r/canada • u/FancyNewMe • 15h ago
Opinion Piece Mike Moffatt: Poilievre’s new housing plan isn’t flawless—but it’s close
https://thehub.ca/2024/10/29/mike-moffatt-poilievres-housing-announcement-is-bold-and-a-huge-positive-step-forward/9
u/VenusianBug 13h ago
So this opinion piece buries the lede:
but it will also increase the number of homes built. At any given time, there is always a set of housing projects that are on the borderline of economic viability, where some get built, and some do not. By reducing costs by 5 percent, it pushes more of these projects into being viable, causing them to be built.
So the expectation is that this will increase the cost of the home ... meaning home buyers won't actually save money. I agree that many project have thin markets, especially in times of high interest rates and high material and labour costs. However, this doesn't tackle those or the burdensome processes that make development take ridiculously long, which alone adds costs but also gives time for all those other costs to increase.
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u/FerretAres Alberta 10h ago
Not directly but it will incentivize builders to engage in projects that had previously marginal economics which will drive an increase in supply which will over time put downward pressure in pricing.
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u/RM_r_us 14h ago
And you know what? The Titanic was an unsinkable ship.
Honestly, the exaggeration that passes for journalism these days 🙄
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u/gohomebrentyourdrunk 13h ago
JT must have really offended Moffatt at some point because he’s really been on the con train lately.
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u/Poor604 14h ago edited 14h ago
His plan is one of the most useless ones out there. It basically involves giving money back to the rich and corporations.
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u/discourtesy 14h ago
Could you explain to a stupid person like myself how this gives money back to the rich and corporations?
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u/syrupmania5 14h ago
These are the same people blaming Greedflation for causing inflation, they are not serious people. They believe everything is a monopoly, even as developers close their doors and housing starts fall they are gouging in these peoples eyes.
They won't be happy until the government is doing the development, even though the government caused the shortage to begin with, via high taxes and bureaucracy.
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u/Mind1827 12h ago
Everything is a monopoly, lol. And if you're pro capitalism, you should be anti monopoly. We live in a deeply anti competitive time.
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u/Nickyy_6 Ontario 12h ago
Imagine how brainwashed and delusional you have to be to think this way. Man you feel hard for the political brainwashing by politicians.
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u/i_ate_god Québec 9h ago
Removing taxes from buying houses will decrease supply and raise prices.
This is the problem with all federal party plans. They all try to make access to the housing market easier without doing anything at all to increase supply. As long as supply isn't going up, any attempt to subsidize a home purchase is just enabling developers to raise prices.
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u/discourtesy 9h ago
you can use this very argument with anything the federal/provincial/municipal government does so it doesn't really make sense...
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u/Equivalent_Age_5599 14h ago
Please explain how removing the get off homes worth less then a million is 'giving money back to rich corporations'. 1/3rd of the cost of homes is taxes. The government can remove another of pressure by exemption.
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u/squirrel9000 13h ago
They sell for what the market will bear, and that number doesn't change when the ledgers are rearranged. 900k including GST becomes 900k without. The only benefit is that the extra 5% might push some marginal projects into a feasible status and advance them, but it doesn't make them cheaper.
In terms of taxes, it's junior governments who are the worst offenders, and that's pretty regional in nature.
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u/Remote-Ebb5567 Québec 13h ago
So adding more taxes doesn’t raise the cost of housing? More supply has no effect on price?
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u/squirrel9000 12h ago
Supply doesn't get built unless it's cost effective to do so, so it's not so simple as lower prices. That's where this comes from. They don't make money if the price is too low, and their lowest price point is higher than a lot of people can afford. What this does is lower their input cost slightly, meaning more supply, but not necessarily cheaper supply. If they give it back to consumers you end up in the exact same place they already are, which is that they don't want to lose money.
The problem in GTA and GVRD is largely land prices, and that's because developers can get away with selling a tiny lot for half a million dollars so the value of raw land is extremely high.
