As I contemplate the arrival of yet another increase in the carbon tax, I am loath to criticize the only man to offer a reprieve from this inflation driving, regressive tax. So please don’t shoot the messenger. I support Mr. Poilievre, honestly. But, I have some suggestions for him.He has now dedicated himself to the concept of “flooding the zone” with money to stimulate housing development in Canada. As in words to the effect of, “Increase your housing stock by 15% and win a prize! Increase your housing stock by less than 15% and win a prize! Albeit a smaller prize.”This is obviously election rhetoric. But, I am concerned that he might believe in his own solution. Housing problems in Canada are multi-faceted and defy a single, cash blanket solution. Vancouver and Toronto have experienced rampant home price escalation due in part, according to Sam Cooper, to ineffective controls on drug related money laundering. The CD Howe Institute has pointed out the high and rising costs of regulatory barriers to housing development.It is hard to see how throwing vast quantities of money at municipalities to build housing will remedy these issues. In fact, adding materially to the dollars sloshing around the housing industry will likely exacerbate the problems.No one needs to remind Mr. Poilievre that housing supply is only one side of the puzzle. The other side is housing demand. Does a realistic immigration program fit into his housing solution thinking? It would be good to get some details on this part of the puzzle. Maybe housing problems could be reduced if we stopped bringing more than a million students and immigrants into the country each year.Overlay on this, the penchant of our municipal governments to force feed a densification strategy that is born of ideology rather than market demand. Will Canada once again throw enormous amounts of money at a problem that is inadequately scoped and improperly defined? Let’s all repeat a mantra designed to scare us into caution and more effective problem solving… ArriveCAN… ArriveCAN… ArriveCAN.As Philip Cross has pointed out, governments in Canada have a lousy track record in building infrastructure and massive cash outlays for housing won’t change that conclusion. The scope of Calgary’s Green Line is now 25% of the original plan, and the cost estimate is the same. That is a 400% cost overrun. No Mr. Poilievre! Don’t throw out large chunks of cash that incentivize the rapid construction of ugly, low quality, high density ticky tacky.Here is my suggestion. Announce new immigration targets that are 25% of current levels and ask the provinces for:Details of how they will reduce regulatory costs by 75%.Details of how they will eliminate money laundering to reduce price inflation.Their five-year plan to build high-quality housing that isn’t solely driven by densification ideology.The proof that this housing plan meets consumer demand.The amount of investment that the provinces and their construction industry will make to support the plan.Details of the project management and cost control processes to ensure targets and cost estimates are met.With such a plan, the federal government can offer significant grants and incentives based on commitments to create a robust environment for high-quality, lower-cost housing construction within a five-year plan.The point of the exercise is not just to increase housing stock. The point is to balance a planned increase in population against necessary construction of high-quality housing stock at prices that are lower than currently experienced in Canada. Are we China that we can afford to build ugly, undesirable apartments and townhouses that will sit empty because the price points spiral ever higher due to variables that remain uncontrolled? That, I am afraid, will be the net result of your housing solution, Mr. Poilievre. Resolve the housing demand side of the equation at the federal level and then discipline the provincial governments with cash incentives to solve all the problems associated with housing supply. Bring it home, eh?
As I contemplate the arrival of yet another increase in the carbon tax, I am loath to criticize the only man to offer a reprieve from this inflation driving, regressive tax. So please don’t shoot the messenger. I support Mr. Poilievre, honestly. But, I have some suggestions for him.He has now dedicated himself to the concept of “flooding the zone” with money to stimulate housing development in Canada. As in words to the effect of, “Increase your housing stock by 15% and win a prize! Increase your housing stock by less than 15% and win a prize! Albeit a smaller prize.”This is obviously election rhetoric. But, I am concerned that he might believe in his own solution. Housing problems in Canada are multi-faceted and defy a single, cash blanket solution. Vancouver and Toronto have experienced rampant home price escalation due in part, according to Sam Cooper, to ineffective controls on drug related money laundering. The CD Howe Institute has pointed out the high and rising costs of regulatory barriers to housing development.It is hard to see how throwing vast quantities of money at municipalities to build housing will remedy these issues. In fact, adding materially to the dollars sloshing around the housing industry will likely exacerbate the problems.No one needs to remind Mr. Poilievre that housing supply is only one side of the puzzle. The other side is housing demand. Does a realistic immigration program fit into his housing solution thinking? It would be good to get some details on this part of the puzzle. Maybe housing problems could be reduced if we stopped bringing more than a million students and immigrants into the country each year.Overlay on this, the penchant of our municipal governments to force feed a densification strategy that is born of ideology rather than market demand. Will Canada once again throw enormous amounts of money at a problem that is inadequately scoped and improperly defined? Let’s all repeat a mantra designed to scare us into caution and more effective problem solving… ArriveCAN… ArriveCAN… ArriveCAN.As Philip Cross has pointed out, governments in Canada have a lousy track record in building infrastructure and massive cash outlays for housing won’t change that conclusion. The scope of Calgary’s Green Line is now 25% of the original plan, and the cost estimate is the same. That is a 400% cost overrun. No Mr. Poilievre! Don’t throw out large chunks of cash that incentivize the rapid construction of ugly, low quality, high density ticky tacky.Here is my suggestion. Announce new immigration targets that are 25% of current levels and ask the provinces for:Details of how they will reduce regulatory costs by 75%.Details of how they will eliminate money laundering to reduce price inflation.Their five-year plan to build high-quality housing that isn’t solely driven by densification ideology.The proof that this housing plan meets consumer demand.The amount of investment that the provinces and their construction industry will make to support the plan.Details of the project management and cost control processes to ensure targets and cost estimates are met.With such a plan, the federal government can offer significant grants and incentives based on commitments to create a robust environment for high-quality, lower-cost housing construction within a five-year plan.The point of the exercise is not just to increase housing stock. The point is to balance a planned increase in population against necessary construction of high-quality housing stock at prices that are lower than currently experienced in Canada. Are we China that we can afford to build ugly, undesirable apartments and townhouses that will sit empty because the price points spiral ever higher due to variables that remain uncontrolled? That, I am afraid, will be the net result of your housing solution, Mr. Poilievre. Resolve the housing demand side of the equation at the federal level and then discipline the provincial governments with cash incentives to solve all the problems associated with housing supply. Bring it home, eh?
