Speaking at the ongoing Re:Address summit in Vancouver, University of St. Andrews economist Duncan Maclennan said that Canadian federal and provincial governments need to focus on encouraging more domestic investment to shore up the economy against housing risks.
“I have read some of the discussion of Chinese investment in Vancouver and I think it’s a classic example of othering, i.e. blaming someone else for what is actually a systemic problem within the Canadian housing system,” Maclennan said in a panel, as quoted by Metro News
“That applies in Toronto and Montreal as well, the inability to respond to market pressures regardless of where they might come from.”
Complicating matters is that the current system surrounding the usage of Canadian tax revenue—most of which comes from income and employment growth in cities—is incredibly politicized, making it difficult to utilize the funds for infrastructure or housing purposes.
“The Canadian context, more than any other context I’ve seen, is reinforced by fiscal imbalance,” Maclennan said.
“I happen to believe that in a world that’s increasingly dominated by how metropolitan areas perform, there has to be a much closer match of fiscal resources. I think that’s a fundamental imbalance of the Canadian system and it’s not dealt with well by the political system.”
The Re:Address conference, which ends October 29, assembles around 500 professionals and thinkers from around the world to discuss viable strategies to tackle the long-running affordability crisis in Canada’s hottest housing market.
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A Scottish housing expert recently argued that an unfortunate tendency among Canadians to blame outside forces for their real estate woes is preventing them from taking a more introspective approach that would instead address factors closer to home.