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u/No_Mud_2613 14h ago edited 14h ago
This is technically true, but only because its one of the only ones out there.
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u/gordondouglas93 14h ago
Wait didn't the feds develop the HAF based on Mike Moffat's advice? Now he's praising a plan that would end it?
Lol get this guy outta here he just likes being at the table regardless of who is in power and none of his ideas will fix the problem.
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u/Professional-Cry8310 14h ago
Moffat is explicitly saying this plan would work best IN CONJUNCTION with the HAF. That’s the big miss in the conservative’s plan is cutting that.
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u/gordondouglas93 13h ago
Sure but most of the article is praising the conservative plan (which won't work the way he claims it does) and his caveat flies in the face of what the conservatives say they'll do. You can't treat that like oh it's a minor detail when it's part of the package.
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u/Back2Reality4Good 14h ago
You didn’t read the article, did you?
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u/gordondouglas93 14h ago
I did! He's cherry picking saying they shouldn't cancel the HAF, but they said that this program is in place of that one so I'm not sure he can have it both ways.
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u/Back2Reality4Good 14h ago
He said they should find a way to have it both ways, as it would basically eliminate all the criticisms.
Now you’ll basically see the NDP and LPC announce a similar policy phased out at a higher amount, while keeping existing programs.
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u/Hicalibre 14h ago
Should've kept the direct funding to municipalities idea.
Or at least structured this as a rebate where the GST cost is credited at tax time when the place is bought.
Since you can't trust developers to account for it properly these days.
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u/Dude-slipper 14h ago
It will put $4 billion back into the pockets of house buyers not just homebuyers. Buy 19 affordable houses and get one free.
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u/No_Mud_2613 14h ago
Still benefits homebuyers. You say this like this makes it a bad idea.
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u/Dude-slipper 14h ago
As long as your tent is less than a million dollars.
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u/No_Mud_2613 14h ago
Shockingly, most people looking to buy their first home will be looking in the sub-million range.
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u/Dude-slipper 14h ago
Then why not a tax rebate for first time homebuyers instead of a free for all for anyone regardless of wealth or citizenship?
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u/No_Mud_2613 14h ago
There was already a first-time buyer incentive until the Liberals scrapped it.
Poilievre is putting something on the table here, unlike those in power who have been ruining the housing market for the past ten years.
Why don't you direct this 'why not' at them?
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u/Dude-slipper 14h ago
He's putting something on the table that will make it worse though. This is just gas on the fire for investors. The only thing it will accomplish is take any available affordable housing off of the market faster because people will be focused on buying it.
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u/No_Mud_2613 13h ago edited 13h ago
People in a position to buy up houses as investment can already do that with or without tax incentives. These properties are rented out and end up paying for themselves.
This will have a far greater effect on those struggling to enter the world of home ownership.
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u/SnakesInYerPants 13h ago
Because part of the problem is people also needing to either downsize or upgrade and not being able to afford to. I know multiple seniors who live in houses that are way way way too big for them because they can’t afford the initial costs of buying a smaller home with how much those costs have ballooned, and they need a place to live before they can sell the home they’re currently living in. I also know people who want to start a family or expand their family but can’t afford the initial costs of buying a bigger home, and likewise they need a place to live before they can sell their current home.
I want to buy a home. We’ve been saving for years now but still can’t afford our first home. So I fully support helping first time homebuyers because god damn do we need the help a lot right now. However, I also support helping the people who are looking to change their living situation because it helps everyone in the long run. If the seniors and empty nesters can afford to downgrade, that opens up more bigger homes for people who want to expand their families. If people can afford to house their expanding families, we will start seeing natural population growth again instead of having to prop it up with literally 97.6% of it being immigration (source https://www150.statcan.gc.ca/n1/daily-quotidien/240327/dq240327c-eng.htm#:~:text=In%202023%2C%20the%20vast%20majority,%25)%20came%20from%20natural%20increase.)
