EDITORIAL: No subsidizing our way to prosperity

Canadians were reminded this week that their governments can’t fix every problem with our money.

The parliamentary budget officer (PBO) reported that the federal government’s signature $13-billion Build Canada Homes program will only lead to the construction of 26,000 new homes over the next five years, with only half of them available to low-income households.

Interim PBO Jason Jacques said that’s just 3.7% of the 690,000 housing units that will have to be built over the next decade — beyond business as usual — to meet increased demand.

“Build Canada Homes should be expected to make a modest contribution toward housing supply and affordability,” the PBO said.

But overall, the report noted, “Federal planned spending on housing programs is set to decline 56%, from $9.8 billion in 2025-26 to $4.3 billion in 2028-29 due to the expiry of funding for existing programs and cuts set out in Budget 2025.”

While the government has pledged to double the pace of residential construction to 500,000 homes per year over the next decade, the PBO said, “the government has not yet laid out an overall plan to achieve this goal.”

Housing Minister Gregor Robertson responded that the government is just getting started on programs that will leverage private sector investment to meet its housing goals.

The reality, however, is that it is ultimately the private sector, not government, that will determine the pace of residential housing construction.

Meanwhile, we learned that despite the federal and Ontario governments contributing $500 million in loan guarantees to Algoma Steel, the company will lay off 1,000 workers from its Sault Ste. Marie plant in March.

The company said both governments knew Algoma was planning layoffs to convert from blast furnace to more efficient electric arc steelmaking technology when it approved the loans.

The impact of U.S. President Donald Trump’s 50% tariffs on Canadian steel simply sped up the timetable for the layoffs.

Finally, the CBC reported the federal government gave automaker Stellantis more than $220 million to help upgrade its plants in Ontario before it revealed its plans to move some production to the U.S.

These examples illustrate why we can’t subsidize our way to economic recovery through emergency subsidies.

The only long-term solution is for governments to create the conditions for economic recovery.