Juno News - April 12, 2022


Why is Canada so expensive and will government spending help？ (Ft. Chris Spoke)


Episode Stats

Length

33 minutes

Words per Minute

204.96877

Word Count

6,834

Sentence Count

254


Summary


Transcript

00:00:00.000 Buying a house in Canada is becoming increasingly difficult and unaffordable, particularly in the
00:00:04.580 major cities. Governments have now acknowledged the problem and they're starting to throw
00:00:08.060 money at it. But will that actually help? I'm Candice Malcolm and this is The Candice Malcolm Show.
00:00:23.560 Everyone, thank you so much for tuning into the podcast today. So as we saw in last week's budget,
00:00:29.000 the government has acknowledged the fact that there is a housing crisis in Canada. They have
00:00:34.280 pledged to spend $10 billion from the budget, from your money, from borrowed money, to help ease the
00:00:41.480 problem of Canada's housing crisis. So joining me today to talk about this issue and to figure out
00:00:47.740 whether this money is going to actually help people buy homes, I'm very pleased today to be joined by
00:00:52.580 Chris Spoke. Chris Spoke is the founder and CEO of August, which is a boutique agency that designs
00:00:58.560 and builds digital products. In 2017, he launched YIMBY, which stands for Yes In My Backyard Advocacy
00:01:05.040 Group, Housing Matters, which aims to advance the cause of land use liberalization in Toronto in
00:01:10.740 order to solve the urban housing problem. Chris is a contributor over at The Hub. He also has a
00:01:15.440 newsletter on Substack. Chris, thank you so much for joining us. It's great to have you.
00:01:19.840 Yeah, thanks for having me.
00:01:20.720 Okay, so first, what was your reaction of the budget? Do you think that this $10 million in
00:01:26.560 spending is a good start to addressing this issue?
00:01:30.640 So I had a few reactions. The first reaction, you know, I expected to be disappointed in the
00:01:36.200 diagnosis of the housing problem. I expected there to be kind of a lot of hand-waving around the need
00:01:40.700 for more low market rate or affordable housing without any real addressing the fact that we just
00:01:45.940 don't have enough housing at all, you know, market rate or otherwise. And when I read the budget,
00:01:50.500 there was a lot of good kind of supply side YIMBY type language, like there were quotes in there that
00:01:56.100 could have been from pieces that I've written, like, if we want housing to be more affordable,
00:01:59.540 we need to build more housing. There was an acknowledgement that the reason why we're not
00:02:03.540 building more housing is because there are systemic constraints, regulatory constraints. So I thought
00:02:08.900 I thought that was all good. I think Christopher Freeland kind of understands the YIMBY argument.
00:02:13.300 The YIMBY argument very succinctly put is that housing is expensive because there's not enough
00:02:17.540 of it. And whenever you have a situation where a lot of people are chasing after kind of like an
00:02:21.940 insufficient amount of stuff, they bid prices up. And that's what we've seen with housing.
00:02:28.180 What I'm less sure about is whether, you know, throwing money at the problem will solve it. I mean,
00:02:34.820 ultimately, again, housing is expensive because there's not enough of it. There's not enough of it,
00:02:38.340 mostly because our cities enact rules and regulations that make it harder to build
00:02:43.540 housing than it should be. And it's not clear to me that you solve that with more money as opposed
00:02:48.740 to kind of like getting into the weeds and uprooting some of these things. One of the things that was
00:02:54.660 kind of directionally addressing this problem was it's called the new housing accelerator fund.
00:02:59.300 So in the federal budget, they've set $4 billion aside that they want to spend over five years to kind of
00:03:04.020 consent municipalities to upzone or expedite maybe their approvals process to get more housing built
00:03:09.940 and completed and braw online for occupancy. And I think the real test for this government will be,
00:03:17.300 you know, how aggressive they are in getting that money out to cities and ensuring that it's being
00:03:21.860 used most effectively. So basically ensuring that the municipalities are doing their part of the
00:03:27.940 bargain and actually meaningfully up zoning, meaningfully allowing for more housing supply than they
00:03:32.500 otherwise would. Well, that's part of the issue. Whenever I end up talking about housing with
00:03:37.380 people, they always say, oh, well, it's a municipal issue. The feds can't really do anything about it
00:03:41.140 without sort of stepping in on the jurisdiction. I know that Pierre Polyev has been talking a lot about
00:03:46.420 the sort of things that he would do. So what do you think of that sort of dilemma of, you know,
00:03:52.660 letting municipalities govern their own business, leaving things up to the province, letting individual
00:03:57.540 provinces? I mean, the idea is that you could kind of have competing jurisdictions, right? Vancouver is like
00:04:01.940 pricing itself out of the affordability game. Young people just don't want to live in Vancouver. It's
00:04:06.500 a spectacular, beautiful city. I grew up there and you have this amazing lifestyle and sort of the
00:04:11.860 leisure opportunities are incredible. But when it comes to young families and homes, you're just
00:04:17.540 not there. I grew up in a very family friendly area right in the center of Vancouver neighborhood
00:04:22.420 Carisdale. And you go there today and there's just not really a lot of families anymore because it's
00:04:26.740 just become one of those places that's so unaffordable. So what do you think to that argument of,
00:04:32.260 it's not really a federal government's job, leave it up to the provinces and the cities and they can
00:04:35.940 compete? Yeah, I think there's like two parts of the argument. There's one, should the federal
00:04:40.820 government do anything about it? And then the second is, if the answer to that question is yes,
00:04:45.140 then what could they do about it? Because you do have these kind of like jurisdictional issues.
