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Maxed Out

With Max Fawcett
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September 24th 2024
Feature story

The BC Conservatives want to make housing more expensive

John Rustad was in the midst of a political comeback for the ages, one that saw him kicked out of his old party, take over as leader of a new one and ride the popularity of Pierre Poilievre’s anti-carbon tax message to the top of the polls. He even made the leader who kicked him out of BC United, Kevin Falcon, bend the knee and surrender to him in one of the most public political humiliations in Canadian history. 

Then Rustad opened his mouth. 

I’m not talking about the comments unearthed by the NDP from July where Rustad, in talking with an anti-vaccine group suing BC public health officer Dr. Bonnie Henry, claimed that she was using “the so-called vaccine” for “control on the population.” I’m not talking about the remarks he made during a recent appearance on the Dr. Jordan B. Peterson podcast about climate change, where he said “it’s a sad reality, but how is it that we’ve convinced carbon-based beings that carbon is a problem?” And I’m certainly not talking about his Facebook comment from 2022 where he suggested “the masses have bought into a lie” and “the CO2 theory does not hold water.” 

No, I’m talking about his announcements and pronouncements on housing, which should be the defining issue in this provincial election. He began by declaring his fealty to the very same municipal gatekeepers that his pal Pierre Poilievre has sworn to defeat, telling delegates at last week’s Union of BC Municipalities conference that “we need to make sure that we support local government and local democracy and not have it taken away and have it run out of Victoria, as has been done with the current government.”

It was taken away, of course, because B.C. municipalities have been far more interested in protecting the rights (and property values) of existing homeowners than promoting the sort of density and affordability so desperately needed in the province. Their constant filibustering has been a key driver of the housing crisis and has produced the highest average rents and most unaffordable real estate in North America. As policy analyst Alex Hemingway noted, “If cities like Vancouver are willing to finally end the apartment ban on their own, that would be welcome, but their records are not encouraging. There is a strong democratic case for provincial action on zoning.”

The BC NDP, to its credit, finally took some of that action. Its Bill 44 — the one Rustad has vowed to replace — requires municipalities to allow the construction of up to four units on single-family lots, with those near transit now upzoned to six units. The NDP government also issued so-called “housing target orders” to key municipalities, which include both the number and configuration of units they need to build along with a promise of amenity bonuses (new bike lanes, parks, and other infrastructure spending) if they hit their target. 

This all builds on the supply-side measures the BC NDP have been working on for years, many of which are targeted at the so-called “missing middle” between single-family houses and multi-family towers. It’s working, too. As the Globe and Mail’s Frances Bula noted, permits were issued for over 22,000 more new units in B.C. in early 2024 than there were in the same period in 2023. “That’s double the Canadian increase for that period,” she wrote. “And those high numbers come on top of two bumper years for the province, with permits for 54,000 and 49,000 units in 2022 and 2023.”

This isn’t the only successful NDP housing policy Rustad wants to reverse. He also plans to repeal the restrictions on short-term rentals that came into effect province-wide in May that require listings on platforms like Airbnb or VRBO to be located in the homeowner’s residence or a secondary suite on the property. A new study suggests these new rules have had their desired impact, with rents already declining and renters poised to save an estimated $592 million annually by 2027.

But perhaps the worst housing idea Rustad has shared is his pledge to create a new tax deduction of up to $3,000 per month for mortgage and rent payments. Never mind, for the moment, that this would cost the provincial treasury $3.5 billion in foregone revenue that will have to be made up for with cuts or taxes elsewhere if the BC Conservatives have any intention of actually balancing the budget. As University of Toronto economist Rob Gillezeau noted on Twitter, “the main impact of this hugely expensive tax change would be to dramatically inflate both home prices and rents. I’m sure we’d also see lots of tax planning activities designed to exploit this.”

To recap: Rustad plans to repeal pro-supply legislation, eliminate rules that take much-needed rental units off the market, and pour gasoline across the full breadth of an already overheated housing market. If you were explicitly trying to design a set of housing policies that would produce as much inflationary pressure as possible, you couldn’t do much better than this. 

In a province like British Columbia, where housing affordability remains an existential threat for millions of people, this should be disqualifying. Yes, it’s bad enough when a political leader plays footsie with anti-vaccine activists and denies both the underlying science of climate change and the need to meet it with action. But actively trying to make housing more expensive, and enriching existing homeowners in the process, might be even worse. 

 

Climate progressives keep begging the question

Aaron Wherry is one of this country’s best political journalists, and I’ve been a fan of his work for years. But his latest CBC piece on the politics surrounding the federal carbon tax betrays a kind of naiveté that deserves a bit of scrutiny here. It’s a blind spot that progressives have had on climate policy for far too long, and it’s one conservatives keep taking advantage of. 

