Morning reminder: Record numbers of people are leaving Ontario. Young families simply can't afford to live here.
So who, on net, is leaving Ontario for other provinces?
Pretty much every age under 70, with people in their mid-20s being the largest cohort of leavers.
We used to gain a lot of people in their 30s from other provinces. Now we're losing them.
If Ontario is suddenly losing people to other provinces, who is gaining them?
Answer: Alberta, Nova Scotia, and New Brunswick.
B.C. is also gaining people from other provinces, but somewhat fewer than they used to.
And it really is high prices and ability to work from home that is causing young Ontarians to move to other provinces.
Ontario has gotten very expensive... and not just Toronto.
Think about that for a sec. Say you're an OHL player and you play for the Guelph Storm or Kitchener Rangers or London Knights or Windsor Spitfires etc. and you get called up to the NHL to play for the Habs, Jets, Oilers or Flames, you're moving to a less expensive housing market.
Here's a list of all OHL cities in Ontario, and whether or not their home prices are higher or lower than Edmonton. (I feel like this is prime @stubbs980 content).
If I were to substitute Winnipeg for Edmonton, then both Sudbury and North Bay go into the "More Expensive" column, leaving the Soo Greyhounds as the only Ontario-based OHL team in a market with cheaper real estate than the home of the Winnipeg Jets.
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Why are residential development taxes so much higher in Ontario than in other provinces (and so much higher than 20 years ago?)
We get asked this a lot. And the short answer is that there isn't good research on this. Yet. So here are some possible explanations.
I want to stress that these are conjectures that need to be tested. So here goes:
1. Ontario municipalities have 10 billion+ dollars in unspent dev charge money, whereas other provinces (and the Ontario of 2005) does not. That's an obvious one.
2. Perhaps Ontario simply builds more infrastructure per capita than other provinces (or Ontario circa 2005).
3. Perhaps Ontario has more white elephant projects. An Ottawa LRT or two will really mess up a place's finances. Quality of spending is vital.
Thread time. The Housing Accelerator Fund and Canada Housing Infrastructure Fund are in the news, as the Conservatives are promising to abolish them.
That would be a mistake.
But we should also recognize that the programs have some big problems and need to be overhauled.
The core ideas behind the HAF and CHIF are outstanding. Municipalities lack funding but have also created regulatory barriers to housing construction. A "cash for reforms" program can make everyone better off and get more housing built. Win-win.
But policy as a blackboard exercise is one thing. Implementation is another. One implementation mistake the feds made from the outset is that instead of having one set of standards, the HAF is a set of bespoke deals with municipalities. Each one is different.
Quick thread about development charges. In most midsized Ontario cities, DCs go to exactly two things: Roads and Water/Wastewater. And soccer facilities if you're Kitchener.
The City of #ldnont provides a helpful breakdown. DCs on single-detached homes were 5K just 20 years ago
We should not simply shift these road and water/wastewater costs onto property tax, income tax, etc. That doesn't solve the core problem and could accelerate sprawl.
Rather, we should be finding better and cheaper ways to pay for all of this.
On water/wastewater, the fix is straightforward - we should move to a similar model to electricity, and have it run through municipal/regional/provincial crown corps, rather than through municipalities.
Some background here: cdhowe.org/intelligence-m…
Thread time. The #1 question I got asked at the Cabinet retreat was, "so... what are you working on next?", often with a nervous laugh.
We'll be launching something new and fun in the next 6 months. But I won't spoil that. But here's what I'm thinking about these days...
#1: Development charges and the price of land.
A back-of-the-envelope calculation suggests that we'll never get middle-class housing affordability if per-unit development charges and the cost of land total over 100K. That's for units of any type, both ownership and rental.
That's really rough - true cut-off might be 80K or 130K or whatever. But once you consider costs of construction, interest rates, other taxes, etc., you're not getting back to standard attainability metrics (like home price 3x of income), if land + DCs is over 100K/unit.
At the end of 2024, we'll only be through four years of this decade. Despite that, we'll have added more people to our population than we did in any of the four previous decades.
Needless to say, despite our total population growth being equivalent to past decades, our housing starts have not been.
(I'd use completions instead of starts, but CMHC killed that data series at the end of 2023).
We're about 1-1.5M housing starts short in the past 4 years.
It's not just that we're not building enough units; what we're building are tiny one-bedroom and studio apartments, which aren't family-friendly.
Canada is starting *8* non-apartment units for every 100-person growth in population. Historically we've started about 40.
I got a lot of feedback and comments on this. Some great, some… not. But a few of you pushed back on the idea that this was a deliberate decision to suppress wage growth.
The response I got was “they weren’t trying to drive down wages, they were trying to get companies workers where there weren’t any”. But, remember, one of the big deregulations to this program was to expand it to regions with higher unemployment!
Let’s think about this for a second. What normally happens if a firm can’t find someone to work for $17 an hour? They raise their wage to $18 or $19 an hour, to get more applicants! But with the expansion of the low-wage temporary foreign worker program, they don’t have to!