{"id":11190,"date":"2023-08-14T06:36:59","date_gmt":"2023-08-14T13:36:59","guid":{"rendered":"https:\/\/www.stevesaretsky.com\/?p=11190"},"modified":"2023-08-14T06:37:16","modified_gmt":"2023-08-14T13:37:16","slug":"deck-chairs-on-the-titanic","status":"publish","type":"post","link":"https:\/\/www.stevesaretsky.com\/2023\/08\/news\/deck-chairs-on-the-titanic\/","title":{"rendered":"Deck Chairs on the Titanic"},"content":{"rendered":"\n<p>Happy Monday Morning!<\/p>\n\n\n\n<p>It\u2019s been a few weeks now since the Trudeau government shuffled his cabinet ministers, naming both a new housing minsiter and a new immigration minister. However, as we discussed a few weeks ago in my piece,&nbsp;<a href=\"https:\/\/stevesaretsky.substack.com\/p\/same-faces-different-places\">Same Faces, Different Places<\/a>, nothing has fundamentally changed. These are the same people, and the same policy ideas. We are simply rearranging the deck chairs on the Titanic.<\/p>\n\n\n\n<p>Despite growing concerns over the levels of immigration in this country, one that is increasing social tensions, overloading public infrastructure, and exacerbating a housing crisis, new immigration minister Marc Miller is doubling down.<\/p>\n\n\n\n<p>\u201cI don\u2019t see a world in which we lower immigration targets, the need is too great \u2026 whether we revise them upwards or not is something that I have to look at but certainly, I don\u2019t think we will lower them.\u201d<\/p>\n\n\n\n<p>Further adding, \u201cWithout those skilled workers coming from outside Canada, we absolutely cannot build the homes and meet the demand that exists currently today.\u201d<\/p>\n\n\n\n<p>In other words, we need more immigration in order to build the houses to accomodate the new immigrants?<\/p>\n\n\n\n<p>There\u2019s just one problem, according to the IRCC (Immigration, Refugees and Citizenship Canada) less than 2% of new permanent residents are entering the constuction sector!<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/substackcdn.com\/image\/fetch\/f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe9616b5a-e3cd-437d-834f-48f7801f9ac1_866x590.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img alt='https3a2f2fsubstack-post-media-s3-amazonaws-com2fpublic2fimages2fe9616b5a-e3cd-437d-834f-48f7801f9ac1_866x590-6784194' src='https:\/\/www.stevesaretsky.com\/wp-content\/uploads\/2023\/08\/https3A2F2Fsubstack-post-media.s3.amazonaws.com2Fpublic2Fimages2Fe9616b5a-e3cd-437d-834f-48f7801f9ac1_866x590-6784194.jpg' alt=\"\"\/><\/a><figcaption class=\"wp-element-caption\">Source: CIBC Economics<\/figcaption><\/figure>\n\n\n\n<p>As for foreign workers, combining information from the Temporary Foreign Workers Program and the International Mobility Program it shows that the share of foreign workers in construction is now close to 11%, and is trending in the wrong direction.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/substackcdn.com\/image\/fetch\/f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F16d2d780-8c44-445b-8603-7b8dc1bd430c_888x560.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img alt='https3a2f2fsubstack-post-media-s3-amazonaws-com2fpublic2fimages2f16d2d780-8c44-445b-8603-7b8dc1bd430c_888x560-7149816' src='https:\/\/www.stevesaretsky.com\/wp-content\/uploads\/2023\/08\/https3A2F2Fsubstack-post-media.s3.amazonaws.com2Fpublic2Fimages2F16d2d780-8c44-445b-8603-7b8dc1bd430c_888x560-7149816.jpg' alt=\"\"\/><\/a><figcaption class=\"wp-element-caption\">Source: CIBC Economics<\/figcaption><\/figure>\n\n\n\n<p>The definition of insanity is doing the same thing over and over and expecting different results.<\/p>\n\n\n\n<p>Let\u2019s now turn our attention to former immigration minsiter turned housing minister, Sean Fraser. Some interesting comments from him this past week.<\/p>\n\n\n\n<p>\u201cOur goal is not to decrease the value of their home. Our goal is to build more units that are at a price that other people, who don\u2019t currently have their needs met, can afford.\u201d<\/p>\n\n\n\n<p>In other words, we need to maintain current home prices while also adding more affordable supply. It appears Mr. Fraser is trying to ride two horses with one ass.