EDITORIAL : THE NATIONAL POST, CANADA

 

 

Deregulate housing

Bank of Canada governor Mark Carney may have to raise interest rates on all Canadians to stop a potentially catastrophic housing bubble, even though higher interest rates could abort our still-shaky economic recovery. Prime Minister Stephen Harper and the provincial premiers should stop him, not by telling him how to do his job but by doing their own jobs and setting the distorted Canadian housing sector aright.
Canada's housing sector -far from operating on free-market terms -has been a creature of federal industrial policy since the 1930s, when Ottawa passed the Dominion Housing Act to subsidize housing, kick-start the economy and improve Canada's social values. Home ownership, then as now, was seen by many as a promoter of social stability. In subsequent decades, the federal government added more and more subsidies to the housing sector, bringing us to the situation we face today, where unbridled home-owning has become the single biggest threat to Canada's economic stability.
The remedy for Harper is straightforward: Rather than ignore the distortions in Canada's housing sector and cause Carney to raise interest rates, Harper should systematically peel back the layer upon layer of subsidy that levers our giant housing market into a teetering threat. Each layer that Harper removes will not only act to strengthen the Canadian economy, it will also act to save taxpayer dollars.
The most important way to deleverage housing is a privatization or dismantling of the Canada Mortgage and Housing Corporation, the juggernaut created in the 1940s to provide housing for servicemen returning home after the Second World War. CMHC has morphed into a gargantuan agency that primarily serves to inflate the housing sector through various programs subsidized through government guarantees. Wind down the CMHC -the private sector is fully capable of performing its functions without subsidy, and without inviting taxpayer risk -and the federal government will be eliminating half a trillion dollars in housing liabilities, the type of risks for Canada that Fanny Mae and Freddie Mac visited on the United States in its catastrophic housing collapse of 2008.
But CMHC is only the largest of the direct and indirect species of subsidy trained on the housing sector. The federal government also artificially boosts home ownership through numerous tax provisions. The First-Time Home Buyer's Tax Credit helps heat up the housing market, as does the Home Buyers' Plan provision for RRSPs. There's the GST New Housing Rebate. And the absence of capital gains tax convinces many to put their money down for a home.
Once in a home, the government can then be counted on to roll out programs that help keep people in them. Subsidies for energy conservation renovations have been a favourite over the years; two years ago, the federal government subsidized renovations of all kinds.
Provincial and municipal governments also use the tax system to entice people with poor credit or inadequate savings into premature home ownership -they offer property tax rebates and various incentives to first-time buyers. More often, the homeowners don't even know that they have been subsidized, as happens through deals cooked up among the province, the municipality, and the real estate developer. These development handouts may be offered as grants or via mechanisms such as "tax-increment financing," which assumes that a new development will incrementally raise the neighbourhood's property values and thus property taxes. Governments then use these presumed future tax increases as justification to help the developer finance a current development that is otherwise unfinanceable.
The biggest distorter of all, however, may come from an undeclared, 100-year war that governments at all levels have waged against tenants. Prior to the Second World War, when tenants were seen as lacking hygiene, as sexually promiscuous, as disease prone, and as alcohol abusers, this war was been fought primarily through health regulations, zoning restrictions and bans on shared accommodations and apartment buildings. The taint against tenants continues today in updated form through governments that levy hidden property taxes on tenants several times higher than the property tax charged home owners, and through governments that charge tenants more for services such as garbage collection.
To boot, rent-control policies act to stream people into home ownership by discouraging developers from building new rental units or upgrading existing ones. Taken in toto, policies from governments at all levels recklessly discourage renters and recklessly encourage home ownership.
Governments don't serve their economies by spurring housing, as the International Monetary Fund discovered in a study conducted following the 2008 meltdown, when the U.S. housing bubble played an outsize role in its greatest economic decline since the Great Depression. Of the 20 housing "busts" that occurred in various countries between 1970 to 2001, the IMF found, a recession followed in every case but one. Worse, the recessions associated with housing busts are deeper and longer-lived than other recessions, and typically lead to "output losses two to three times greater than recessions without such financial stresses."
Neither do governments do homeowners any favours by dispensing housing goodies. The housing busts the IMF described all involved falls in housing prices of 30% or more.
The case could not be clearer for housing deregulation. If Mr. Harper and his provincial counterparts don't deregulate, the entire economy and homeowners in particular are put at risk. If they do deregulate, Canada's housing stock -the chief investment for most Canadians -becomes secure without needlessly dampening the Canadian economy.
? Lawrence Solomon is executive director of Energy Probe and Urban Renaissance Institute and the author of Toronto Sprawls (University of Toronto Press).

