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Economy

Opinion: Let's normalize renting – Canada's obsession with homeownership hurts the economy – The Globe and Mail

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Canadians remain deeply attached to home ownership, with only a third of us renting. Even with an average Canadian home price of $626,318 last December, people will take extreme measures to call themselves owners.The Globe and Mail

Rob Csernyik is a freelance journalist.

Along with the certainty of death and taxes, a growing number of Canadians are pencilling in a third fate: renting. In the post-Great Recession years that have framed my adulthood, home ownership has shifted from an inevitable milestone my peers and I took for granted to an opportunity stretching further from our grasp.

Yet Canadians remain deeply attached to home ownership, with only a third of us renting. Even with an average Canadian home price of $626,318 last December, people will take extreme measures to call themselves owners. Leaving one’s community, family and friends behind to be a property owner rather than a leaseholder (even if the cost savings aren’t significant) is increasingly considered “normal” thinking. Renting in the community you would prefer to live in is viewed as financially imprudent, stripping quality of life (enjoying where you live) out of the equation completely.

By not only normalizing but embracing renting we can redefine what it means to live in Canada. This alone won’t solve housing gaps and spur necessary construction, but shifting public sentiment can offer an impetus for that necessary journey. More importantly, we can unlock economic gains that are currently sidelined.

The effects of well-stocked, reasonably priced rental housing reach a lot further than they often get credit for. The U.S. non-profit National Low Income Housing Coalition identifies affordable rentals as opportunities to increase economic mobility while reducing intergenerational poverty. Meanwhile, a 2020 CMHC-funded study found that, although there was a relationship between intergenerational income mobility and home ownership access, a lack of causality meant promoting the latter wouldn’t necessarily foster greater equality.

On a larger scale, changing our perspective on renting can have economic effects far beyond individuals and families. Researchers Chang-Tai Hsieh and Enrico Moretti estimate that between 1964 and 2009, U.S. GDP could have been 13.5-per-cent higher if not for “increased constraints to housing supply in high productivity cities.”

Normalizing renting also offers opportunities for companies to expand and hire easily. Millennials are the largest generation of Canadian workers, and renting is a good fit for young professionals who accept moving to new cities as part of their career trajectory. As a renter who has moved to take advantage of different career opportunities, I’ve been able to do so affordably and nimbly when the need has arisen.

Companies prize this too. When Toronto bid for the 50,000-employee Amazon HQ2 – the second headquarters of the e-commerce giant – housing availability was seen as one of its biggest deficiencies by critics and boosters alike. Then-mayor John Tory told the media as much, recalling that in a meeting with Silicon Valley businesspeople, the first questions he was asked were about housing supply. Even comparatively modest company expansions take housing stock into account, and the communities that reap the economic benefits are going to be the ones better prepared to house an influx of workers. This point doesn’t get reached when renters are an afterthought.

Compared with homeowners (especially the outsized “not-in-my-backyard” contingent), developers, Airbnb hosts and, yes, landlords, renters lack a strong say in the conversation about housing. The five million rental households across the country are viewed as lacking the financial clout or political power needed to influence housing policy. But it’s not impossible for societies to normalize renting. In Germany and Switzerland, for instance, renters constitute the majority, not homeowners.

In Canada, look no further than Quebec, which has the lowest home ownership rate in the country, hovering around 60 per cent. Having lived and rented in Montreal, I can say this is partly cultural. There’s less stigma around renting versus buying, and nobody raises an eyebrow when residents eschew other material markers such as owning a car instead of taking public transit. But the 2022 CMHC Rental Market Report says there are more tangible reasons, such as a larger rental stock of older and smaller structures, both conditions that help make renting more affordable there.

Since having a fulsome conversation on the benefits of renting is still challenging, let alone getting the housing supply up to speed, we need another tack to move forward. A renewed focus on the economic benefits, from the household level on up, may be the best way to redirect the conversation and normalize renting instead of treating it as a second choice.

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Economy

Mark Carney to lead Liberal economic task force ahead of next election

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NANAIMO, B.C. – Former Bank of Canada governor Mark Carney will chair a Liberal task force on economic growth, the party announced Monday as Liberal MPs meet to strategize for the upcoming election year.

