May. 8, 2022

Unlawful, unprincipled governance on housing

The Trudeau/Singh cabal is assuring us it can solve a housing crisis created by federal and provincial governance ineptness.

The federal government contributes to high housing prices by insuring mortgages through the Canada Mortgage and Housing Corporation (CMHC). Qualified buyers can purchase a home with as little as 5% equity if they meet specific regulations.

The home purchaser must pay a premium for the insurance, but the insurance protects the lender or mortgagor, not the homeowner. Banks and other lenders like the plan because if a homeowner fails to make mortgage payments, the lender can recover any losses from the CMHC.

Homebuyers will naturally purchase the best and biggest house their savings (or family financing) will buy. Since qualification is primarily based on income, the higher the family income, the more expensive the potential house. Home sale prices are market-driven. As long as there are competing buyers, prices go up.

Provincial governments contribute through a bureaucratic nightmare of property development regulations and restrictions. Instead of requiring that a new housing development include 10% low-cost homes, regulations require that all homes meet artificial standards to keep average prices similar and high.

As prices rise, the pool of eligible buyers at the bottom end of the income scale diminishes. A buyer may qualify for a $250,000 home mortgage, but in that price range, demand far exceeds supply.

The primary funding for municipalities, including cities, is from land taxes. Efforts to introduce affordable housing units in the mix reduce the total value, resulting in a higher ongoing land tax component. The owners of unaffordable houses wind up subsidizing affordable units.     

Following the federal conservative party leadership race, I note that most front-runners are all on the affordable housing kick. It seems irrelevant that the federal government has no jurisdiction over housing issues. The management and sales of provincial lands within a province are an exclusive constitutional jurisdiction.

When the federal government attempts to deal directly with cities or other municipalities, it is acting without constitutional authority. It is not true that the federal government is in charge of everything and can involve itself in repairing or reconfiguring anything that comes to its attention.

Our major cities are unaffordable. That is due to a combination of inattention and bad planning. Housing prices in Toronto and Vancouver are not and must not become a national issue. The cities and provinces have to figure out a solution without using federal funds. It is not up to taxpayers across Canada to fund solutions for municipal failures to plan and create an affordable and pleasant environment for its residents.

Federal political parties don’t care about the welfare of city residents. They are trolling for votes in urban areas by making promises they can’t keep and diverting attention from national responsibilities they are avoiding.

A recent article stated that the Bank of Canada considered getting involved in cryptocurrencies. The federal government has exclusive jurisdiction over; (1) currency and coinage, (2) bills of exchange and promissory notes, and (3) legal tender. Without creating a law making cryptocurrencies legal tender, they are unlawful in Canada no matter what the Bank of Canada may think or do.

We must not allow governments to continue to ignore the constitution, which is the primary law for democratic governance in Canada. Governments that ignore their constitutional duties, limitations, and obligations are subversive to Canada’s peace, order, and good government. They blame one another for all issues that ail the nation while avoiding accountability for their roles.