00:04:49.220 I think on the first question, I think you kind of have to. Conservative Party is having a leadership
00:04:54.740 race right now. You have a few candidates kind of lining up hoping that they win that spot and they
00:05:00.420 kind of enter the next general election as the leader of the Conservative Party. I think it's
00:05:04.020 hard to make the case that whoever that person is shouldn't address what is probably the number
00:05:09.060 one issue for a large and growing number of Canadians. I mean, we saw in the last general
00:05:13.540 election, just last year, not that long ago, the National Post surveyed people on what were their
00:05:19.140 kind of election priorities, like policy priorities. And the number one was cost of living. And number three
00:05:24.820 was housing. And that's kind of like repeating the same point. So I think that I think that the
00:05:29.940 federal government has to have something to say about runaway housing costs. And the fact that you
00:05:34.100 have a whole generation really being priced out of homeownership, which we see as somewhat, you know,
00:05:38.820 a part of what we think about the Canadian dream. I also think that there's this national productivity
00:05:44.100 problem that gets worse, if you don't make it easier for smart, ambitious young people to move to the most
00:05:50.900 productive regions in the country, if we allow housing prices to be kind of the obstacle to
00:05:55.860 moving to where all the good jobs are, ultimately, that will kind of show itself in national productivity
00:06:02.500 statistics and ultimately GDP growth. Well, no, it's interesting, you mentioned that point that like,
00:06:06.740 you want productive people to end up in the same places, because then they become more productive.
00:06:10.740 And I know that the government has often tried to create these sort of hubs in places like
00:06:14.580 Waterloo, Ontario, or in Toronto, Vancouver, seems to me increasingly, especially with COVID,
00:06:19.140 what we just saw is that people are leaving those areas, right? Like everyone used to go to the
00:06:22.900 Silicon Valley to start a tech company, they don't anymore, they go to Dallas, or they go to Austin,
00:06:27.300 they go to Miami, and you kind of see people leaving poorly governed places in the United States,
00:06:33.060 go to go to kind of freer, more affordable places where there are these new kind of upstart
00:06:38.980 tech communities. I know you're a tech guy, you're heavily involved in this sort of tech community as
00:06:43.620 a founder. And I'm wondering if you see anything like that happening in Canada, where people are
00:06:48.260 moving to places that are more affordable, like maybe someplace like Saskatoon, or somewhere even
00:06:53.940 in Ontario that's outside of the GTA, because they're just getting priced out of the expensive
00:06:57.780 markets there. Yeah, I think that's right. I think so, kind of like the way I approach this
00:07:03.380 is thinking of cities as primarily labor markets, people move to cities for access to the jobs that
00:07:07.940 those cities offer. And typically, the larger the city, the greater the opportunity to specialize in
00:07:12.020 trade. And this is why you have kind of really niche jobs in cities, which you might not have in
00:07:16.740 smaller towns or rural areas, and also why productivity rates and wages are higher in
00:07:21.060 cities. And yeah, what you're seeing in the US is people kind of leaving some cities for other cities,
00:07:26.740 but they typically still go to cities, there are these agglomeration effects. And if you look at
00:07:30.740 the tech community, I mean, a lot of them are going to Austin or Miami, because more of their peers and
00:07:36.180 other tech workers are going to Austin, Miami. So they're still trying to like establish this critical
00:07:39.940 mass of people in these areas. And I think this kind of this reflects a general approach that you have
00:07:45.860 when you're faced with bad governments, right, you could you could exercise your voice, you could
00:07:49.140 try to vote for change or lobby for change, or you could exercise your right to exit and to kind of go
00:07:53.700 somewhere that's a little bit a little bit better. Maybe it's easier to move from San Francisco to
00:07:57.860 Austin than it is to upend San Francisco's municipal government. I think the challenge that we have in
00:08:02.820 Canada is that we don't have as many options in terms of like better governed cities that still have
00:08:08.580 a dense enough agglomeration of, you know, workers in whatever sector is interesting to you,
00:08:14.180 to make it this kind of like laboratory of democracy or like menu or this like menu long menu of options
00:08:21.380 to choose from. Most of our cities where most of our big cities are extremely expensive and the small
00:08:27.460 cities that aren't yet expensive are typically the cities that haven't seen great employment prospects.
