This article supplied by Troy Media.

By Roslyn Kunin

Canada’s biggest policy mistakes come from treating complex systems as simple math

Here is an old story with a valuable message. In the directed economy of the USSR, it was the government, not markets, that decided what and how much was to be produced.

Take metalware for the kitchen: mugs, mixing bowls, pots, pans, dishpans and washtubs. The government decided how much people needed and ordered the industry to produce that many tons at the lowest possible price.

Quotas were met, the appropriate tonnage was produced and costs were controlled. But no mug, pot or dishpan was to be found. The industry found that the easiest way to meet its cost and quantity requirements was to produce nothing but washtubs.

It is a valuable reminder today for Canada: when policymakers rely on a single number to steer complex systems, they almost always get the wrong results.

There are at least three reasons why we need better analysis in policymaking. The first is that the things inside a total number are not all the same. Mugs and washtubs are not interchangeable.

The second is unintended consequences. How did devoting metal to domestic products affect other metal-using sectors like automobile production? The same pattern appears in modern Canadian policy: shifting one number often disrupts systems we depend on elsewhere.

Third, picking a number to solve a problem is often an easy way to avoid doing a rigorous cost-benefit analysis that would offer a clear indication of the overall effectiveness and impact of any decision. Too often, our debates jump straight to targets instead of evidence.

We like to think that policy decisions in Canada are decided on more than just picking a magic number and waiting for it to solve a problem. That is not always the case. Policies for both the housing market and labour market could benefit from more detailed analysis.

Canada faces a severe housing shortage, not only in the major cities, but also in smaller centres as people move there from metro areas and push up home prices. One-number thinking has led the government to drastically cut back the number of people coming into Canada on a permanent or temporary basis believing that thousands of fewer new arrivals will make available thousands more housing units.

This is not likely, especially when considering temporary workers. Many of these are international students. The number of housing units freed by their absence is significantly lower than the reduction in student visas issued. Many students stay in dorms or other student housing. Others crowd together in apartments or houses to save costs. Not much housing is freed to deal with the shortage.

One serious unintended consequence of cutting back student visas is the negative impact on educational institutions which have been relying on the generous fees that foreign students pay to deal with the constrained fees and limited funding imposed on them by governments.

Cutting back on the number of temporary foreign workers (TFWs) will also have a minimal effect on the supply of housing in the major centres where shortages are most severe. TFWs are most needed in industries like agriculture and in smaller centres where their absence will be sorely felt.

Looking at the labour market, it is unrealistic to expect unemployed Canadians to fill these job gaps. People in major cities rarely move to remote areas to take lower-paying work. Cutting back TFWs will harm the sectors and places that rely
on them. Differences in geography, occupations and preferences ensure that workers are not interchangeable.

Homes are not interchangeable either. They have to be in the places where people choose to live, and they have to be affordable. In many places like Vancouver, the actual and potential number of homes is enough to house everyone who needs one, especially if the development permits now being sought result in actual construction. But in cities like Vancouver and Toronto, the benchmark price of a home has risen far faster than wages for more than a decade, making many new units unaffordable even when supply increases.

Builders are now having trouble filling existing units because they did not pay enough attention to affordability. The cost of producing a housing unit is higher than what most Canadians can pay, even after the size of a home has shrunk below what most Canadians are used to. As a result, builders are lowering prices and rents and offering other inducements to potential residents. Builders are now lowering prices and rents and/or offering other inducements to potential residents.

Let us hope that our educational institutions will be able to produce, and our immigration policies will allow us to admit, qualified people who can develop and implement policies based on more than one number.

Canada needs decisions grounded in reality, not wishful targets.

Dr. Roslyn Kunin is a respected Canadian economist known for her extensive work in economic forecasting, public policy, and labour market analysis. She has held various prominent roles, including serving as the regional director for the federal
government’s Department of Employment and Immigration in British Columbia and Yukon and as an adjunct professor at the University of British Columbia. Dr. Kunin is also recognized for her contributions to economic development, particularly in Western Canada.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country. 

From the Fraser Institute

By Tegan Hill and Austin Thompson

Calgary’s new mayor, Jeromy Farkas, has promised to scrap “blanket rezoning”—a policy enacted by the city in 2024 that allows homebuilders to construct duplexes, townhomes and fourplexes in most neighbourhoods without first seeking the blessing of city hall. In other words, amid an affordability crunch, Mayor Farkas plans to eliminate a policy that made homebuilding easier and cheaper—which risks reducing housing choices and increasing housing costs for Calgarian families.

Blanket rezoning was always contentious. Debate over the policy back in spring 2024 sparked the longest public hearing in Calgary’s history, with many Calgarians airing concerns about potential impacts on local infrastructure, parking availability and park space—all important issues.

Farkas argues that blanket rezoning amounts to “ignoring the community” and that Calgarians should not be forced to choose between a “City Hall that either stops building, or stops listening.” But in reality, it’s virtually impossible to promise more community input on housing decisions and build more homes faster.

If Farkas is serious about giving residents a “real say” in shaping their neighbourhood’s future, that means empowering them to alter—or even block—housing proposals that would otherwise be allowed under blanket rezoning. Greater public consultation tends to give an outsized voice to development opponents including individuals and groups that oppose higher density and social housing projects.

Alternatively, if the mayor and council reform the process to invite more public feedback, but still ultimately approve most higher-density projects (as was the case before blanket rezoning), the consultation process would be largely symbolic.

Either way, homebuilders would face longer costlier approval processes—and pass those costs on to Calgarian renters and homebuyers.

It’s not only the number of homes that matters, but also where they’re allowed to be built. Under blanket rezoning, builders can respond directly to the preferences of Calgarians. When buyers want duplexes in established neighbourhoods or renters want townhomes closer to work, homebuilders can respond without having to ask city hall for permission.

According to Mayor Farkas, higher-density housing should instead be concentrated near transit, schools and job centres, with the aim of “reducing pressure on established neighbourhoods.” At first glance, that may sound like a sensible compromise. But it rests on the flawed assumption that politicians and planners should decide where Calgarians are allowed to live, rather than letting Calgarians make those choices for themselves. With blanket rezoning, new homes are being built in areas in response to buyer and renter demand, rather than the dictates of city hall. The mayor also seems to suggest that city hall should thwart some redevelopment in established neighbourhoods, limiting housing options in places many Calgarians want to live.

The stakes are high. Calgary is not immune to Canada’s housing crisis, though it has so far weathered it better than most other major cities. That success partly reflects municipal policies—including blanket rezoning—that make homebuilding relatively quick and inexpensive.

A motion to repeal blanket rezoning is expected to be presented to Calgary’s municipal executive committee on Nov. 17. If it passes, which is likely, the policy will be put to a vote during a council meeting on Dec. 15. As the new mayor and council weigh changes to zoning rules, they should recognize the trade-offs. Empowering “the community” may sound appealing, but it may limit the housing choices available to families in those communities. Any reforms should preserve the best elements of blanket rezoning—its consistency, predictability and responsiveness to the housing preferences of Calgarians—and avoid erecting zoning barriers that have exacerbated the housing crisis in other cities.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute