‘Housing hell: How we got here and how we get out’ has been viewed more than four million times.
A video by Conservative Party of Canada (CPC) leader Pierre Poilievre exposing the country’s housing prices and supply crisis, which a taxpayer watchdog said is being fueled by high-interest rates from bad fiscal policy by Prime Minister Justin Trudeau’s government, has reached over 4 million views.
“Something new and strange has happened in Canada. Canada is sitting on probably one of the largest housing bubbles of all times, something we haven’t seen before,” Poilievre said in his 15-minute video titled Housing hell: How we got here and how we get out.
“An entire generation of youth now say they will never be able to afford a home. This is not normal for Canada.”
Housing hell: How we got here and how we get out. pic.twitter.com/vVLsXMVM35
— Pierre Poilievre (@PierrePoilievre) December 2, 2023
The video goes deep into Canada’s housing market and includes statistics on why it is in such a dire state. It currently has 4.2 million views on X (formerly Twitter) after it was released on December 2.
Poilievre documents in his video, using facts to back him up, that in the coming months and years “tens of thousands of Canadians could default on their mortgages” due to skyrocketing interest rates.
He noted how the “nightmare scenario” after “generations of affordable and stable Canadian home prices” means that 66% of a person’s average monthly income is to simply “make payments on the average single detached Canadian house.”
“Given that most of the remaining 34 percent of the family paycheck is taken out by taxes, there’s literally nothing left for food and recreation,” Poilievre noted.
Taxpayer watchdog says high house prices due to Trudeau’s out of ‘control’ government
Franco Terrazzano, federal director for the Canadian Taxpayers Federation (CTF), told LifeSiteNews that the reason house prices, along with everything else, are more expensive is due to Trudeau’s “out of control” governmental spending.
“Trudeau’s never-ending deficits and the hundreds of billions of dollars the Bank of Canada printed during the pandemic are driving up the cost of everything,” Terrazzano told LifeSiteNews.
“Life is more expensive because the cost of government is out of control.”
Terrazzano noted that governmental fiscal policy is making home prices more expensive and thus out of reach for most. He said what needs to happen is a reduction in red tape.
“Taxes and onerous government regulations are making homes more expensive,” Terrazzano told LifeSiteNews.
“If governments want to make homes more affordable, they would cut taxes and the red tape that makes it harder and more expensive to build homes.”
Terrazzano highlighted a report from the C.D. Howe Institute that shows the cost of excessive government regulations on home building.
As for Poilievre, he observed how it now would take a staggering 25 years just to save enough money to make a downpayment for a simple home in Toronto.
He continued, noting how newlyweds now on average pay $1,000 per month to rent a “single room in a townhouse that they share with two other couples.”
He also raised the issue of how 35-year-olds “live in their parent’s basements” and “rents are so high in Toronto that students live in homeless shelters.”
When it comes to middle-class workers, Poilievre emphasized how “people like nurses and carpenters now live in their vehicles.”
While housing falls primarily under provincial and municipal jurisdiction, some areas, such as interest rates, are directly influenced by the federal government.
House prices have shot up in Canada due to short supply in the market, and speculative buying and interest rates have risen to highs not seen for decades. As it stands, Canada’s interest rate sits at 5%. At this same time in 2021, interest rates were 0.25%.
This past Wednesday, the Bank of Canada decided to keep rates at 5% but did not rule out future rate increases, as it “is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed.”
Interestingly, Trudeau put out a video the same day as Poilievre that he said was to address housing challenges. This video only has 264,000 views, however.
Curiously, Poilievre made no mention of Canada’s high immigration levels, which critics say has put a strain on an already tight supply.
Maxime Bernier, leader of the People’s Party of Canada, has been one of the only party leaders to call out high immigration levels and their effects on housing.
Trudeau’s ‘money printing’ pouring fuel on ‘inflationary fire’
According to Poilievre in his video, in the past one could save enough to buy a house by their mid-20s but said this “changed” about “eight years ago” when Trudeau came to power.
“When the government borrows and spends, it builds up the goods we buy and the interest we pay. The Trudeau government has doubled Canada’s debt, adding more debt than all prime ministers combined. Our finance minister has conceded that this deficit spending pours fuel on the inflationary fire,” Poilievre said.
He observed how excessive money printing through a banking scheme called “quantitative easing” has only benefited well-connected banking insiders and financial institutions that are awash with money.
“In recent years, the Trudeau government spending has exploded, and they’ve been borrowing more than lenders will lend. So, the Bank of Canada has started creating the cash. The money supply has therefore grown eight times faster than the economy over the last three years,” Poilievre said.
