The Candice Malcolm Show - Why is Canada so expensive and will government spending help？ (Ft. Chris Spoke)

00:00:00.000 Buying a house in Canada is becoming increasingly difficult and unaffordable, particularly in the

00:00:04.600 major cities. Governments have now acknowledged the problem and they're starting to throw money

00:00:08.440 at it. But will that actually help? I'm Candice Malcolm and this is The Candice Malcolm Show.

00:00:23.580 Everyone, thank you so much for tuning into the podcast today. So as we saw in last week's budget,

00:00:29.020 the government has acknowledged the fact that there is a housing crisis in Canada. They have

00:00:34.300 pledged to spend $10 billion from the budget, from your money, from borrowed money, to help ease the

00:00:41.500 problem of Canada's housing crisis. So joining me today to talk about this issue and to figure out

00:00:47.780 whether this money is going to actually help people buy homes, I'm very pleased today to be joined by

00:00:52.620 Chris Spoke. Chris Spoke is the founder and CEO of August, which is a boutique agency that designs

00:00:58.580 and builds digital products. In 2017, he launched YIMBY, which stands for Yes in My Backyard

00:01:04.260 Advocacy Group Housing Matters, which aims to advance the cause of land use liberalization

00:01:10.000 in Toronto in order to solve the urban housing problem. Chris is a contributor over at The Hub.

00:01:14.660 He also has a newsletter on Substack. Chris, thank you so much for joining us. It's great to have you.

00:01:19.940 Yeah, thanks for having me.

00:01:20.760 Okay, so first, what was your reaction of the budget? Do you think that this $10 million

00:01:25.900 in spending is a good start to addressing this issue?

00:01:30.660 So I had a few reactions. The first reaction, you know, I expected to be disappointed in the

00:01:36.240 diagnosis of the housing problem. I expected there to be kind of a lot of hand-waving around the need

00:01:40.740 for more low market rate or affordable housing without any real addressing the fact that we just

00:01:45.980 don't have enough housing at all, you know, market rate or otherwise. And when I read the budget,

00:01:50.580 there was a lot of good kind of supply-side YIMBY-type language. Like, there were quotes in

00:01:55.860 there that could have been from pieces that I've written, like, if we want housing to be more

00:01:59.220 affordable, we need to build more housing. There was an acknowledgement that the reason why we're not

00:02:03.720 building more housing is because there are systemic constraints, regulatory constraints.

00:02:08.340 So I thought that was all good. I think Christopher Freeland kind of understands the YIMBY 1.00

00:02:13.000 argument. The YIMBY argument very succinctly put is that housing is expensive because there's not

00:02:17.380 enough of it. And whenever you have a situation where a lot of people are chasing after kind of

00:02:21.840 like an insufficient amount of stuff, they bid prices up. And that's what we've seen with housing.

00:02:28.080 What I'm less sure about is whether, you know, throwing money at the problem will solve it. I mean,

00:02:34.960 ultimately, again, housing is expensive because there's not enough of it. There's not enough of it

00:02:38.440 mostly because our cities enact rules and regulations that make it harder to build housing

00:02:43.960 than it should be. And it's not clear to me that you solve that with more money as opposed to kind

00:02:49.160 of like getting into the weeds and uprooting some of these things. One of the things that was kind of

00:02:55.180 directionally addressing this problem was it's called the New Housing Accelerator Fund. So in the

00:03:00.000 federal budget, they've set $4 billion aside that they want to spend over five years to kind of

00:03:04.060 incent municipalities to upzone or expedite maybe their approvals process to get more housing

00:03:09.740 built and completed and brought online for occupancy. And I think the real test for this

00:03:15.880 government will be, you know, how aggressive they are in getting that money out to cities and

00:03:20.860 ensuring that it's being used most effectively. So basically ensuring that the municipalities are

00:03:26.720 doing their part of the bargain and actually meaningfully upsoning, meaningfully allowing for

00:03:31.200 more housing supply than they otherwise would. Well, that's part of the issue. Whenever I end up

00:03:36.480 talking about housing with people, they always say, oh, well, it's a municipal issue. The feds can't

00:03:40.120 really do anything about it without sort of stepping in on the jurisdiction. I know that Pierre Polyev has

00:03:45.100 been talking a lot about the sort of things that he would do. So what do you think of that sort of

00:03:50.840 dilemma of, you know, letting municipalities govern their own business, leaving things up to the

00:03:55.820 province, letting individual provinces? I mean, the idea is that you could kind of have competing

00:04:00.220 jurisdictions, right? Vancouver is like pricing itself out of the affordability game. Young people

