The Liberals are more interested in political wedges than sound policy

Prime Minister Trudeau’s promised doubling of the number of homes to be built during the next five years will not happen. The political operatives in the Prime Minister’s Office see it as a way to harass the Conservatives.

They expect that most Canadians will not understand the flaws in their promise. Here is a simplified explanation.

Imagine a village of 200 families. Let’s call it Carefree. It is a nicer place to live than many of the other villages. As a result, people from those villages seek to move to Carefree. There are many advantages to a growing village—more money for infrastructure is just one of them.

For many decades, both Liberal and Conservative political leaders of Carefree managed the numbers of newcomers to a level that could be accommodated, including providing enough housing and services, especially health care.

Twenty of Carefree’s inhabitants are trained in the trades needed to build enough homes for the new arrivals, which were limited to six families per year. Increasing the number of qualified tradespeople takes years.

In 2024 the political leaders lost control of population growth, which suddenly grew to 12 families per year. Housing became a serious problem, with many homeless people living in tents and others in inadequate premises.

Carefree’s village chief has promised to spend enough money to double the number of new homes to be built over the next five years. That would mean doubling the number of tradespeople by the end of 2024. But increasing the number of skilled workers takes years, no matter how much money is available.

This is the scenario in Canada. Currently, the federal and most provincial governments have waived the GST on materials for new housing. The trades companies are all going flat out, so they find little resistance to raising their prices. A large part of the government spending is being hoovered up by those companies. This is another example of unwise government spending fueling inflation.

Your columnist enquired diligently of the Department of Housing, Infrastructure and Communities to understand how the doubling goal might be achieved. It became clear that they did not seriously engage with the question of labour availability. There is zero chance of the promise being fulfilled, but that will only become clear to everyone after the next election.

So why make such a promise? It became evident on June 11, when the legislation to implement the increase in capital gains taxes was tabled by Finance Minister Chrystia Freeland. The pitch was that this tax increase would pay for the flawed promise to double the pace of house construction.

The reason for having a separate bill for this piece of the budget was to put the Conservatives on the spot. Freeland says it is a matter of fairness, with the obvious implication that the Conservatives’ failure to support this change would mean that they were opposed to fairness.

She argues that the Mulroney government also increased capital gains taxes without acknowledging that they simultaneously reduced some other taxes.

Taxpayers have reason to question the assertion that only 0.13% of taxpayers will be affected. Doctors and farmers are among its critics. So are entrepreneurs, especially in the technology sector.

The Liberals have a history of deception. When they announced the Carbon Tax they claimed that eight out of ten Canadians would get more back from the Canadian Carbon Rebate than they would pay. That conveniently ignored the taxes on home heating fuels.

They also failed to allow for the affect on provincial and municipal expenses for fueling vehicles and heating buildings. Those costs are passed on to taxpayers.

The same issues affect universities, putting pressure on tuitions. Likewise, increases in costs for both short and long-term delivery vehicles drive up prices at grocery stores and other merchants.

Economist Jack Mintz estimates that 50 per cent of taxpayers who claim more than $250,000 of capital gains in a year earned less than $117,592 in normal annual income from 2011 to 2021.

Many families will be surprised and disappointed by the taxman wanting a bigger pound of flesh after the family cottage passes to the next generation.

The Conservatives voted against the increase in capital gains tax. Leader Pierre Poilievre said that his party’s agenda is to reduce taxes, not increase them.

Campaigning for the next election, they could promise to retain the increased capital gains tax and use 100% of the proceeds to provide tax relief for people with low or moderate incomes. That would do a lot for fairness and make it easier for households to pay the rent. Unlike Trudeau’s promise, that would be one that can be fulfilled.


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