“More money bidding on fewer goods, including fewer houses, equals higher prices.”
Poilievre ended his video by stating that the “good news is housing costs were not like this before Justin Trudeau.”
“And they won’t be like this after he’s gone,” he added.
He said that the solution, besides a change in leadership, is for all levels of government to work together to cut red tape and taxes to encourage the construction of new homes.
Under Trudeau, mainly due to excessive COVID money printing, inflation has skyrocketed.
A recent report from September 5 by Statistics Canada shows food prices are rising faster than headline inflation at a rate of between 10% and 18% per year.
Earlier this year, the Bank of Canada acknowledged that Trudeau’s federal “climate change” programs, which have been deemed “extreme” by some provincial leaders, are indeed helping to fuel inflation.
Canada can’t have fast population growth, housing supply constraints, and housing affordability
From the MacDonald Laurier Institute
By Steve Lafleur
No one wants to solve the housing crisis enough to make the hard choices.
It’s tempting to try to have it all and policymakers are not immune to this. There are tradeoffs in everything. Ignoring those tradeoffs might work for awhile, but eventually reality catches up to you. Try as we might, we can’t have it all.
For instance, we can’t have rapid population growth, housing supply constraints, and housing affordability all at the same time. We’ll call this the housing affordability trilemma.
The idea of a policy trilemma comes from the Mundell-Fleming model which is included in most introductory economics textbooks. The model was named after Canadian economist Robert Mundell and British economist Marcus Fleming, who developed the idea in the early 1960s. The basic premise of the model, also called the “impossible trinity” or “trilemma” is that you can have two of three policies, but not all three (namely, free capital flow, a fixed exchange rate, and a sovereign monetary policy).
The idea of an impossible trinity can and has been applied to other situations, like the euro crisis in the early 2010s, and provides a useful way of looking at seemingly intractable problems. Plotting the related problems on a Venn Diagram helps visualize the problem. Here is the Mundell-Flemming model, visualized.
(Source: Author’s creation, graphic recreated)
Now, let’s return to housing policy. Few Canadian problems are as intractable as the now nationwide housing affordability crisis. Rents are rising quickly, apartment availability is falling, and home prices are the highest relative to incomes in the G7. As we’ve shown in a recent paper for the MacDonald Laurier Institute, Canada’s population growth is outstripping housing growth. This, unsurprisingly, has undermined housing affordability. Let’s visualize this trilemma.
(Source: Author’s creation, graphic recreated)
At the root of Canada’s housing woes is a severe shortage of homes relative to the number needed. We simply don’t build enough homes to adequately house current and future Canadians.
Not only is there cross-party consensus that there’s a housing shortage, but most parties in provincial and federal elections have proposed policies aimed at addressing it. So why do we still have a shortage?
Let’s go through the elements of the Canada’s housing trilemma (or housing impossibility trinity).
The first element is a fast-growing population. Canada has the fastest growing population in the G7, and last year alone grew by more than a million people. Barring any major shifts in immigration policy, this trend is unlikely to change any time soon. Indeed, the population grew by 430,635 in the third quarter of 2023. That’s the highest quarterly growth rate since 1957.
The second element is restrictions on homebuilding. Whether intended or not, a suite of policies processes and regulations that prevent or limit the addition of more homes both in existing neighbourhoods and at the urban fringe. Barriers to density include local zoning bylaws, lengthy and uncertain consultation processes, and growth plans that exclude building or upgrading the infrastructure necessary to enable more homebuilding in existing neighbourhoods. Policies explicitly preventing the addition of homes outside of existing neighbourhoods include Ontario’s Greenbelt and British Columbia’s Agricultural Land Reserve, while softer versions include local planning targets limiting the share of development slotted to occur on city outskirts. Given these limitations, it’s no surprise that we’ve rarely surpassed 200,000 housing completions annually since the 1970s, while the rate of population growth has reached generational highs.
The third element is housing affordability. That is, the ability for individuals and families earning local incomes to comfortably meet their housing needs. This means shelter costs don’t prevent them from feeding and clothing themselves, but also allow saving and investing in an education, for instance. For example, some peg the cut-off for affordability at 30 percent of income. By that measure, a household would require an income of over $100,000 to afford a one-bedroom apartment in Vancouver, for example.
Whether we like it or not, we can’t have fast population growth, rigid housing supply constraints, and housing affordability all at the same time.
For most of our recent past, the choice we’ve collectively made is to accelerate population growth while maintaining many (if not most) restrictions on both outward and upward growth, meaning we’ve excluded the possibility of achieving broad affordability. The consequences? All the symptoms mentioned before: rising rents, falling vacancies, higher ownership costs.
