After recent media reports suggesting that the Canada Mortgage and Housing Corporation (CMHC) has been developing a possible “home equity tax” caused panic and fear amongst many Canadian households, the Trudeau government quickly refuted these claims and rejected the idea altogether. CMHC president Evan Siddall has since insisted that such a tax isn’t part of CHMC’s agenda. Considering that the politics behind a tax on home equity would be self-evidently negative, it is not hard to understand why the government was so quick to deny these claims.
For many Canadians, housing is the biggest source of wealth. More than six in 10 families report their home as an asset. A home equity tax would thus amount to a broad-based wealth tax on millions of Canadian families. This sort of tax would be particularly devastating for the Canadian middle class who have been depending on their nest egg to secure their financial futures.
Yet, it is not hard to see why people were quick to believe CMHC’s leadership would support a new tax on homeownership. Over the years, Evan Siddall has spearheaded a relentless campaign against homeownership, calling the so-called “glorification of homeownership”, “regressive” “elitist” and ultimately “counterproductive economically and socially.” Despite the fact that homeownership is positively linked to plenty of economic, social and civic behaviors that are crucial a healthy society it has long been the target of Siddall’s unconventional negative rhetoric. Unfortunately, now it is beginning to look like Siddall’s opposition to homeownership is more common amongst public policy makers than we may have thought.
There seems to be a growing view that government policy should cease supporting homeownership altogether. This highlights the problems caused by the governments narrow economic thinking about what constitutes a good life and a good society. While there’s plenty room for debate about how public policy should best support homeownership, the question should not be whether public policy should cease to support homeownership altogether.
A big part of the disconnect here lies in conflicting views about the proper ends of government policy. The government’s way of thinking seems to suggest that the purpose of government intervention is to maximize efficiency. But good public policy arguably requires a deeper conception of what it takes to promote all around human flourishing. Those who oppose pro-homeownership policies see homeownership as an obstacle to economic efficiency as they believe it involves a poor allocation of capital and creates an obstacle to labour mobility. They see renting as superior because it’s “better to own shares than to own homes” and easier to pick up and move in response to evolving labour market conditions.
The inherent flaw in this economic way of thinking, is that it defines people solely as economic actors whose capital and labour ought to be maximized. It fails to treat them as parents, spouses, siblings, workers, neighbours, coaches or community members. Our political leaders need a deeper perspective about what constitutes a good life for individuals and a good society for us all. While economic thinking is necessary to help promote healthy communities, it is an insufficient way to think about what motivates people and families to sustain health in those communities.