Quote:
Originally Posted by opendoor
There are lot more industries in the country than construction. The point is, we need to maintain a sustainable ratio between working-age people and retired people, or else the whole thing just breaks down.
Ultimately, current seniors didn't pay near enough into the system to fund the services they expect. When there was a favorable demographic makeup, "pay as you go" made a lot of sense because there were far, far more working age people than retirees, but that's not the case anymore. So things like universal healthcare, CPP, OAS, etc. simply can't work without one of three things happening (or a combo of them):
1) Reduction in services (i.e. OAS cuts, poorer healthcare, etc.);
2) Tax/fee increases (which are an inevitability if you allow the labor force to shrink while expecting them to pay for the same level of services for an aging society); or,
3) Enough immigration to keep the labor force growing at its historical rate of about 1.3% a year. In the current context where there are 2 people retiring for every 1 teenager entering the workforce, that translates to about 500K new permanent residents a year, which is the current government's target.
Of the three, immigration should be by far the most palatable solution, which is why all the major parties seem to agree on it. But that doesn't stop people from blaming immigration for the country's problems and treating it as a partisan issue.
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That’s all true. Canadians are in denial about the costs of an aging population, and few politicians want to talk about the tradeoffs we’ll be forced to make around taxes, health care, and pensions. We need immigration to moderate the demographic imbalance.
But immigration in this country is highly concentrated in handful of small regions that have seen home prices skyrocket beyond the affordability of all but the highest-earners, or those with parents who can bankroll eye-watering down payments.
We risk fostering a class-based society where homeowners are all the children of homeowners, while the working class and children of renters have no hope of getting on the property ladder. We also risk generational warfare between those who were fortunate enough to get into the market before prices when crazy and those who weren’t. If someone told you four years ago that the Conservatives would not only lead in support among Canadian Millennials, but lead the Liberals by 19 points and the NDP by 17 points, you probably would have laughed them out of the room. But here we are.
Unaffordable housing also has an impact on family formation - delaying having a kid (never mind a second or third) until you can afford to buy a home at 37, and mortgage payments take up half your income, only makes the demographic imbalance worse.
Governments need to address a bunch of issues around zoning, permitting and the costs of construction in order to increase supply. But even if those measures are passed, ramping up home construction to the levels we need will take more than a decade. Meanwhile, if housing and rents remain this unaffordable or worsen, public anger will grow. Something has to be done in the next 3-5 years or we’re sowing the seeds for enduring breakdown of public trust in institutions in this country. Which would be a very bad thing.
It’s not demagoguery to freeze or roll back international student visas and TFWs as part of a multi-pronged strategy to give housing builds a chance to catch up to population growth. Those measures won’t have a huge impact on housing affordability, but they can be implemented right away and will bear some fruit (however modest) in the short-term.