State of Canada’s Cities Summit: What’s at Stake – Canada’s future will be won or lost in our cities
Every challenge facing Canada manifests most acutely where most Canadian residents live: food security, adapting to climate change, creating job and wealth building opportunities, settling newcomers, decarbonizing our economy, providing mental health and housing support. Almost every metric of success presented in ministerial mandate letters for the federal or provincial governments is dependent on the capacity of Canada’s urban regions to harness innovation, social and financial capital. How do we harness our potential, and what happens if we can’t?
Note to readers: This video session was transcribed using auto-transcribing software. Questions or concerns with the transcription can be directed to email@example.com with “transcription” in the subject line.
Karen Chapple So what’s at stake? This is the big conversation. I want to welcome our panelists. We have from left to right, we have Don Iveson, former mayor of Edmonton and currently Canadian Urban Leader at the School of Cities University of Toronto. We have Scott Stirrett, founder of Venture for Canada. We have a Pedro Antunes, chief economist of the Conference Board of Canada. We have Dr. Andrew Bond, who’s medical director of Inner-City Health Associates, and we have Professor Ursula Eicker, who is the Canada Excellence Research Chair in Smart and Sustainable and Resilient Cities at Concordia University. So welcome to the panel. So I do have a couple of big picture questions for the panelists, but then I’m also going to give them each time. Four of the five actually contributed to the volume that got released today by CUI, the State of the Cities report. So I’m going to give each a little bit of time and have a question for them on their pieces. And I also will give Scott some time to talk about Venture For Canada. But let’s start with the with the big picture. Why does Canada’s future depend on our cities? Why? I’m going to start with you, Don, because you work for me, more or less.
Don Iveson I volunteer for you technically, but you did pay for my red eye flight here, so I am grateful for that. So 50% of Canadians live in our ten largest metro regions and 60% of our economy. And both those stats are growing. So as goes those big metro regions, which in part have, you know, 275 local governments within them. So I want to pick up on the theme of the last panel that when we’re talking about city we’re, I love Bruce’s framing of this, we’re talking about a network of a series of governments and stakeholders and often Indigenous actors and governments rights holding and informal networks that are not very well linked together in this country because we don’t think the way they do in the United States about those systems as needing to be planned in a coherent way. And when you think about the challenges that we’re facing, the climate issues and energy transition issues, the housing and inequality issues, the public health issues, those are all borderless issues faced in our communities. And Chief Billy Morin from Enoch Cree Nation, which is right next door to Edmonton, used to remind people that he was born in a hospital in Edmonton. He cheers for the Edmonton Oilers, and when someone asks him where he’s from, he can give a land acknowledgment in his language and then also say, I’m from Edmonton. And so when we think about those systems and their reach in this country, I also think about the fact that, you know, in Edmonton we were not just policing Edmonton’s inner city, we were policing northern Alberta and to some degree northern Canada’s … one of Northern Canada’s inner cities. And those are the sort of networked and systems level issues that converge in our largest metros. And just because the paper that that Gab Eidelman and I released last week focuses on the Big Ten census metropolitan areas. I can assure you that these issues manifest in Saskatoon and in Halifax and in Victoria. It’s nice to see Lisa here as well. And so this idea of a metropolitan mindset on the systems level challenges we need to face in a coherent and system aligned way really can apply in 50 or 60 census metropolitan areas. And by the time you get to that number, you’re talking about 80% of Canadians. And if we get that wrong, so goes the country. So to me, that’s what’s at stake. Whether your lens is climate, whether your lens is equity, whether your lens is housing or whether your lens is whatever else brought you here. All of those issues intersect in our cities. And I won’t recapitulate the paper, but it’s essentially a call for more of this regionalism at the local level and specific support from provincial governments in ways that build on what Premier Wynne was talking about earlier and a couple of nudges to the federal government for something that we refer to as metropolitan federalism, which is a way of changing the country without necessarily touching the Constitution. Though I’m not afraid to talk about the Constitution too, eventually we’re going to have to get there. But provinces … Our contention is that provinces that choose to take this approach and B.C. does this in a lot of ways and is, I think, knocking it out of the park on a number of fronts because of it, provinces that choose to adopt a metropolitan mindset to thinking about how to plan for the success of their large city regions. Those provinces are going to outperform on environmental, economic and social indicators. Provinces who instead divide, sow discord, punch down their local government leaders and otherwise treat them in a disrespectful and anti-democratic way. So I do think there’s a path forward on all of these challenges, but a lot rests on provinces seeing the light. There’s much the federal government can do to align with that strategy, which perhaps we can talk about a little bit. And ultimately, it won’t work without leadership from the ground up, which we can talk about more, too. But I’ll leave it there.