Despite recent pivots by a growing number of local and provincial governments, the balance of housing and land-use policies remains firmly tilted against reaching the level of homebuilding we need to restore some semblance of affordability, which by some estimates means more than doubling homebuilding. To wit, housing construction has remained remarkably stagnant—even slightly declining—in recent decades. Even the bold changes to zoning recently passed in British Columbia, Ontario and Nova Scotia are unlikely to double the number of housing built provincewide.
But, as the housing trilemma suggests, there are alternative routes. If Canadians remain adamant about affordability, we can demand more meaningful reduction or removal of policies preventing a growth in housing supply, or we can demand a reduction in population growth, or both. These are not easy choices but ignoring them doesn’t make them go away. We need to build upwards, outwards, or both, in order to meaningfully increase housing production. We can’t say no to every solution and expect better results.
The point is, there’s broad consensus that Canada faces a housing crisis, and that major policy actions are needed to fix the problem. There’s also a tacit consensus that the policies feeding the crisis should remain in place.
To put it more bluntly, everyone wants to solve the housing crisis, but no one wants to solve the housing crisis enough to make the hard choices. Until we collectively shift our priorities, we are choosing to sacrifice housing affordability. We can’t have it all. If we insist on maintaining fast population growth and restrictions on supply, we’ll get the broken housing market we deserve.
Steve Lafleur is a public policy analyst who researches and writes for Canadian think tanks.
Province forms Edmonton Public Safety Cabinet Committee in response to homeless encampment crisis
Edmonton encampments: Deputy Premier Ellis
Deputy Premier Mike Ellis issued the below statement in response to Edmonton Mayor Amarjeet Sohi’s announcement of his intention to declare an emergency:
“In November, Premier Danielle Smith ordered that an emergency cabinet committee be created and convened in response to the issue of crime and gang-related activity within encampments across the City of Edmonton.
“Alberta’s government cares deeply about vulnerable Edmontonians and we will always ensure that anyone who wants shelter and supportive services will receive it. However, we will not stand by and watch as vulnerable Albertans and the general public continue to be extorted, taken advantage of and killed by gangsters and deadly drugs.
“The Edmonton Public Safety Cabinet Committee (EPSCC) is comprised of ministers from departments that oversee operations and/or administer programs that promote public safety and support the transition of Edmonton-based encampment residents into safe, secure and appropriate arrangements.
“The cabinet committee membership includes:
- Danielle Smith, Premier (chair)
- Mickey Amery, Minister of Justice
- Mike Ellis, Minister of Public Safety and Emergency Services
- Adriana LaGrange, Minister of Health
- Ric McIver, Minister of Municipal Affairs
- Jason Nixon, Minister of Seniors, Community and Social Services
- Searle Turton, Minister of Children and Family Services
- Dan Williams, Minister of Mental Health and Addiction
- Rick Wilson, Minister of Indigenous Relations
“Also sworn into the committee are:
- Cody Thomas, Grand Chief, Confederacy of Treaty Six First Nations
- Dale McPhee, Chief, Edmonton Police Service
“This committee has met continuously since its initial meeting on Nov. 29, 2023, to plan a joint response. Our government is working on an action plan alongside Alberta Health Services, Edmonton Police Service, the Confederacy of Treaty Six First Nations and several departments from the City of Edmonton, including Edmonton Fire Rescue Services.
“Our government will continue to respond to these issues following the expected court decision on Jan. 16, no matter the outcome. We will have a more detailed statement regarding this response once the court decision is made.”
“It is dangerous for the mayor and others to continue to suggest that vulnerable Albertans do not have anywhere to turn. This is false and will lead to more folks choosing not to seek out shelter because they fear they’ll be turned away. I have said before and will continue to say: there is safe space in shelters around the city and nobody will be turned away. We have more than enough room for every homeless person in the city of Edmonton to have a warm, safe place to stay. It is completely inappropriate and dangerous for the mayor, or anyone, to suggest Edmonton is out of capacity in our social services sector or our emergency shelter systems. Anyone needing shelter space will be kept care of.”
Jason Nixon, Minister of Seniors, Community and Social Services
“I have been working and will continue to work diligently alongside the provincial government, in the spirit of reconciliation, for months on the serious action that is needed to get all people off the streets, including First Nations people. Encampments are not a safe place and letting people overdose and freeze in the cold is not reconciliation.”
Cody Thomas, Grand Chief, Confederacy of Treaty Six First Nations
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