Riley Donovan is a freelance journalist and editor of Dominion Review.Prime Minister Mark Carney and BC Premier David Eby are teaming up to use taxpayer funds for the noble cause of saving real estate developers, likely including some of the ones responsible for the urban blight known as “shoebox” or “dog crate” condos.The “Canada-British Columbia Partnership on Condo Conversion” announced on June 18 will “leverage innovative financing tools to convert more than 2,200 vacant condo units in priority growth areas into affordable homes.” This strategy is heralded as “one of the fastest and most efficient ways to increase housing supply.”The “condo conversion” strategy is part of a $5 billion federal investment to boost housing and infrastructure in BC. The specific cost of converting vacant condos has yet to be determined, with estimates ranging from $1.5 billion to well over $1.7 billion. The principal reason so many condos are vacant in the first place is a lack of interest from Canadian buyers in the tiny, cramped units being churned out en masse in recent years. Much of the condo sector, particularly in Toronto and Vancouver, has pivoted to what are sometimes called “micro condos.” Real estate company Remax describes this type of unit as being under 600 square feet and even under 300 “for the truly dedicated.” Dedicated to what exactly, doing your laundry in the kitchen? .These shoebox condos have more often been used as investment vehicles than as homes for living in. As Canada emerged from the pandemic, a speculator frenzy fuelled by low interest rates and skyrocketing housing prices broke out, with risk-taking investors putting their fortunes on the line in the great Canadian real estate casino.The party is over. A June 2025 report by Canada Mortgage and Housing Corporation (CMHC) found that condo apartment sales fell 75% in Toronto and 37% in Vancouver from 2022 to 2025. Speaking at a June 18 press conference in Vancouver, Prime Minister Carney bluntly explained that Ottawa and BC are stepping in to save condo developers from the financial hit that would result from this drop: “With higher interest rates, weaker investment demand, developers are stuck. They don't want to sell at a loss. They can't afford to hold those empty units indefinitely.”In other words, businesses created a product that nobody wanted to buy, so the government is going to buy it instead. What other sectors should we apply this logic to? If a clothing company designed a t-shirt so horrid that nobody could stand to look at it, should they be bailed out? If I have foolishly held onto a stock for too long and don’t want to sell at a loss, can I get a Carney cheque too? If I list a modest bungalow for $10 million and people don’t bite, will Premier Eby help me make up the difference? The worst part of the Carney-Eby condo conversion scheme is that if the two governments had simply done nothing, the average price of small condos would have fallen until it reached a price point where Canadians would be willing and able to buy them. That point may have been very, very low — but eventually it would have been reached..The Prime Minister said condo developers “don’t want to sell at a loss” and “can’t afford to hold those empty units indefinitely.” Whether they “want” to or not, absent a government bailout, the developers would be forced to sell. A dramatic price drop would create affordable housing over the long term, all without costing taxpayers a single dime.BC Conservative Housing Critic Linda Hepner made exactly this point in a statement opposing the condo bailout: “If prices are set too high for condo units to be sold, market forces will cause the prices to lower until people can afford them.”Leaving the market to do its work would have created affordable housing for Canadians, but at the cost of a great deal of financial loss for certain developers, perhaps even bankruptcies. Such is life in a market economy. Speculators are free to take risks. Sometimes those risks succeed, and sometimes they fail. Nobody forced them to take the risk.The more fundamental problem behind the condo conversion plan is that federal and provincial governments would rather shore up Canada’s unhealthy dependence on real estate than build an economy on a more solid basis. It is hardly surprising that the condo bailout was pioneered in BC, a province where real estate is the largest sector as measured by real GDP, towering over truly productive industries like agriculture, forestry, mining, and manufacturing. Bailing out condo developers reinforces the unhealthy dominance of real estate in the Canadian economy, while the struggling Canadian taxpayers who truly deserve a bailout foot the bill.Riley Donovan is a freelance journalist and editor of Dominion Review.
