Our Jordan Bateman gives you the heads-up on more bad national economic news, what B.C.’s rent cap means, and just how much the Trudeau government’s energy plans will jack up new housing construction costs.
📉 Desjardins Economics is out with a new report showing what the Business Council of BC has been saying for a while – Canada’s economy only looks like it’s growing because we’re adding more people. But look at per-person economic indicators like GDP, productivity, plus a business investment level Desjardins calls “alarming”, and things are far more grim. It’s almost like the politicians in charge have a vested interest in spinning numbers that seem better. But Canadians know the truth on the ground: our prosperity is slipping away.
🏠 In today’s reminder of how complex the housing crisis has become, B.C. has announced it will cap the maximum allowable rent increase at 3.5% this year, well below inflation. While that may sound good to many renters, it does cause two negative effects – first, it means even higher rates for new tenants as landlords will need to make up their losses when someone moves. It also reduces the financial return and incentive for people to build more rental housing. So pick your poison, government.
🛠 The Trudeau government is bringing in strict energy efficiency rules for new homes, and the Fraser Institute got out its calculator to try and figure out how much it will cost homebuilders and owners. In the midst of an affordability crisis, these new rules will increase the cost of a new home by $55,000 – all to cut less than 1% of Canadian greenhouse gas emissions. It will also reduce economic activity in Canada by 1.8%. The juice just isn’t worth the squeeze – but will Prime Minister Trudeau listen?