00:04:05.260 just don't want to live in Vancouver. It's a spectacular, beautiful city. I grew up there

00:04:08.720 and you have this amazing lifestyle and sort of the leisure opportunities are incredible. But when it

00:04:14.820 comes to young families and homes, you're just not there. I grew up in a very family friendly area

00:04:20.460 right in the center of Vancouver neighborhood Carisdale. And you go there today and there's just not

00:04:24.760 really a lot of families anymore because it's just become one of those places that's so

00:04:28.880 one affordable. So what do you think to that argument of it's not really a federal government's

00:04:34.020 job, leave it up to the provinces and the cities and they can compete? 0.99

00:04:37.200 Yeah, I think there's like two parts of the argument. There's one, should the federal government

00:04:41.240 do anything about it? And then the second is if the answer to that question is yes, then what could

00:04:45.800 they do about it? Because you do have these kind of like jurisdictional issues. I think on the first

00:04:50.060 question, I think you kind of have to. Conservative Party is having a leadership race right now.

00:04:55.520 You have a few candidates kind of lining up hoping that they win that spot and they kind of enter the

00:05:01.180 next general election as the leader of the Conservative Party. I think it's hard to make the

00:05:04.760 case that whoever that person is shouldn't address what is probably the number one issue for a large

00:05:10.420 and growing number of Canadians. I mean, we saw in the last general election, just last year, not that

00:05:15.880 long ago, the National Post surveyed people on what were their kind of election priorities, like policy

00:05:21.520 priorities. And the number one was cost of living. And number three was housing. And that's kind of

00:05:26.460 like repeating the same point. So I think that I think that the federal government has to have

00:05:31.260 something to say about runaway housing costs. And the fact that you have a whole generation 0.99

00:05:35.060 really being priced out of homeownership, which we see as somewhat, you know, a part of what we think

00:05:40.600 of as a Canadian dream. I also think that there's this national productivity problem that gets worse

00:05:45.600 if you don't make it easier for smart, ambitious young people to move to the most productive regions

00:05:51.740 in the country. If we allow housing prices to be kind of the obstacle to moving to where all the good

00:05:57.060 jobs are, ultimately, that will kind of show itself in national productivity statistics and ultimately

00:06:03.440 GDP growth. Well, no, it's interesting. You mentioned that point that like you want productive people to

00:06:08.380 end up in the same places because then they become more productive. And I know that the government has

00:06:12.100 often tried to create these sort of hubs in places like Waterloo, Ontario, or in Toronto, Vancouver,

00:06:17.400 seems to me increasingly, especially with COVID, what we just saw is that people are leaving those areas,

00:06:21.860 right? Like everyone used to go to Silicon Valley to start a tech company. They don't anymore. They go to

00:06:25.920 Dallas, or they go to Austin, they go to Miami, and you kind of see people leaving poorly governed

00:06:31.800 places in the United States to go to kind of freer, more affordable places where there are these new

00:06:37.560 kind of upstart tech communities. I know you're a tech guy, you're heavily involved in this sort of

00:06:42.560 tech community as a founder. And I'm wondering if you see anything like that happening in Canada,

00:06:47.480 where people are moving to places that are more affordable, like maybe someplace like Saskatoon or

00:06:53.080 somewhere even in Ontario that's outside of the GTA because they're just getting priced out of the

00:06:57.260 expensive markets there. Yeah, I think that's right. I think so kind of like the way I approach this

00:07:03.500 is thinking of cities as primarily labor markets, people move to cities for access to the jobs that

00:07:08.060 those cities offer. And typically, the larger the city, the greater the opportunity to specialize

00:07:11.940 in trade. And this is why you have kind of really niche jobs in cities, which you might not have in

00:07:16.660 smaller towns or rural areas, and also why productivity rates and wages are higher in cities.

00:07:21.940 And yeah, what you're seeing in the US is people kind of leaving some cities for other cities,

00:07:26.880 but they typically still go to cities, there are these agglomeration effects. And if you look at the

00:07:31.000 tech community, I mean, a lot of them are going to Austin or Miami, because more of their peers and

00:07:36.300 other tech workers are going to Austin, Miami. So they're still trying to like establish this

00:07:39.700 critical mass of people in these areas. And I think this kind of this reflects a general approach

00:07:45.500 that you have when you're faced with bad governments, right, you could you could exercise

00:07:48.420 your voice, you could try to vote for change or lobby for change, or you could exercise your right

00:07:52.640 to exit and to kind of go somewhere that's a little bit, a little bit better. Maybe it's easier to

00:07:56.860 move from San Francisco to Austin, than it is to upend San Francisco's municipal

00:08:00.780 government. I think the challenge that we have in Canada is that we don't have as many options in

