December 5, 2023

The recent Conservative Party attack ad documentary (15mins) on money supply and housing costs takes a real suspension of disbelief to listen to all the way through.

If you have not watched it, I actually suggest that you think about adding to the count of those who have. It is breathtakingly silly from an economics standpoint, but shows that the Conservatives are interested in producing policy-sounding narratives.

Attack ads change shape, but they remain the same in content.

While I am no fan of the Liberal government's monetary and economic policy positions, it does show that there is some disagreement between the Conservatives and the Liberals when it comes to type of lies told about each other.

I think that the left should respond in kind, but with the caveat that I am not a communications specialist. Maybe it is a bad idea from a communications and strategic position.

Maybe the left still do not think they have a coherent (and different) answer to Liberals and Conservatives on housing and bank rate regulation?

I beg to differ, of course. Our positions are quite coherent and very easy to understand.

But, let's start with some glaring problems with facts in the Conservative video.

Now, we all know why these things were either not mentioned or lied about (it is an attack ad not a lecture, though it sounds like one), but that should not stop us from pointing them out anyway.

• Somehow the global pandemic is not mentioned in context of any massive spending graph.
• Quantitative Easing did not start when the Liberals were elected.
• Canadian inflation was not caused just by "money printing" by the Bank of Canada.
• Inflation is a global, not a local phenomenon.
• Housing cannot be solved by allowing developers to build in public parks.
• No one believes that 100s of thousands of middle class people will be forced to live on the streets and under bridges because of the current affordability crisis.
• Price inflation is not Trudeau's fault, as much as I would like to say it is.
• A family's budget is not 66% housing and 34% taxes with nothing left over.
• Housing is not the same as "homes".

• Comparing just two dates 50 years apart of house building to attempt to show we are not building enough homes is silly, but it really silly to compare 1972 and 2022.

  • 1972 was the year just before the recessions of the 1970 and 1980s when rentals overtook single unit houses and 2022 was when housing inputs were their most expensive after the pandemic housing shock.
  • immigration in 2022 was a bounce from almost no immigration from the pandemic.
  • house building stalled 2022 for a variety of reasons, mostly because inputs where super expensive for a very short period of time.
• "Government added costs" have existed long before the housing affordability crisis and didn't increase prices by any amount worth talking about.
• Parking requirements are demanded by residents, not imposed by governments. Just because demand is falling does not mean that they are no longer demanded.
• Paying taxes doesn't relate to building homes since homes are not built with "taxes".

• The difference between the Squamish Nation and Vancouver housing policy cannot be boiled-down to "less red tape".

  • Squamish Nation development is a mini-version of a public housing program on land that didn't have housing on it. The City of Vancouver is hardly in that position. This has nothing to do with "red tape". In fact, it is built in conjunction with a government agency.

Then there are the clear violations of sensibility.

• Housing is a complex issue, pretending it is just about "building more" is incorrect and idiotic.
• Correlation is not causation.
• The very notion that "governments stand in the way of you getting a home" is outrageously stupid.
• Showing the same graph but turning it into a line chart from a bar chart does not make it have special power to make a different point.
• Saying big numbers doesn't mean that something big and bad is happening.
• Tories believe in the same fairy tale economics the Liberals do, they would have done nothing different. How do we know? Most provincial governments were Tory governments while Trudeau was PM.
• Showing pictures of Olivia Chow in this context, who has been mayor for less than a year, is petty.

The Conservative's "common sense" plan is detached from reality and makes no sense.

1. Require big cities to complete home building. How do they complete home building when the Tory plan is private market based?
2. Giving bonuses to cities where private developers just happen to make more profit and so invest more is not really a "build more" strategy.
3. Transit station builds for high density housing sounds great. But, that is a provincial jurisdiction issue and the Tory government in Ontario only just now thought of that.
4. Sell 15% of federal buildings. This one is a slap in the face of working Canadians especially after the minister of Public Services and Procurement (PSPC) has just announced that the government is re-purposing a bunch of those buildings to add 24,000 units—which is the only Liberal plan that will actually result in new housing.

Also, money cannot flow after the "keys are in doors". That just means that everything is built with private-sector borrowing by private developers, which is just a gift to the banks and limits building.

So, no, not so "common sense".

The reality is that Conservative "common sense" is just a throw-back to the disastrous economic policy of treating the government's finances like an individual's of the 1990s. I know the 90s are back somewhat in fashion, but zombie economic politics is not the answer.

It is important that the left remind people that the Liberals and Tories are the same economic program. They spend money on slightly different things—Liberals to banker friends through spending and Tories to their banker friends through tax cuts.

The left has a clear alternative program. When we are building attack ads (and we should), lets make sure that we spend at least half the time explaining what our alternative looks like.

We have written about housing before. Maybe we need to do more.

Inflation and housing are complex issues and our analysis of them has to be as complex. And, I think that we should outline that the complexities are real and the Tories like to pretend things are easy and simple. That's a nice populist line, but I think that there is a better one.

People want to know what is going on and how we can fix it. Pretending things are not complex when they are feeds into the Conservative's new populist lines.

Our background analysis might be long-winded. Just like the analysis of regulating capitals and housing is because we cannot pretend that these are simple things.

That said, our answer to an affordability crisis does not have to be complicated or long-winded.

The answer to the housing affordability crisis is this: we need the government to procure, finance, and build decent non-profit housing for working Canadians.

How?

The Canadian Mortgage and Housing Corporation and Public Services and Procurement (and their Canada Lands Company) needs more power and more money to build more homes. Converting Crown assets to affordable homes (not selling them to developers as the Tories want) is a good first step, but better is the procurement of new affordable housing directed at the segment of the market no one else is building for: working-class people just getting started be they younger workers, new immigrants, or just people down on their luck and starting again.

These housing units should be built along with procured community development so that these houses have all the fixings and should be built to recoup the costs over a longer time horizon than a private mortgage gets you to keep the costs down.

It is not rocket science. But, it clearly isn't "common sense" either.