Childhood memoirs, profanity and a cane all cause concern

The National Post kicked off Father's Day weekend with a bang last Saturday, with the front-page story: "My Father, His Firebombs and My Messed-up Sixties Childhood." In this and the subsequent four editions of the Post, reporter Peter Kuitenbrouwer recounted what it was like "growing up with a hippie father who was on the run."
This five-part series, sometimes stretching across three pages of the newspaper, proved too much for a handful of readers.
"Since when is the National Post the favoured medium for a memoir?" asked F. McAlister. "Many people have had hard lives; many wonderful Dutch have successfully immigrated to Canada. Everyone has stories of their youths, some sad and some joyful. But they are not material for newspapers. Yet another example of the narcissism of our present society."
Numerous other readers told us they found this series fascinating.
"Thank you for providing a forum for Peter Kuitenbrouwer's reflections on his father, said Ann Aveling. "In an age of dwindling attention spans, it is refreshing to read a sustained exploration of a subject. And thank you, too, for recognizing that Father's Day is about something more than premium beer and barbecue equipment."
"What a remarkable and interesting story Peter Kuitenbrouwer has written," added Geoff Godard. "It evokes the ethos of a time I experienced as a young adult -the pill, drugs, Vietnam war, Prague Spring. I have been moved to tears on several occasions and congratulate [Kuitenbrouwer] on what he has achieved in recreating the story and recounting it so compellingly."
"By examining his family history from the Sixties, Peter Kuitenbrouwer allows us to re-examine that period of political history and perhaps our own complicated family stories," added Elissa Pane. "I believe the editorial decision to run the series on the front page was a good one. It has angered some people, but it has made them think. What more can you ask of the morning paper?"
? Some people rely on canes to help them cope with physical shortcomings. But can they also be used as props? This reader thinks so, com-menting on a photo (shown above) of Jack Layton that ran in our Monday paper.
"What's with Jack Layton's vaudevillian cane?" asked Dolores Bell. "I might understand if he -more than three months after his hip replacement -were still fragile and in need of support, but with the number of times he's photographed brandishing his cane over his head, that can't be the case.
"Is he trying to part the voter waters so he can cross over from Stornoway to 24 Sussex Drive?" she continued. "Is this his Excalibur, the hoisting of which he hopes will convince us that he is our true and fearless leader? Perhaps it's his socialist sword of Damocles, raised as an omen? Whatever he's up to, as it were, it's wearing very, very thin."
? As mentioned in this column last week, the Post strives to avoid offensive language. When it creeps in, readers let us know. Here are three examples.
Monday's paper offered a montage of photos from the MuchMusic Video Awards in Toronto, including one of Avril Lavigne in a black dress with a small opening on its side. Although the image of Napanee, Ont.'s favourite daughter was small, one eagleeyed reader found something odd with the image.
"Did your photo editor notice the word tattooed or stencilled on Avril Lavigne's body visible through the opening in her dress?" asked Allan H. Adams. "I guess one ought not be overly shocked by such graceless displays given the current music 'culture,' but I was a little surprised to see that word clearly visible in the photo."
(The photo in question is visible at the bottom of this column, reproduced at the same size it ran in the Post on Monday. Don't worry about being offended, as most readers will need a magnifying glass to be able to read the mystery word, described above.)
The second profanity-related letter concerned the Peter Kuitenbrouwer series described earlier in this column, specifically a photo used in Thursday's instalment. It showed the title page of a prison diary written by the reporter's father.
"Paul Kuitenbrouwer must be laughing . at having slipped [this word] past the Post editors," wrote David Stephens. (The prison diary pictured in the paper was titled: "From the Bowels of the Mother---ing Machine").
The third profanity-related note came over the phone. It concerned the angry reaction from some readers to our recent story on an "expletive-laced book of rhyming verse, Go the f--k to sleep."
"These people should relax," said someone who identified himself only as Dan from Calgary. "It's a real word. They should look it up. By writing you letters about it, they are only drawing attention to the book."

