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Daniel Dorman: On contingency: Tradition and realism are always going to matter

Commentary

As part of The Hub’s coverage of last year’s Conservative Party leadership race and its underlying political ideas, Hub contributor Ben Woodfinden wrote an excellent essay about the main cultural and intellectual trends inherent in Canadian conservatism. 

One of Woodfinden’s key arguments is that while conservatism as a political programme subscribes to some immutable principles (namely, a realism about the world and a deference to tradition), the application of these principles is highly contingent rather than universal. As he puts it: “conservatism will look different in different places.”

This conception of conservatism accords with historian Samuel Huntington’s famous observation that a Saudi Arabian conservative is seeking to conserve something different from a European conservative or a North American one.

But Huntington and Woodfinden’s view of conservatism as “inherently tied up in context and circumstance” can be overstated. Woodfinden’s argument for instance that “there is no true conservativism tradition” may be such a case.

Just because someone dresses in different clothing one day to the next doesn’t mean that there isn’t a stable being underneath the temporary appearance; just because conservatism can appear in different forms doesn’t mean that conservatism lacks a unifying body of beliefs. Even if conservatism can’t be narrowly defined as a particular set of policies to be rigidly adhered to regardless of circumstance, it’s still, in my view, a discernible dogma with definitive edges and a meaningful definition. Put more simply: while it’s true that conservatism isn’t a universal ideology—like, say, communism or liberalism—it still has some core principles and insights that extend across time and place. 

What are those core principles and insights? Woodfinden is right to focus on two key ones: conservatism’s deference to tradition and its rejection of abstraction. 

Edmund Burke, the founding thinker of conservatism, wrote of conservatism’s commitment to tradition in his Reflections on the Revolution in France. He famously contrasted the inherent conservatism of the English population by praising the English “prepossession towards antiquity” and the desire “to derive all we possess as an inheritance from our forefathers.”

But conservatives revere tradition not merely because of what Burke may have described as a naive antiquarianismSee also, Burke: “We are not guided by the superstition of antiquarians, but by the spirit of philosophic analogy.” that simply assumes the past is better than the present. Instead, conservatives tend to trust those who came before them because, notwithstanding the apparent differences between generations and ages, we’re made fundamentally of the same skin and bones.

The implication is that tradition holds a collective wisdom greater than could be discovered by any individual or by any momentary society. Russell Kirk wrote: “The individual is foolish, but the species is wise.” Conservative deference for tradition, in other words, springs out of an epistemological humility—a recognition of the limitations of our present knowing. 

G.K. Chesterton summed it up: “Tradition means giving votes to the most obscure of all classes, our ancestors. It is the democracy of the dead. Tradition refuses to submit to the small and arrogant oligarchy of those who merely happen to be walking about.”

Where conservatives value tradition because inherited knowledge is our best-tested route to the truth they value traditional political institutions for the same reason, out of a trust that the progress of centuries has allowed us to discover something of the true nature of things, something of the real nature of people and societies, and that our societies key institutions have been built by trial and error to reflect that reality. 

This reflects conservatism’s second key principle: its preference for the real over the abstract. Conservatism is the recognition that there is a true nature of things, a really existing, unchanging human nature and a subsequently fitting (though not perfectly attainable or easily knowable) order for human organization. Conservatism then proposes that this true nature of things is not invented by abstract political theorists but has been painstakingly discovered through the pages of history.

Burke wrote, “Our political system is placed in a just correspondence and symmetry with the order of the world.” Burke considered that the world was not constructed by human perceptions but that it has an objectively existing order which decrees the essence of a just political system. This realism at the basis of Conservative thought is a philosophical realism built upon the philosophical tradition embodied in figures like Aristotle and Aquinas.Russel Kirk referred to Burke’s thinking as: “steeped in Christian and classical wisdom.” The important point here is that without Aristotle there would be no Burke; without philosophical realism, there can be no Conservatism. 

The importance of philosophical realism to conservatism can be further seen in Burke’s objections to the French Revolution. He rightly saw the radicalism of the revolution as a dangerous revolt of speculations, of invented abstractions, against the natural order of the world discovered through tradition. Burke wrote of the revolutionaries: 

All your sophisters cannot produce anything better adapted to preserve a rational and manly freedom than the course that we have pursued, who have chosen our nature rather than our speculations, our breasts rather than our inventions, for the great conservatories and magazines of our rights and privileges.

