For as long as he’s been the leader of the Conservative Party of Canada, Pierre Poilievre has had the political winds at his back. Inflation, which peaked just a few months before he won on the first ballot in September 2022, has remained a persistent problem for millions of Canadian households, while the interest rate hikes used by the Bank of Canada to forestall it have driven housing costs through the proverbial roof. Timing isn’t everything in politics, but as with location in real estate, it definitely helps to have it on your side.
The winds, though, are starting to shift. The most recent Statistics Canada report showed inflation slowing to 2.8 per cent year-over-year in February, down from 2.9 per cent in January. “We’ve had two months in a row of inflation coming in under expectation,” RSM economist Tu Nguyen told Global News’ Craig Lord. “It’s a reason to celebrate.” That’s especially true in light of the data on grocery prices, where inflation came in below the overall rate for the first time since October 2021. Indeed, according to University of Calgary economist Trevor Tombe, “Over the past three months, food and goods inflation has been negative.”
Tombe’s crystal ball suggests inflation will drop to 2.2 per cent in April and actually fall below two per cent later in the year. As a result, he expects the Bank of Canada to start cutting interest rates soon, which will take at least a bit of the pressure off housing costs and further quell inflation. The vicious cycle of inflation, in other words, is in the process of becoming a virtuous one.
By the time Canadians go to the polls in 2025, affordability issues may no longer be top of mind. They might, for example, be far more consumed by a potential Trump presidency and Canada’s response to it. They might, after another summer of wildfires, drought, and other reminders of climate change, want to see an actual climate plan on the part of a potential government that goes beyond saying the word “technology” over and over.
And, of course, they might want to know how the next government proposes to fix the things that are actually “broken.” They might even notice that said things tend to fall under the control and guidance of Canada’s mostly conservative provincial governments, from health care and housing to education and electricity. Do they want a prime minister who’s going to actively help these provinces as they continue to chip away at the foundations of our social safety net or do they want one who’s actually going to call them out?
As it happens, the provinces are also making inflation and affordability issues worse. Thanks to a number of decisions made by the UCP government, from the removal of rebates on electricity prices and fuel prices to its ongoing marketing efforts aimed at attracting people to the province, Alberta is expected to have the highest rate of inflation in the country — one that’s actually rising while the rest of the country’s falls. In Calgary, inflation last month was 5.1 per cent, while in Edmonton, it was 4.2 per cent. The key drivers? The cost of water, fuel and electricity, all of which fall under the purview of the provincial government.
In Ontario, meanwhile, Doug Ford’s ongoing refusal to do anything on homebuilding that won’t directly help his party’s donors is choking off new supply and pushing housing prices higher for longer. And as CNO’s own John Woodside noted in January, his government’s decision to overrule a recent ruling by the Ontario Energy Board (that required developers to pay for gas infrastructure in new homes upfront rather than spreading the cost out over 40 years) will almost certainly drive up energy costs for homeowners in the province. “I actually think the Ford government's sprawl agenda and subsidy of fossil gas is going to make the housing affordability crisis worse,” Ontario Green Party Leader Mike Schreiner said.
If there’s an affordability crisis that’s still haunting Canadians come next fall, it will almost certainly be driven by provincial governments, not the federal one. Poilievre will be far less willing to take on the premiers, given that it would require him to blame his political allies. That’s not necessarily good news for the Trudeau Liberals, but it’s far less bad than the news has been for a long time. Now it’s up to them to do something with it.
The gatekeeper generation just won’t quit
Intergenerational justice is one of my longest-running hobby horses, and it’s something I’ve been passionate about ever since I started getting passionate about political things. Part of that comes from growing up in Vancouver, where intergenerational injustice is a core feature of the city’s housing market and one that anyone under the age of 50 can’t ignore — not, at least, unless they have parents who have benefited from it.
My almost reflexive disdain for Vancouver baby boomers has softened a bit in recent years, but a recent social media post from local developer Michael Geller raised my bile levels to their previous levels. Geller’s post, which contained photos of an overwhelmingly old and white crowd, was about a recent community meeting on the city’s Broadway Plan and its impact on the ultra-privileged community of Kitsilano. Geller captured the mood of the crowd, I’m sure, with his editorial comment that “notwithstanding the housing crisis, a tenfold increase in density is wrong!”
