Impossible Housing Plans in a Failed Budget

Justin Trudeau presented a federal budget that is packed with reckless spending and higher taxes, leaving our economy in ruins just to satisfy the frivolous Liberal ambition of solving the housing crisis.

Trudeau claims his plan will improve housing affordability. But his lofty and unrealistic targets to build millions of homes in a set of years are pure fantasy, while doing nothing to address the root supply crisis that the likes of Poilievre has called out over and over again. This budget is all spectacle and no substance.

And how is Trudeau funding this spending spree? By gouging Canada’s most productive citizens and businesses with punishing new taxes, of course.

He’s hiking capital gains taxes and strangling investment, which will only make Canada poorer.

Conservatives have warned that this budget will hamper growth, spur inflation and saddle future generations with crippling debt. But Trudeau plowed ahead with his leftist ideological agenda regardless.

The future can only get brighter when we turn the page on this high-tax low-growth Liberal vision for Canada.

Trudeau and the Budget from Hell

The Trudeau government’s 2024 federal budget, unveiled this week, promises a slew of new spending aimed at young Canadians and tackling housing affordability.

But beneath the glossy veneer, it demonstrates a dangerous drift towards bloated big government and higher taxes that could hamstring Canada’s economy without solving or truly addressing the housing crisis and all of its root causes.

At first glance, the Trudeau budget seems designed to curry favour with frustrated young voters by making home ownership more attainable.

Measures like allowing first-time buyers to stretch their mortgages to 30 years and increasing RRSP withdrawal limits for down payments may superficially make buying marginally easier.

But these plastic policies risk further inflating prices by stoking demand, while doing nothing to address the fundamental supply shortage in Canada’s housing market.

Throwing more government money at buyers is a band-aid solution that papers over the root causes of unaffordability. But of course that’s the only competent thing Trudeau can do, alongside lying like no tomorrow.

The Trudeau budget’s main housing plan involves a dubious target to build 4 million new homes in 7 years. A top-down, centralized approach is unlikely to succeed where the free market hasn’t.

Trudeau and the liberals’ track record of meeting ambitious housing goals is dismal. And even if these units materialize, it won’t help young people today locked out of the market.

Conservative leader Pierre Poilievre already talked endlessly about the housing crisis and how Canada got to its dire state after 8 hellish years of Trudeau and the Liberals.

He talked about the overspending, the increased interest rates, and the faulty economy with the atrocious GDP per capita ratio that is affecting housing affordability for the average Canadian.

The housing crisis is the result of many things but the most important is the existence of an inept and unproductive liberal government screwing up the economy while throwing away billions of taxpayer dollars into failing programs, in hopes of maybe closing the supply and demand gap.

Trudeau and the Housing Promise

Trudeau’s recent housing “promise” of 4 million homes in 7 years, is a stark example of this perpetually embarrassing habit of promising big but never delivering.

Let’s look at the numbers. The plan aims to construct 3.9 million homes by 2031. That’s over 550,000 homes every single year. Yet Canada currently struggles to build even 200,000 annually.

This target is over twice our record high rate of home construction in the 1970s. It would be an unprecedented national effort outside of wartime.

To call this promise far-fetched is an understatement. Did the Liberals just pull an ambitious housing target out of thin air without considering what’s actually achievable? Do they comprehend how detached this is from practical construction constraints? It reeks of desperation to grab headlines rather than a serious policy.

And even if by some miracle Canada did manage to build 3.9 million units, it still falls short of closing the housing gap by 2031 according to the CMHC’s own estimates.

This plan is still 1.5 million homes below what’s required to restore affordability. So it won’t solve the crisis, while being logistically impossible to implement. That’s the sweet liberal ineptitude for you.

But it doesn’t end there, as the budget’s progressive rhetoric around “inter-generational fairness” is contradicted by its small-government unfriendly tax hikes.

Taxes, Taxes and More Taxes

In particular, the proposed increase in capital gains tax inclusion from 50% to 2/3 for gains over $250k will discourage investment. It sends the message that entrepreneurialism and building wealth will be punished, not encouraged.

With business investment and productivity growth already weak, hiking taxes on capital gains is terrible economic timing. The budget claims only the wealthy will be impacted, but in reality it will undermine middle class wealth creation.

Punitive taxes on capital gains discourage business investment and hurt Canada’s competitiveness leading to a worse affordability crisis.

Overall, the budget demonstrates an ideological commitment by the Trudeau government to big spending and higher taxes. There is no path to a balanced budget on the horizon, with $40 billion deficits projected as far as the eye can see. New program spending is pegged at $57 billion over 5 years.

This will inevitably be funded through more debt; Canada already has the highest debt-to-GDP ratio in the G7. With rising interest costs, this debt burden will hamstring future generations.

It is the height of fiscal recklessness to permanently jack up spending without a plan to pay for it in the foreseeable future.

The budget’s rosier near-term economic projections may create the illusion of fiscal room for Liberal spending sprees. But this temporary windfall driven by high commodity prices masks dangerous long-term trends.

Canada’s economic outlook is lackluster, with growth slowing and business investment stagnant.

Now is the time for spending restraint, not expansion. Otherwise Canada risks falling into a debt spiral, where more borrowing is needed just to pay interest costs.

This would necessitate eventual tax increases. The budget already points in this direction by hiking capital gains taxes on “the wealthy.” when we already know the middle class and day to day Canadians will be the greatest sufferers of these corrupt policies.

Higher taxes on high achievers, investors and entrepreneurs does not foster a pro-growth environment. It will encourage brain drain and capital flight at the worst possible time. Canada’s tax competitiveness is eroding compared to other countries.

The budget also does nothing to tackle soaring inflation, which disproportionately hurts lower-income Canadians. The Bank of Canada is desperately trying to cool the economy as prices spiral upwards. But the budget’s inflationary multi-billion dollar spending will undermine these efforts.

Its housing plans in particular could perversely add fuel to the inflation fire. Measures like expanded buyer access to financing will stimulate housing demand when the priority should be increasing supply. This is a recipe for higher prices.

Overall, the 2024 federal budget reflects an ideological commitment by the Trudeau government to big activist government over fiscal prudence. It demonstrates a belief that spending and taxes are the answer to every problem, while ignoring potential negative impacts on growth and investment.

Conservatives like Poilievre argue this approach is counterproductive. Canada needs reduced red tape, lower taxes, balanced budgets, and pro-business policies to incentivize investment. The budget’s housing plans are a Band-Aid solution that papers over the real issues.

This big spending, high tax vision for Canada will hamper our economic competitiveness and prosperity. It will mean slower growth, less business investment, more debt, and ultimately a lower standard of living than would otherwise be possible.

Younger Canadians saw right through the government’s sad attempts at garnering support. But they realise how they will be the ones paying down massive Liberal deficits and debt burdens in the future through higher taxes, fewer services and weaker growth. This budget’s fiscal recklessness is anything but fair for future generations and don’t let sleazy corporate speak from the deputy prime minister sway you any further.