Canada’s Economic Dependence On Housing Is Unsustainable

Our economy increasingly resembles that of a small and crowded nation without abundant natural resources, when we are the exact opposite.

It’s easy to imagine a dense nation that is somewhat short of key resources being economically dependent on housing.

If a country has reached a baseline level of economic development and wealth, it can import many of the resources it needs, and will have people who want to live there.

Combined with a lack of space, and housing understandably becomes scarce and valuable.

This also holds true for the ‘world-cities’ like New York, London, Paris, and others.

They are cultural and economic hubs, and the combination of large corporate headquarters and immense levels of tourism drive up housing prices in core areas.

While Canada has a few cities that could conceivably call themselves ‘world-cities,’ the raw population numbers and demand still aren’t there.

And, most of our country is sparsely inhabited.

Meanwhile, we have a truly stunning amount of natural resources, the kind of abundance that most other nations could only dream of.

So, if there is a country where housing should be plentiful and affordable, and where the economy should not be dependent upon housing much at all, it would be Canada.

And yet, here we are:

“And we wonder why we have the lowest rates of projected productivity growth in the G20. RE doesn’t produce productivity gains. It’s old tech. Not exportable. Zero innovation. We need a new economic model. Capital allocated to productive means. New goods. New services. High tech.”


Not only are we more economically dependent upon housing than other peer nations, we are more dependent than the United States was before the global financial crisis.

As noted by Rudyard Griffiths, this is a massive policy mistake:

“Your policy makers allowed this to happen from @bankofcanada to @OSFICanada to @CMHC_ca. It’s likely the biggest policy mistake of our generation. It’s unwinding will hurt the most economically vulnerable first and most.”

Canada is being governed incorrectly

Canada covers a landmass large than all of Europe.

Most of our provinces are bigger in size than most European countries.

For example, France covers an area of 551,695 km², while Saskatchewan covers an area of 651,900 km².

And yet, the current federal government is trying to manage the country as if it were a small and dense region that was dependent on imports of natural resources.

Simply put, Canada is being governed incorrectly.

To think that Canada could be effectively managed by centralized decision makers in Ottawa is unrealistic, and can only result in rising national tension and disunity.

Innovation and experimentation can happen best at the provincial level, with the federal government focused on providing a basic foundation of national infrastructure and national defense.

But so long as we have a federal government led by centralizers who impose things like the carbon tax on far-flung regions, so long as the government thinks inflating the population and money supply is a substitute for real productivity growth, and so long as we think of our energy sector as something to be ashamed of rather than something to be proud of, our country will continue to remain far too dependent on housing and will be far poorer than we should be.

Spencer Fernando


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