Liberal Wisdom from PEI

 

Two prominent news items in Canada this past week have been the Federal Cabinet meeting in PEI to discuss the housing crisis and the expansion of the BRICS coalition. I plan to say something about BRICS next time.

We --- the residents of Canada --- had hoped that the government would find mercy and wisdom to develop a strategy that was more than having a good time in PEI and the taxpayers’ expense.

Our housing shortage is a function of demand versus supply. Typically, an unfettered free market would pay attention to supply and would meet the demand to the point of equilibrium. We do not have such a market. We have a market distorted by the pressures of government meddling, with the consequences of unreliable price signals and interference with profit opportunities. The result is that supply of housing is not enough to meet the demand.

Demand is fairly inelastic. People need a place to live. Sadly, the only idea that I heard reported as coming from the unimaginative PEI meetings is the proposition that Canada could relieve housing demand by limiting the number of student visas. It is a mistake to try to resolve the housing problem by stifling demand. It doesn’t work. All it will do is lower the standard of living by reducing wealth that could otherwise be.

It’s no wonder we are short of housing. We are a rather unproductive country. GDP per person is about 70% of what it is in the USA. We have immense natural resources and an educated workforce, so what makes the difference? In Canada, so many of our economic inputs are diverted into government activities (or inactivities) that our production of useful goods and services is crippled. Government wastes resources that could otherwise be used to benefit the population. The consequential shortages of real wealth manifests in desired purchases being out of reach for many people --- so out of reach that a lot of them live on the streets. That’s the wisdom of Canadian government.

There’s more wisdom, spouted by Chrystia Freeland, who answered a journalist’s question about the effects of the punitive carbon tax on PEI by responding that she doesn’t have a car in inner Toronto and often rides a bike or takes the subway. Why didn’t those Islanders think of taking the subway, or even of riding their bikes, especially in the PEI winter? She neglected to mention her chauffeur driven limousine, which even drives from Ottawa to Toronto to be available to her after she has done the journey by private plane.

Our government is so out of touch. It can easily happen. My parents came from poor families who were victims of the Great Depression. I recall one of my aunts telling me about her mother crying because she had nothing to feed the children. It’s a common story. Yet I recall talking to a man that grew up in the depression but who said he didn’t know much about it because he was from a family that knew no want: his father was employed lucratively by government. I think many of us in Canada are very unaware of the suffering --- the hunger and other deprivation --- that fellow Canadians are enduring right now. So I get that Freeland and her accomplices can easily be unaware. I wish they would care enough to become aware.