The dividing line between the theorists and the realists still exists today. At the risk of generalization, where progressives are too often content to measure a policy by its intentions, conservatives insist on analyzing results. The basis of fiscal conservatism, for instance, is a commitment to economic realities, a recognition of the constraints of scarce resources and the foundational need for economic growth and wealth creation. Social conservatism likewise grounds itself in realism, in a belief that there is a fixed human nature which ought to guide our social norms and behaviours, as opposed to the progressive assumption that such norms and behaviours are merely a social construct.

This discussion brings us back to Woodfinden’s article. He’s right to focus on conservatism’s emphasis on realism and deference to tradition. But, if anything, there’s a risk that he underestimates how foundational these insights and principles are to conservatives from Canada to the Middle East and virtually everywhere in between. Philosophical realism and a deference to tradition provide a unifying foundation to the various streams of conservative thought and policy even if it still must be adapted across time and place. 

The key point here is that the debate between a universal conservatism versus a contingent conservatism may not be quite the right way to think about these questions. Conservatism is a big tent but it does have borders.

John Pasalis: Canada’s immigration policies are driving up housing costs

Commentary

Ask a Canadian why home prices are so high and you’ll certainly get a whole host of answers from foreign buyers to greedy investors and, up to recently, a long period of low interest rates.

But the most common answer you are likely to hear is that a lack of supply of new housing in Canada is the primary cause of the high cost of housing.

The lack of supply narrative has been the dominant explanation for high home prices in Canada over the past five years. Every level of government in Canada cites a lack of supply as the primary cause for high home prices and countless academic and bank economists have made the same argument. Scotiabank’s chief economist went so far as to argue that a lack of supply was the underlying cause “for rising prices and diminished affordability”. When an economist says A causes B they mean that the relationship is a statistical fact rather than an opinion.

The debate regarding the key drivers of high home prices has been so one-sided it led Howard Anglin, former deputy chief of staff under Stephen Harper, to write a column in The Hub in 2021 titled, “The one factor in the housing bubble that our leaders won’t talk about.”

What’s the one factor not talked about? How Canada’s immigration boom is impacting the demand for housing and, by extension, increasing the cost of housing.

Over the previous decade, Canada admitted roughly 275,00 new immigrants each year. In 2022, Canada saw a record 431,645 new permanent residents and this number is expected to reach 500,000 annually by 2025.

An unequal two-sided problem

When considering these two demand and supply factors alone, demand for homes due to changes to Canada’s immigration level and the lack of supply of new homes to meet this demand, we see an interesting phenomenon. One factor, the lack of supply, has been discussed for many years, and year after year, political efforts to mitigate this issue have failed. The other factor, immigration, is one that policymakers have far more control over.

Policymakers don’t have any direct control over the number of new homes developers launch and complete each year, a number that has always been hard to achieve due to labour shortages and other factors, and is only expected to decline in the years ahead due to higher interest rates and the current economic uncertainty.

So why has the debate about the high cost of housing focused on a solution that policymakers have no direct control over, building more homes, as opposed to addressing the demand for housing from changes in our immigration level, something policymakers have direct control over?

I’ll highlight what I believe are the two primary reasons.

The false lure of the zoning panacea

A popular area of academic research has been to explore the role that local zoning policies have on the supply of new housing and home prices, and the academic conclusions on the surface sound very intuitive.

Municipalities that have relatively few zoning restrictions on the supply of new housing tend to have more affordable homes and experience more moderate growth in house prices because builders can more easily adjust to changes in demand by building more homes. Academics also argue that these cities with few zoning restrictions have fewer and shorter housing bubbles.

I’ll admit, it’s a wonderful story! If cities simply remove zoning barriers to new housing, builders will flood our market with new homes putting an end to years of rapid price growth and leaving us with an affordable housing market for all.

Unfortunately, the academic theories don’t hold up very well in the real world. Many of the cities that economists cite as having relaxed zoning policies which, in theory, should see modest price growth, such as U.S. cities like Houston, Atlanta, and Charlotte, have all seen a significant surge in home prices over the past decade. Cities like Phoenix in the U.S. and Dubai more globally which have relatively relaxed zoning policies experienced housing bubbles during the first decade of the 2000s because the supply of housing wasn’t able to keep up with the sudden surge in demand from investors.

The fact is that even with relaxed zoning policies, it’s very hard for the construction sector to respond to a rapid surge in demand for housing.

A report by the Bank of Montreal found that countries with higher rates of population growth also saw the most rapid increase in home prices, a result that is intuitively obvious, and one we are seeing in Canada. While it’s very easy for our government to double the number of immigrants moving to Canada each year, it’s extremely hard for them to double the number of homes being built to house these new Canadians. When housing completions don’t increase enough to match a country’s immigration goals, the result is what we are experiencing in Canada: a spike in the cost of housing.

