Blake Doyle

The wheel of progress moves slowly, and a broken spoke can serve as a brake on the wheel. While the economy keeps fortifying the wheel of progress, there remain external forces applying pressure to fracture spokes.

To quote our political leadership, “the economy is on a tear”. While positive, it is not as profound as that statement may suggest. Our economy is performing well; the U.S. economy, by contrast, is experiencing unprecedented growth.

Where we may see an annual growth rate of between one and two per cent, last year we peaked at 3.2 per cent.

An increase, but not as large an increase as we experienced between 2009 and 2010 or 2014 and 2015. For comparison the Canadian economy grew by 3.3 per cent during the same period and the U.S. economy is currently growing at 4.2 per cent.

With growth comes constraint, and with constraint comes strain. Thus, the economic laws of equilibrium are in play.

In a growth cycle, or a contraction cycle, factors are not in balance. This is presenting currently in housing. Rapid housing demand can outstrip the normal cycles of construction. Sourcing labour, managing a permit process, sourcing materials all take time. The wheels turn; and the impacts can absolutely be predicted. There are no shocks in this system and housing challenges do not appear overnight.

Construction lags demand, and the industry has been slowly regaining footing since the 2008 housing crisis.

Stats remain strong with all communities predicting heightened growth in 2018 (Stratford issued 395 permits in the last three years, Charlottetown 1294 permits in the last three years and Summerside also approved 136 permits over the same time. Activity lags demand. The demand remained predictable, until this past week).

The supply-demand challenge is a function of factors. It is not immigration or household separations, it is not burdensome permit processes or delays in processing, it is not low interest rates and high liquidity, it is a function of many things.

Supporting developers to “develop” should have been, and now must become a priority. Costs rise in a constrained economy. Increasing density supports the objective of the developer and the demand of the market.

Knee-jerk reactions to issues result in short-sighted solutions. Well considered, well researched approaches result in sustainable solutions.

Markets are rational and their responses to stimuli can be tested and forecast.

This applies to accommodation regulation, immigration, changes to health care, new program implementation, or a population’s response to school zoning amendments.

For all our collective sakes, we must support the continued growth of the economy and repairing the spokes as they snap under pressure. This is a nonnegotiable, as it fuels our societal investment in health, education, roads and services. There are challenges when the wheels turn, but wheels that move slowly or get stuck are followed by very bad times.

Big Wheel keep on turning, let the economy keep on burning.