There are times when the Conservative Party of Canada sounds like the common-sense alternative to the high-handed policy making and clumsy execution of the Liberal government.
Other times – sadly, far too many – the Conservatives sound more like Moe Szyslak.
Moe is the bartender on The Simpsons, whose angry brand of political awareness leads to rash overreactions. In a Season 6 episode in which Springfield is lucky to escape oblivion when a comet hits, Moe rallies his fellow citizens to “go burn down the observatory, so this’ll never happen again!”
Matt Jeneroux, the Conservatives’ critics for housing and diversity and inclusion, channelled Moe this week in a letter he sent to the Liberal government. His solution to economic research that reaches conclusions you don’t like? Stop funding research.
The letter was in reaction to a new report released by Generation Squeeze – an intergenerational-equity advocacy and research group that receives some funding from government agencies – recommending a surtax on the value of homes above $1-million. Mr. Jeneroux’s letter – which was published in a Conservative Party media release – not only calls on the government to publicly reject the recommendation, but also to “immediately stop all plans to fund home tax studies in the future.”
Yes, the Conservative shadow cabinet member in charge of the housing file is demanding that the government cut off funding to research a key question in Canada’s deepening housing crisis, because this study came up with a scary answer. Obviously, researchers must be stopped, before they recommend again.
Paul Kershaw, the University of British Columbia professor who led the research, wants to be clear: This was not a government-commissioned report, as the Conservatives are spinning it. The study did receive most of its funding from a grant from the National Housing Strategy’s Solutions Labs Program, which is overseen by the Canada Mortgage and Housing Corp.
“The Liberals didn’t ask me to conduct the study. They didn’t send funding to me to support the study. Rather, I sought out funds from the Solutions Lab program administered by the CMHC,” he said by e-mail Wednesday.
Prof. Kershaw and his fellow academic researchers have been investigating other policy factors influencing the housing boom, including monetary policy and supply policy. Their work, and their recommendations – which they hope the Liberal government will at least consider – are not narrowly limited to the surtax proposal.
Yet that tax idea set off the Conservatives, who have pursued “gotcha” evidence of a Liberal hidden agenda to tax our homes. This is not the smoking gun that the Conservatives have been looking/hoping for. It’s just an idea proposed by researchers.
And, ironically, it’s an idea that is rooted in principles that are actually quite close to the economic philosophy that the Conservatives themselves have been preaching.
Conservative finance critic Pierre Poilievre has repeatedly bemoaned our addiction to creating wealth through asset inflation in debt-fuelled housing markets, while neglecting our capacity to produce goods and services. Generation Squeeze’s researchers argue that the lower taxation of that housing wealth is part of the problem: There is a huge tax advantage, and therefore incentive, to make your money through investing in your home rather than through wages and profits. The proposed surtax aims to remove at least some of that incentive.
Perhaps what sounds good on a broad, theoretical level becomes problematic when it lands on voters in key election battlegrounds. The only viable path to victory leads straight through Greater Toronto and the region surrounding it – where average home prices are already over the proposed surtax’s $1-million threshold. Those are votes the Conservatives know they have to court. If it leads to some inconsistencies in their economic thinking, well, so be it.
Mind you, this sort of political compromise in policy logic is not unique to the Conservatives. Prof. Kershaw doesn’t sense much appetite for the surtax proposal in the Liberal government, which has previously distanced itself from expert recommendations that it re-examine the tax treatment of homes. The Liberals are as aware of voter sensitivities as anyone.
Nevertheless, it’s disturbing to see that distrust of research and evidence still holds sway in the Conservative Party. This is the same party that, when it was last in power, discontinued the long-form census, slashed Statistics Canada’s funding, and placed increasing control over data collection and statistical analysis in the hands of politically run departments. It appears the party still sees research as a suspicious enemy rather than a trusted tool.
Whether you like or hate the idea of taxing the appreciation of home values, there’s an inequity built into the Canadian tax system that deserves closer scrutiny. We tax wealth accumulated through the appreciation of the family home much more favourably than we do wealth accumulated through employment earnings. That’s not criticism, that’s fact.
Our leadership absolutely should be asking whether that’s fair and justified. We should have professional, data-grounded researchers investigate the extent to which this distorts and inflates housing markets and hinders healthy and balanced economic development. This is how well-considered, evidence-based policy is developed.
We might not like all the answers. But we’d be fools to stop asking the questions.
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