Justin Trudeau is right housing is not a “primary federal responsibility,” But a Federal Government entity known as the CMHC Permanently Destroyed The Housing Market With Their Mortgage Insurance – August 1, 2023
Canadian Prime Minister and his main opposition Conservative Leader Pierre Poilievre made headlines as one tried to shift blame while the other wants the prime minister (which could be him one day) to take the blame for the Canadian housing disaster.
Pierre Poilievre is digging his own grave with this housing issue because in case Pierre Poilievre forgets, the housing market was one of the main reasons why Stephen Harper lost to Justin Trudeau.
One of the main reasons Justin Trudeau is down in almost every election poll is that he made the housing problem WORSE. Trudeau’s more popular times were during covid when a lot of Canadians didn’t have to pay their rent or mortgage and were receiving free cheques from the Federal government, for doing NOTHING.
But the reality is back and Justin Trudeau really sucks at being prime minister, he’s proven to be an above-average drama teacher, but he’s not very likable and he’s accelerating homelessness with his PERSONAL climate change agenda, which revolves around raising taxes and growing the size of the federal government.
I don’t write about immigration levels that much, because in my opinion, that’s not the problem, if builders could BUILD the market would meet the housing demands, the problem is the Canadian housing market revolves around the CMHC, which incentivized condo development.
Now, let’s remember why CMHC was created in the first place, I argue that provincial and municipal RENT CONTROLS created the demand for government intervention when builders stopped building rental housing.
Why did builders stop building rental housing, well, it’s very popular in Canada, for tenants to win in the courts and for renters to vote for RENT CONTROLS, which equates to a landlord having to get creative to make a profit.
Most people imagine landlords as these uber-wealthy people, when in fact most landlords are deeply in debt, and what this means is that if they can’t show their creditors how they will be profitable, they’ll find it extremely difficult not to go bankrupt.
So from an outsider’s perspective, building rental-purposed housing in Canada is a very risky bet with no real upside for expansion. So along comes CMHC and mortgage insurance which revolved around the idea to make more Canadian renters HOMEOWNERS.
Turns out CMHC became a way to prevent the Canadian housing market from crashing because as I like to point out if the Canadian housing market declines, CMHC is upside in its mortgages and in case you didn’t know the Canada Mortgage and Housing Corporation if it crashes will require a taxpayer BAILOUT!
With Canada’s expansion of the money supply via the CMHC diluting the DOMESTIC purchasing power of the loonie, to the degree we see today WITHOUT a crash, imagine what would happen if Canada’s housing market required a bailout?
The housing market should NOT be the focus of the Federal Government, but you see, Pierre Poilievre is already setting himself up for failure.
I remember watching Pierre Poilievre consciously selling his soul for power, with Justin Trudeau, you know he’s scum, but with Pierre Poilievre at the moment he’s presented himself as a savior, but from my point of view, he’s digging his own political grave.
Interesting times ahead