00:08:32.020 So you have a lot of people, for example, in Toronto moving to Hamilton, Hamilton's no longer affordable.
00:08:36.180 So now they're moving out to Halifax. And Halifax is a bit more affordable, but you don't have the same job
00:08:40.900 opportunities that you might have in the GTA. So I think it's a bit of both. I think that you put
00:08:45.300 pressure on municipal politicians by showing them that they're going to lose the opportunity to benefit
00:08:50.020 from, you know, young, productive tax paying workers. But I think there is still something
00:08:54.500 to be said for trying to improve governance. I think there's something to be said for people
00:08:58.340 who stay back in San Francisco to try to improve land use in San Francisco, because it's kind of like
00:09:03.940 this golden goose, um, that you'd rather bring back, that's been dying, that you'd rather bring back to
00:09:08.820 life than just kind of like try to find another golden goose to some extent.
00:09:12.740 Is there a city in Canada that you can point to as a good example? I remember seeing a presentation
00:09:17.300 a few years ago that compared the urban density in Vancouver and compared it to New York City.
00:09:22.660 And I mean, at one point, I'm sure 100, 150 years ago, there were a lot of single family homes in and
00:09:28.020 around New York. And that has turned all into apartments and brownstones and that kind of thing.
00:09:31.940 And the expectation in New York is not that you live in a single family home, where as in Vancouver,
00:09:36.340 there's very much still the expectation, people don't want to, they want to protect the beauty
00:09:41.060 of the neighborhood, the natural character, you see that all around Toronto, these neighborhoods
00:09:45.220 that are so close to downtown. And yet, if you feel like you're out in the in the suburbs, because
00:09:51.300 because there's just beautiful yards and lawns and, and people live this sort of very spread out
00:09:57.300 lifestyle. Whereas again, in big, dense American and cities all over the world, Europe, Asia, they don't
00:10:03.780 have that expectation. So I'm just wondering if there are any examples in Canada that have moved
00:10:08.500 more towards the dense multi unit model, or whether it's a Canadian problem? Why is it happening in so
00:10:15.140 many of the cities across the country? Yeah, so whenever you see like a detached house with a big
00:10:20.340 backyard in something like a big city urban center, which what you certainly see very near Toronto's
00:10:25.700 downtown and Vancouver's downtown, it's almost always I mean, I mean, it's pretty much always because
00:10:30.340 of zoning, like there's a higher and better use for that land, if it were unconstrained,
00:10:34.660 more people want to live in these downtown cores, again, for access to these downtown jobs.
00:10:38.340 And the reason why you're not seeing that redevelopment to a higher and better use is
00:10:41.620 because there's some sort of regulatory constraint, and mostly that's mostly zoning.
00:10:46.020 So New York has the benefit of having been mostly built up tree zoning. So the really aggressive
00:10:52.180 kind of like separation of land uses and really prescriptive land use zoning that we see today,
00:10:57.300 really came into effect in the 60s and 70s and have been ramping up and becoming more prescriptive
00:11:02.020 and more descriptive ever since. And again, like Toronto over the last 20 years has started to grow
00:11:09.780 into it, you know, something like the idea of a global city, it was a little bit sleepy in the 1960s,
00:11:15.460 whereas Manhattan went through its transformation of like a lot of farmland to detached houses,
00:11:20.580 to maybe three story, four story walk ups to tenements and high rises in the early 1900s. And
00:11:26.260 all of that happened pre zoning pre aggressive zoning, at least. So in Canada, where you'll see
00:11:32.500 most of that, so let's say kind of like an older urban built form, where it's a little bit more
00:11:37.380 dense, and you don't see big 50 foot wide frontages and single detached homes near downtown,
00:11:43.300 you have to look at our older cities, like Montreal is more dense in its urban core than
00:11:47.380 Toronto is, and Toronto is more dense in its urban core than Calgary is. And it's because the,
00:11:51.860 you know, the later and later, more recently that the cities have been developed, the more likely
00:11:56.260 they were to have been constrained by modern zoning. So let's talk a little bit about the NIMBY
00:12:02.020 concern, because it seems like Canada is becoming very much a country of haves versus have nots. The
00:12:06.340 politics of it is that, you know, a lot of Canadians like, like you are a voice and concern over the lack
00:12:11.620 of housing, lack of opportunity for buying houses for young families or young Canadians. Whereas on the
00:12:17.060 other side of the coin, you have all these people that own homes are perfectly happy with the rapid
00:12:20.900 acceleration of costs, they want to protect their neighborhoods, right? They don't want a high rise
