Federal budget opinion: “Nothing to see here” for our industry
Announcements on affordable housing, infrastructure and skilled trades training are underwhelming
March 24, 2017 by Steve Payne
Federal budgets rarely boost the homebuilding and renovations industry in a significant way – at least directly. Our industry is one of the most private-money driven sectors of the Canadian economy. Such budgets do, however, have the ability to restrain or slow down our industry.
Finance Minister Bill Morneau’s 2017-18 budget, tabled March 22, is a case (for homebuilders and renovators) of “nothing to see here.” Except for, of course, more Trudeau-esque piling onto the national debt. (We say “Trudeau-esque” because Pierre Trudeau’s governments were 14 for 14 on budgets that bled red ink and now Prime Minister Kardashian is doing the same.)
Let’s look at the areas of the budget that might have affected our industry, had they been significant – which they are not.
Affordable Housing. Affordable housing is a previously-announced $11.2-billion commitment from Trudeau’s government, spread over ten years. As per last year’s budget, the emphasis is on social justice with shelters for victims of violence and measures to tackle homelessness high on the agenda. This year’s budget was light on details on the spending of those billions. More information will be available later this year when Ottawa’s National Housing Strategy is unveiled. Even though $11.2-billion over a decade is not chump change, it won’t impact our industry very much. Canadians spend about $60-billion a year simply on home renovations and repairs. ($53-billion home renovations and repairs in 2015, according to Scotiabank; $71-billion that same year according to StatsCan). The new homes industry is of a similar size. Some $120-billion a year in residential construction, renovations and repairs dwarfs the average $1.1-billion annually that Ottawa is pledging to jumpstart a “housing strategy.” $5-billion of the $11.2-billion is being earmarked for private-public partnerships. Again, details to come later in the year.
Skilled Trades Training. Video clips of eager young people wielding power tools and climbing over stud-framed structures were frequently seen on the news reports on the budget. But trades training remains a provincially-driven responsibility and Morneau’s budget talked more about (unspecified) high-tech jobs than about power tools. The budget specified $5.2-billion for “skills development” but that’s not just for trades training – that’s for all types of training including (we predict total bureaucratic uselessness here) $950-million of “hubs for innovation” (translation: “we haven’t a clue…”) under Innovation Canada.
Sorry, We Got Carried Away With Your Credit Cards. Overall, the Trudeau government is forecasting a $28.6-billion deficit in fiscal 2017-18. The national debt is currently at some $640-billion, federally. But to figure out what your kids and grandchildren will have to pay off, you need to add your province’s or territory’s debt, too. If you live in Ontario, stop reading here. Aren’t you late for work?