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Maxed Out: Future promises

'What could go wrong?'

“I’ll gladly pay you Tuesday for a hamburger today.”

-J. Wellington Wimpy

“The sun’ll come out... Tomorrow”

-Andrea McArdle

Promises for the future. What could go wrong?

Well, Wimpy—of Popeye fame—made it a point to never go to the diner on Tuesdays to pay for his mooched hamburgers. And as Annie sang, “Tomorrow’s just a day away.” By the time tomorrow rolls around, it’s today, and there’s another tomorrow sitting on the horizon like a mirage.

These two snippets seem to encapsulate the essence of the Minister of Finance’s fall economic statement last week. Acknowledging her government’s concerns were aligned with the biggest concern of most Canadians, Chrystia Freeland assured us all help was on the way.

As the Titanic was sinking in the middle of the night on April 15, 1912, two ships responded to her initial calls of distress. The Frankfurt and the Olympic said, “Help is on the way,” or words to that effect. Problem was, the Frankfurt was 170 miles away, the Olympic almost 500 miles. The Carpathia, much closer, finally rescued 700 passengers, most freezing their bums off in lifeboats. Fifteen hundred drowned before help arrived.

And what was, you might wonder, the biggest concern of Canadians, at least as divined by the finance minister? If you guessed housing, give yourself a Sun Rises in the East award.

Government: What do you want?

Canadians: Housing.

Government: When do you want it?

Canadians: Yesterday.

Government: How does $16 billion for housing initiatives sound?

Canadians: Great.

Government: In 2025-26?

Canadians: ?

The timing of the promises in the mini budget bring to mind, in addition to Wimpy and Annie, another cartoon icon: Lucy Van Pelt, of Peanuts fame, and her never-fail, pull-the-football-away trick. Charlie Brown always fell—literally—for it, and the Liberals hope Canadians will fall for their future promises one more time.

The dangled funds consist of $1 billion for affordable housing. The money will be directed toward more non-profit, public housing and co-op housing projects.

The much larger pledge of $15 billion was targeted at the Apartment Construction Loan Program, to create much-needed, purpose-built rental apartments. Canadian developers used to build apartment buildings, but several decades ago, the government of the day dismantled the favourable tax structure and other inducements and, poof, nothing got built after that except condos. We know how that turned out.

The money for affordable housing, et. al., will, in government math, help fund 7,000 new homes by 2028. The funds earmarked for new apartments will spur construction of an additional 30,000 housing units, time horizon not specified.

The goal, in the minister’s words, is to “once again make Canada ... a place where if you worked hard there would be a home that you could afford.” The cartoonish aspect is the timing. The promised funds won’t be available until 2025-26. If memory serves, there will need to be an election some time in 2025. If that election goes the way current polls and current thinking go, all those good intentions may well vanish... or maybe PM-PP will roll the dice and invest those funds in crypto to support an even bigger program.

Either way, like some of the Titanic’s survivors, Canadians will be treading water awaiting rescue. According to a recent report from the Canada Mortgage and Housing Corporation, the country is likely to be around 3.5 million homes shy of what the projected population needs by 2030.

Perhaps rather than promising money that may never come, the government might want to go back to the future and change the tax system to, once again, encourage the construction of rental apartment buildings. It worked once. And the most encouraging step the government has taken recently has been to forego the GST on the construction of purpose-built rental units, a step roundly applauded by developers.

Instead, in addition to the promised funding—tomorrow—the feds will erase tax deductions for people who have invested in properties with the intention of running them as Airbnbs. This will be narrowly targeted at people who are doing this in areas local governments have prohibited short-term rentals. Perhaps laudable, but with no real idea of whether this step will do anything constructive to ease the countrywide housing shortages.

But if you focus on the minister’s right hand, you’ll see a promise to help people who do, in fact, have housing, but are in danger of losing it to rising mortgage costs. Right hand. I said look at her right hand. That’s the promise.

If, however, you look at her left hand, you’ll find the promise illusory. There’s no hammer coming down on banks, just an expectation they’ll help folks having difficulty meeting their mortgage payments. Lower payments? Well, no. But maybe temporary extensions to the length of mortgages. Or if they’re struggling with mortgage payments but can make a lump-sum payment of principal that can be arranged without penalties... maybe. As if folks who can’t make monthly payments have a mattress full of money to slap down on principal. Or, hey, they’ll be able to sell your house without prepayment penalties. And join the homeless.

If all those measures don’t relieve Canadians’ stress around housing, there’s even something for them in the mini budget. If their housing angst has put them in a place where they have a crying need to seek counselling, if they’re going bonkers every time they go to the grocery store because everything they buy is either a lot more expensive or comes in a much smaller package, if they’re feeling bad about having to visit the local food bank to keep their family eating, or if life in general is really just grinding them down, their government cares. Deeply. So much that they’re going to waive the GST on the cost of psychotherapy and counselling.

You may be forgiven if you think I’m making this up. I’m not. I’ll leave that level of cruel irony to others.

In a town, our town, long on multimillion-dollar houses that aren’t really homes and short on housing people who live here can afford, there are no ships steaming to the rescue. But then, we really weren’t expecting any, were we?