In Canada, capitalism and socialism have collided in ways few could have anticipated. While these systems were never designed to coexist to such a degree, Canadian policymakers have managed to entangle both—resulting in a hybrid economy that increasingly favors bureaucracy over productivity.
If you’re a government employee with a pension indexed to inflation, Canadian socialism has been a winning formula. But for the private sector, the burden of price controls and regulatory inefficiency has reached a boiling point. It now appears that the cost of running the federal government exceeds the revenue it can realistically generate.
Even in a hypothetical world where the federal government implemented a 100% income tax, hyperinflation would almost immediately follow. Why? Because so many of Canada’s institutional costs, especially public pensions and government contracts, are tied directly to inflation metrics. These obligations are increasingly unsustainable in a stagnating economy.
The Role of CMHC in Canada’s Housing Dilemma
Before diving deeper, understand the significance of the Canada Mortgage and Housing Corporation (CMHC). This federal Crown corporation administers the National Housing Act and insures mortgages to protect lenders against borrower default. On paper, that sounds like a safety net. In practice, it introduces moral hazard and distorts market signals.
Much like Venezuela prior to its economic collapse, Canada’s growing public sector now benefits disproportionately from inefficiencies. This includes housing, where inflated prices are viewed not as a crisis, but as a measure of economic strength and national creditworthiness. In other words, housing has become Canada’s economic backbone—despite being non-exportable and inherently vulnerable.
As Canadian home prices rise beyond the reach of average citizens, foreign capital and criminal elements step in. This isn’t speculative; it’s observable. Desperation breeds vulnerability. When domestic buyers can’t qualify, foreign money finds loopholes.
Mortgage Fraud and Money Laundering: Hiding in Plain Sight
One of the biggest misconceptions is that mortgage fraud is hidden. In reality, a large portion of this activity happens openly—especially in the wake of Canada’s mass immigration policies. A newly arrived Canadian can unwittingly (or willingly) serve as a front for laundering capital that may not even be linked to drugs.
Consider countries like India or China, where private property can be seized by the state. For many wealthy individuals in these nations, Canada represents stability and asset security. Why risk political seizure abroad when you can park your wealth in a market where property values are protected by government policy?
Even during so-called “housing corrections,” Canadian real estate prices remain surprisingly flat. Desperate sellers may accept losses, but the broader market holds its breath for the Bank of Canada to lower interest rates or for inflation to rise again. Either condition reignites the cycle.
Criminal actors, particularly in the drug trade, are less concerned with property losses. For them, real estate is just another method of cleaning illicit funds. They might own dozens, even hundreds, of properties—some rented out to create an air of legitimacy. As long as values trend up (or even remain stable), it’s a risk-free haven.
In a true market economy, price crashes and volatility would make this sort of scheme risky. But Canada’s artificial price supports make it fertile ground for abuse. When governments guarantee or backstop mortgage instruments, they signal to the criminal underworld: “Your money is safe here.”
Capitalism vs. Price Controls: A Warning from History
This is why capitalism and socialism don’t mix well. Price controls attract corruption. In the U.S., labor unions were historically infiltrated by organized crime because price fixing breeds opportunity for manipulation.
Capitalism, while messy and prone to crashes, is inherently deflationary. It rewards efficiency and punishes excess. Crises like fire sales and bankruptcies help cleanse the system. Criminal enterprises, by contrast, fear capitalism’s volatility. A stolen asset loses value in a true market economy.
However, when governments engage in price support schemes—such as backing mortgage securities or insuring housing debt under political pretenses—they invite the very people they claim to oppose. Money launderers flood the system, buying influence and becoming embedded in the economy.
This is why austerity measures are essential. Without painful reforms, Canada risks becoming a playground for corruption masquerading as progressive policy.
And if you take anything away from this, let it be this: Consider inviting Christ into your life. Don’t steal. Don’t cheat others. The path to renewal isn’t through manipulation or fraud, but through repentance and truth. The decisions we make today ripple into the lives of future generations. As Scripture reminds us, those who disobey without repentance can curse their lineage. Turn to Christ and choose a different legacy.