Despite the evidence, the solution to our housing crisis promoted by our policymakers and expert economists continues to be rooted in the delusion that housing supply can respond to any sudden surge in the demand for housing if we simply reform zoning policies.

This does not mean supply-side reforms that encourage more housing and more density are not important, they are. But supply-side policies alone are not the panacea to our housing crisis that some academics and economists make them out to be.

A politically sensitive issue

The other likely reason that many economists have argued that a lack of supply is the cause for high home prices is because any suggestion that Canada’s record high immigration levels may in fact be the bigger driver of home prices runs the risk of being called xenophobic. I’ve experienced this myself from self-described “housing advocates” who believe that with the right zoning reforms, there is no limit to how many homes Canada can build.

But questioning what is the right level of immigration for our country, and whether the current level is doing more harm than good, isn’t xenophobic at all. It’s a critical policy question that for a long time has been ignored out of fear that one might be called a racist for even raising the question.

But the times are changing.

Over the past month we have seen a significant shift in this discussion. More journalists, economists, and editorials are questioning the goal of our federal government’s immigration strategy and whether their current immigration targets are doing more harm than good.

After years of silence regarding the impact our government’s immigration policies are having on healthcare, housing, and wages, more and more experts are starting to ask some very important questions. And not surprisingly, in virtually every column the author clarifies that they are not xenophobic or against immigration, but are noting some of the negative side effects of our country’s aggressive immigration strategy.

Why are more experts starting to talk about our government’s immigration targets?

It’s becoming clearer that the federal Liberal government’s strategy to nearly double the number of immigrants admitted to Canada each year without making the necessary investments to support them is straining our housing markets and health-care system.

A demand crush that further hurts renters

The other important factor is that many of the negative side effects of Canada’s immigration strategy are starting to be felt most by the poorest and most marginalized communities in Canada—including many of these immigrants themselves.

While the discussion about Canada’s housing crisis often centres around the high price of homes and its impact on first-time buyers, a bigger concern should be how our government’s policies are driving up the cost of renting as renters typically have much lower household incomes as compared to homeowners, and unlike homeowners they don’t benefit financially from the rising cost of housing.

To provide some context to the recent acceleration in rents, it is helpful to compare how average rents have changed before and after the current Liberal government took office in 2015.

Under the previous federal Conservative government, the average rent for a Toronto condominium went from $1,570 in 2006 to $1,866 in 2015, a $297 (or 19 percent) increase in nine years. In contrast, average rents under our current Liberal government have climbed from $1,866 in 2015 to $2,657 in 2022, a $791 (or 42 percent) increase in just seven years.

Am I suggesting that our current government’s change in immigration policy alone is responsible for this outsized increase in average rent in Toronto? Of course not, but of the most common explanations for the high cost of housing, from foreign buyers to low interest rates and even irrational exuberance, this one has the most direct impact on rents.

Calculating the demand and price of a property is more complex as the source of capital and the cost of debt are all important factors, alongside the usual factors such as the number of households requiring housing. Rent, on the other hand, is simply the cost of housing services, a cost more closely linked to the demand and supply for housing services, and not as impacted by other factors.

It’s worth noting that the higher appreciation in condo rents since 2015 was not due to a lack of building. Average annual condo completions were 12 percent higher after 2015 when compared to the period before 2015. This additional supply didn’t cool condo rents because Canada’s population was growing faster than these housing completions.

The impact of—and on—foreign students

The other aspect of Canada’s immigration policies that is often overlooked is the growth in the number of international students attending universities, which are not directly included in Canada’s immigration numbers today. An important part of Canada’s immigration pipeline, the number of foreign study permit holders in Canada has climbed from 352,330 in 2015 to 621,565 in 2021.

The Globe and Mail’s Matt Lundy argues that there is a simple explanation for this boom in foreign students: money.

The annual tuition for foreign students is five times what domestic students pay, so post-secondary institutions are doing what any profit-maximizing corporation would do: they are admitting as many foreign students as they can.

But unlike Canada’s program for permanent residents, there are no targets for foreign study permit holders—post-secondary institutions can admit as many students as they want each year. But while these institutions have the right to maximise their profits by admitting as many foreign students as possible, they have no obligation to ensure there is adequate housing for the students they are admitting. The lack of planning and investment from post-secondary institutions into the housing needs of their students means that the burden of Canada’s housing crisis has fallen in part on these often financially stretched students who are moving to Canada for a better life but are left feeling exploited. When foreign students are fighting for the most affordable rentals in their community, it also puts pressure on low-income households looking for the same.

It’s time to start asking harder questions about the negative side effects of Canada’s immigration policy. As economist David Green wrote, immigration is not some magic pill for saving the economy.