Going global

On Friday we yakked about Canada’s economy (doin’ okay), how we fare against other countries (better than okay), plus the case for pride.

Phooey, said the angry kiddos and their malevolent little AI buddy bots. Canada sucks.

Then yesterday Ryan the Deficit Hawk penned a piece on all the debt extant in North America. The real worry is with Trump’s America, but we’re also incapable of running the country in the black. In contrast to other industrialized countries, maple is good. But every year we borrow a helluva lot from the future.

Bad boomers, cry the rebels down below. You’ve destroyed Canada and rendered it unaffordable. It’s generational rape.

Well, all this comes down to one thing. In the 18 years this blog’s been around – with almost 6,000 posts written and 962,000 comments in response – nothing’s changed. Back in 2008 we talked about ‘the troubled future of real estate’ and it’s still that way. The more we chase this fetish, the more vexatious she becomes.

The kids hate us, in other words, because they can’t afford a house in Toronto or Vancouver the way their parents did. Or they imagine it. So they’re pissed, They trash the country, the leaders, the lenders and the times. They want what the previous gen could get fifty years ago. Failed expectations have led to dissing immigrants, ageist rants and questioning capitalism. They await the burn-it-all-down moment they’re convinced is coming when house prices crash, Boomers writhe in financial pain and the kiddos ascend.

Well, it’s not coming. At least to the GTA or the LM, according to a new report from Desjardins economics. If you want an affordable house, it’s time to stop waiting. Instead consider Moncton or maybe Estevan. Kits and Leaside are gone, baby.

Why?

Because Toronto and to a lesser degree Vancouver are now ‘global’ cities. They’re command-and-control centres where power, structure, wealth and influence are concentrated. “A key feature of global cities is that they partially decouple from their national economic context. Their labour markets, income distribution and housing dynamics more closely resemble those of other global cities rather than other cities in their own country.”

That means…

• Income disparity is the most extreme within these cities. Wealthier people own homes and a vast array of others support them, and increasingly are renters.
• Homeownership rates fall in global cities. So while 67% of Canadians have real estate, in Toronto that fell to 52% in then last census, and is currently around 48%. Vancouver is just 46%.
• The professional class – teachers, health care workers, tradespeople, office staff – are being pushed into being permanent renters, as has happened in New York, London, Sydney and other global centres.
• Global cities are unaffordable cities – everywhere on the planet. Only a widespread economic collapse might change that, but hard times hurt lower-income people more.
• Because real estate ownership has been the easiest path to building wealth, in a global city the gap between the rich and the rest is yawning wider.
• “Toronto and Vancouver may have crossed a threshold from which a return to broad-based homeownership is infeasible.” The ship has sailed. Not coming back.

Says Desjardins, starkly:

While housing is a basic need, its increased financialization—as a collateral vehicle, a form of forced savings or a way to have exposure to tax-advantaged speculative gains—has amplified wealth disparities between owners and non-owners. The principal residence capital gains exemption is one of the largest tax expenditures in the federal system—estimated in 2023 to be over $7.6B. Its benefit grows in value as home prices rise and flows entirely to homeowners. In cities where a growing share of residents will rent long term or permanently, the case for examining tenure neutrality in the tax system strengthens.

Indeed, in 2019, the then-President and CEO of the CMHC remarked in his speaking notes that “Overpromotion of homeownership is both economically and socially counter?productive, contributing to the increasing division between rich and poor.”

And, yes, it’s what this pathetic blog has said with nauseating repetition. Canada can no longer afford to let people keep all the windfall profits from residential real estate tax-free, when gains from every other asset class are taxed. Exempting real estate alone has increased societal demand for it, jacking prices to the point where it is massively unaffordable. Now folks with six-figure incomes find it impossible to buy a family home in most cities, let alone our global ones.

And as greater numbers of people become permanent renters, the PR capital gains tax exemption grows more and more unfair. Why do homeowners get a break of $8 billion a year on their nesteggs when renters have to pay tax on their investments? Moreover, how are we growing the Canadian economy by pushing so much money into the greatest all-time tax dodge – a house – where it creates few new jobs or innovation and adds little to the GDP while massively inflating family debt?

Mostly, why is nobody in public talking about this?

That was a trick question.

About the picture: “Been reading your blog since I was a baby fresh out of college,” writes Rachel. “Now I’m 40, how did that happen. Lots of good (free) advice over the years is much appreciated. Here’s a pic of our trio out for a daily patrol.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/05/03/going-global/