Long touted as a possible leadership successor to Prime Minister Justin Trudeau, Carney was already scheduled to address caucus as part of the retreat in Nanaimo, B.C., this week.

The Liberals say he will help shape the party’s policies for the next election, and will report to Trudeau and the Liberal platform committee.

“As chair of the Leader’s Task Force on Economic Growth, Mark’s unique ideas and perspectives will play a vital role in shaping the next steps in our plan to continue to grow our economy and strengthen the middle class, and to urgently seize new opportunities for Canadian jobs and prosperity in a fast-changing world,” Trudeau said in a statement Monday.

Trudeau is expected to address Liberal members of Parliament later this week. It will be the first time he faces them as a group since MPs left Ottawa in the spring.

Still stinging from a devastating byelection loss earlier this summer, the caucus is now also reeling from news that its national campaign director has resigned and the party can no longer count on the NDP to stave off an early election.

Last week, NDP Leader Jagmeet Singh ended his agreement with Trudeau to have the New Democrats support the government on key votes in exchange for movement on priorities such as dental care.

All of this comes as the Liberals remain well behind the Conservatives in the polls despite efforts to refocus on issues like housing and affordability.

Some Liberal MPs hope to hear more about how Trudeau plans to win Canadians back when he addresses his team this week.

Carney appears to be part of that plan, attempting to bring some economic heft to a government that has struggled to resonate with voters who are struggling with inflation and soaring housing costs.

Trudeau said several weeks ago that he has long tried to coax Carney to join his government. The economist and former investment banker spent five years as the governor of the Bank of Canada during the last Conservative government before hopping across the pond to head up the Bank of England for seven years.

Carney is just one of a host of names suggested as possible successors to Trudeau, who has insisted he will lead the party into the next election despite simmering calls for him to step aside.

Those calls reached a new intensity earlier this summer when the Conservatives won a longtime Liberal stronghold in a major byelection upset in Toronto—St. Paul’s.

But Trudeau held fast to his decision to stay and rejected calls to convene his entire caucus over the summer to respond to their concerns about their collective prospects.

The prime minister has spoken with Liberal MPs one-on-one over the last few months and attended several regional meetings ahead of the Nanaimo retreat, including Ontario and Quebec, which together account for 70 per cent of the caucus.

While several Liberals who don’t feel comfortable speaking publicly say the meetings were positive, the party leader has mainly held to his message that he is simply focused on “delivering for Canadians.”

Conservative House leader Andrew Scheer was in Nanaimo ahead of the meeting to express his scorn for the Liberal strategy session, and for Carney’s involvement.

“It doesn’t matter what happens in this retreat, doesn’t matter what kinds of (communications) exercise they go through, or what kind of speculation they all entertain about who might lead them in the next election,” said Scheer, who called a small press conference on the Nanaimo harbourfront Monday.

“It’s the same failed Liberal policies causing the same hardships for Canadians.”

He said Carney and Trudeau are “basically the same people,” and that Carney has supported Liberal policies, including the carbon tax.

The three-day retreat is expected to include breakout meetings for the Indigenous, rural and women’s caucuses before the full group convenes later this week.

This report by The Canadian Press was first published Sept. 9, 2024.

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

Here’s a quick glance at unemployment rates for August, by province

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OTTAWA – Canada’s national unemployment rate was 6.6 per cent in August. Here are the jobless rates last month by province (numbers from the previous month in brackets):

_ Newfoundland and Labrador 10.4 per cent (9.6)

_ Prince Edward Island 8.2 per cent (8.9)

_ Nova Scotia 6.7 per cent (7.0)

_ New Brunswick 6.5 per cent (7.2)

_ Quebec 5.7 per cent (5.7)

_ Ontario 7.1 per cent (6.7)

_ Manitoba 5.8 per cent (5.7)

_ Saskatchewan 5.4 per cent (5.4)

_ Alberta 7.7 per cent (7.1)

_ British Columbia 5.8 per cent (5.5)

This report by The Canadian Press was first published Sept. 6, 2024.

The Canadian Press. All rights reserved.

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