00:12:27.540 going in down the street, because they like, you know, they want to protect it for their children,
00:12:31.540 they want the kids to be able to run around and go to parks. And they worry that the, you know,
00:12:34.900 with if it becomes very dense, it'll become dangerous. And all these other problems that you see in
00:12:39.780 cities where people go to neighborhoods to avoid that. So maybe you can walk us through sort of the
00:12:45.780 distinction, like what drives NIMBYism, and what you're trying to do with your EMB organization
00:12:52.180 that's promoting a change to all this. Yeah, so to put a little bit of color
00:12:56.020 around kind of like the NIMBY label. So again, we say that housing is expensive, because there's
00:13:00.420 not enough of it. There's not enough of it mostly because of municipal regulatory supply constraints
00:13:05.140 that make it impossible for us to build as much of it as we need. And the reason why we have those
00:13:09.780 supply constraints is because you know, to your point, a lot of incumbent homeowners enjoy them,
00:13:13.940 quite enjoy them. If you live in a detached neighborhood or house a neighborhood, sorry,
00:13:18.180 rather full of detached houses, you might want it to remain that way, you might like the bill form,
00:13:23.060 the physical character, and you might not want to see, you know, like four story walk up apartment
00:13:27.460 pop up next door with renters who are a little bit more transient, let's say than like longtime homeowners.
00:13:33.380 So that is the problem, like we've reached this equilibrium through a very democratic process
00:13:37.220 of people buying homes in low rise, low density neighborhoods, and then voting to ensure that
00:13:41.940 being never changed. The problem with that is that there's a little bit of a hypocrisy, if not like
00:13:48.820 an outright schizophrenia here, right? Canadians are generally a pretty progressive people, we're very
00:13:54.100 welcoming and open to immigration. And yet somehow that kind of like stops at our neighborhood, right?
00:13:59.620 So we want more people to enter this country to come to the country to participate in the Canadian
00:14:02.980 dream, contribute economically. But we don't want to build the housing that new immigrants need, at least not
00:14:09.940 in our neighborhoods. And of course, if everybody says, I'm pro new development and new housing,
00:14:14.740 just not in my neighborhood, you know, if everybody in every neighborhood says that,
00:14:18.100 then you just end up building nothing. And that's, that's kind of what we're seeing.
00:14:21.780 I think we're reaching a bit of a tipping point where people who've enjoyed these really runaway
00:14:26.900 housing value gains that have served them quite well, they're now reaching an age and a point where
00:14:32.740 they're thinking like, okay, I remember what it was like in my late 20s to save a little bit of money in a nice,
00:14:38.660 middle class, working class job, and buy a home. But that's not that doesn't seem to be the scenario
00:14:44.020 for my kid who doesn't look like they'll be able to buy a home anytime soon, if ever. It's also not
00:14:49.460 great for these people who might want to live somewhere near their kids and their grandkids,
00:14:52.740 and now their kids and grandkids are moving from, let's say, Toronto to Halifax. So I think it is
00:14:56.980 starting to hit home that there's this incumbent versus new entrant dynamic, which you see in most
00:15:04.100 industries. But in this one, you know, the incumbents might be related to the new entrance,
00:15:08.820 and they're starting to realize, you know, despite the 20-30% gains I've seen over the last 20 years,
00:15:13.220 or rather the last two years, that also means that homeownership has gone that much farther
00:15:18.340 away from my kids. And I think it's becoming a little bit of a problem. There's also this
00:15:23.460 problem with housing, not building enough housing beyond just the affordability thing. So in Toronto,
00:15:28.180 we have a lot of people, again, a lot of progressive people open to immigration, as long as,
00:15:31.940 you know, those immigrants don't build or don't move into any new build rental apartments in their
00:15:36.500 neighborhoods. They also have environmental concerns, right? But when it comes to cities,
00:15:41.300 people, again, move to cities, because that's where the jobs are. If you don't build up, you have to
00:15:44.580 build out. So you have people who have these, again, kind of schizophrenic views where they're both
00:15:49.460 against infield development in their neighborhoods for NIMI reasons, but they're also against urban
00:15:53.860 expansion and sprawl for environmental reasons. And at some point, like, you have to resolve these
00:15:58.420 contradictions. And I think the way that you resolve them is to allow for a little
00:16:01.940 bit more of a kind of like free market and land use, stronger property rights and less restrictions
00:16:07.540 in terms of what you can build and kind of let entrepreneurs build things that people need.