Karen Chapple Fantastic – Ursula.
Ursula Eicker Yeah, I want to break it down even to a more granular level because we’ve talked about a lot of challenges and crises that we’re facing and pledges that countries are making on, whether it’s climate change pledges, CO2 reduction and change to more sustainable mobility, more housing and so on. But in the end, all of this needs to translate into concrete projects on the ground. And I think that’s why cities are so important and not just the municipal government, because in the end, we need for every retrofit project, for every mobility project, for every bike lane that we put in the city, we need people and stakeholders that put it actually into action. And I think there’s a big discrepancy between all these sort of large-scale pledges that are easily made and probably we see new pledges made at the COP that is just starting. But if that doesn’t translate into action on the ground. So if we don’t get the real estate sector together with the municipality allowing for this mixed city of use and that we all want to have more sustainable mobility solutions – these pledges are never going to realize and we’re already seeing that we’re going to probably miss all the sort of ambitious targets because they stay at this rather abstract level. But at the end, it means allowing density around new transit hubs. And we talked about public consultation. Often public consultation means these projects are blocked because people don’t like more density in their neighborhood if it was a suburban neighborhood. So a lot of the sort of nitty gritty, detailed problems that need to be solved. But unless we start on action on the ground right now, we’re going to miss all the sort of targets towards sustainability and climate change that we that we all agreeing upon, of course, on principle because they are nice targets. But the details are more and often more of a struggle to really implement. And I think that’s where the local level is incredibly important because that’s where people congregate and solve these issues.
Karen Chapple Terrific. Let’s jump to Pedro. Well, you know, why does Canada’s future depend on cities?
Pedro Antunes Well, it’s interesting. We just got the news this morning that the economy was in decline in the third quarter. We’re very concerned about the near-term economic outlook. And we’ve heard a lot of concern around our productivity, investment, etc.. But I’m going to start with something a little different, and that is a positive note on what’s going on in our economy, and that is that we are continuing to transition to a knowledge economy. We are continuing to see, and especially through the pandemic, a surge in essentially well-paid professional scientific technical services jobs. We are continuing to see a massive amount of educational attainment, growth in our workforce that is highly educated, through immigration and through essentially our domestic education programs. We are a knowledge economy and for all of the things and good things that the resources sector brings and the goods production sector brings, the growth has been in the knowledge sector. So there’s a real problem and a real issue with our physical capital in our growth and productivity. But where we’ve seen some good things has been in the growth and the contribution of our human capital and how strongly that’s generated good things, I think, for our economy. And where does human capital reside? As Don just pointed out, human capital resides in our cities. And I think later I’ll be talking a bit more about how we have an opportunity now because of the technology to spread the benefits to all of our cities.
Karen Chapple So that gives us a great transition to Scott.
Scott Stirrett And building on what Pedro was talking about, Canada’s future economy is going to be an innovation economy. We are in the midst of an energy transition, an economic transition, and Canada’s future economic growth is going to come from companies that derive their profits off of intellectual property, off of data. And where do those companies exist? They’re in cities, and they’re in particular in large metropolitan cities. That’s a phenomenon that exists not just in Canada but around the world. So the future of Canadian cities is integral to Canada’s ability to develop that knowledge economy, that if we have cities that folks do not want to live in, that are unaffordable, that have declining quality of livelihoods, that have crumbling transportation systems, that that impedes our very ability to develop that kind of knowledge economy that will sustain Canada’s future, both in terms of our economy, but also our very quality of life. Obviously, Canada has huge economic challenges. Our labor productivity has declined in 12 of the last 13 quarters. You look at Canadian GDP growth on a per capita basis versus the United States over the last year or two. And it’s not a good outlook, as Pedro mentioned. And you also look at studies like, for instance, from the OECD, which shows that Canada has the lowest projected labor productivity growth over the next four decades. We really need to get serious on growing our economy in particular in a way that enhances labor productivity. And a key component of that is investing in cities that will be fertile grounds for fostering the kind of companies like Shopify, like OpenText, that can create high paying quality jobs that ultimately enhance all of our prosperity.