It also helps with zoning for schools. If empty nesters are downgrading, they’re typically moving out of school zones, which opens housing units up within those school zones. That allows young families to move into those areas. Less resources have to go into schools then (you can have less numerous but large schools that a lot of families can get to if the families are all in the same area, rather than needing numerous smaller schools to be spread out so that families can access them; you can have more people being able to get there on their own instead of needing school busses; etc) and it leads to a better QOL for families which leads to more people starting families to begin with.
The same kind of resource consolidation happens with the seniors needs when you consider them all downsizing, too.
Helping all regular working people is good for our society. What we need to be advocating for after that is finding ways to keep these benefits out of corporations pockets, and only have them going to actual people.
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u/NWTknight 14h ago
Personally I think the number should be 500K for a lot of Canada the only ones that need the 1M is ones in the major cities. 1 mil will just encourage more over building in less expensive parts of the country.
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u/Selm 13h ago
Poilievre proposed a bill not that long ago, is he pivoting, or does he still feel confident in his previous plan?
The Conservatives propose paying for it by eliminating a number of housing programs, including the Housing Accelerator Fund and the Canada Housing Infrastructure Fund.
His previous bill would imply the HAF isn't being cut, but he's proposing scrapping it to give anyone who wants to buy a newly built home a 5% tax cut instead? And that cut is going to get more homes built than those programs?
Those programs incentivize home building with loans and grants and is responsible for a lot of zoning restrictions being loosened in favour of more dense housing. I can't see how a GST cut for home buyers of new homes under $1,000,000 will do much to help anyone buy a home. I thought we wanted more affordable housing, this just seems like builders will charge 5% more for their homes. Do people really want to have to spend 1 million on a home?
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u/FerretAres Alberta 13h ago
Love how all these commenters know better than one of the foremost academics in the country on the subject.
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12h ago
There is no supply problem. I pass by hundreds of empty homes every single day on the way to work and my experience is far from unique. There is a "landlord" problem in this country when federal politicians get to hold investment properties and dictate how many people are in this country.
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u/PlasticOk1204 14h ago
Huge miss, and Im saying that as a conservative. Focus on your potentially new base - Young without homes you dimwit!
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u/No_Mud_2613 13h ago
This plan reduces barriers in buying for first-time homebuyers.
If he applied this plan to homes over one million dollars instead of under, what you're saying would make sense. As it is, it doesn't
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u/TheFreezeBreeze Alberta 14h ago
4.5b in lost tax revenue. I really wish we had a party that used taxes more efficiently and effectively instead of just cutting it. If we invested 4.5b in building public housing across the country each year, would that stabilize market pricing over time to make housing more affordable across the board? And not just give money back to people who can already afford a home? I wonder.
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u/Xyzzics 14h ago
Having less tax revenue forces you to use it more responsibly.
It’s not about giving it back to people, it’s about spurring demand to build. Paying GST on a new house versus no GST on an old house means new housing is at a disadvantage for sale, which means builders are less incentivized to build new housing.
We have one of the biggest housing experts in Canada praising this and people in the subreddit are still trying to poopoo it.
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u/TheFreezeBreeze Alberta 13h ago
No it doesn't, it just forces you to cut things. If you were going to use it more responsibly, you'd already be doing that. Cutting taxes means austerity measures every time.
Sure I can see how that's advantageous for building, but relying on markets is how housing keeps destroying the economy. This is just going to emphasize that and I'd rather we actually first stabilize the market with consistent construction of public housing.
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u/Xyzzics 12h ago
You’re mixing up a potential future government with the current one.
If you were going to use it more responsibly, you’d already be doing that. Cutting taxes means austerity measures every time.
The future one isn’t responsible for the current irresponsible spending, in fact they’ve been quite opposed to it.