00:08:05.940 terms of like better governed cities that still have a dense enough agglomeration of, you know,

00:08:11.340 workers in whatever sector is interesting to you, to make it this kind of like laboratory of democracy

00:08:17.280 or like menu or this like menu long menu of options to choose from. Most of our cities where most of our

00:08:25.080 big cities are extremely expensive. And the small cities that aren't yet expensive are typically the

00:08:29.500 cities that haven't seen great employment prospects. So you have a lot of people, for example, in Toronto

00:08:33.660 moving to Hamilton, Hamilton's no longer affordable. So now they're moving out to Halifax. And Halifax is a bit

00:08:39.220 more affordable, but you don't have the same job opportunities that you might have in the GTA. So I think it's a bit

00:08:44.200 of both. I think that you put pressure on municipal politicians by showing them that they're going to lose the

00:08:49.140 opportunity to benefit from, you know, young, productive taxpaying workers. But I think there is still

00:08:54.320 something to be said for trying to improve governance. I think there's something to be said for people who

00:08:58.620 stay back in San Francisco to try to improve land use in San Francisco, because it's kind of like this

00:09:04.260 golden goose that you'd rather bring back, that's been dying, that you'd rather bring back to life than

00:09:09.340 just kind of like try to find another golden goose to some extent.

00:09:11.720 Is there a city in Canada that you can point to as a good example? I remember seeing a presentation a few

00:09:17.620 years ago that compared the urban density in Vancouver and compared it to New York City. And I

00:09:23.520 mean, at one point, I'm sure 100, 150 years ago, there were a lot of single family homes in and around

00:09:28.360 New York. And that has turned all into apartments and brownstones and that kind of thing. And the

00:09:32.340 expectation in New York is not that you live in a single family home where as in Vancouver, that's very

00:09:36.880 much still the expectation. People don't want to, they want to protect the beauty of the

00:09:41.420 neighborhood, the natural character. You see that all around Toronto, these neighborhoods that are

00:09:45.500 so close to downtown. And yet, if you feel like you're out in the suburbs, because there's just

00:09:52.240 beautiful yards and lawns and people live this sort of very spread out lifestyle. Whereas again,

00:09:59.360 in big, dense American and cities all over the world, Europe, Asia, they don't have that expectation.

00:10:05.000 So I'm just wondering if there are any examples in Canada that have moved more towards the

00:10:09.380 dense multi-unit model or whether it's a Canadian problem, why is it happening in so many of the

00:10:15.800 cities across the country? Yeah. So whenever you see like a detached house with a big backyard

00:10:20.800 in something like a big city urban center, which you certainly see very near Toronto's downtown and

00:10:26.320 Vancouver's downtown, it's almost always, I mean, it's pretty much always because of zoning. Like

00:10:31.960 there's a higher and better use for that land. If it were unconstrained, more people want to live in

00:10:35.800 these downtown cores, again, for access to these downtown jobs. And the reason why you're not seeing

00:10:40.000 that redevelopment to a higher and better use is because there's some sort of regulatory constraint

00:10:43.900 and mostly that's mostly zoning. So New York has the benefit of having been mostly built up

00:10:49.280 tree zoning. So the really aggressive kind of like separation of land uses and really prescriptive

00:10:55.300 land use zoning that we see today really came into effect in the sixties and seventies and have been

00:10:59.980 ramping up and becoming more prescriptive and more descriptive ever since. And, and, and again,

00:11:06.140 like Toronto over the last 20 years has started to grow into a, you know, some, something like the

00:11:11.820 idea of a global city. It was a little bit sleepy in the 1960s, whereas Manhattan went through its

00:11:16.760 transformation of, of like a lot of farmland to detached houses, to maybe three story, four story

00:11:22.080 walk-ups to tenements and high rises in the early 1900s. And, and all of that happened pre zoning,

00:11:27.940 pre aggressive zoning at least. So in Canada where you'll see most of that, so let's say kind of like

00:11:34.240 an older urban built form where it's a little bit more dense and you don't see big 50 foot wide

00:11:40.700 frontages and single detached homes near downtown. You have to look at our older cities. So like

00:11:45.100 Montreal is more dense in its urban core than Toronto is. And Toronto is more dense in its urban

00:11:49.320 core than Calgary is. And it's because the, you know, the later and later or more, more recently that

00:11:54.740 the cities have been developed, the more likely they were to have been constrained by modern zoning.