Wherry’s piece dutifully reports and then debunks a few of Pierre Poilievre’s more hysterical criticisms of the carbon tax, from its supposed impact on food insecurity to the $25 billion “hole” it will blow in our economy. As Wherry wryly notes, said hole is the difference between Canada’s real GDP in 2030 being $2.688 trillion or $2.663 trillion. “That’s not nothing,” he writes. “But there are many existing taxes and regulations that impose some kind of cost on the economy. The mere existence of a cost doesn't necessarily mean a measure isn't worthwhile.”

Sure. The problem here is this presumes that people are willing to assess the costs and benefits in a semi-rational way, and the last few years have provided almost no evidence of that. We simply do not attach any real value to costs that are avoided in the future, whether they pertain to natural disasters or rising insurance premiums. And we certainly don’t attach any real value to these avoided costs if they fall disproportionately on non-Canadians, as is the case with climate change. We are more than willing to screw over future generations, and even our future selves, if it results in near-term tax or cost avoidance. 

The problem with Wherry’s piece is that he begs the same question that tends to bedevil most progressives on climate: that we believe we have to do something. “Like any piece of public policy, the carbon tax is worthy of debate,” he writes. “But ultimately, the question before Canadians is not whether there should be a carbon tax. The real question — the biggest question confronting Canadian political leaders today — is what governments should do to reduce the emissions that cause climate change.”

I would gently suggest that the biggest question confronting Canadian political leaders today has nothing to do with climate change. Instead, it’s about how they react to an information environment where the truth is rapidly losing ground to things like engagement and clicks. Are they willing to push back against some of the more obviously anti-social incentives being created by and on social media, or leaning into them instead? 

But I’d also suggest, perhaps a little less gently, that we can’t afford to presume that enough Canadians share the belief that we need to reduce our emissions — much less do it quickly. We’ve failed to build the sort of consensus here required to move ahead with actual policy, leaving climate action  vulnerable to merchants of doubt like Poilievre and his various proxies. 

We must stop pretending to be surprised when Conservatives like Poilievre and Danielle Smith resist climate policy at every available opportunity. Their objective here, after all, is clear: rag the puck, stall for time, and protect the oil and gas industry’s status quo for as long as possible. If they can use these efforts to advance their own political standing and prospects, well, all the better. 

Rather than feigning surprise at their disingenuous attacks on things like the carbon tax, we need to call them out for what they really are — and be willing to do the work required to actually win the fight. That begins with a clear-eyed understanding of what the state of play actually is, and how Canadians really feel about making the sacrifices required to advance and sustain good climate policy. 

 

The oil sands are actually getting dirtier

If you knew that the world was in the process of decarbonizing its economy, what would you do? For Canada’s oil sands giants, the answer seems increasingly clear: stall for time and fill your pockets. While the companies continue to post massive profits that have been enhanced by the completion of the Trans Mountain Pipeline Expansion, they continue to do as little as possible when it comes to reducing their emissions. 

It’s no secret by now that soaring emissions from the oil and gas industry are swamping progress being made in the rest of the country. Industry advocates have reflexively countered with their talking point about how per-barrel intensities are actually going down, and that this is what we should really be focusing on. But as a new report from the Pembina Institute shows, those per-barrel intensities have actually risen slightly since 2018, with emissions from oil sands mining operations rising by 12 per cent. 

This is why they’re so vocally opposed to the federal government’s oil and gas emissions cap, and why they’ve complained so loudly about its new anti-greenwashing provisions. The emissions cap, after all, would effectively formalize the promises these companies have already made. 

Given the way in which these companies have slow-walked the carbon capture projects they’re so clearly relying on, it’s hard to imagine any of them actually proceeding before the next federal election. It’s even harder to imagine them proceeding under a Pierre Poilievre government, given his studied indifference to the issue of climate change. 

 

CTV’s screwup is bad for everyone

When someone’s trying to put you out of business, it’s generally a good idea not to lend them a helping hand. But that’s what someone at CTV did last week when they spliced together a clip of Pierre Poilievre talking about the non-confidence motion he planned to bring forward in the House of Commons. In the process, they gave conservative politicians and pundits a huge victory in their war against the press — and further undermined the public’s trust. 

On Sunday, CTV news ran a segment prefacing the potential defeat of the Liberal government with a conversation about the government’s new dental plan, and suggested its future was very much in jeopardy. It then cut to Poilievre, who appeared to say that “that’s why we need to put forward a motion.”

He never said that, though. That was a splice of three different sentences he said throughout the course of his comments on the vote, as Conservative media relations director Sebastian Skamski noted. What he actually said was “that’s why it’s time to put forward a motion for a carbon tax election.”

The difference between these two statements is almost impossibly small. The most charitable explanation I can offer is that someone in the editing room wanted to attach it to the issue of the dental care program, and thought that cutting together his comments in this way didn’t change the underlying meaning. 