00:16:12.180 And in this case, that's build housing that people need.
00:16:14.260 It's interesting because during the pandemic, it was like, you know, downtown Toronto just kind
00:16:19.220 of emptied out and you had all these commercial buildings that people just weren't using anymore.
00:16:23.060 And a lot of families moved out of Toronto because they didn't have to commute anymore. And
00:16:27.860 maybe they just wanted to get into the into the real estate market wherever they could. So they
00:16:31.460 ended up moving far out. And then and then now, all of a sudden, everyone has to return
00:16:35.380 back to the office. So I hear a lot of people kind of groaning and complaining about having to
00:16:40.340 commute now because they ended up buying so far. I want to touch on the immigration thing that you
00:16:46.020 discussed, because obviously, there's a lot of discussion over what's driving this, right? I know you're
00:16:50.980 much more of a supply side that we just need to build a lot more. But there are obviously demand issues
00:16:55.060 when you when you look at things like Airbnb, taking up space, I completely agree with that,
00:16:59.620 I disagree with that, because I tend to think that people who put their homes on Airbnb, it's usually
00:17:06.820 occasionally, my family and I will go to Vancouver to visit my family will rent an Airbnb house almost
00:17:11.780 every time. It's a family that actually lives in the house, and they'll go on a vacation and they'll
00:17:16.740 rent out their house while they're away to kind of help subsidize the cost of living in a very
00:17:20.660 desirable area. But but but this idea that that you have, I don't know exactly how many new families
00:17:28.980 move to the GTA every year, I imagine, it's a large percentage of Canada's immigration numbers. So for
00:17:35.380 welcoming in 450,000 people a year, we might have 350,000 of those coming into the GTA. You wrote in
00:17:42.260 the hub recently that over the past 10 years in Ontario, there's been an average completion of 70,000
00:17:48.020 new homes per year, that Ontario is that kind of is last in the g7 in terms of per capita housing.
00:17:54.820 And just to catch up, we would need to build 1 million new housing units overnight, just to keep
00:18:00.420 up with this population growth. So can you comment a little bit about the impact of welcoming all these
00:18:07.460 people into Canada, but not having anywhere to house them and what what that's doing to our cities
00:18:12.100 to to a place like Toronto or Ontario? Yeah, totally. So prices, as we all know, from like
00:18:17.780 our first year microeconomics classes are a function of supply and demand. If the demand for housing
00:18:22.900 increases, because people within the country move from like small towns, rural areas, big cities,
00:18:27.860 and people from around the world move to Canada for access to, you know, everything that Canada has to
00:18:32.180 offer. That's the demand side of things. And if we don't build enough housing for them, then we have
00:18:37.300 limited supply. And ultimately, this resolves itself in rising prices, a higher equilibrium, and people
00:18:43.060 kind of getting priced out and left behind. So that's absolutely right. And you could kind of
00:18:48.100 confront this fact with with, I guess, one or two approaches, you could think that what we need is a
00:18:54.020 supply side solution, which is to build many more homes to accommodate many more people, or with a
00:18:59.780 demand side solution, which is ultimately to somehow have fewer people looking for housing. So that might be
00:19:05.380 a reduction in immigration, it might be like, somehow making cities less attractive relative to smaller
00:19:11.700 towns where housing is a little bit more abundant, or a little bit less scarce, at least. And the way
00:19:16.660 I think about this is kind of like, what is the most productive outcome, I think the supply side
00:19:20.580 solution is really a solution of building a production of entrepreneurship of creating jobs
00:19:25.780 and stuff for people to enjoy and live in. Whereas the demand side solution is ultimately a little bit
00:19:30.660 of a zero sum game, right? It's kind of picking winners and losers, even when we talk about uses of real
00:19:36.020 estate, you know, should this be a long term rental apartment or short term rental apartment, maybe we
00:19:39.780 should outlaw short term rental apartments, it's always this zero sum game that has to come at the
00:19:44.180 cost of something that people want, people want to rent Airbnbs and stay in Airbnbs. Whereas if you
00:19:48.900 build more, that kind of that's a positive sum game, we're expanding the pie, we're making more goods
00:19:53.620 available to more people. Now, that comes at the cost of maybe increased shadow impacts on the
00:19:59.060 neighborhood neighbors, or more more competition for like on street parking, or maybe construction noise for
00:20:05.300 the two years that it takes to build anything. And ultimately, that's what kind of feeds the NIMBY
00:20:08.900 resistance to these things. But we have to kind of pick our costs, right? Is it better to kind of
00:20:14.340 accept the cost of localized impacts of development, which might mean that if you go downtown Toronto,
00:20:18.980 you won't see beautiful detached houses, you know, just north of the bridge in Rosedale? Or is the cost
00:20:24.660 that we maintain this extremely rigid and restrictive system and exacerbate urban sprawl, make housing
00:20:32.180 completely unaffordable to anybody under the age of let's say 30 or 35, never mind you immigrants who are
00:20:37.060 entering this with no kind of skin in the game, they haven't benefited from the home equity value
00:20:40.820 increase in the last few years, they're coming into this fresh, we kind of have to pick our costs here.