00:11:59.940 So let's talk a little bit about the NIMBY concern, because it seems like Canada is becoming 0.64

00:12:03.940 very much a country of haves versus have nots. The politics of it is that, you know, a lot of

00:12:08.880 Canadians like, like you are, are voicing concern over the lack of housing, lack of opportunity for

00:12:13.400 buying houses for young families or young Canadians. Whereas on the other side of the coin, you have all 0.98

00:12:18.160 these people that own homes and are perfectly happy with the rapid acceleration of costs. They want to

00:12:23.180 protect their neighborhoods, right? They don't want a high rise going in down the street because they

00:12:29.120 like, you know, they want to protect it for their children. They want the kids to be able to run

00:12:33.000 around and go to parks. And they worry that, you know, if it becomes very dense, it'll become

00:12:37.040 dangerous. And all these other problems that you see in cities where people go to neighborhoods to

00:12:41.540 avoid that. So maybe you can walk us through sort of the distinction, like what drives NIMBYism and what

00:12:48.780 you're trying to do with your EMB organization that's promoting a change to all this.

00:12:54.720 Yeah. So, so to put a little bit of color around kind of like the NIMBY label. So again, we say that

00:12:59.360 housing is expensive because there's not enough of it. There's not enough of it mostly because of

00:13:03.160 municipal regulatory supply constraints that make it impossible for us to build as much of it as we

00:13:07.800 need. And the reason why we have those supply constraints is because, you know, to your point,

00:13:12.000 a lot of incumbent homeowners enjoy them, quite enjoy them. If you live in a detached neighborhood or

00:13:17.080 house, a neighborhood, sorry, rather full of detached houses, you might want it to remain

00:13:21.680 that way. You might light the bill for them, the physical character, and you might not want to see,

00:13:25.640 you know, like a four-story walk-up apartment pop up next door with renters who are a little bit more

00:13:30.260 transient, let's say, than like longtime homeowners. So that is the problem. Like we've reached this

00:13:35.060 equilibrium through a very democratic process of people buying homes in low-rise, low-density

00:13:39.960 neighborhoods, and then voting to ensure that they never change. The problem with that is that

00:13:46.220 there's a little bit of a hypocrisy, if not like an outright schizophrenia here, right? Canadians 1.00

00:13:50.720 are generally a pretty progressive people. We're very welcoming and open to immigration.

00:13:56.600 And yet somehow that kind of like stops at our neighborhood, right? So we want more people to

00:14:00.620 enter this country, to come to the country, to participate in the Canadian dream, contribute

00:14:04.060 economically. But we don't want to build the housing that new immigrants need, at least not in 1.00

00:14:10.220 our neighborhoods. And of course, if everybody says, I'm pro new development and new housing,

00:14:14.820 just not in my neighborhood, you know, if everybody in every neighborhood says that,

00:14:18.320 then you just end up building nothing. And that's kind of what we're seeing. I think we're reaching

00:14:22.520 a bit of a tipping point where people who've enjoyed these really runaway housing value gains

00:14:28.360 that have served them quite well, they're now reaching an age and a point where they're thinking

00:14:33.360 like, okay, I remember what it was like in my late 20s to save a little bit of money in a nice

00:14:38.760 middle class working class job and buy a home. But that's not that doesn't seem to be the scenario

00:14:44.040 for my kid who doesn't look like they'll be able to buy a home anytime soon, if ever. It's also not

00:14:49.580 great for these people who might want to live somewhere near their kids and their grandkids.

00:14:52.980 And now their kids and grandkids are moving from let's say Toronto to Halifax. So I think it is

00:14:57.040 starting to hit home that there's this incumbent versus new entrant dynamic, which you see in most

00:15:04.180 industries. But in this one, you know, the incumbents might be related to the new entrance.

00:15:08.920 And they're starting to realize, you know, despite the 20-30% gains I've seen over the last 20 years,

00:15:13.600 or rather the last two years, that also means that homeownership has gone that much farther away

00:15:18.660 from my kids. And I think it's becoming a little bit of a problem. There's also this problem with

00:15:24.020 housing, not building enough housing beyond just the affordability thing. So in Toronto, we have a lot

00:15:28.720 of people, again, a lot of progressive people open to immigration, as long as, you know,

00:15:32.320 those immigrants don't build or don't move into any new built rental apartments in their 1.00

00:15:36.620 neighborhoods. They also have environmental concerns, right? But when it comes to cities,

00:15:41.520 people, again, move to cities, because that's where the jobs are. If you don't build up, you have to

00:15:44.700 build out. So you have people who have these, again, kind of schizophrenic views where they're

00:15:49.100 both against infield development in their neighborhoods for NIMI reasons, but they're also

00:15:52.940 against urban expansion and sprawl for environmental reasons. And at some point, like, you have to resolve

