Glitzy jobs and homes promises hold silver lining
The promises are certainly glitzy: a million jobs, a million houses, perhaps even more!
The details are far less glamorous, at least from an electoral standpoint. The market, not politicians, will do most of the heavy lifting.
But that shouldn’t let governments off the hook for making sure our recovery from the pandemic is at least somewhat fair.
The nature of election campaigns is that politicians promise the world, and they have certainly done so. We can hope that in the fallout of the campaign and when reality hits, that the best parts of their policies stick and fill in the gaps to help us through the pandemic in an equitable way.
When it comes to housing, the private sector is building new homes at a pace of about 268,000 a year, according to the most recent data. Over the course of three years, that would be 804,000 — getting us fairly close to the one million homes the Conservatives have promised over that time.
Over four years, the market would give us 1,072,000 new homes. The Liberals are promising a total of 1.4 million homes over that time period, but not all of them are new. Their platform commits to build, preserve or revitalize the additional new homes.
Both parties rely on forecasts that set the market activity somewhat higher than it actually is right now. But the point is, those big one-million numbers that make for flashy campaign promises depend on the private sector to come through.
We need all those houses and then some. Construction is not keeping up with existing demand, let alone rising levels of immigration over the next few months that will make up for low levels during the pandemic. Even if building and policy eventually take some of the heat out of the housing market, prices will remain out of reach for many first-time buyers and newcomers.
And since elections push political parties to hand out money, or access to it, they have both promised to make it easier for homebuyers to afford their homes — measures that exacerbate the demand for housing and stand to drive up prices even further.
The flashy promises either take too long to work or they counteract each other.
So instead of the headline numbers, it’s important to look at what kind of housing the platforms would encourage, and some of the novel ways they propose to fix market failures.
The Conservative commitment to tie municipal transit and infrastructure funding to density requirements, for example, is enticing because it goes to one of the key reasons for the housing supply shortage: zoning requirements. The Liberals propose setting up a $4-billion fund for municipalities that would entice them to increase density and ease up on zoning. They also suggest a tax credit for renovations that would allow multiple generations to live together, such as nanny suites.
And both platforms have measures aimed at increasing the stock of rental housing, which is so important when it comes to young people and newcomers trying to find a home. More on this front and less on the flashy front would be welcome.
Similarly, when it comes to one million jobs, the labour market is doing most of the work all by itself. The August jobs report shows employment was just 156,000 (or 0.8 per cent) away from its pre-pandemic levels in February 2020.
Plus, some industries are complaining bitterly about labour shortages, not surpluses.
So, do we actually need the one million jobs that both parties have promised to the tune of billions of dollars? Probably not, but the labour market does need some repairing that doesn’t just come organically from the private sector on its own.
For one, labour shortages stem in part from a mismatch between the experience and skills required by employers and those on offer from the workforce. The mismatch has been a long-standing problem in Canada’s economy, and now is the time to fix it.
Plus, there’s also a troubling level of long-term unemployed whose skills are atrophying. Even though employment is picking up steadily, there are 394,000 people who have been out of work for six months or longer — more than double the usual amount from pre-pandemic times.
Again, the best policy help for them comes in the form of skills and retraining — not job creation per se.
Both parties have earmarked funds for programs to boost people’s resumes, but the emphasis pales in comparison to the job-creation promises.
For sure, retraining does not set party strategists’ hearts aflutter. But our recovery from the pandemic and our readiness for a post-pandemic economy that is on track to be far more digital and far more precarious than the job markets of the past depends on getting that piece right.
The silver lining for those superficially glitzy promises is that both parties agree on what their proposals aim to do. If we’re heading for a minority government, that bodes well for some of the more creative ideas to take hold.