Justin Trudeau On the Ropes

Candidates heading to the finish line have all but assured Canadians of one sure result: No clear winners.

64994870ec8ab04d644b8a69f500c1cd.jpg_1200x630

LIBERAL PRIME MINISTER JUSTIN TRUDEAU NOT CATCHING FIRE IN THE FAR WEST

By late September Insights West polling found 72% of British Columbians see the Liberals doing a poor job on housing. That is the kind of result that will lose a Federal Election. Or net the best leader in the race a mere minority government… A result which could be good for Canada.

In his first term, Justin Trudeau stepped on a land mine. His handling of the Lavalin affair handed him a bonafide political scandal: he got caught looking after a major political contributor. That’s still OK in Canada, provided its not flaunted in the face of the public. Thus, if he manages to survive, and forms a minority government, that may prove an important political lesson for him with others still to come. For example, he is still tone deaf on the west coast. And Calgarians living off the oil patch are openly speculating that a coalition minority government will ring the death knell of Alberta oil. Both the NDP and the Greens are tripping over themselves to see who can spew more evil over the dirty tar sands oil. Meanwhile, the Loonie—near all-time lows against the US dollar—is also a problem for Canada and for the incumbent. Canadians like to shop and vacation south-of-the-border. Trudeau has not done much to forge a stronger path ahead for the national currency. Its fate appears all tied up with Alberta oil. His Liberal bargain for the economy of raising social capital with environmental talk, only to spend it pushing through the unpopular Trans Mountain pipeline, appears dead in the water. It carries the odour of selling cigarettes to build cancer wards. Nobody in Vancouver—except staunch Conservatives—want oil piped into the Burrard Inlet. Viewed from the west coast, where the deciding votes will be counted on election night, every indication is this Prime Minister is going down.

Lucky for him, the alternatives are all clearly worse.

Back on 30 August—12 days before the writ was dropped declaring 21 October 2019 Election Day in Canada—Justin Trudeau made a stealth appearance at Vancouver City Hall. Very early on a Friday, well before the doors opened for business, he and Mayor Kennedy Stewart exchanged pleasantries on the front steps. Only city staff—and then only the ones that start work early—were in attendance. However, the timing was perfect for the Ontario and Quebec time zones. So much for ‘Trudeaumania II.’ So much too for Justin’s grasp over the China syndrome making a mockery of Vancouver and Toronto’s house prices. Home prices here, where the ballots are being cast that will decide his political fate, are hovering around the 6-times over the affordability threshold. House prices in Vancouver are threatening to tear asunder the very fabric of Canadian society, and set to spike should anything go awry in Hong Kong, Beijing, or both.

What are the odds that Trump’s trade war hits a few bumps? Ottawa looks completely unprepared for any such eventuality.

Meanwhile, this Vancouver mayor and council, rode a wave into office last November that sent the previous 10-year administration into exile, never to be heard from again. Why? They got too cozy with China, and too dependant on the Hong Kong towers-and-subway urbanism. Now the new mayor and council are dithering over the “reset” button. Trudeau’s turn at bat will give them an opportunity to weigh their own political fates. Should the country reject the Prime Minister, Vancouver Council will be put on tenter hooks.

1 | AFFORDABLE HOUSES, NOT GOVERNMENT HOUSING

Politicians at all levels of government appear inert over the issue of solving the Housing Crisis affecting Vancouver and all the other major population centres in Canada. In a Quixotic turn, the leaders of the major parties first appear to shun the laws of supply and demand in a country rich with vast land resources, then promise to build government housing.

Canadians do not need their government in the housing business. In Greater Vancouver, Canadians would rather have market housing put back at affordable prices. The proper role for government, therefore, is to curb housing markets so that the democratic and open market mechanisms—the kind that do not exist in China and Hong Kong—can deliver houses median income Canadians can afford. THAT is the Canadian dream.

In order to achieve this, the federal government could develop performance standards for rehabilitating existing urban footprint and building new townsites. Social, environmental and economic factors can all be addressed.

Yet, not one federal leader running in this election has invoked the Canadian Dream. Approaching the finish line, none have been ready or able to address this concern.

The NDP would deliver half a million rental units. That sounds like more condos of the brand that are lifting the price of land in our neighborhoods. Spread over four years, 3 territories and 10 provinces… it doesn’t amount to much.

The Green Party would make housing a fundamental human right… Hard to imagine what comes next. They would work with provinces (and territories) to build 25,000 new rental homes and 15,000 rehabilitated units annually for the next 10 years. I’m pretty sure that 150,000 ‘rehabilitated’ units (fixer uppers fixed up?) would not make a dent in demand here in Greater Vancouver, or Toronto, much less in the rest of the country.

The Conservative’s would extend mortgages to 30 years in order to lower monthly premiums. This is another naked government cash grab. It is a bonus for the banks who would collect even more money in mortgage interest, not help for median income households. The debt levels carried by Canadians is another powder keg the federal contenders have yet to address.