00:15:58.340 these contradictions. And I think the way that you resolve them is to allow for a little bit

00:16:02.160 more of a kind of like free market and land use, stronger property rights, and less restrictions

00:16:07.520 in terms of what you can build, and kind of let entrepreneurs build things that people need. And

00:16:12.440 in this case, that's build housing that people need. It's interesting, because during the pandemic,

00:16:16.820 it was like, you know, downtown Toronto just kind of emptied out. And you had all these commercial

00:16:21.000 buildings that people just weren't using anymore. And a lot of families moved out of Toronto, because

00:16:25.960 they didn't have to commute anymore. And maybe they just wanted to get into the into the real estate

00:16:30.600 market wherever they could. So they ended up moving far out. And then and then now all of a sudden,

00:16:34.160 everyone has to return back to the office. So I hear a lot of people kind of groaning and

00:16:38.840 complaining about half having to commute now because they ended up buying so far. I want to touch on the

00:16:44.880 immigration thing that you discussed, because obviously, there's a lot of discussion over what's

00:16:49.280 driving this, right? I know you're much more of a supply side that we just need to build a lot more. But

00:16:53.440 there are obviously demand issues when you when you look at things like Airbnb, taking up space,

00:16:58.080 I completely agree with that. I disagree with that. Because I tend to think that people who

00:17:02.700 put their homes on Airbnb, it's usually as occasionally, my family and I will go to Vancouver

00:17:08.840 to visit my family will rent an Airbnb house almost every time. It's a family that actually lives in the

00:17:13.860 house. And they'll go on a vacation and they'll rent out their house while they're away to kind of

00:17:18.540 help subsidize the cost of living in a very desirable area. But but but this idea that that you have,

00:17:26.280 I don't know exactly how many new families move to the GTA every year, I imagine, it's a large

00:17:32.920 percentage of Canada's immigration numbers. So for welcoming in 450,000 people a year, we might have

00:17:38.460 350,000 of those coming into the GTA. You wrote in the hub recently that over the past 10 years in

00:17:44.360 Ontario, there's been an average completion of 70,000 new homes per year that Ontario is that

00:17:51.800 Canada is last in the G7 in terms of per capita housing. And just to catch up, we would need to

00:17:56.360 build 1 million new housing units overnight, just to keep up with this population growth. So can you

00:18:03.780 comment a little bit about the impact of welcoming all these people into Canada, but not having anywhere 0.52

00:18:08.880 to house them and what what that's doing to our cities to to a place like Toronto or Ontario?

00:18:13.980 Yeah, totally. So so prices, as we all know, from like our first year microeconomics classes are a

00:18:20.200 function of supply and demand. If the demand for housing increases, because people within the

00:18:24.800 country move from like small towns, rural areas, big cities, and people from around the world move

00:18:29.500 to Canada for access to, you know, everything that Canada has to offer. That's the demand side of

00:18:34.460 things. And if we don't build enough housing for them, then we have limited supply. And ultimately,

00:18:39.100 this resolves itself in rising prices, a higher equilibrium, and people kind of getting priced

00:18:44.000 out and left behind. So so that's absolutely right. And you could kind of confront this fact

00:18:49.820 with with, I guess, one or two approaches, you could think that what we need is a supply side

00:18:54.960 solution, which is to build many more homes to accommodate many more people, or with a demand side

00:19:00.460 solution, which is ultimately to somehow have fewer people looking for housing. So that might be a

00:19:05.660 reduction in immigration, it might be like, somehow making cities less attractive relative to smaller

00:19:11.760 towns where housing is a little bit more abundant, or a little bit less scarce, at least. And the way I

00:19:16.920 think about this is kind of like, what is the most productive outcome, I think the supply side solution

00:19:21.040 is really a solution of building a production of entrepreneurship of creating jobs and stuff for

00:19:26.500 people to enjoy and live in. Whereas the demand side solution is ultimately a little bit of a zero sum

00:19:31.420 vein, right? It's kind of picking winners and losers, even when we talk about uses of real estate,

00:19:36.780 you know, should this be a long term rental apartment or short term rental apartment, maybe

00:19:39.820 we should outlaw short term rental apartments, it's always this zero sum game that has to come at the cost

00:19:44.580 of something that people want, people want to rent Airbnbs and stay in Airbnbs. Whereas if you build more,

00:19:50.060 that kind of that's a positive sum game, we're expanding the pie, we're making more goods available to more

00:19:54.460 people. Now, that comes at the cost of maybe increased shadow impacts on the neighborhood neighbors,

00:20:00.120 or more more competition for like on street parking, or maybe construction noise for the two

00:20:05.640 years that it takes to build anything. And ultimately, that's what kind of feeds the NIMBY resistance to

