May 19, 2017
Back when I worked for Toronto’s Taxi News, my favourite assignments were writing profiles of our advertisers.
I loved meeting entrepreneurs who had been in business for decades and had astute observations to share.
Gus Pap was a radio guy in on the ground floor of cellular technology and sold several patents to Bell before Bell Cellular (now Bell Mobility) was launched.
When I interviewed him in a grimy garage, he was already worth millions of dollars.
Jay Scheetz, who became a major Bell Mobility dealer, told me, “business is like a pinball machine. For everyone you bump into, you get your 50 points. But every now and then, you fall into one of those holes where you rack up the thousands. Stay there as long as you can.”
However, the voice that most echoes in my mind as the Ontario government grapples with skyrocketing house prices, particularly in the Toronto real estate market, is that of Willie Hohenburger of Willies-Systems on Bathurst Street.
Willie was a German immigrant, fast and smart about all things technology-related.
I interviewed him around the time taxis started collecting the Goods and Services Tax (GST) and every taxi meter had to be adjusted for it.
I asked him how anyone could be certain every cab had a fully-functioning, accurate meter.
I have never forgotten his answer.
Willie gave a deep sigh and turned both hands palms up.
“Rita,” he said, “there will always be ‘mechanics.’ When I started in the 1950s, we had mechanical meters which clicked over every 100 yards. Drivers found a way to insert a paper clip at a certain spot that would make those meters run faster. Later, we switched to computerized meters and drivers found ways to interfere with the programming to make those meters run faster. Now we are adjusting for GST — I am sure drivers will find a way to reprogram our chips to pay less GST and make more money for themselves. These guys are out there, and they are smart. We can slow them down, but we cannot stop them. We call these guys ‘mechanics’ and there will always be mechanics.”
Now, the Ontario government has decided it needs to cool off Toronto’s hot real estate market.
How will the mechanics respond?
Someone I know has already offered to make purchases on behalf of foreign buyers for 7.5% of the selling price, saving the actual buyer 7.5% of the new tax.
Another fellow, a real estate agent I know, started his career at age 10.
“There were a lot of old Italian men who played cards and drank coffee on Danforth,” he explained to me.
“Every day, they would put stink bids in on multiple properties. My job was to run around and pick up their bids, and run them to the sellers’ agents. Every now and then one would be accepted, and this guy would get a property for a fraction of its value.”
Surely Premier Kathleen Wynne understands that a young version of my real estate friend is running around right now, picking up and dropping off “stink bids” to see what purchasers will pay for a property.
As entrepreneurs, they will find every loophole and trick of the trade to make money.
No government is going to stop them.
Because there will always be mechanics.
- Rita Smith has worked as a communications professional in business, government and politics since 1985.
Rita Smith, Sun Toronto