00:20:45.300 And in my view, I'd much rather take the perspective that abundance is better than scarcity, and we
00:20:52.980 should make housing, which is as fundamental as good as we have in society, as abundant as possible.
00:20:57.700 And I think that leads to a lot of good outcomes.
00:21:00.740 Well, it's sort of fundamentally unfair, as well, to tell these people from around the world,
00:21:04.980 hey, come to Canada, have this great life, you know, of course, a lot of them are going to choose
00:21:08.740 Toronto, because that's the place where they have a community where there are other people who speak
00:21:11.700 their language, where they can find their food, and they can they can find a community of people
00:21:16.980 that they feel comfortable with. And yet, you know, they have no way of being able to easily and unless
00:21:22.660 they're very wealthy, being able to buy into this this market. But then at the same time,
00:21:27.860 at some point, we have to have other attractive places for people to live aside from
00:21:32.820 Toronto, I know a lot of people from all over the country that moved to Toronto, because the type
00:21:36.980 of work that they do, the type of law or the type of tech, there just aren't jobs in other parts of
00:21:41.940 the country. I'm wondering if you if you can comment on just sort of the fact that everyone in Canada
00:21:49.300 wants to go to Toronto, how can you, you know, as an influencer, or as a politician, or as someone in
00:21:55.540 government, how can you create incentives for people to want to go to other cities? And we
00:22:00.500 talked about this earlier in the interview where, you know, you might be able to go afford a place
00:22:04.340 in Halifax, but the job market isn't really there. It's like, it's kind of like the chicken
00:22:07.700 and the egg thing. It's like, you want people to go, but there's no jobs. Well, there's no jobs,
00:22:10.980 because there's no people. How would you how would you like if you were to create a strategy? How would
00:22:16.020 you encourage people to move to cities outside of these sort of very desirable places, Vancouver,
00:22:21.860 Calgary, Toronto, to try to build up the rest of the country with people and have other hubs that
00:22:27.540 are attractive to people? Yeah, so what I'm surprised is that we're not seeing more competition,
00:22:33.780 all these kind of smaller cities that would benefit from a larger tax base and more, let's say,
00:22:37.620 dynamism and vibrancy in their in their cities. I'm surprised that we haven't seen them more
00:22:42.100 proactively court, let's say, Toronto expats. In the US, famously, Mayor Suarez of Miami, like had a
00:22:49.860 concerted marketing plan to get people from Silicon Valley and from San Francisco and the Bay Area to
00:22:55.140 move to Miami specifically. And he was out there kind of like waving the Miami flag and telling
00:22:59.860 everybody why Miami is so great. And we haven't really seen that in Canada. And I'm a little bit
00:23:04.020 surprised. I mean, I mean, the reason why the reason why we probably haven't seen that is that every
00:23:10.100 city government and every mayor is constrained to some extent by the same kind of NIMBY sentiment,
00:23:15.380 so that the existing homeowners in Halifax might not be so happy or excited about Torontonians moving
00:23:21.620 into Halifax and bidding up their neighborhoods and contributing to traffic congestion and all these
00:23:25.700 things. So that's the first point that I would like to see just more competition between cities.
00:23:32.420 I would like to see people understand a little bit better the benefits of density and a growing
00:23:36.580 population as opposed to a declining population and be a little bit more proactive to encourage that.
00:23:42.100 But I do think this has to be somewhat of kind of like a market-led process. I think it's very hard
00:23:46.340 to plan this from the top down to kind of decide, okay, financial services will stay in Toronto,
00:23:51.300 but we're going to move AI to Montreal. This is what the super clusters try to do, right? We're going to
00:23:54.980 move blockchain development to Calgary, AI to Montreal, and basically try to like organize these things
00:24:00.500 from the Ministry of Innovation or something like that. I think ultimately people have to sort
00:24:04.980 themselves out to whatever the market kind of feedback loops are telling them.
00:24:09.460 I do think that COVID has, to your point, enhanced the ability to work remotely. We've seen a lot
00:24:15.220 more of that through COVID necessarily. And now because we've implemented all these systems, people
00:24:19.860 are kind of to some extent sticking with them. So maybe we will see a little bit more of a discount
00:24:25.540 placed on living super close together where you could see someone face-to-face in an office and maybe
00:24:31.060 that increases the relative attractiveness of decentralizing a little bit how we live.