00:20:09.560 these things. But we have to kind of pick our costs, right? Is it better to kind of accept the cost of

00:20:15.300 localized impacts of development, which might mean that if you go downtown Toronto, you won't see

00:20:19.580 beautiful detached houses, you know, just north of the bridge in Rosedale? Or is the cost that we

00:20:25.060 maintain this extremely rigid and restrictive system, and exacerbate urban sprawl, make housing

00:20:32.240 completely unaffordable to anybody under the age of, let's say, 30 or 35? Never mind you immigrants 1.00

00:20:36.960 who are entering this with no kind of skin in the game, they haven't benefited from the home equity

00:20:40.340 value increases last few years, they're coming into this fresh. We kind of have to pick our costs

00:20:45.220 here. And in my view, I'd rather much rather take the perspective that abundance is better than

00:20:52.440 scarcity, and we should make housing, which is as fundamental a good as we have in society,

00:20:56.820 as abundant as possible. And I think that that leads to a lot of a lot of good outcomes.

00:21:01.120 Well, it's sort of fundamentally unfair as well to tell these people from around the world,

00:21:05.180 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

00:21:11.820 their language, where they can find their food, and they can find a community of people that they

00:21:17.380 feel comfortable with. And yet, you know, they have no way of being able to easily, unless they're

00:21:22.900 very wealthy, being able to buy into this market. But then at the same time, at some point, we have

00:21:29.600 to have other attractive places for people to live aside from Toronto. I know a lot of people from all

00:21:34.800 over the country that moved to Toronto, because the type of work that they do, the type of law or the type

00:21:38.860 of tech, there just aren't jobs in other parts of the country. I'm wondering if you can comment on

00:21:46.420 just sort of the fact that everyone in Canada wants to go to Toronto, how can you, you know,

00:21:52.140 as an influencer, or as a politician, or as someone in government, how can you create incentives for

00:21:57.980 people to want to go to other cities? I know, we talked about this earlier in the interview, where,

00:22:02.480 you know, you might be able to go afford a place in Halifax, but the job market isn't really there.

00:22:06.600 It's like, it's kind of like the chicken and the egg thing. It's like, you want people to go,

00:22:09.460 but there's no jobs. Well, there's no jobs, because there's no people. How would you like,

00:22:14.420 if you were to create a strategy, how would you encourage people to move to cities outside of

00:22:19.580 these sort of very desirable places, Vancouver, Calgary, Toronto, to try to build up the rest of

00:22:25.380 the country with people and have other hubs that are attractive to people?

00:22:29.820 Yeah, so what I'm surprised is that we're not seeing more competition, all these kind of smaller

00:22:34.700 cities that would benefit from a larger tax base and more, let's say, dynamism and vibrancy in

00:22:39.340 their cities. I'm surprised that we haven't seen them more proactively court, let's say,

00:22:44.420 Toronto expats. In the US, famously, Mayor Suarez of Miami, like, had a concerted marketing plan to get

00:22:52.440 people from Silicon Valley and from San Francisco and the Bay Area to move to Miami specifically.

00:22:56.900 And he was out there kind of like waving the Miami flag and telling everybody why Miami's so great.

00:23:01.340 And we haven't really seen that in Canada. And I'm a little bit surprised. I mean, I mean,

00:23:05.720 the reason why the reason why we probably haven't seen that is that every city government and every

00:23:11.720 mayor is constrained to some extent by the same kind of NIMBY sentiment, so that, you know, the existing

00:23:16.880 homeowners in Halifax might not be so happy or excited about Torontonians moving into Halifax and

00:23:22.540 bidding up their neighborhoods and contributing to traffic congestion and all these things.

00:23:26.080 So that's the first point that I would like to see just more competition between cities. I would

00:23:32.720 like to see people understand a little bit better the benefits of density in a growing population as

00:23:37.420 opposed to a declining population and be a little bit more proactive to encourage that. But I do think

00:23:42.820 this has to be somewhat of kind of like a market-led process. I think it's very hard to plan this from

00:23:47.440 the top down to kind of decide, okay, financial services will stay in Toronto, but we're going to

00:23:51.980 move AI to Montreal. This is what the superclasses try to do, right? We're going to move blockchain,

00:23:55.680 development to Calgary, AI to Montreal, and basically try to, like, organize these things

00:24:00.540 from the Ministry of Innovation or something like that. I think ultimately people have to sort

00:24:05.100 themselves out to whatever the market kind of feedback loops are telling them. I do think that

00:24:10.380 COVID has, to your point, enhanced the ability to work remotely. We've seen a lot more of that

00:24:15.960 through COVID necessarily, and now because we've implemented all these systems, people are kind of

00:24:20.880 to some extent sticking with them. So maybe we will see a little bit more of a discount placed on

00:24:26.300 living, you know, super close together where you could see someone face-to-face in an office, and

00:24:30.460 maybe that increases the relative attractiveness of decentralizing a little bit how we live.

