Why, at a time when we most need action and results, are our leaders failing us again?
While the federal government’s rental incentives have contributed to a meaningful increase in new purpose-built rental construction, overall new home construction has crashed to early 1990s levels, the lowest in 30 years. This is alarming when our population has grown by 11 million people – an increase of one third.
It seems like there is a movement to deter real estate investors, but who else is going to buy an un-built condo and wait several years for it to be completed? A better approach could be for the government to encourage condo builders to proceed with construction by co-insuring construction loans prior to achieving 70-75% presales as required by lenders. This would stimulate condo construction and offer quicker move-in dates to end-user buyers.
Toronto imposed a vacant home tax, which has been an administrative disaster and will likely cost more to administer than it will increase the supply of rental properties.
The Province of Ontario has passed much legislation aimed at reducing red tape and NIMBYism, but without the cooperation of municipalities, many of the policies are ineffective. For example, when the Province tried to speed up development approvals, municipalities shot back with new procedures, such as pre-consultations aimed at slowing down the approval process and reducing pressure on municipalities to meet provincially mandated deadlines.
As Mark Carney stated in his Globe and Mail article on Dec. 30, 2024, “We need Canadian builders to be unleashed…to build housing, energy, technology, communities and security.” Governments can achieve this by getting out of the way, and eliminating restrictions rather than imposing them. In addition, all levels of government need to step up and work together, across political lines and provincial borders, rather than continue with the siloed approaches being taken by Trudeau, Doug Ford, and Olivia Chow, for example.
And as claimed by Professors Pandes and Robinson in The Globe and Mail on Dec. 31, 2024: “Recent tax changes have made Canada even less attractive for private investment. Raising the marginal tax rates on income and capital gains means Canadian entrepreneurs will be further inclined to sell their businesses early instead of investing time and effort to grow them into global champions. This not only stifles innovation in key industries of the future, but it also sends the message that success is penalized in Canada, rather than celebrated.”
While I love the social safety nets our Canadian society provides, I fear they somehow compete and conflict with our need to be entrepreneurial and competitive in the business world.
Some Canadians seem to view business success as a bad thing and some of us even consider wealth to be evil. And our disdain for builders and developers only exacerbates our housing crisis, as all levels of government fear associating with the suppliers of our most needed infrastructure – housing.
JohnAmardeil.com 