Date of publication: 12 Apr 2022 • 1 hour ago • 5 minutes reading • 245 Comments Does Poilievre really suggest that giving people back control means giving them control of the central bank? Photo @ PierrePoilievre / Twitter
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Justin Trinto looked upset this week when asked about a housing crisis that has pushed average prices across the country by a third, year after year.
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Last week’s budget was designed to give some shoppers more chances to get their foot on the ladder (with initiatives like the tax-free first home savings account) while reducing demand from others (banning foreign buyers) – a sucking exercise and blast that is likely to offset any supply-side gains from the acceleration of the new building. But Trinto’s discomfort was more political than policy-oriented. “Canadians know that anyone who promises a simple, easy solution to the housing crisis is trying to promote something political that is not true,” he said. The Prime Minister should be concerned. No one knows better than this the result of the promise of solving difficult problems with simple solutions, only if the voters usurp the ineffective establishment.
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He used the same tactics against Stephen Harper in 2015, with a wave of excitement as he committed himself to a huge platform of third party promises, many of which proved impossible or unpleasant when the Liberals were elected. Now, it’s the Conservative leadership candidate Pierre Poilievre, who is attracting large crowds across the country who claim he alone can give people back control of their lives, including working-class home ownership. In a new five-minute video focusing on housing that is making the rounds on the Internet, Poilievre stands in front of a $ 5 million disaster in Vancouver and asks why middle-income Canadians can no longer afford houses like the one behind him. who assumed it could have been bought with the wages of a trucker and a waitress 40 years ago. “The system is broken, it protects the privileges. Government costs increase the cost of living. “We need to fix the monetary system to make sure it no longer inflates asset values and we need to remove the local security guards so we can build more houses,” he said, as the background music swelled to crescendo. . “In other words, stop printing money, start building houses. That is what a Poilievre government will do. ” Almost expect to hear loud applause as the final price appears: “Pierre Poilievre as Prime Minister” – the small issue of seizing leadership was momentarily forgotten.
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The guardians of big cities — such as Vancouver City Hall — are shattering the dreams of homeownership of working-class youth.
Enough.
If they want more federal money, these big city politicians will have to approve more houses.
Join and vote: pic.twitter.com/bvceqHp1dF
– Pierre Poilievre (@PierrePoilievre) April 11, 2022
It is a strong point and it is not strange that it attracts large crowds of dissatisfied voters (and not). It sells freedom and control to people who feel they have both been robbed. It promises to correct the seemingly intractable problems that plague them. And it’s not Justin Trinto.
But he has not yet made a clear commitment to what he would do to reduce house prices.
In his video, he said a Poilievre government would prevent the Bank of Canada from “printing cash that would allow politicians to spend and the rich to borrow.”
What does this mean? Is he talking about re-registering the Bank’s mandate, which is currently focused on price stability? Or is he indulging in the same fantasies that saw Donald Trump, Recep Tayyip Erdogan and other populists trying to reconcile central bank independence? Those of us who are old enough to remember the 1970s remember why the global rise in central bank independence prevailed from the beginning – to frustrate politicians who manipulated interest rates to boost their popularity. The reluctance to endure higher unemployment meant that inflation was not tackled head-on and led to lower prices. In contrast, central bankers’ independence is one reason why inflation has averaged 4% over the past two decades.
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Doug Porter, chief economist at BMO, said the story showed the importance of central bank independence. He has been wary of “hyper-stimulating policies” by central banks and governments that have pushed up house prices and inflation, but says the Bank of Canada will learn from experience and calibrate its response in the future. “I had no problem with the quantitative easing of the Bank and was one of the first to start unraveling it, even if they ignored it a bit,” he said. Does Poilievre really suggest that the return of control to the people means that he is given control of the central bank? In terms of offering the housing equation, the video told him that a Poilievre government would require municipalities like Vancouver to speed up building permits and reduce the “public cost” associated with homes. “My message to City Hall here in Vancouver is, ‘Remove the janitors.’
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He cited a study by the CD Howe Institute, which suggests that these “state costs” could reach $ 644,000 for an average Vancouver home, which is really impressive. In other cities across the country, such as Victoria, Calgary, Toronto and Ottawa, the CD Howe study found that number to be close to $ 230,000. But it is difficult to see how any federal politician can remove the “guards” or reduce these costs. There are many taxes and charges that increase the price of a home and many are related to the provision of infrastructure such as water and sewage. In some counties, these charges are charged by the manufacturer to the municipality and are passed on to the buyer. The initial price could be reduced by switching from a development fee to a user payment system upon completion of the project.
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But one way or another, and contrary to Poilievre’s impression, the piper must be paid. The same applies to the abolition of land transfer taxes charged by provinces and municipalities. By financing services through increased excise taxes and real estate, governments could significantly reduce prices. But Toronto collects 5% of its operating budget from land transfer tax and seems unlikely to risk that revenue in order to spread the pain to taxpayers. Therefore, Poilievre’s promise to remove the guards and reduce state costs is hollow. Federal supremacy is one thing, but forcing provinces and municipalities to cut their throats is quite another.
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In contrast to the Poilievre bombing, there was a new realism in Chrystia Freeland’s budget preface. On housing, he offered a note of caution. “There is no silver bullet that will immediately, once and for all, make every Canadian homeowner in the neighborhood where he wants to live,” he said. Campaign commitments are not made under oath and Poilievre was persevering enough not to make harsh promises yet. But we need to remind his fans of the high expectations raised by Trinto in 2015 – and the frustration that followed. Monty Python’s wise words apply to both: “He is not the Messiah – he is a very naughty boy.” • Email: [email protected] | Twitter: IvisonJ
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