00:24:36.800 But that's also been the promise of the internet since its advent, and we haven't really seen that.

00:24:40.420 We've actually seen a concentration in cities and an increase in density in cities. There's something

00:24:45.460 about humans living and operating and interacting closely together that seems appealing, and we all

00:24:51.800 keep paying higher rents than we need to be by moving to big cities and living in smaller, you know,

00:24:56.720 units than we otherwise could. So I don't know what I would suggest as, like, a top-down kind of

00:25:01.540 government-led plan other than to encourage more cities to adopt more of this kind of, like,

00:25:07.300 abundance can be agenda, right? So Halifax could very quickly become as unaffordable as any other city

00:25:14.160 if it doesn't respond to this increased demand by building more housing. So it needs to build more

00:25:17.920 housing. The U.S. benefits from more, I think, pronounced cultural and ideological differences

00:25:25.320 between regions. So the southeast builds a lot, Texas builds a lot, whereas, like, the northeast and

00:25:30.740 northwest coast don't. And I think a lot of that is driven by the cultural and ideological differences.

00:25:35.340 In Texas, the idea is, like, this is my land, I'm going to build, you know, whatever I want in my land.

00:25:39.780 We don't really have that here. So, I mean, this is a long way of saying I don't have a great answer

00:25:44.580 for you. I would like to see a few pockets of the country take this challenge as an opportunity for

00:25:49.780 them to kind of grow in stature and in status. And if they did that, maybe, yeah, maybe people would

00:25:54.860 have more than three options for where to live if they want access to the best jobs.

00:26:00.100 And to your point, it's certainly not, like, a top-down, like, the Minister of Innovation,

00:26:04.660 whatever that means, can't just decide, okay, we're going to make Montreal the AI capital. Like,

00:26:09.860 yeah, you have to do a bit more than that. And it has to be industry-led and people-led.

00:26:14.800 You did mention blockchain in Calgary. And I did want to ask you while I have you,

00:26:19.560 we saw Pierre Polyev, the Conservative leader nominee. He was out in London, Ontario. He bought

00:26:27.460 a Sharma using Bitcoin. And he said that he wanted to make Canada the crypto capital of the world or

00:26:34.420 the blockchain capital of the world. I'm wondering if we could just ask you some basic questions,

00:26:38.340 because I know you mentioned on Twitter, you tweeted, I like where this is going. So to people

00:26:42.980 who don't have a background, they don't understand blockchain or crypto, can you just sort of give us

00:26:47.380 a 101 lesson here on what it means and how Canada can accommodate this sort of new industry that

00:26:55.080 that we're seeing? I mean, Bitcoin's been around for a decade, but it seems like it's just suddenly

00:26:59.340 become really popular. And so maybe you can comment on that as well.

00:27:02.700 Yeah. So, and I'm certainly more kind of familiar or well-versed with the Bitcoin side of things than

00:27:06.720 the broader blockchain or crypto universe. So Bitcoin, very simply, is kind of like the first

00:27:11.100 form of money we've had in a very long time that doesn't have its monetary policy decided by

00:27:17.600 a central bank or kind of constrained in any way by a government. So something like we've had the

00:27:23.280 separation of the state and the church, and now Bitcoin represents the potential for the separation

00:27:29.200 of the state and money. And it's kind of like an internet native form of money that facilitates

00:27:36.520 transactions and to some extent acts as a store of value without the need for any third party

00:27:43.080 intermediaries, including government, having a say in how it operates. The reason why I'm kind of like,

00:27:50.620 I don't know if excited is the right word, but I like the fact that Pierre is going in this direction

00:27:56.680 is I do think that our money is going, like our lives are going online, so our money is going online.

00:28:01.480 And I think that there are two visions for how the future looks, you know, if our money goes online.

00:28:06.420 One vision of the future is within the world of what's called central bank digital currencies.