00:24:35.780 But that's also been the promise of the internet since its advent. We haven't really seen that.
00:24:40.260 We've actually seen a concentration in cities and an increase in density in cities. There's something
00:24:45.380 about humans living and operating and interacting closely together that seems appealing. And we all
00:24:51.700 keep paying higher rents than we need to be by moving to big cities and living in smaller units than
00:24:56.980 we otherwise could. So I don't know what I would suggest as like a top-down kind of government-led plan,
00:25:02.660 other than to encourage more cities to adopt more of this kind of like abundant CMB agenda, right? So
00:25:09.780 Halifax could very quickly become as unaffordable as any other city if it doesn't respond to this
00:25:15.460 increased demand by building more housing. So it needs to build more housing. The US benefits from
00:25:20.500 more, I think, pronounced cultural and ideological differences between regions. So the Southeast builds a
00:25:27.540 lot. Texas builds a lot, whereas like the Northeast and Northwest coasts don't. And I think a lot of
00:25:32.820 that is driven by the cultural and ideological differences. In Texas, the idea is like, this is my
00:25:37.300 land. I'm going to build, you know, whatever I want on my land. We don't really have that here.
00:25:41.140 So, I mean, this is a long way of saying, I don't have a great answer for you. I would like to see a few
00:25:45.940 pockets of the country take this challenge as an opportunity for them to kind of grow in stature and in
00:25:51.300 status. And if they did that, maybe, yeah, maybe people would have more than three options for where
00:25:56.900 to live if they want access to the best jobs. And to your point, it's certainly not like a top down, like
00:26:02.580 the Minister of Innovation, whatever that means, can't just decide, okay, we're going to make
00:26:08.260 Montreal the AI capital. Like, yeah, you have to do a bit more than that. And it has to be industry led and
00:26:13.700 people led. You did mention blockchain in Calgary. And I did want to ask you while I have you, we saw
00:26:19.940 Pierre Polyev, the Conservative leader nominee. He was out in London, Ontario. He bought a Sharma
00:26:28.100 using Bitcoin. And he said that he wanted to make Canada the crypto capital of the world or the
00:26:34.500 blockchain capital of the world. I'm wondering if we could just ask you some basic questions,
00:26:38.260 because I know you mentioned on Twitter, you tweeted, I like where this is going. So to people
00:26:42.820 who don't have a background, they don't understand blockchain or crypto, can you just sort of give us a
00:26:47.780 101 lesson here on what it means? And how Canada can accommodate this sort of new industry that
00:26:55.140 we're seeing? I mean, Bitcoin's been around for a decade, but it seems like it's just suddenly become
00:26:59.460 really popular. And so maybe you can comment on that as well. Yeah, so and I'm showing more kind
00:27:04.340 of familiar, well versed with the Bitcoin side of things than the broader blockchain or crypto universe.
00:27:08.900 So Bitcoin very simply is kind of like the first form of money we've had in a very long time that
00:27:13.140 is not that doesn't have its monetary policy decided by a central bank or kind of constrained
00:27:20.500 in any way by a government. So something like we've had the separation of the state and the church and
00:27:26.180 now Bitcoin represents the potential for the separation of the state and money. And it's kind
00:27:32.260 of like an internet native form of money that facilitates transactions and some to some extent
00:27:39.700 acts as a store of value without the need for any third party intermediaries, including government
00:27:46.260 having a say in how it operates. The reason why I'm kind of like, I don't know if excited is
00:27:52.900 the right word, but I like the fact that Pierre is going in this direction is I do think that our
00:27:58.180 money is going, like our lives are going online, so our money is going online. And I think that there
00:28:01.940 are two visions for how the future looks if our money goes online. One vision of the future
00:28:07.540 is within the world of what's called central bank digital currencies. And this is where we decide
00:28:12.580 that paper cash doesn't have the utility that it once had, because we're all operating and
00:28:16.180 transacting online, whether like online explicitly or, you know, with a square point of sale terminal
00:28:23.380 at a coffee shop, we're not exchanging pieces of paper anymore. So just at some point, our money will
00:28:29.860 go online. It might be central bank digital currency, which is, again, fully controlled and governed and
00:28:35.940 regulated by the Bank of Canada, and maybe to a lesser extent, or maybe to a greater extent,
00:28:40.340 depending on how the politics go, the Ministry of Finance and other branches of government. Or you go
00:28:46.420 in this other direction where the online form of money is not defined or dictated or a regulator,
00:28:53.780 anyhow, kind of controlled by the federal government. And I think that that second scenario is probably
