TURNING THEIR BACKS
Trudeau’s spending on housing only driving up inflation
Despite Justin Trudeau making his third housing announcement in as many days, things are looking bleak on the housing landscape across Canada.
As the prime minister took to the podium in Winnipeg, last Thursday, to announce support for affordable rental housing, a federal report said home starts will slow , new rental construction will face issues and home prices could peak this year.
It’s not exactly the message Trudeau wants to be spreading as he belatedly tried to deal with the housing crisis.
“It’s simple – you should be able to live in the community you love, with a rent you can afford,” Trudeau said.
It should be that easy, and it used to be like that, but sadly things have changed.
According to a new study by the Royal Bank, times have never been tougher.
“It’s never been as expensive to own a home anywhere, anytime in Canada as it was in Vancouver in the 4th quarter,” the RBC report stated.
It currently takes 106% of the median income in Vancouver to cover home ownership costs.
In Toronto that figure sits at 84.8%, nationally it’s 63.5%, 49.9% in Ottawa, 48.3% in Calgary and 53.3% in Montreal.
In all of those cities, that is above what is considered a financially healthy portion of a family’s income going to cover housing costs.
Don’t worry , though, the Trudeau government plans to spend billions of taxpayer dollars to make homes more affordable.
It has more money for infrastructure, more money for affordable rental housing and more money for construction loans.
If spending money made homes cheaper and easier to get, we wouldn’t be in this position.
Last week Trudeau announced an extra $15 billion for the Apartment Construction Loan Program with a goal of building 131,000 new apartments over the next decade.
This program was initially launched in 2017 with the goal of building 71,000 homes by 2027-28.
As of December, just 11,208 units have been built.
The Trudeau government is big on announcing things, not so big on delivering on them.
Which is why this rash of housing announcements should be taken with a grain of salt.
If it has only completed 11,000 of 71,000 promised apartments since 2017, what are the chances it will hit the 131,000 mark anytime soon?
It’s not that these measures are ill advised or won’t help the situation, but they’re small potatoes compared to the two big issues driving up housing costs – immigration and interest rates.
We added more than a million people to Canada’s population over the past nine months in the middle of a housing crisis.
Think about that – at a time when we don’t have enough housing for the people already here, the Trudeau government spiked the population by bringing in a million more people.
Trudeau admits immigration is a factor driving up housing costs but denies that he bears responsibility despite his government running the immigration service. He has promised to lower the rate of temporary foreign workers and students over the next few years but will also do so at a very slow pace.
Meanwhile, interest rates remain high as the Bank of Canada struggles to bring inflation rates down, but the Trudeau government is giving it no reason to cut.
Since last Monday, Trudeau has announced nearly $25 billion in new spending for the 2024 federal budget. Government spending is one of the drivers of inflation and it looks like the coming federal budget will ramp up spending significantly, meaning the government will add to inflation.
Former Liberal finance minister John Manley said a few months ago that trying to bring down inflation with higher interest rates while also ramping up government spending was like driving with one foot on the gas and the other on the brake.
Lowering interest rates would really help with housing affordability, but that won’t happen with all this new spending. Which likely means that in response, Trudeau will find new ways to spend.
We have a real problem with housing affordability in Canada and while Trudeau has lots of announcements, he doesn’t seem to have any answers.
MB Accounting is helping its business customers in the process of acquiring fast recovery loans. Please connect with Mr. Mahmood Naqvi: 1-866-667-1377 Ext: 205 & Mr. Kashif Jamal: 416-575-0873.
MB Insurance is offering you the best life or business insurance deals with affordable premiums. It is of the utmost importance to have the proper coverage. To cover your business from bankruptcy or to find the proper life insurance, please Contact, Mr. Syed Hassan: 647-832-7265 & Mr. Kashif Jamal: 416-575-0873
Click here to view all the benefits.
Click here to become our member.
Cyber security Awareness email:
Be Aware
Dear Customer,
There are an increasing number of reports of cybercriminals acting as MBE Inc. representatives employing different methods including telephonic phone calls/ SMS/ e-mail masking with our official numbers to gain access to important personal and business information. Such disclosure of information could lead to any fraud hazard.
Please do not respond to any such call / SMS / e-mail other than the official number of MBE Inc. and if the call is from MBE Inc.’s number call back for verification because of number masking cyber scams.
Please report such suspicious communication to our contact center on 1 (866) 667-1377