<\/p>\n\n\n\n<p>Further adding,<\/p>\n\n\n\n<p>\u201cThe solution is to build more houses. We should be working to more closely tie our immigration levels to both our industrial policy and to the absorptive capacity of communities, which includes, but is not limited to, housing. It\u2019s important that we don\u2019t reduce our population growth targets, but instead increase our housing supply targets.\u201d<\/p>\n\n\n\n<p>Again, there\u2019s just one problem, residential permits are rolling over hard and fast, now at their lowest levels in a decade.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/substackcdn.com\/image\/fetch\/f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Feef59b54-dd8b-4f14-8c3a-df8e6a16a22a_990x770.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img alt='https3a2f2fsubstack-post-media-s3-amazonaws-com2fpublic2fimages2feef59b54-dd8b-4f14-8c3a-df8e6a16a22a_990x770-5413611' src='https:\/\/www.stevesaretsky.com\/wp-content\/uploads\/2023\/08\/https3A2F2Fsubstack-post-media.s3.amazonaws.com2Fpublic2Fimages2Feef59b54-dd8b-4f14-8c3a-df8e6a16a22a_990x770-5413611.jpg' alt=\"\"\/><\/a><figcaption class=\"wp-element-caption\">Source: Ben Rabidoux, Edge Analytics<\/figcaption><\/figure>\n\n\n\n<p>So while Mr. Fraser might want more housing, the laws of economic gravity have taken over. This is what happens when credit tightens and the cost of financing new housing construction jumps by 500bps in the span of eighteen months.<\/p>\n\n\n\n<p>Future housing supply is being obliterated, and so is the need for construction workers, at least in the near term. According to Stats Canada, the construction industry just shed 44,000 jobs last month. The industry has now dropped 4% of its workers over the past three months. According to&nbsp;<a href=\"https:\/\/edgeanalytics.ca\/\">Edge Analytics<\/a>, outside of the pandemic and the global financial crisis, this is the largest three month decline since the 1990\u2019s.<\/p>\n\n\n\n<p>Canada\u2019s housing woes are only deepening.<\/p>\n\n\n\n<p>The average asking rent in Canada reached another record high of $2078 in July, up 8.9% from last year.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/substackcdn.com\/image\/fetch\/f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7a9689c7-4e4b-452b-860b-a1c889470968_1444x866.jpeg\" target=\"_blank\" rel=\"noreferrer noopener\"><img alt='https3a2f2fsubstack-post-media-s3-amazonaws-com2fpublic2fimages2f7a9689c7-4e4b-452b-860b-a1c889470968_1444x866-5613617' src='https:\/\/www.stevesaretsky.com\/wp-content\/uploads\/2023\/08\/https3A2F2Fsubstack-post-media.s3.amazonaws.com2Fpublic2Fimages2F7a9689c7-4e4b-452b-860b-a1c889470968_1444x866-5613617.jpeg' alt=\"\"\/><\/a><\/figure>\n\n\n\n<p>Here\u2019s annual rent growth by major city.<\/p>\n\n\n\n<ol>\n<li>Calgary +16%<\/li>\n\n\n\n<li>Montreal +15%<\/li>\n\n\n\n<li>Vancouver +12%<\/li>\n\n\n\n<li>Edmonton +12%<\/li>\n\n\n\n<li>Toronto +11%<\/li>\n<\/ol>\n\n\n\n<p>I wish there were was a silver lining from all of this, but it is truly a crisis of epic proportions. If anyone in Ottawa is listening, God speed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Happy Monday Morning! It\u2019s been a few weeks now since the Trudeau government shuffled his cabinet ministers, naming both a new housing minsiter and a new immigration minister. However, as we discussed a few weeks ago in my piece,&nbsp;Same Faces, Different Places, nothing has fundamentally changed. These are the same people, and the same policy [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":11191,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[70],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Deck Chairs on the Titanic - Steve Saretsky<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.stevesaretsky.com\/2023\/08\/news\/deck-chairs-on-the-titanic\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deck Chairs on the Titanic - Steve Saretsky\" \/>\n<meta property=\"og:description\" content=\"Happy Monday Morning! 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