Wednesday August 14, 2024 | LANGFORD, BC
by Mary P Brooke | Island Social Trends
Has the economy recovered from the pandemic? Island Social Trends posed that question to Camosun College business instructor Keith Yacucha last week.
“By and large it looks like we definitely have come towards a recovery situation. The Bank of Canada seems to be showing that (as in cutting the rates recently),” said Yacucha, whose key area of instruction is economics and statistics, since 2016 at Camosun.
“We have recovered a lot of the stimulus that went into the pockets of families rather than big corporate bailouts — which has been great for helping the families but the multiplier effect shows that when families get that money they tend to spend it a lot more than the corporations do. That lends to quicker recovery but also generates inflation,” he said in an interview after a child care spaces announcement in the west shore.
The stimulus across Canada was primarily CERB in 2020 ($2,000 per month for about a year, then was phased down and out). In BC there were additional worker benefits and boosts to family benefits.
Some low-income seniors had their Guaranteed Income Supplement (GIS) clawed back by government, but that was eventually sorted out in 2021.
The big government response:
What if governments hadn’t bailed out households as a way to get through the initial phases of the economic impacts of the pandemic? Many people couldn’t go to work, stores were closed, community services weren’t operating.
Without cash flow there could have been rioting, looting and violence. There were indeed indicators of socioeconomic stress. There were increased instances of domestic violence and racism across various sectors and communities. There were protests that in some cases got out of control. But it could have been worse.
“The situation that we faced was a supply shock. It was very difficult from a policy perspective to work your way out of,” says Yacucha.
“There’s no good policy solution that doesn’t have big costs associated with it,” said Yacucha. “If the government is going to get involved — which I feel they were right in doing — you’re going to have consequences, which we’re facing.”
Housing challenge in BC:
Since before the pandemic but made worse during that unusual economic period, the housing shortage looms as an economic challenge.
The BC government has brought in a series of legislative approaches to deal with housing including regulation of short-term rentals, allowing for multiplexes on single-family lots, and locating housing along active transportation corridors. Yacucha calls the ‘re-regulation’.
“Either regulate or deregulate the industry. There’s no such thing as deregulation … it’s just who are you regulating it for. No matter what the government does it’s going to benefit one party or another,” says Yacucha.
“It’s a bit too early to see how all of this is going to flesh out. Policy decisions like this have quite a significant legs to them. From an economic theory standpoint it’s a move in the right direction,” Yacucha told Island Social Trends.
“We’ll see a lot of benefit but we will in a complex world that has interlinking systems,” he said, adding that “policy needs to be done out off the best theory and understanding and then wait and see”.
“We’re still a bit too early on to really be able to evaluate the effects of it,” he said.
He points out that the rapid resupply of housing units to the market by cancelling standalone short-term rentals (STRs) was certainly faster than waiting to build more homes. STRs are still allowed if a room in a person’s own home.
Interest rate increases have been a factor in the housing supply development challenge, he says. But he points out that the Bank of Canada is there to make “economically required” decisions that are perhaps politically unpopular.
Loosening up since the early 2000’s:
He’s not letting the financial sector off the hook.
Yacucha describes the rise of globalization and manipulation of markets. “There has been a lot of financial loosening since the early 2000’s which has allowed certain groups to benefit more than others. With that we’ve seen a lot of the investment class in real estate, the commoditizaton of real estate.”
Housing got commoditized:
“I think the current BC Government has pushed back to a degree — real estate is for shelter, for living, for homes,” says Yacucha. “It shouldn’t necessarily be a commodity.”
The housing crisis will be a major issue in the upcoming BC provincial election. Housing Minister Ravi Kahlon spent pretty much all of his time after becoming BC’s first Housing minister in December 2022 in wrestling with the housing challenge.
Arguably, the STR restrictions are possibly the one single game-changer in a generation — knocking off commoditization of housing while at the same time freeing up living spaces for families overnight. In October 2023 Kahlon said that as many as 16,000 previous STR units would come onto the market at May 1, 2024.
Also guiding Langford:
Yacucha is also a municipal councillor with the City of Langford, a municipality with a significant level of real estate investment that relies on renters to pay the property owner’s bills.
In his municipal governance role, he reiterates that real estate should not be an investment industry but rather a way to build homes for people.
“Langford has done a lot in building homes and communities for families to come live in. And yes some people have treated it as a commodity. We’re going to continue to bring in the social infrastructure, the physical infrastructure. We’re not just providing homes but also transportation, rec centres, firefighters and police,” he said, itemizing a few things that have pushed up taxes in Langford in 2023 and 2024.
He wraps up that thought by pointing out that the economy is more holistic than mechanistic. Things are going to be complex and synergistic. What is the output we seek for an economy, and what does the economy require in order to be maintained and prosperous? “For so long, economists have failed to look at that and we starting to now. It is the big move that we’re facing,” said Yacucha, adding that it’s a framework he keeps in mind in his municipal leadership role.
Provincial election:
Yacucha feels that the current provincial government has been taking a holistic economic approach to challenges. If that view is shared by voters then we might be seeing a return of a BC NDP majority government. He notes how education and public safety have fit into economic challenges.
As Langford is growing he has been vocal about the need for more provincial and federal funding support for local infrastructure. He notes that the current government has been investing in child care, schools and transportation as pieces surrounding the housing challenges. “They see the bigger picture and that’s a very powerful thing,” says Yacucha.
The BC provincial election is on October 19, 2024. Campaigns are already ramping up across the province and here in the west shore where there are now three ridings (up from two): Esquimalt-Colwood, Juan de Fuca-Malahat, and Langford-Highlands.
===== RELATED:
- Bank of Canada announces 8 interest rate dates for 2025 (August 6, 2024)
- Economy still hard on Canadians & housing sector (May 29, 2024)
- New short-term rental rules start May 1, 2024 (April 18, 2024)
- Housing supply boost with off-the-shelf multiplex designs (November 16, 2023)
- Clamping down on short-term rentals to free up housing stock (October 16, 2023)
- GIS clawback still on NDP radar, want one-time emergency payment for impacted seniors (January 21, 2022)
- Easing the frustrations of pandemic times (January 21, 2022)
- Possible win for seniors who lost GIS for taking CERB (December 14, 2021)
- BC Finance: continued adaptation to pandemic economic conditions (September 13, 2021)
- CERB wrapping up, shifting to updated EI for employees & gig/contract workers (July 31, 2020)
- CERB extension for 8 more weeks through summer 2020, says Trudeau (June 16, 2020)
- CERB gets extended thanks to NDP pressure in minority scenario (June 15, 2020)
==== ABOUT THE WRITER:
Mary P Brooke has been writing socioeconomic and political analysis about the west shore region since 2008 and BC more broadly since 2020 after covering the COVID pandemic daily during 2020-2022. She now reports alongside the BC Legislative Press Gallery.
Ms Brooke is the founder, editor and publisher of Island Social Trends, and before that three news publication that are now permanently archived at the Sooke Region Museum: MapleLine Magazine (2008-2010), Sooke Voice News (2011-2013), and West Shore Voice News (2014-2020).
Island Social Trends publishes daily at IslandSocialTrends.ca and biweekly in print/PDF.