Karen Chapple Great. Thank you. And Andrew, take us home.
Scott Stirrett So I want to pick up on something that Janice, I think signaled early on around the point of cities being friction points. And that’s where innovation happens. And I think we’re hearing that as critical to the future of Canada and what our national economic strategy might look like. It’s really being around education and innovation economy. There’s no question … I don’t think it’s any great mystery what the likely future economic contours should look like. It’s how we get there and whether we can actually get there in a competitive and well-positioned way. That is going to be really a question. But maybe I’ll just note that I’m a health care provider. I’m a physician. I have the distinct challenge of talking about the place of health care in cities right now. I think one of the things … and Naheed, really, I think preempted us a little bit in terms of the what’s at stake in cities around the existential crises that are facing civilization. And they are substantial. Many of them, please note, have a health dimension to them. Please also note that Bob noted that the U.S. is a health care economy with a military. That’s not a joke. It’s $4.3 trillion in the United States is $344 billion in Canada. The place of health care and health in general, in overall national economic strategy, urban design, how we build and live, where we build and live and do that well, how we welcome people, Naheed mentioned folks coming from at this point, from Central Africa and in Toronto not having anywhere and sleeping on the streets. My health care organization provides care for those folks who are on the streets. While we’re trying to figure out what on earth we can do to get the federal government, provincial government and the city to work together to finally maybe have a reception center. Health is connected in fundamental ways to everything we’re talking about in health care building, and I worry that I might be one of the only health care providers in the room. And that’s a problem for us as a country, because in general, health production, 70% of health care production doesn’t come from health care providers, comes from all of you. And that’s an issue where if we’re not working and talking together about how we actually shift from not just health care provision, ensuring that when we do have skilled individuals come in and come to Canada, that they can get health care. If they can’t, they’re not going to come here. How do we ensure that those who are kept out of our economy are able to be kept safe and healthy enough to actually contribute in their education? How do we make sure that First Nations communities in these communities across the country have the health care that they need so they can be the immense contributors to overall economic development in this country that they can be, with the support they need to have. And we are not doing that. I really was glad to hear Mayor Bowman mention about … in Winnipeg where the Southern chiefs are doing some of the most innovative work around urban development that combines both social development and health together. The artificial separation of health care and non-health care sectors is really a challenge for us, and the States is actually besting us on this. Actually, the Interagency Council on Homelessness with HUD is amazing and Kaiser Permanente is partner with HUD in doing that work. We have to be able to leverage the health economy for the future. We have, for example, and Scott mentioned around tech and data and AI, Geoffrey Hinton, one of the founders of much of the AI work in the world went to Google now back to Toronto is one of the global minds. We have a huge innovation economy. The margins of … In Kitchener-Waterloo Corridor are as competitive and emerging in ways that are really at par with either Cambridge or to a certain extent, Silicon Valley. We have to be able to invest in the innovation economy. And The future of the health care sector is increasingly going to be tech and particularly AI and data oriented. And so if we do not have a tech strategy that combines with our health care strategy to get us out of the mess that we are in, the fact that we are working right now with 6 million people who don’t have access to a health care provider at all, let alone good quality care, just any access at all. We have a huge cliff to get over at the moment right now, but we can do it. But that does mean making health care and health overall a huge priority in our national economic strategy. We cannot build strong, resilient communities, cities that can respond to both the crises, public safety issues, but also build sustainable economies. If we don’t make sure that health is central in it and it will be one of the big parts of our engines. And I think Bruce really tipped that hat there that in the States it is one of the engines not doing terribly well in ROI, unfortunately. But we can do better and we can actually outcompete in this area. So I think it’s an area that we really have to learn to really bring together the health care sector with all the folks in the room that are doing urban renewal right now.