This is hardly Geller’s only recent foray into NIMBYism. In a letter to Vancouver is Awesome (how ironic), he made the case against the city’s plan to densify the Broadway corridor. “After five decades trying to create affordable housing in the public and private sectors,” he wrote, “I have learned that while it is difficult to create affordable housing without density, higher densities do not always equate to affordable housing.”
He’s right that higher densities don’t always equate to affordable housing. In Vancouver, for example, the forest of tall towers hasn’t prevented the surge in housing prices, in large part because demand has still managed to outstrip supply. The solution here is twofold: constrain excess and exogenous demand (foreign investors, mostly) and build as many units as possible. The Broadway corridor, which has long been an obvious location for increased density, will inevitably become an even more natural home for new towers once the Broadway subway is built out to UBC.
Will this have an impact on the multimillion-dollar single-family homes in the surrounding neighbourhood? Sure. Will some of those impacts be negative? Sure. But, to be blunt, who cares? Why should Vancouver’s housing policies be defined by a small group of wealthy homeowners who have become wealthy through no real work or labour of their own? And why should their privilege be allowed to override the increasingly desperate needs of younger residents and renters?
In fairness to Geller, he’s hardly the only boomer out there making this sort of argument. In Calgary, where the mayor and progressive members of city council are pushing for a citywide rezoning that would allow rowhouses and duplexes everywhere, local business leader Steve Allan penned his own paean to NIMBYism. Allan lives in Rideau-Roxboro, one of Calgary’s most exclusive neighbourhoods, and he detailed his long-standing fight — back to the 1970s! — against the scourge of duplexes and rowhouses. “I recognize the need for more housing options, including affordable housing, but development of multi-family residences in Rideau-Roxboro, or other similar communities, will not meet the definition of affordable housing.”
His solution is the same as the one Geller proposed in his letter: do it somewhere else. “The focus of the City should be on freeing up some of its significant land holdings for housing and reducing red tape so housing developments (in appropriately zoned areas) can proceed to construction,” Allan wrote.
Maybe the most galling example of this generational privilege, though, comes in the response to Sen̓áḵw, the Indigenous-owned development at the foot of Vancouver’s Burrard Bridge. In an interview with Gitxsan reporter Angela Sterritt, former city councillor Gordon Price suggested that the project is somehow at odds with “an Indigenous way of building.” He went further. “Look, I’ll say it. It’s basically, ‘You f—ked us, now we f—k you.’ That’s no basis for reconciliation. That’s not gonna work. That’s awful.”
This isn’t going to work either, though. Unlike the Vancouver city councillors who have long genuflected to wealthy westside homeowners, the Indigenous community leaders building Sen̓áḵw, Iy̓álmexw and Heather Lands are listening to a wider range of voices.
As Michelle Cyca wrote in a wonderful piece for Maclean’s, “The project offers exciting architectural possibilities which could be replicated elsewhere by Indigenous leaders: a focus on communal public spaces rather than private yards, walking paths over parking spaces and the incorporation of Indigenous languages and designs reflecting thousands of years of site-specific history. And rather than taking an incremental approach to development, with concessions to nearby homeowners, the projects at Sen̓áḵw, Iy̓álmexw and Heather Lands consider the entire community — including those who don’t yet live there, and those often marginalized by city planning, such as renters, non-drivers and, obviously, Indigenous people.”
That can’t happen fast enough for me. If we’re lucky, other communities can and will learn from Vancouver’s example here — one that’s long overdue.
Danielle Smith’s renewable ban blowback is coming from inside the house
The opposition to Alberta’s new anti-renewables policy from environmental groups and progressive politicians came as no surprise to its UCP government. But the rebuke that was delivered by its own Alberta Utilities Commission (AUC) in a recent report probably stings a little more. No, it didn’t come out and explicitly criticize the Alberta government or the choices it was making. But if you read between the lines, the subtext becomes clear: none of this had to happen.
In its lengthy analysis of the policy and regulatory landscape for wind and solar energy in Alberta, the AUC essentially debunked all of the Smith government's arguments. The supposed threat posed by wind turbines and solar panels to “prime agricultural land?” Using the Alberta Electric System Operator’s so-called “Renewables and Storage Rush Scenario,” the most aggressive of its forecasts for renewable deployment, and assuming all 10,375 MW of new generation was supplied by solar, the necessary land requirement would be an additional 31,125 hectares.
