Mark Carney’s Hope Is A False Antidote For Fear

“Cease to hope and you will cease to fear” – Stoic philosopher Hecato of Rhodes (Seneca, Letter 5)

After nine years of Liberal incompetence, mass immigration, debt fuelled social programs, divisions along identity lines, deconstruction of our heritage, a bottom dwelling economy, a housing crisis, and inaction on major commitments – along comes Mark Carney to deliver the Liberal Party a comeback hope. And boy, does he come with much hope. Time to take a closer look at the shiny new leader.

Mark Carney as a UN climate change czar was a world leader in developing the Glasgow Financial Alliance for a Net Zero (GFANZ).  This fund, which would be critical to funding an energy transition to a net zero future, is in its death throes as the likes of BlackRock and Canada’s top four banks have just now backed out of the alliance. According to the multinational consulting giant McKinsey, the capital cost of a net zero transition between 2021 to 2050 would be $235 trillion. The funding pool just got smaller. Now, Mark Carney has pledged to eliminate the carbon tax in favour of some vague new carbon trading scheme. So much for a net zero future, killed by the czar himself. And not a word from Mark Carney’s campaign about the cost of mitigating against climate-related natural disasters such as fire, floods, and high wind damage.

Our new prime minister obviously has a significant work and academic history. But, that was not good enough – he had to lie about his record:

• Lie 1: Carney said he helped Paul Martin balance the budget. He did not, he was working for Goldman Sachs at the time the budget was balanced in 1998.
• Lie 2: He said he was instrumental in helping the Harper Conservatives work through the 2007-2009 global economic meltdown. Not true, according to Harper it was the work of finance minister Jim Flaherty.
• Lie 3: Carney was Chair of Canadian asset manager Brookfield and recommended that Brookfield move its headquarters from Toronto to New York. Initially, he denied this until proof got in the way.

Carney has a bold policy platform to live up to. He has pledged to transform the Canadian economy, even if he has to use emergency powers.  In the process he will drill baby drill and build baby build – so long, net zero. In his words, he is going to sit down all the premiers and get them to remove all economic barriers so that Canada has one economy instead of 13. Could even Chuck Norris do all of this? Corralling premiers is like catching fish with your hands.

While rolling out major infrastructure projects, he is apparently going to balance the budget in three years while at the same time cutting taxes for the so called middle class – as well as resurrecting health care! During his acceptance speech, he praised Jean Chretien for his austerity budgets. How is all of this possible as the world’s economy is slowing, and no one is sure if and when it will correct?

Even more questionable is his assertion that – even as the American Eagle seeks to devastate our economy – a Carney government will be able to find new trade partners. Whom does he think will start buying our goods at higher rates? Not European partners, whose trade with Canada has only increased an inflation adjusted 9% since the Canada European Trade Agreement deal was signed. Worth noting is that this trade deal has not been fully ratified in all sectors – and besides, the EU economy is stagnant. Nor is the newly signed Trans Pacific Partnership (TPP) going to fill in for losses in bilateral trade with the US – remember, Vietnam pays a buck an hour for labour. They may like to buy our hydrocarbons, but new infrastructure to get additional hydrocarbons to the Pacific coast is still decades away. Perhaps India will be a good trade hope – but that market is volatile, protectionist, fuelled by discounted Russian oil, and corrupt.

He speaks about helping the unfortunate – who could find fault with that? But helping the less fortunate requires new money, not debt through quantitative easing. Where does that money come from? The minute he scraps the carbon tax, carbon rebates of $700 for the average family will be scrapped as well. The carbon tax rebate has been a net benefit for most Canadians, as most people have received more in rebates than they have paid through the tax itself. In place of this $700, Carney is proposing a corporate carbon tax where “large industrial emitters” will pay Canadians to defray the cost of environmentally friendly decisions like switching to a fuel-efficient car, or installing new insulation and heat pumps. Small solace for an average family that rents a home and has no dreams of a car. Let them eat insulation, says the emperor. Meanwhile he will force large corporations to fund the rebates. Who does the large corporation pass on those expenses to? You.

Carney plans to cap immigration. If a cap means freezing numbers as they are, Canada would still be admitting some 400,000 new permanent residents, 140,000 plus refugees, and over 500,000 combined temporary workers and foreign students every year. We would have to ramp up homebuilding to meet this new demand as well as our already staggering back log of housing need.

Ron Butler of Butler Mortgage Inc. recently stated to a federal standing committee, under questioning by MP Adam Chambers, that the condo market in Toronto is collapsing and that by 2029 the industry will only build 1,550 new units a year. No GST holiday will remedy this malaise – and without new builds, what will deflate the unaffordable housing prices? Forget about lowering very high development charges, because the provinces and the federal government are highly in debt and cannot cover the social and hard infrastructure needed to accommodate new builds. The money to build has to come from some where!

It would seem that Mark Carney’s hope to build four million new homes in the space of several years faces intractable headwinds – namely, mass immigration as well as high material and infrastructure costs. How will he make this happen? Probably he will fail, just like ministers Chrystia Freeland, Sean Fraser, Marc Miller and Prime Minister Trudeau have failed with their housing accelerator gimmicks. Perhaps a good start would be to allow in only highly skilled, highly motivated immigrants. Another important reform would be to require careful scrutiny of  temporary workers before visa entry, and to make their employer responsible for their housing and health care. This may ease demand for more housing, but would not address the backlogs. If Carney expects to balance the budget, he has no room to subsidize home building.

Overcoming Canada’s national challenges will take time and credible action, not hope. Mark Carney is the darling of the well-heeled Liberal Party elite, who are insulated from the coming doldrums. They can afford hope, while the majority of Canadians live in fear of debt and high living costs. Your action is required to head off electing Mark Carney in the next general election.