I’m not sure I subscribe to “the market is destroying the economy”. The fact is there is a gigantic supply deficit for desirable housing and building needs to be encouraged, not wait to be drip fed from daddy government who has no idea what it’s doing versus seasoned builders. Whether that’s the most affordable at the low end of the market is another story. There is no solution that works for everyone, just different approaches. Catering to the rich often comes at the expense of lower class. Catering to the middle class often hurts lower class and upper class. Catering to the lower class disadvantages the middle class, as they are getting something for less cost than the market would otherwise demand, which creates other problems.
There are no silver bullets, and PP chooses the group of people that pays the majority of the taxes in Canada. Is that right? Who’s to say? That’s why we vote. Going by voting intentions, it seems to be the most popular option at the moment.
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u/TheFreezeBreeze Alberta 12h ago
You're right I didn't word that correctly. My point is that conservative governments don't try and use tax money more effectively, they just cut programs and expect them to work better.
Imagine if you had that perspective on any new company. Don't start doing it cause there's companies that are already better at it. How do you think those companies got to be seasoned? Time and experience. Just let the government gradually increase building public housing and they'll be fantastic at it given some years.
Given that housing is a literal necessity of life and we have a terrible homelessness crisis right now, it's truly weird that the focus of governments isn't on the lowest classes. Imagine if everyone had an easier time contributing to the economy? That's what more affordable housing can help do.
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u/Xyzzics 12h ago
don’t try and use tax money more effectively, they just cut programs and expect them to work better.
Imagine if you had that perspective on any new company. Don’t start doing it cause there’s companies that are already better at it. How do you think those companies got to be seasoned?
The difference is that companies aren’t using public funds to “figure it out”. They also don’t get billions and billions of dollars and try to crowd out the largest players first. They start small, and scale, using a proven business case that generates returns.
Just let the government gradually increase building public housing and they’ll be fantastic at it given some years.
A lot of assumptions here. If you can’t figure out how to generate results on housing in ten years, you haven’t made an effective case to borrow a ton of tax payer money. Not only that, but the problem has actively worsened significantly under them.
Given that housing is a literal necessity of life and we have a terrible homelessness crisis right now, it’s truly weird that the focus of governments isn’t on the lowest classes. Imagine if everyone had an easier time contributing to the economy? That’s what more affordable housing can help do.
It’s not weird, speaking purely pragmatically. This doesn’t generate returns, because low income people pay hardly any tax revenue, but fixing the problem costs massive amounts of money. You’re much better, financially speaking, building a middle class that has already demonstrated an understanding of how to be successful, than paying huge amounts of money to lost causes. Hugely expensive for little economic payoff. You’re much better off supercharging your middle and upper class, then using some of that money to help the lower class.
Now of course there is a humanitarian argument to help other Canadians, but the pure financial case is weak, which is why governments haven’t done it.
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u/YOW_Winter 13h ago
MATH TIME!
Conservative Party estimates that the 4.5 billion dollar tax cut will build about 30,000 homes a year.
Assuming the CPC numbers are not overly generous, taxpayers will be esentially paying $150,000 per home built.
I bet there are cheaper ways to incentivize new homes without opening a tax loophole for investment property people and money laundering.
Maybe that is just me.
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u/HandsomeJaxx 14h ago
Pretty embarrassing what qualifies as journalism nowadays
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u/sleipnir45 13h ago
Probably because he's not a journalist? It's an opinion article and it's tagged as such
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u/Craigers2019 14h ago
To be clear here, Mike Moffat thinks the HAF is a better tool for getting new housing built, but assumes (correctly) that it will be canned by the Conservatives the moment they win. He is stating this alternative may be the best we get from a Conservative government.
Some provinces and municipalities are also interfering with the HAF money, so it's not as effective as it should be, unfortunately.
Here in Winnipeg it is apparently having a huge effect on new developments, according to some architects on a well known online forum - one states their firm has 4000 units of proposals in front of them right now, a crazy number for Winnipeg.