For what it’s worth, and as the AUC report notes, “Market forces have favoured non-prime agricultural land for renewable projects, resulting in about four per cent of renewable projects locating on Class 2 land as of October 2022.” But even with the most unfavourable set of assumptions (all solar, rapid buildout, using today’s technology and only on Class 2 agricultural land), the amount of high-quality agricultural land impacted is less than one per cent. That’s without accounting for so-called agrivoltaic programs, which help mitigate impacts on the land and add new sources of revenue for landowners.
OK, but what about the impact on “viewscapes?” As the AUC report notes, “There is no universal definition of a pristine viewscape… Individuals value viewscapes uniquely, from their own personal perspective.” Fair enough. But the commission also called out the government’s implicit hypocrisy here, given that it’s only applying the nebulous notion of “viewscapes” to one form of energy development. “Should the government find it in the public interest to pursue ‘no-go’ restricted viewscape zones,” it says, “any prohibition on development intended to achieve viewscape preservation be industry agnostic, and apply equally to all forms of development within the restricted zone, not just electricity generation.”
Fine. But surely the AUC will validate concerns about renewable energy projects leaving behind a mess once they’re finished their productive life, right? Wrong. Here, too, the AUC had bad news for Smith’s government. “To date, the commission understands that there have not been any instances of abandoned utility-scale renewable power plants in the province. Proponents and experts noted that the occurrence of abandoned power plants, particularly solar and wind power plants, is not common in North America or worldwide.”
But it could happen, right? “As compared to some other forms of industrial development, renewable power plant projects have well-understood and relatively contained reclamation risks. Comparatively, renewable projects disturb land less intensively than thermal and hydropower plants and extractive industries such as mining or oil and gas production.”
Well, shoot.
Smith’s government is even taking fire from the kinds of rural municipalities that reflexively — heck, almost religiously — vote conservative. In Cardston County, the renewables ban will threaten projects that could provide $7.7 million in annual tax revenues, an amount equivalent to 97 per cent of its operating revenues. With few other prospects for economic development, that means hard times for the community. “We’re basically going to be in the poor house forever,” Cardston Country reeve Randy Bullock told the Edmonton Journal’s Matt Scace.
Paul McLauchlin, president of the Rural Municipalities of Alberta (RMA), was a bit more diplomatic. “A lot of our folks are saying, ‘Is there a way that we can push the envelope a bit and look for less of a draconian measure but look at something that has at least some flexibility built into it?’” McLauchlin said.
At some point, the UCP is going to have to make a choice here. Does it want to devastate the economies of rural communities that support its party in order to kneecap renewable energy in the province? The AUC has already shown that its favourite justifications for the policy have no basis in fact or substance, which leaves just one thing: politics. In time, these communities are going to have to make their own choice: how much economic pain are they willing to endure just to own the libs?
Required Reading
It’s all carbon tax, all the time right now in pundit-land. On Wednesday, I offered my take on the policy and its future — one that looks increasingly doomed from here.
In the Globe and Mail, Christopher Ragan — the former chair of Canada’s Ecofiscal Commission — took his own hacks at the conversation about climate policy in Canada.
So did Andrew Coyne, who effectively captured the public’s role in this pitiful display of political cynicism.
And finally, CBC News’ Aaron Wherry asked a relevant question that ought to be put to Conservatives more aggressively: if not a carbon tax, what?
Over at Bloomberg, Tyler Cowen tried to suggest that all the doomsaying about Canada’s economic prospects isn’t actually warranted by the data. Spoiler alert: this did not go over well with said doomsayers.
And in the Edmonton Journal, McLauchlin fired some shots in the government’s direction over the growing tab of unpaid property taxes by oil and gas companies. As he noted, it’s the canary in a much bigger coal mine. “As some oil and gas companies continue to ignore their obligation to pay property taxes, we at the RMA want all Albertans to understand this issue and why it matters. The reality is that non-payment of taxes by some oil and gas companies is not only unfair to all other property taxpayers in the province, but also an indicator that companies are unable or unwilling to meet other regulatory or environmental requirements.”
Remind me again: are deadbeats who don’t pay their taxes “ethical?”
I think we all know the answer. That’s it for this week’s newsletter, folks. As always, feel free to email it to friends and relatives you think need to be in the know.