Heading to the Polls

Happy Monday Morning!

It’s official, Canadians are heading to the polls on April 28th. Interim PM, Mark Carney has triggered an election, in what will surely be one of the most consequential elections in recent history. The country is caught between a rock and a hard place, fighting multiple battles on different fronts. Not only are we fighting a trade war with the United States and with China, but we’re also fighting a domestic war here at home. One that many Canadians seem to have forgotten about in recent months, but it’s not going away even if President Trump removes all the tariffs tomorrow.

The Canadian economy has suffered a lost decade. There’s been no economic growth on a per capita basis for ten years, living standards have collapsed, and the Bank of Canada is calling it a ‘productivity emergency’.

Source: Trevor Tombe

This is a war of our own making, and one that we hope will be equally covered by the media during this election period. Economic policies of the past decade have brought us to this ill-fated moment.

As my good friend, and co-host of the Loonie Hour Podcast, Richard Dias notes, these policy mistakes have hurt the country, but the hurt has not been equally distributed. The boomer generation, who owns most of the housing, has enjoyed a decade of record home price inflation. On the flip side, the younger generation has now been priced out of housing, and their wages suppressed through record immigration.

Boomers have been insulated from some of the worst policy mistakes in a generation. No Housing, No Capital, No CAPEX, No Productivity.

Source: Richard Dias, Ice Cap Asset Management

In a twist of fate, the Liberal party has become the party for the established elite, and the Conservatives the party of the young working class. This is a dramatic shift from the 2015 election when Trudeau was first elected as Prime Minister. According to post-election polling from places like Abacus Data and Elections Canada, the 2015 election results suggest:
Ages 18–24:

• Liberal: ~45–47%

• NDP: ~25–30%

• Conservative: ~20%

Ages 25–34:

• Liberal: ~42%

• NDP: ~30%

• Conservative: ~22%

Regardless of ones political views, one can not deny the facts. The Liberal party is hoping to regain some of the youth vote, hence the recent announcements to remove GST on new homes for first time buyers and cut taxes for the middle class. Both of which Polievre has also committed to.

Housing and immigration will be front and center in this election, both of which we follow closely in this newsletter. The good news is that there’s been recent progress on the immigration file, with population growth slowing to 63,000 quarter over quarter. For context, the same quarter last year was 270,000. Meanwhile, temporary resident growth outright declined for the first time in three years.

So while we are making much needed progress on immigration, we had to do a doubletake when we saw the news this week that Carney has added the co-founder of a controversial lobbying group that advocates for increasing the Canadian population to 100 million by 2100 to his council of advisors on Canada-U.S. relations.

The other thing to watch in this election is the foreign buyer ban. Trudeau introduced the policy in 2023 but recent comments from the condo king, Bob Rennie, suggest it might be removed.

“I’m working with Carney – surprise – and I’m trying to get a rental program in where people can buy, put it into a 25-year pool, get a preferred rate from CMHC and let’s allow foreign buyers to buy it; they have to rent it out for 25 years and it will show the world we are open for business, because right now all of our governments are not showing that we’re open for business.”

Like we said, the tariff war, while important, has become somewhat of a distraction to the problems that persist here at home.

Lots to follow between now and April 28th. Let’s watch.