The Liberals propose to take 10% off the cost of a house with a new First-Time Home Buyer Incentive. That may have worked in the days of Pierre Trudeau. But it won’t be much help now with house prices over one-million dollar price tag. A $900,000 dollar mortgage is still beyond the reach of the median household incomes in Canada’s major population centres.

The Leaders Are Not Listening: The Canadian Dream is to own a house on a lot priced on par with median household incomes. This is still possible in most places in Canada. But increasingly in the larger metropolitan regions other forces are at play that require federal oversight. Canadians turn to their government to level the playing field when the markets get wildly out of hand.

2 | GOVERNMENT INVESTING IN CANADIAN INFRASTRUCTURE

The challenge we face as Canadians is leveraging our environmental sentiments to achieve two goals:

(a) ending our dependence on fossil fuels; while

(b) achieving higher levels of social and economic functioning.

In order to build cheap housing we have to access crown lands. Thus, major federal commitments to infrastructure, highways and commuter rail are necessary.

That’s a package Canadians can support. Yet, it is still a ‘bridge too far’ for our politicians.

 

3 | CANADA’S OIL FUTURE

This will be the election that will finally force the Alberta Oil patch to read the writing on the wall and embrace—as has Saudi Arabia already—the brutal facts of the sunset of oil as a marketable commodity.

This doesn’t mean there is not a decade or two for drawing profits from the tar sands. But it does mean that this process must be undertaken as part of a plan to end our reliance on fossil fuels.

The opportunity is to draft a credible 30-year strategy for sunsetting the oil industry—about 20% of national GDP—while incentivizing the new renewable energy sector where Canada is already a world leader.

4 | FREE TRADE

It has become increasingly clear over the past 3 decades that ‘free trade’ ambitions have landed us in a serious trade imbalance with Communist China.

These matters also require government sanction, although it is important not to conflate the two. On the one hand, Canada has been the laughing stock of the world for being too lax on money laundering. On the other Canadian governments have been climbing over one another to slap taxes on foreign home ownership, home vacancies, second homes, you name it. Governments have been too eager to turn the housing crisis into yet another money grab. Its time they fix the problem instead.

It has taken putting a Manhattan real estate developer in the White House to finally get the China policy right. In the first place, tariffs against goods made in China must be put in place to protect national markets against the abuses of international corporations with manufacturing plants in places where human rights and democracy are a laughing stock. In the second, Communist China’s expansionist ambitions must be kept in check.

This is now a Cold War being fought in the arena of economics and finance.

5 | RESTRICTIONS ON OFF-SHORE CAPITAL FLOWS

The same off-shore capital from China that has run amuck in Vancouver, also went to work in Toronto. The massive amounts of capital that crashed the Shanghai market in 2015, drove the price of a fixer-upper in Vancouver in 2016 to 12-times over median household incomes. Meanwhile, Beijing spent U$800 billion in 2016 to manage capital outflows and keep the Yuan afloat.

A day of reckoning is approaching when mortgages taken out at the top of the market in 2016 come due for refinancing in 2021. Meanwhile, the federal government must act to stop foreign nationals from turning the Canadian Housing market into their off-shore casino.

6 | CLIMATE

On the west coast of Canada a climate emergency—just declared by Vancouver City Council—amounts to taking out an umbrella. Rain events over the past 15 years have remained more or less constant, while the quantity of rain deposited by each event has gone up markedly. The summers, it must said, have more sunny days than they did 10 years before.

The bulk of the Green House Gases (GHGs) emitted in Greater Vancouver do not originate form industry or business, since these sectors have been decimated. Pollution around here comes from the urban footprint and transportation in about equal amounts. Thus, climate policy in Greater Vancouver really needs to switch from building towers to building the regional, human scale vernacular. The EVs will do the rest.

7 | ELECTION DAY IN CANADA

Caught up in their self-inflicted problems, the Liberals have bet that the Conservatives would not advance in the polls. That looks to have been a good bet. The Conservatives’s promise of a balanced budget by 2023 has not made voters to stampede to their side. It has solidified their base.

Meanwhile, the NDP and the Le Parti Québécois appear to have secured enough votes to make it practically impossible for either major party to win.

8 | SEPARATION OF CHURCH AND STATE

Black-face, turbans and Catholic views on same-sex marriage and women’s rights are leading issues among the politically correct set. Wearing theatrical make up in the new age of identity politics has become a front page issue plumbing the shallowness of public discourse. What next? Ostracizing white males for owning the full catalogue of Marvin Gaye recordings? Meanwhile, the connection between donning the religious attire of the Indian Sikh religion, or wearing business suits but clinging to views that discriminate against women and gays, goes unnoticed. Yet, these views disqualify the claims to national leadership made by both the NDP and Conservative leaders. One who aspires to lead Canada—a country where tolerance and equality are among our highest values—should play neither racial, nor religious cards for advantage.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s