Honouring Mordecai

Mordecai Richler is Canada's greatest claim to literary fame. If he had been born and lived in Toronto, to commemorate his life and achievement, our literati would have called for the renaming of Yonge Street in his honour, or maybe demanded the erection of a huge statue in Queen's Park, featuring the dishevelled genius wryly peering over his pince-nez at a smoked meat sandwich.
Instead, the Montreal political mandarins have decided he is getting a crummy little open pavilion at the foot of Mount Royal -a place for people to come in out of the rain. It's not quite a public toilet -but it's something close to that, since it is frequently used by homeless people.
This is the equivalent of Toronto naming the change house behind an outdoor skating rink after Margaret Atwood. Or Alberta naming the duck blind at an irrigation lake after novelist Robert Kroetsch (who died tragically this week, just short of his 84th birthday).
But then, if Mr. Richler had been born in Toronto or Edmonton, maybe he wouldn't have been inspired to the kind of savage indignation that made him such a household word (and often not in a good way) in his native Montreal.
Mr. Richler's satiric talents were honed to gleaming acuity by the constant irritation he experienced at growing up as a Jew and an anglophone in an environment that was not, let us say, overflowing with the milk of multicultural tolerance and religious pluralism.
Quebec did become more open, inclusive and tolerant over the years. But Mr. Richler and Quebec never established an entente cordiale.
While other Canadian anglos who toughed out the language wars made their peace with the French fact, Mr. Richler fossilized in terms of his Quebec cultural identity. Because he spent so many years in England, he remained psychologically fixed in his adversarial perspective. He never did learn to speak any French at all; or if he did, he kept it well hidden from public exposure.
And his international fame gave him a huge forum for spleen-venting. His brutal attack on Quebec's ethnic nationalism, "O Canada, O Quebec: Requiem for a Divided Country," which first appeared as a New Yorker article, utterly humiliated Quebec's ruling elites. He also appeared on the CBS program 60 Minutes, introducing American viewers to the Soviet mindset of Quebec's language police.
All this explains why -a decade after Mr. Richler's death -the province's nationalists are putting up such a stubborn and petty campaign of resistance against any significant public commemoration of his life in Montreal. By the lights of, say, the Saint-Jean-Baptiste Society, Mr. Richler was an outsider who took advantage of the perks Quebec had to offer -the exceptionally satisfying cosmopolitan life he enjoyed in downtown Montreal; his beautiful, bosky retreat in the Eastern Townships -yet who confined his social and cultural life to a circumscribed huddle of anglo friends and admirers.
On the other hand, a park pavilion? That is adding yet another insult to the many already dished out to him in his lifetime. The man is dead. He put Montreal on the map. It doesn't matter whether you liked him or hated him; he was one of us and he achieved great things.
Give the man a street name at the very least, or a building, or a statue (too bad the Ritz Carlton, where Mr. Richler crossed the road from his apartment to drink, is being renovated as condos; a statue in the bar there would have been great).
Quebec's nationalists, separatists and language purists all take great pride in the modern, sophisticated society that francophones have created in Quebec. But if the province truly does want to project an image of pride and confidence, it should not ignore or denigrate the legacy of its great artists.