Karen Chapple Thanks so much, Andrew, for raising that. And just as a quick follow up, show of hands in the room, how many of you are health care providers? We got one. Okay. You’re getting the prize. So? So, yeah. So thank you all for those introductory comments. So when I arrived in Canada, I was a refugee from Berkeley, California. And although my great grandparents were from Canada, but we’d been in the U.S. for a few generations and Mary kind of Mary Roach took me under her wing and she said to me, Karen, you want to learn about cities in Canada? Okay. Take the federal budget. And every year when it comes out, do a search and see how many times cities are mentioned. And sure enough, I do it every year now, and it may be five times, and it’s usually in a footnote or a reference. So let’s talk about the federal budget for just a moment. How can we get the federal government to realize its own agenda on climate, on housing, on health? How can we get them to realize it depends on cities. How can we get that budget to major cities a few more times? Anybody.
Scott Stirrett Sure I’ll be the odd one out to try and get it going. $70 billion over ten years for a national housing strategy that doesn’t mention health is appalling. It is bound to not succeed. And so if you want to get local – health care is delivered locally. And so if you want to get local and to the point that Ursula shared, get concrete, because ultimately cities are where policy becomes real. And so when we talk about investing $70 billion, if you don’t want to flush it down the drain. And I don’t mean that facetiously, we already know that the amount of acute housing loss is greater than the housing build that $70 billion is going to buy. That’s before we even take into account that the housing can’t succeed if we don’t actually have the services that allow people to actually obtain and maintain that housing. It will become loss and it will become into the financialization cycle, which we can argue whether or not this financialization of the, sorry, language or not … I think there was a fair point from Romy earlier. But I think the point is the de-profiteering that is happening right now without the regulatory pieces in place is what’s going to happen if we don’t actually have the right kind of supports to ensure people actually have that in place. And we know that this is one of those intersectoral areas where we can actually learn from partners in the States because there’s a template for how to do this. This exists already. This isn’t even innovative at this point. This is just trying to catch up with how do we do prudent planning in the housing sector. And the fact that we’re not having housing health come together on that is really shocking.
Don Iveson Let me put my Canadian Alliance and Homelessness board hat on for a minute and agree completely that that a housing strategy that isn’t a health strategy is failing to capture the greatest return on investment. Besides all the productivity issues and economic competitiveness issues and basic equity issues that are at stake, we are building very, very unwell cities in terms of population health outcomes, and that’s both the form of the cities because a more compact infrastructure efficient city is also a lower carbon city, is also a physical and mental health healthier city. And so picking our Guideposts, because right now, you know, I think the issue is not that the federal government doesn’t get it or want to get it. I think that there are just many competing Guideposts at play. But if we made the social determinants of health in our settlements of all sizes, including rural, remote and indigenous, where health outcomes are even worse, which is unconscionable in this country, if we put that lens on all of our public policy, then I don’t think we’d have a federal government giving the premiers another $46 billion for the increasingly bad health outcomes. We would see money going to communities at the network scale to improve housing outcomes, improve equity outcomes, combat isolation and support and support stronger health outcomes for people on the ground. So I think it’s a question of putting the right lens on it. And I think the federal government could flex its power of the purse through that lens and through the climate lens to get those outcomes at the community level. Again, my bias is to do that at the metropolitan scale in the larger communities. Otherwise, you know, having a health and infrastructure and climate strategy for Mississauga and a different one for Toronto and a different one for Brampton just seems insane to me. So I think you pick your units of engagement carefully, and I think the federal government’s there too. So I think that if there are gatekeepers in this country right now and it is, I guess, popular to blame certain orders of government and there’s a bit of a standoff between all orders of government about whose fault this is. I think if there is one, with due respect to two, Premier Wynne, as an exception in this, provinces are the gatekeepers to a lot of this because for reasons that Alexandra talked about on the first panel, they do have throughput control on resources to cities historically. But we’ve seen a federal government that’s much more activist, much more willing to engage directly with local governments through things like the rapid housing initiative during the pandemic. And the country didn’t have a constitutional crisis when we built, I think, 12,000 units of much needed permanent supportive housing in this country. What we simply saw was, you know, 12,000 Canadians or more, being treated with dignity, finally. So let’s have more of that. Thank you very much.
