Canada will be having an election soon, this is my view of its problems. This is a rant and it will please no one. Long thread: - ThreadSky

humblestudent.bsky.social • 13 days ago

Canada will be having an election soon, this is my view of its problems. This is a rant and it will please no one.
Long thread:

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humblestudent.bsky.social•13 days ago

Canada suffers from a productivity problem. It cannot be strictly blamed on the Trudeau government, because the productivity divergence began well before he won, though he did little to address it.

It began just before the GFC.

humblestudent.bsky.social•13 days ago

Moan all you want about innovation, taxation, etc. Low productivity can be mainly attributed to most of Canadian capex going into residential housing, which created a bubble.

Non-res capex flat, res capex rising (until it recently cratered in Ontario)

humblestudent.bsky.social•13 days ago

Canadian residential RE became financialized. After the US GFC collapse, Canadians (and Aussies) continued to pile into RE, buoyed by a combination of offshore money, low rates, and a stampede by locals to cash into the bubble.

humblestudent.bsky.social•13 days ago

Canadian politicians at the federal and provincial levels turned blind eyes to the money laundering and fund flows. It was hoped that all the foreign money would bring growth and employment, but it didn't. Instead, ppl were trading houses like penny stocks.

humblestudent.bsky.social•13 days ago

The real solution is to crash the housing market, but that would be political suicide. Instead, we get these half-baked measures of building more housing, lower development costs, more rental stock, etc.

humblestudent.bsky.social•13 days ago

Here's why I am disappointed by my political choices. The Trudeau Liberals, elected in 2015, enjoyed a prolonged period of negative real rates. It was a Golden Age when the market paid you to borrow, but the Liberals squandered that opportunity and piled on unproductive debt.

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