such as apartments and condos. These substitutes allow them to have more choices which constantly changes the supply side of the market. The supply of a product to the market will change over time because changes in the factors that influence that supply. For example, renting houses in Vancouver have been very popular due to the higher prices. Now the housing bubble might burst due to the upward-sloping supply curve because of the change in quantity supplied in response to the change in the price of housing. Housing is shifting on its elasticity curve in the Greater Vancouver market. Housing is frequently categorized as elastic because it is expensive and has multiple substitutes like trailers, apartments, etc. Time is influencing the elasticity of housing. The market is at current equilibrium where there is large supply and demand on the market. The total revenue of housing is increasing meaning majority of the housing investments are cash cows. Over time, housing is a reliable market to invest in. It is unlikely that market prices will decrease and hence it will continue to constantly increase. There is still a large demand because the time to invest in housing is profitable. The resulting concept is that time does make all products even more elastic.

When Canadian economic conditions are booming, it can also create the perfect breeding ground for speculative price bubbles to form in BC expanding housing market. There is a sense the air is leaking out of what had become an over inflated market even though in the bubble scenario, prices keep climbing at the same rate as supply of housing grows. High costs have not restricted housing construction. In the new supply of houses created, there is the increasing supply that will have a downward effect on the price. The market needs just a little bit of time to recharge before the next introduction of supply. So the air of the housing bubble must be released from the earlier tight market.