Karen Chapple Thank you … Pedro …
Pedro Antunes Yeah, well, I was just never thought I’d be doing this, but just to defend a little bit some of the policies that the federal government has put in. You know, I think certainly there has been a lot of money in the transfers to health to the provinces. There has been a lot of focus on affordability and some of these programs that we just mentioned, even in the economic update, we saw a fair bit of focus on that. And I think, of course, every time the federal government starts to delve into municipal issues, they get into trouble with the provinces. So, you know, I think that’s the big picture issue in Canada, is this kind of three layers that we’ve been talking about all morning. The other thing I’d like to say is, I don’t know that I agree that the federal government has a lot of ability to raise revenues any further. And I think we just saw in the last economic update a fairly slim chicken, let’s say, very skinny chicken that we split up in new spending. But we’ve been, since the pandemic, time and time again, spending all of the excesses that came in. In other words, every time the deficit was going to come in a little lower than expected, we ramped up the spending. We did so again and we did so again. And now going forward, I think we’ve got a real challenge. We’ve got interest costs that have gone from 20 billion pre-pandemic. This is at the federal level only, that are going to be 60 billion a year post-pandemic in just a few years out. You know, this is a challenge. And the federal government will let us know and tell us that we’re running deficits and debt load that is much better than other OECD countries or than the U.S. The U.S., by the way, is running deficits that are, you know, close to 5% of GDP. We’re running at 1.4% of GDP, but we’re comparing ourselves to a whole bunch of countries, OECD countries and the U.S. that are going to face the same difficulties. We are challenged. So if we want more in terms of funding from the federal government we have to be able to accept that we need to raise more revenues.
Karen Chapple Not Scott …
Scott Stirrett To Pedro’s point – one of the things … I recently was reading a report on subnational debt and often the conversation on debt in Canada is at the federal level. Of any OECD country, Canada has the highest percent of GDP to subnational debt ratio. Like when you look at a chart, it’s like Canada is way to the right and all the other countries are, you know, to the left. I think that that’s a fact that is often very misunderstood. And a lot of Canadians just think of debt in terms of the federal level. I bring this point up in the context of the fact that municipalities are obviously starved for cash – municipalities have around 70% of like infrastructure that they’re responsible for, but only 10% of tax roughly goes to them. And it’s interesting to think about, I think, in the context of Canada, how can we have more fiscal transfers to municipalities or creative ways for municipalities to generate more revenue? One idea that is a little bit more controversial, but I think it’s interesting to think about is making the interest on municipal bonds tax exempt as exists in the United States. There’s a huge municipal bond sector in the United States, in Canada it’s relatively paltry. And what are creative ways beyond the federal government to just giving more money, although that is, in essence, a kind of federal transfer. How can we foster a much larger municipal bond, potentially sector in Canada to fuel some of the investments that’s needed, certainly as it relates to municipal infrastructure? Because as the conversations mentioned earlier, opening the constitution is a very complex question. And what are some quick wins that we can do to address some of the short-term fiscal pressures?
Karen Chapple Terrific.
Ursula Eicker Yeah, maybe just a short comment because I’m still pretty new to the country. So not so expert in the federal budget, but I think one of the major topics that needs to be addressed in the next years is transportation. And very, very relevant for everything related to climate change, but also social justice accessibility. And, of course, there we have all levels of connections, whether it’s sort of intercity transport. I mean, coming from Europe, it’s hard to deal with the Canadian rail system that’s not really geared towards passengers, it’s more to goods. So that’s the very big issues in terms of improving public transit infrastructure. And as far as I understand it, the different levels of government need to cooperate because these are usually huge infrastructure projects. And again, it’s a lot of talk about it, but the speed of realization, of sort of structuring public transit systems is very, very slow. And I think it’s because that’s one of the major carbon emitters in the country. If we don’t get the different levels of government to cooperate from inner city public transit to intercity transit strategies, we were talking about industrial strategies and air traffic is a whole world for itself. Where again, we need to move to renewable fuels, which is a big infrastructure project. The Federal Government for sure needs to intervene. So I think the for me, the transportation sector is one major sector that needs to be completely transformed and we certainly need more support from the federal government in that domain.
Karen Chapple Great points to raise. And I’m going to turn now to some questions about your specific areas of expertise. And meanwhile, we can take questions from the audience. So, yeah, I’m going to turn to Mary in a minute to come in with the questions. But let me just stay with you, Ursula, for a moment, because when I read your piece for the report, you had the best first sentence ever. Your first sentence was “The vast majority of buildings we will need by 2050 are already built”. So can you talk about that and how we can do more deep retrofits of those existing buildings?
