By Jason Clemens and Niels Veldhuis

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Opinion: Canadians pay a high price when governments ignore common sense Back to video

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Play Video

Due to a dearth of common sense in government policy across the country, but particularly in Ottawa, Canadians are paying a high price in terms of living standards, an increased burden of government and diminished economic prospects for the future. To reverse these trends, governments must make a dramatic U-turn based on common sense and real-world evidence.

Consider, for instance, one of the top issues worrying Canadians right now — housing affordability. Every politician from coast to coast pays lip service to the need to improve housing affordability. And yet some of the actions being taken not only will fail to increase affordability but will worsen it markedly.

Repeated analyses have shown that the main cause of Canada’s affordability crisis is the lack of construction of new homes (including single- and semi-detached, row housing and apartments). Housing completions reached 219,942 in 2022 but much more is needed just to catch up with existing demand.

At the same time, the federal government has super-charged immigration. Canada’s population is expected to increase by more than 1.2 million people in 2023, largely through immigration. While immigration is a positive for the country, it needs to be assessed alongside other considerations. Common sense tells us that we can’t increase the population by more than one million people in a year — while only increasing housing by roughly 220,000 — without imposing enormous strain on the housing market.

This isn’t a new issue. From 2015 to 2022, Canada’s population increased by 3.3 million while housing completions were half that at 1.6 million.

Or consider another hot-button issue — energy. The federal government and several provinces continue to march forward on a massive centrally-planned restructuring of the Canadian economy and our energy markets despite disastrous results in the parts of Europe and the United States that have pursued similar policies. Which raises a commonsense question: if this approach didn’t work in Europe and the U.S., why implement the same policies in Canada and expect different results?

Yet Ottawa has imposed formal and informal restrictions on the exploration, development and transportation of traditional, reliable sources of energy such as oil and gas while pouring massive subsidies into unreliable renewable energy sources, principally wind and solar. Because the wind does not always blow and the sun does not always shine, these energy sources require back-ups, which must be available and maintained, making renewables more expensive. Like Europe and the U.S., Canada is on a path of more expensive but less reliable energy, which confounds basic common sense.

At the same time, governments in Canada, particularly the Trudeau government, are imposing additional regulations to transition all motor vehicles to electric without any thought given to — let alone a realistic plan to address — the practical question of where all the additional electricity will come from to power both existing and future needs.

In fact, the federal government has explicitly premised its plan on a yet-to-be-determined technological breakthrough. In other words, both the grand restructuring of the Canadian economy and therefore the wellbeing of Canadians rely on an assumed technological breakthrough in the future. To say this strategy lacks basic common sense is generous.

Finally, consider Canada’s investment crisis. Simply put, business investment has collapsed. That has both short- and long-term consequences for Canadians. Common sense dictates that the federal government at least acknowledge the problem even if it’s not actually going to introduce pro-investment policies or, more importantly, undo policies (e.g., tax increases and aggressive regulations) that have impeded investment. Instead, leaders in Ottawa continue to ignore the problem, forging ahead with the policies that led to the current crisis.

Canadians face huge costs because of the utter lack of common sense from many elected leaders across the country but particularly in Ottawa. If our country is to return to competitiveness, progress and prosperity, the federal government needs a dramatic injection of common sense.

Jason Clemens and Niels Veldhuis are economists with the Fraser Institute.