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Steve Lafleur: You want to support workers? Build more housing

Commentary

Labour negotiations are often fraught. This is particularly the case with workers in the education and health-care system. It’s understandable that people feel especially sympathetic towards people who are there for them when they’re sick, or people who help care for their kids. It’s no surprise that people will casually mention that they think teachers or nurses are underpaid.

I’m not here to tell you how much we should pay any particular group of workers. What I wonder, though, is why no one brings up housing when they talk about how, say, educational assistants are underpaid. After all, housing is one of the biggest expenses most people face. Especially in big, expensive cities like Toronto or Vancouver. Increasing the taxable income of health care or education employees by a few percentage points would obviously help them pay the bills. 

But do you know what would be really helpful for educational assistants or nursing assistants? Paying five hundred dollars less a month in rent. 

I didn’t pull that number out of thin air. That is roughly the amount by which average rents increased between October of 2012 and October of 2021 in Toronto according to the Canadian Mortgage and Housing Corporation (the story is similar in Vancouver). Put another way, that’s about $6000 per year. And, remember, this is after-tax spending. To earn an extra $6000 after tax, someone earning $40,000 per year in Ontario would have to earn around $8000 extra per year.Someone earning $40,000 in Ontario would fall into the first federal and provincial tax brackets, which are 15 percent and 5.05 percent, respectively. In addition to the 20.05 percent marginal tax rate they would face on that additional $8000, they would also have higher CPP/EI premiums. This would lead to a reduction of after-tax income of around $2000, or around a quarter of that incremental income. In other words, in order to get the equivalent of a $500 rent decrease, a single worker earning $40,000 would require a twenty percent pay increase.

It isn’t just that working-class people are paying more for rent. It’s also that in many cases they have to commute from further than they might have ten years ago. As the most desirable neighbourhoods in the city core get pricier, it’s harder for people earning less than six figures to live in the most walkable transit-accessible neighbourhoods. While urban professionals get to walk or take a short train to the Financial District, an educational assistant or nursing assistant might need to take a bus or two in from the suburbs or endure a punishing drive.

The irony is that much of the housing that the upper middle class now lives in was working-class housing not so long ago. My neighbourhood in East Toronto is a perfect example. It’s a classic streetcar suburb where most of the houses are what we now refer to as the “missing middle.” Rowhouses, semi-detached, townhouses—the sort of houses where working-class people used to be able to raise a family. As of October of 2022, the average price in my neighbourhood was over a million dollars (down from a peak of over $1.4 million).I rent, so don’t get too jealous. And most of the houses here aren’t especially fancy. But we haven’t built this kind of cozy yet walkable neighbourhood in a long time. 

Toronto townhouses. Photo credit: Steve Lafleur.

It’s not that people don’t want to live in neighbourhoods like mine. People aren’t paying a million dollars for a small, attached house for no reason. It’s that most of the GTA wasn’t zoned for anything other than single-detached housing. Roughly two-thirds of residential land in Toronto is zoned for single-family houses only. While recent changes by the Ford government are a big step toward building this sort of housing again, more action is needed. 

We don’t just need to change the rules. We also need to change our attitudes. After all, we didn’t keep denser housing out of newer neighbourhoods because we wanted to make housing a luxury good. It’s that a lot of people are perfectly happy with how things are. If you’ve got a comfortable detached house within walking distance of a subway stop, you’re probably fairly content. Surely other people can just move somewhere else? If enough people feel that way—and are willing to tell their city councilors—things don’t change. 

We need to get past the idea that existing homeowners should always be privileged over prospective residents. Because education and health-care workers need to live somewhere too. Paying them a bit more is a nice thought. Allowing them to live in your neighourhood would be even better.

Sean Speer: Canada (finally) picks a side between the U.S. and China

Commentary

Global Affairs Minister Melanie Joly ostensibly chose Vancouver as the venue to release the government’s long-awaited Indo-Pacific Strategy because of its proximity to the region and self-image as Canada’s Asia-Pacific Gateway. Vancouver is about a quarter of the distance shorter than Ottawa to Beijing. 

But one gets the sense that the real audience for Joly’s announcement was about half the distance away in Washington, D.C. The Trudeau government’s rhetorical and policy shift on China—from “China is an important partner for Canada” in 2017 to “China is an increasingly disruptive global power” in the new strategy—is undoubtedly driven in part by a recognition that a growing hawkishness vis-à-vis China is now the “cost of doing business” with the Biden Administration. 

The shift in Washington’s own thinking about China actually started under the Trump Administration. Its 2018 National Defense Strategy has been called “the most significant revision to U.S. defense strategy in a generation” for altering the conception of America’s strategic relationship with China. As the strategy set out in language broadly similar to Joly’s own document: 

China is leveraging military modernization, influence operations, and predatory economics to coerce neighboring countries to reorder the Indo-Pacific region to their advantage. As China continues its economic and military ascendance, asserting power through an all-of-nation long-term strategy, it will continue to pursue a military modernization program that seeks Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global preeminence in the future. The most far-reaching objective of this defense strategy is to set the military relationship between our two countries on a path of transparency and non-aggression.

The problem, of course, is that while the Trump Administration held these rightful intuitions about China’s global ambitions and the return of so-called “great power competition”, it lacked the capacity, discipline, and deft to do much besides enacting a unilateral mix of tariffs and trade sanctions. 

The Biden Administration has been far more effective in bringing expression to a new China policy. It accepted the core insights of its predecessor’s National Defense Strategy and has gone about operationalizing them through a combination of domestic industrial policies, foreign and defence strategies (including President Biden’s strong message on Taiwan), and multilateral efforts to reconceptualize the world’s relationship with China. 

The Indo-Pacific Economic Framework (involving 14 countries including Australia, India, Japan, and the U.S.) is an economic form of this new approach to China. The new naval pact between the United States, Australia, and the United Kingdom (which aims to establish an Australian nuclear submarine capacity to deter China in the Indo-Pacific) is part of its defence and security agenda. 

Canada has been slower than most to respond to these trends. One gets the sense that the Trudeau government may have had false hopes about straddling the two sides in an increasingly bifurcating economic and geopolitical environment. Its slow decision on excluding Huawei from the country’s wireless networks reflected Ottawa’s elusive search for a middle ground. 

It became increasingly obvious, however, that middle ground-ism was not a sustainable economic or security position for Canada. American expectations about supply chain security (such as its “Made in America” strategy for critical minerals) alone meant that the Trudeau government was inevitably going to have to pick sides. 

That decision was probably never in doubt. But it was still aided by a combination of China’s belligerence towards Canada (including the unlawful detentions of the two Michaels and its alleged interference in the 2019 federal election) and the Biden Administration’s growing demands for coordination on China policy including with respect to supply chains, security issues, and human rights. 

It doesn’t seem like a coincidence that Deputy Prime Minister Chrystia Freeland delivered a hawkish foreign policy speech about the need for democracies to coordinate on economic and security matters in Washington in October. Or that Industry Minister François-Philippe Champagne spoke about “decoupling” from China on his own visit to the American capital later in the same month. 

Or that days after he announced that the government was ordering three Chinese companies to sell their interests in Canadian mining companies on national security grounds, we learned that the U.S. defence department is considering public funding directly to Canadian mining projects for the same reason. 

Or even that the U.S. Ambassador to Canada, David Cohen, issued an uncharacteristic statement lauding Joly’s announcement of the Indo-Pacific Strategy over the weekend. 

Canada has its own reasons to modify the government’s policy approach to China. It’s been evident for a long time that the basic assumptions undergirding our policy thinking about China were wrong and needed to adjust. The Trudeau government’s strategy took too long and there are outstanding questions about its implementation, but it represents in theory the kind of paradigmatic shift required to bring Canadian policy into line with a realist view of Xi’s China. 

That it also brings us into close alignment with the United States may, however, be just as important for understanding the Trudeau government’s own shift as any other factor. The U.S. is only mentioned four times (compared to 51 times for China) in the 26-page document. But it should be read between the lines on virtually every page. 

Canada has clearly chosen sides in the technological and geopolitical rivalry between the U.S. and China that will dominate the coming decades. It’s about time.