Ursula Eicker Yeah, good question. I think that’s the situation in most places worldwide, I mean, cities are built. I mean, we need, we talked a lot about new housing and we will need that, especially in countries where immigration increases the numbers very strongly, like in Canada. But basically the cities are built and here where energy prices are pretty low, I mean, and still are pretty low. I mean, especially in Quebec, it’s a real challenge to talk about energy efficiency. So buildings are not built to the standards that we see elsewhere in the world. It’s just unnecessary waste of energy. And it was possible because it was so cheap to … And but this situation is now changing because we need the electricity for other domains. We talk about decarbonization and mainly it means electrification. So then we electrify transport. Our grids are not designed to handle all these loads. Already we are talking about bioenergy systems for buildings or mixing electricity with natural gas, which is not renewable. So there’s a lot of issues. We just can’t go on wasting energies so much anymore. So that means we need to reduce the demand and the only way to do it is to improve the building envelopes, the energy systems, doing a deep retrofit. And it has been done all over the world. The technology is there. I think it’s not a technology problem. And it’s pretty simple. You just insulate the envelope and put a heat pump … I mean, it’s not rocket science, really, but I think it’s more, again, an organizational procurement financing issue that we need to solve to bring these solutions to the market. And I think one good way would be to consequently shift to a lifecycle assessment – even of cost, because usually it does pay back – all these investments pay back over time. But if you just compare upfront investment, especially in the public sector, you’re forced to go for the cheapest solution. So if you could just move to a lifecycle costing, then we would have a much fairer comparison. And many of these deep retrofit projects that we should be doing on the existing stock would be feasible.
Karen Chapple Fantastic. And Andrew, your piece was marvelous … Talked about how to leverage the learning we had during the pandemic. And you have this great term tactical innovations that emerged during the pandemic. So how can we learn from this?
Andrew Bond So what I was trying to raise in the piece, you know, I’ll try and give some context for here, is looking at cities as complex systems and being really attentive to the concept of emergence that comes out of complexity theory, that so much of what happens, and particularly now with so much change on the horizon, that I think everybody has signaled around the geopolitical turbulence that we’re experiencing and some clarity points … so much uncertainty. And that means that over the next 5 to 10 years, there is going to be a lot of unexpected and unexpectable things that are going to emerge. And we’re going to have to be able to figure out how to capitalize on those seriously. So one of them that happened I mentioned in the piece for the report is the confluence during the pandemic of the disproportionate housing loss among low income individuals, particularly racialized communities and Indigenous communities, with the collapse of the tourism industry and the fact that that then created a brand-new opportunity for housing models of care that brought health care and housing together to repurpose previously existing hotels, for example. That’s one type of tactical innovation that no one could have anticipated, that you would have a collapse of one industry and a deep need at the same time driven by a pandemic that was likewise globally we knew was coming at some point, but it’s certainly not now. And so that type of ability to capitalize on the moment, it’s not what we did per sé but the fact is that we have to have the dexterity as communities and societies and economies to be able to identify and respond to those. So a version of hotspotting … in a policy space to be able to identify as they’re emerging, how do we capitalize, convene really quickly in places like this to be able to figure out how to actually use those moments really effectively? So I think to the point that was raised earlier from Naheed and others that we are really on the verge of not learning from the pandemic. And one of those not learning pieces is just around basic public health practices and not closing your eyes or ears. What I’m speaking about is the broader economic lessons and societal lessons from the pandemic around how can we actually respond to very unpredictable events and have the machinery to be able to actually deliver? Because the cadence is fast. Policy windows when we’re talking about this type of cadence open and close very, very quickly. And so we have to be able to move much faster and much more acutely towards implementation than we have historically done so.
Karen Chapple So thank you. Pedro, you spoke about how smaller cities can make bigger strides, which actually Bruce Katz talked about a little bit, too.