00:28:58.980 more hopeful if you care about things like privacy and autonomy and self sovereignty. We've seen
00:29:07.620 very recently, like a lot of federal government actions in, you know, freezing people's bank accounts
00:29:12.980 and that sort of thing that becomes exponentially easier if all money is like a ledger in a Bank of
00:29:20.180 Canada database. So I guess without going too deep into like conspiracy theory territory, I just think
00:29:27.700 it's better and there's a better set of incentives if the money is a little bit out of the government's
00:29:31.860 reach. Well, what a precedent to set that you can freeze the bank accounts of your political
00:29:37.540 adversaries if you don't like what they're doing. I think that that probably awakened a lot of people,
00:29:43.220 not just in Canada, but all over. I was watching on Twitter as sort of some of the leading
00:29:48.500 blockchain and cryptocurrency people were writing essays and writing Twitter threads,
00:29:54.500 concerned about what kind of precedent Trudeau and Chrystia Freeland just set by freezing bank
00:30:00.020 accounts of people that they disagreed with. So just a final question for you about Pierre's
00:30:06.180 announcement. How would Canada do this? How would we situate ourselves and position ourselves as being
00:30:12.020 a leader? I know El Salvador recently adopted crypto or Bitcoin as a legal tender that has to be
00:30:19.060 accepted by all businesses in that country. And they're sort of seen as a, I think they have a young
00:30:23.140 president who's, who's a very apt to these kinds of things. What, what, what could Canada do? And
00:30:28.260 more specifically what, what in Pierre, what Pierre Polly have announced, what, what kind of things can
00:30:33.220 Canada do to, to create the condition to become the leader? Yeah, I think the first thing you could do
00:30:37.940 is, is like somewhat of a Hippocratic approach. So like first do no harm. I think we're going to see a
00:30:42.900 lot more governments kind of crack down on digital currencies explicitly because they don't control them.
00:30:49.060 And, you know, most of our policy at this point is, is a blended kind of fiscal monetary policy,
00:30:55.700 MMT, you know, type of, type of scenario. And that becomes a lot harder to enact. It becomes a lot harder
00:31:00.740 to kind of set the, the, whatever parameters you want for your electoral success through monetary policy,
00:31:06.340 if the money is, is no longer controllable. So I think that a lot of governments will start cracking
00:31:11.700 down on cryptocurrencies and maybe on Bitcoin specifically. So first do no harm. I think, I think,
00:31:17.220 a Pierre Polly of government, let's say that made it explicitly clear that Bitcoin would be allowed,
00:31:22.340 if not encouraged to kind of operate as it does for people to own it, to hold it, to transact in it.
00:31:27.220 That would be very positive on the, on the policy front, kind of beyond that. I think something like,
00:31:33.060 so right now on any foreign exchange trade, there's an exemption. I think your first $200
00:31:38.660 aren't subject to capital gains taxation. I think if you applied something like that to Bitcoin,
00:31:43.460 but with a much higher threshold so that the problem with Bitcoin, people hold Bitcoin,
00:31:47.380 but the reason, one of the reasons why they don't spend it is if you spend your Bitcoin,
00:31:50.580 you're really selling it for whatever you're buying with it. And that's a taxable event.
00:31:55.300 And you're subject to capital gains taxation, if you do that. So I think kind of like,
00:31:59.620 through some similar mechanism to how we deal with Forex, but maybe with a higher threshold,
00:32:03.620 exempt Bitcoin from capital gains taxation, that would kind of right off the bat,
00:32:08.340 maybe just shy of El Salvador, make Canada the friendliest jurisdiction to Bitcoin. So, you know,
00:32:13.780 if I were advising him on his Bitcoin agenda, I might, I might suggest to go there. And then I
00:32:17.940 also think that like the, the, the rhetoric matters. I think if he's rhetorically supportive
00:32:22.740 of innovation in the space and rhetorically supportive of this philosophical idea of a money
00:32:27.220 that's uncontrolled and uncontrollable by government, I think that's encouraging,
00:32:30.900 and you'll see a lot more people participating in the market, including entrepreneurs who will
00:32:34.980 build things that I can't even, you know, anticipate on this call.
00:32:38.020 Great. Well, thanks so much, Chris, for your, for your thoughtful take on, on all of these issues.
00:32:43.380 I hope that the people in power or people advising people in power pay attention to some of the
00:32:49.940 solutions that you had, because certainly when it comes to both affordability and the idea of,
00:32:54.180 of, of having, you know, your assets protected, including your bank accounts, that there's,
00:32:59.380 there's a lot of opportunity that Canada has and to become a leader in, in the tech space as well.
00:33:04.580 So thank you so much for joining us. We really appreciate your time.
00:33:08.260 Thank you. Thanks for having me.
00:33:10.100 Great. That's Chris Spoke. I'm Candace Malcolm, and this is The Candace Malcolm Show.