The Residencial Tenancy Act is Toronto is causing landlords and developers to have less incentive to give out more supply. As of May 30^th, 2017 landlords can only increase their rent by the amount that is set by the Government of Ontario’s Rent Increase Guidelines and as of current day landlords can only increase by 1.5% as of current rent, following the rate of inflation in Toronto.

The government is trying to reduce the costs of rent to the tenants, starting by decreasing the rate in which the rent is increasing by. The government is also opening up some land owned by the government to be used to build 2000 new apartments, in putting efforts to increase supply. The government’s efforts in rent control might be ineffective considering that further increasing the supply will cause prices to fall, maybe not in the short run, but maybe in the long run.

Economists such as Benjamin Tal, the deputy Chief Economists at CIBC doubts the effectiveness of this policy. He said, “It’s Economics 101. You limit the ability to raise rent, you decrease supply”. What he’s saying could be true because as the landlord’s ability to control prices are limited, people would have less incentive to rent their properties to other people.

In my opinion, in the short run landlords will not really affected by the policy, but in the long run, it will definitely cause landlords’ incentive to decrease, or not the quality of the buildings will decrease as incentives decrease. Both will cause significant loss in for tenants, or consumer for apartments.

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Ethics is an area of knowledge that deals with the problem of right or wrong. While business ethics is how a business deals with the decision of right or wrong in a business environment. This would include both the business’ way of handling operations outside and within the business.

A way of looking into business ethics would be through the stakeholder’s theory demonstrated by R. Edward Freeman. He said, “for any business to be successful, it has to create value for customers, suppliers, employees, communities, and financiers”. He argues that a company have to create value for all of these parties to be successful. For example, when the business doesn’t have a good relationship with the local communities, they would create conflict and eventually problems will arise and be in the way of them being successful. Thus, any failure to be successful in creating value for all of these parties would be “a business in decline” as Freeman says it.

A great example of bad business ethics would be a recent case of the indictment of bribery and fraud on Charles “Chuck” Rizzo, the former CEO of ‘Rizzo’s environmental services’, trash firm in Detroit. He made fraud legal documents and bribed a few people including chesterfield township supervisor; Michael Lovelock and a former New Haven trustee; Christopher Craigsmiles. The money made from these deals was later used by Rizzo to contribute to building his new mansion. This example shows a bad set of business ethics, creating fraud legal documents and bribery is illegal and thus eventually led to Rizzo’s indictment and the FBI investigation on the company. This would be an example of “a business in decline”.

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