That’s probably too charitable, though. After all, if there’s one thing you absolutely can’t do as a journalist, it’s deliberately misrepresent what someone said about something. Sure, there isn’t much difference between his actual comments and the spliced clip, but that makes the decision to use it even more baffling given the consequences. 

The splice-maker should have known, after all, that an error like this would be treated as manna from heaven by conservatives who are forever eager to undermine the mainstream media. It gave them a proof point not just of the media’s manifest hostility towards their cause and leader but of its untrustworthiness as a source of reliable information. 

They also should have known that outlets like True North, The Countersignal and Rebel Media, which are very clearly active players on the political field rather than referees covering the action, would weaponize it for their own purposes.

And they definitely should have known that CTV would be in for particularly close scrutiny given Poilievre’s recent attack on its parent corporation. “One of Canada’s biggest and oldest companies, Bell, downgraded to one level above junk bond status,” he tweeted recently. “No wonder their network CTV pushes such pro-Liberal news: they need lots of federal regulatory assistance. My prediction: Bell will need a bailout from the Liberals one day.”

I’m tempted to chalk this up to garden-level incompetence — I am reminded of Hanlon’s Razor here — but you can be sure that conservatives aren’t about to extend anyone at CTV the same courtesy. Former leader Andrew Scheer, for example, suggested that “they were caught red-handed splicing a video to protect Justin Trudeau” and that “we can never believe anything they say.” 

For many of his followers, I suspect that’s going to end up being the case. CTV’s apology, which described the error as a “misunderstanding during the editing process,” isn’t about to reverse the damage done. Instead, it will simply help confirm the biases against journalists that many people in Scheer’s orbit already have — ones he’s more than happy to amplify and aggravate. 

Speaking personally, I can’t help but feel for those of us who still value the work that journalists do — and especially the journalists out there actually doing it. With friends like these, after all, who needs enemies?

 

It’s not all bad news

Let’s end this newsletter on a high(er) note. First, here’s a delightful story (for me, anyways) about why Germany isn’t actually all that interested in Canada’s LNG. “In a briefing for journalists at Germany's embassy in Ottawa on Friday, Jennifer Morgan, the country's state secretary and special envoy for international climate action, warned that Germany and Europe will require less natural gas from countries like Canada in future,” CBC reported.

This is what I’ve been trying to explain to the various fossil fuel touts and conservative politicians for well over a year now, who have tried to pretend that Germany’s hypothetical openness to LNG from literally anywhere in the near term isn’t the same thing as it needing Canada to build new LNG terminals on the East Coast. “All studies show that the market is going to shrink," Morgan said. "Germany will be driving forward on renewables, and gas demand will decline."

In other words, there was never a business case for building new pipelines and export capacity on the East Coast to serve Germany’s shrinking market. That’s especially true when countries like Qatar and the United Arab Emirates can extract, cool, and ship LNG to Europe for a fraction of what it would cost here. If people want us to subsidize exports in order to meet Germany’s shrinking appetite for LNG imports, they should say so. But a business case for it? There never was one. 

Next, here’s a very cool report from Ember, one of the world’s leading climate and energy think tanks, on solar energy’s amazing year in 2024. “Ember estimates that at the current rate of additions, the world will install 593 GW of solar panels this year. That’s 29% more than was installed last year, maintaining strong growth even after an estimated 87% surge in 2023.” Once again, actual installations blew even the most optimistic forecasts out of the water, with China responsible for more than half of it.

Solar’s remarkable growth may even end up putting our climate targets back within reach. “Beyond 2024, outlooks for the rest of the decade from BNEF and SolarPower Europe are now aligned with the Global Renewables and Energy Efficiency Pledge, which aims to triple renewable power capacity by 2030,” Ember’s report says. Achieving this would mean that solar power generates a quarter of the world’s electricity by the end of the decade.”

And finally, another case for electric vehicles, this time from the Economist. There’s been plenty of chatter recently from automakers about slowing the transition to fully electric fleets in favour of more hybrid vehicles. This makes sense, the Economist piece says, because “they are usually as profitable as petrol-powered cars, in contrast to BEVs, many of which are loss-making. Smaller batteries mean lower production costs. Hybrids also allow legacy carmakers to draw more on their existing expertise and supply chains.”

But there are structural factors that they won’t be able to avoid for long. First and foremost is the new rules in California, ones that have been adopted by 16 other states, that put a 20 per cent cap on plug-in hybrid sales by 2035. The rest must be fully electric. In Europe, meanwhile, the sale of hybrids will be completely banned by 2035. As the Economist piece notes, “Hybrids are ‘winning now, but BEVs will win eventually’, reckons Patrick Hummel of UBS, a bank. Xavier Smith of AlphaSense, a consultancy, thinks the obsession carmakers currently have with hybrids will prove short-sighted. Those that lose focus on electrification could soon fall behind.”

I actually had more I wanted to write about this week, but I’ve already tested your patience with the more than 3,000 words in here already. We’ll save the rest for next time. 

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