Pedro Antunes Well, just very quickly, you know, if we just took a look at, you know, what was the driver of kind of Canada’s economy over the past decade to 2019, let’s say, let’s just take that period and the top four cities, in fact, contributed. We talked about this a little bit. Don mentioned it. About 50% of our growth came from the top four cities. And a lot of that, because of very strong demographic and population growth. And so in the piece … That puts two challenges. The challenge on transportation in these major centers that essentially welcome most of our immigration and it causes all sorts of issues with respect to that. But it also kind of, you know, leaves a gap in many other major centers, many other large cities that have very low unemployment rates, very tight labor markets, and, you know, are for lack of workers, not seeing the investments and the growth in those cities. So I think the pandemic and the adoption of technology and our ability to work more, how should I say, more flexibly, virtually, and other words, and also the fact that we are continuing to transition to that knowledge path that I mentioned. I think these are opportunities to attract immigration to smaller centers. And I think we’re seeing the efforts there. I think there’s been certainly a lot of change during the pandemic and post-pandemic in the last few years. The one thing I wanted to mention that’s a little outside of the topic that I talked about in the report, is this concern I have around the cause of inflation and the cause of the affordability crisis linked to immigration? And I just want to say that what caused the rise in housing prices through 2020, 2021 and even the first part of 2022 was not at all anything to do with immigration. In fact, immigration was down in those years. What it had to do with was a lot of savings, a lot of support programs, a lot of money saved in people’s hands, and very low interest rates that led to a huge surge in capital into a fixed stock of 60 million units, roughly. And that’s what drove the prices up. And I think rent prices now are catching up to that. And of course, higher mortgage rates are leading to higher inflation and that … So immigration, no doubt, is causing pressure because we’ve seen a surge in that right now. But it’s not the big cause of what happened in terms of affordability over the past three years, I would say. So keep that in mind. I think going forward, we’re going to see immigration numbers settle into what we expect to be 1% or more normal population growth, very much in line with what we’ve had historically. And it’s important because the labour force in Canada would be in decline if we didn’t have immigration in this country. And I think small positive growth is welcoming for business. It attracts investment. The first questions I get when people, when investors are looking to Canada is, you know, what is the labor force situation, what is the labor market situation looking like in Canada.
Karen Chapple Thank you so much for bringing that up. Scott, we have not heard much about young people at this conference so far. And I wonder if you could talk about how young people inspire you with how they overcome the barriers to entrepreneurship.
Scott Stirrett Yeah. I mean, I think it’s to say, as it relates to this theme and the housing crisis is that young Canadians are the folks who in many cases are suffering the most at the hands of the housing crisis … the inability to pay rents, there are many people I know, you know, through our programs who are ending up paying 50, 60% of their income just to have a roof over their head. And what is the consequences for Canadian society, and the consequences for young people. In our context – a venture for Canada, where we support around 4000 young people each year to develop entrepreneurial skills, we see that the cost of living crisis, the fact that people are having to spend so much on rent, on mortgage payments, is really impeding young Canadians ability to take risks, to be entrepreneurial. And this is backed up by research from around the world that … The Bank of England has done studies that show higher rates, higher mortgage rates result in lower rates of entrepreneurship. And it intuitively makes sense. If you can’t afford … if you’re struggling to meet your basic needs, it’s really challenging to think about going to go launch a business or taking a big risk in your career or your life. So I think the housing crisis is really existential to Canada’s ability to be an entrepreneurial country, that if we don’t fix the housing crisis, if we don’t provide a more affordable path for young Canadians, we are impeding and are limiting so many young Canadians from creating businesses, from being entrepreneurial, and ultimately from building a more innovative, inclusive and prosperous country.
Karen Chapple So before you go … So thank you. Don, I just want to ….
Don Iveson I know, I already talked about the Metro Mindset
Karen Chapple I know, but I want to give a plug. Don’s fabulous report with Gabe Eidelman is at metromindset.ca or you can read the short version in the report but I want to ask you the hard questions. So what are the headwinds that are going to get us there?
