The cost of housing has been going through the roof in many parts of Canada. Most government policies have focused on curtailing the demand for housing. Ontario and B.C. have introduced foreign-buyers taxes. Ottawa has put in place new rules on mortgages. But supply constraints are more likely the key cause of surging prices.
Restrictions on housing supply hinder the efficiency of the housing market. Delays in building what people demand result in shortages and higher prices. One way to measure a broken housing market is to look at the gap between construction costs and sale prices. A well-functioning housing market sees the market price of housing mimic the cost of constructing it. In places where it is hard to build, the costs…
Federal Finance Minister Bill Morneau and economist Jack Mintz debated Canada’s competitiveness for business investment in Wednesday’s FP Comment. Morneau said Canada’s competitiveness is good, and showed a chart to support his view. Mintz said it is bad, and showed a chart to support his view.
Morneau is a former chair of the C.D. Howe Institute’s board of directors and Mintz is a former president of the institute, so perhaps it will help if the institute’s current president weighs in. And I say that Mintz is right. Canada’s relative investment performance is the worst on record. And growth-friendly tax changes are a key tool Morneau should use to improve the situation.
The topic Morneau and Mintz were…
We all know the Trans Mountain saga by now. Kinder Morgan wants certainty by May 31 on being able to proceed with its proposed pipeline expansion from Alberta to the B.C. coast. If not, it threatens to walk away, stranding Alberta’s oil. The federal government has committed to making the project happen, and has just the shiny new tool to help: the Canada Infrastructure Bank.
Ottawa, which approved construction, said it will use “all tools” available to get the pipeline built. The Alberta government has even mused about buying the project from Kinder Morgan. Both governments want to see it completed, for good reason. A new pipeline to tidewater will increase the price Canadian oil fetches because of the Alberta supply…