00:28:11.540 And this is where we decide that paper cash doesn't have the utility that it once had because we're all

00:28:15.700 operating and transacting online, whether like, like online explicitly, or, you know, with a square

00:28:22.080 point of sale terminal at a coffee shop, we're not exchanging pieces of paper anymore. So just at some

00:28:28.700 point, our money will go online, it might be central bank digital currency, which is, again, fully

00:28:34.100 controlled, and governed and regulated by the Bank of Canada, and maybe to a lesser extent, or maybe to a

00:28:40.100 greater extent, depending on how the politics go, the Ministry of Finance and other branches of

00:28:44.620 government. Or you go in this other direction where the online form of money is not defined or

00:28:52.060 dictated or regulated or anyhow, kind of controlled by the federal government. I think that that second

00:28:57.480 scenario is probably more hopeful if you care about things like privacy and autonomy and self

00:29:03.780 sovereignty. We've seen very recently, like a lot of federal government actions in, you know, freezing

00:29:12.160 people's bank accounts and that sort of thing. That becomes exponentially easier if all money is

00:29:17.960 is like a ledger in a Bank of Canada database. So I guess without going too deep into like conspiracy

00:29:26.020 theory territory, I just think it's better and there's a better set of incentives if the money is a

00:29:30.960 little bit out of the government's reach. Well, what a precedent to set that you can freeze the bank

00:29:36.240 accounts of your political adversaries if you don't like what they're doing. I think that that probably

00:29:41.080 awakened awakened a lot of people, not just in Canada, but all over. I was watching on Twitter as sort of some of the

00:29:47.480 leading blockchain and cryptocurrency people were, you know, writing essays and writing Twitter threads,

00:29:54.480 concerned about what kind of precedent Trudeau and Chrystia Freeland just set by freezing bank accounts of people that they

00:30:01.380 that they disagreed with. So so just final question for you about peers in announcement, how would Canada do this?

00:30:08.400 How would we situate ourselves and position ourselves as being a leader? I know El Salvador recently adopted crypto

00:30:15.740 Bitcoin as a legal tender that has to be accepted by all businesses in that country. And they're sort of seen as a I think

00:30:22.820 they have a young president who's who's very apt to these kind of things. What what what could Canada do? And more

00:30:28.560 specifically, what what in peer what peer poly have announced? What kind of things can Canada do to to create the

00:30:35.040 condition to become the leader?

00:30:36.900 Yeah, I think the first thing you could do is is like somewhat of a Hippocratic approach. So like first do no harm. I think we're

00:30:42.600 going to see a lot more governments kind of crack down on digital currencies explicitly because they don't control them. And you know,

00:30:49.920 most of our policy at this point is is a blended kind of fiscal monetary policy, MMT, you know, type of type of scenario. And that becomes a lot harder to enact, it becomes a lot harder to kind of set the whatever parameters you want for your

00:31:04.020 electoral success through monetary policy if the money is no longer controllable. So I think that a lot of governments will start cracking down on crypto currencies, and maybe on Bitcoin

00:31:14.040 specifically. So first do no harm, I think I think a peer poly of government, let's say that made it explicitly clear that Bitcoin would be allowed if not encouraged to kind of operate as it does for people to own it to hold it to transact in it, that would be very positive. On the on the policy front, kind of beyond that, I think something like, so right now, on any foreign exchange trade, there's an exemption, I think your first $200 aren't subject to capital gains taxation. I think if you applied something like that to Bitcoin, but with a

00:31:43.880 much higher threshold, the problem with Bitcoin, people hold Bitcoin, but the reason one of the reasons why they don't spend it is if you spend your Bitcoin, you're, you're really selling it for whatever you're buying with it. And that's a taxable event, and you're subject to capital gains taxation, if you do that. So I think kind of like, through some similar mechanism to how we deal with Forex, but maybe with a higher threshold, exempt Bitcoin from capital gains taxation, that would kind of right off the bat, maybe just shy of El Salvador, make Canada the friendliest jurisdiction to Bitcoin.

00:32:12.380 So you know, if I were advising him on his Bitcoin agenda, I might I might suggest to go there. And then I also think that like, the rhetoric matters, I think if he's rhetorically supportive of innovation in the space and rhetorically supportive of this philosophical idea of a money that's uncontrolled and uncontrollable by government, I think that's encouraging. And you'll see a lot more people participating in the market, including entrepreneurs who will build things that I can't even, you know, anticipate on this call.

00:32:37.380 Great. Well, thanks so much, Chris, for your for your thoughtful take on all of these issues. I hope that the people in power or people advising people in power, pay attention to some of the solutions that you had, because certainly when it comes to both affordability, and the idea of having, you know, your assets protected, including your bank accounts, that there's there's a lot of opportunity that Canada has, and to become a leader in the tech space as well. So thank you so much for joining us. We really appreciate your time.

00:33:07.380 Thank you. Thanks for having me.

00:33:09.580 Great. That's Chris Spoke. I'm Candice Malcolm. And this is the Candice Malcolm Show.

The Candice Malcolm Show - April 12, 2022

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

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