Don Iveson Thank you … many … But I want to pick up on something that Scott said, partly because I used to get asked the young people question, but now not so much after 14 years and these gray hairs, but all of the same headwinds you described facing young people starting out and trying to make a better life for themselves in their community, are being faced by local governments in this country right now, too, because the fiscal pressures that you described are the same fiscal pressures that, you know, the mayor of Saskatoon, the mayor of Toronto, the mayor of Trois-Rivieres, are dealing with right now. And that constraint on the fiscal health of municipalities is impeding their ability to be creative and entrepreneurial and learn from the pandemic and support energy transition and support productivity and competitiveness. And so the fiscal headwinds are real and they’re partly the compound effects of rising interest rates, rising costs to procure things, rising expectations from labor at municipalities and in communities. And the fact that municipalities are now also being asked to support infrastructure for the 5 million houses that we need, and thus the pinch is compounded for municipalities. So FCM’s called for a municipal growth framework, which in the big cities I think needs to be a metropolitan growth framework is a clarion call for precisely the same kind of support to arm our cities to be fiscally healthy enough to keep up with the climate crisis, the mental health crisis, the physical health crisis, the productivity issues. And here’s the other thing that’s happening to them. As we transition to a knowledge economy, which is that their industrial tax base is eroding. And because we’re so heavily reliant on property tax outside of Quebec, where they’ve got this great new deal thanks to Maxime and his work with the mayors there to secure a piece of the PST there, our cities are in a really fiscally unhealthy place, and so they’re not currently equipped to help this country solve its housing challenges, its health challenges, its climate challenges or its productivity challenges. And just to add one more, I don’t know. I’m the bad news bear now here, because the other hat that I wear three days a week that pays the bills is climate adaptation finance, and the weather, as we’ve all seen, is getting worse. Our cities are getting hotter, the air is getting worse. And we also have to fund a massive transition to cope with those risks that are coming at us so that our communities will be resilient while responding to every other challenge that was raised here. And our cities just do not have the fiscal toolkit to do that. The countries in the world that are equipping their cities, or have historically equipped their cities to do those things, are going to eat our lunch from a competitiveness standpoint. And so we need to be looking at a city-deals kind of conversation, including devolution. I think about the Greater Manchester Agreement, you know, we’re many decades behind other parts of the world that are thinking about how to tune their cities in their major city regions to rise to all of these challenges we’re facing.
Karen Chapple Thank you. Mary … You want to give us a question? Your hardest question to wrap up.
Mary W Rowe Well, again, there are sort of a similarity of questions here, but part of what people are looking for is, what’s the key intervention that people could be making in their communities, whether it’s addressing climate or homelessness or ideally both?
Don Iveson Vote.
Mary W Rowe Vote.
Ursula Eicker Yeah, I would go again for a kind of call to action because in the end, we need to see in every neighborhood this inclusive, healthy, more active lifestyle. It’s not just about technology, I mean, we talked a lot about putting money into innovation and technology like batteries, for example. Strong topic in Quebec just now. It’s the right way to go. And I think Canada can be a leader in the clean energy transition. But unless you bring it into the communities and not just add technology and change every vehicle to an electric one, it doesn’t change anything about congestion, but it changes air quality. So it does something for heads, but it doesn’t change the way we live and work and travel. So I think … Neighborhood by neighborhood and project by project, we really need to create these places where people can interact, they can reach amenities without a car. Where we have a just a completely different lifestyle, I would say, a neighborhood that is inclusive and complete. And I think that’s a challenge because it’s very easy to give millions or even more to big companies to build the tech. But unless the tech is combined with a real change in the setting of every neighborhood, it’s not the right way to go.
Karen Chapple Okay. Andrew, Pedro and Scott, and you get one word or one sentence.
Andrew Bond So I’ll just go one step further than Don and say, don’t just vote, run. Or be one of the people who are a part of a campaign. We need all the minds working right now because we are not spending wisely. We are not building wisely. And we need all of you to participate as fully as you are able.
Pedro Antunes I don’t know what one sentence … I’m trying to think, but, you know, I think most … Well, Maxime talked earlier about, you know, the most important asset for people who are on the low-income scale is the city. And I think that’s very important. And there’s a lot of research now that shows that it’s not just a transfer of funds, it’s a combination of transfers of funds and addressing specific needs of people who are maybe low income or may not have the means across the city. So the free market is still there. We talked about that in terms of affordability of housing. I really like the programs that we talk about in the U.S. in terms of, again, a subsidy that goes to the household, that can help – the vouchers, that can help pay for rents. I think we need to address these issues in this kind of approach, you know, a multi-pronged approach and perhaps from a multi-level of government as well.
Scott Stirrett Be entrepreneurial, identify and act upon opportunities to make your community better.
Karen Chapple Thank you so much. Let’s give a hand to our fabulous panel.