The current state of the economy in Canada ought to be a straightforward empirical matter. Instead, it’s an intensely political one, with current governments (and most specifically the current federal government) seeking to play up the good news while promising more help for those who need it. Nevertheless, there are some broadly accurate things we can say about the economy right now that stick to pretty well-established data.
First of all, the bad stuff isn’t just made up for the purpose of criticizing (insert your favourite incumbent politician here). Unemployment has been trending upwards for much of the past two years; more recently, it’s been spiking among young workers, according to recent StatsCan data. That said, the current unemployment rate of 6.6 per cent is still lower than it’s been for much of my adult life, and it’s difficult to argue that Canada is in an actual recession.
That’s cold comfort to people who are struggling right now, and I don’t bring up the longer-term perspective to dismiss real hardship. Rather, the point is that, by most measures, Ontario in 2024 is prosperous enough that — to pick a very specific example — people shouldn’t be relying on food banks more than ever before in our history. And, yet, on Tuesday morning, Feed Ontario announced that’s precisely what’s happening: last year, food banks recorded 7.6 million visits from more than 1 million people. More than two-thirds of food-bank operators are concerned they aren’t getting enough donations to meet demand.
It’s worth emphasizing the fact that, in the midst of relative plenty, food banks are being relied on more than they were during the COVID-19 emergencies and more than they were during the post-2008 recession.
So how is it that we are simultaneously living in a world of affluence and scarcity? The answer isn’t mysterious: Feed Ontario indicates that most food bank clients are renters, and the eye-watering run-up in rents in the GTA, Ontario, and the rest of Canada in recent years has siphoned away the money that people would otherwise spend on things like food.
The reliance on food banks is just the most acute example of a broader point that’s important for governments to understand: The housing crisis isn’t like a recession or inflation — a temporary interruption in the economy’s general upward trend that can generally be handled via things like central-bank interest-rate changes. At the same time, it’s also not something that can be addressed solely through the provision of social supports like OW and ODSP (though Feed Ontario argues that increases in both of those supports would help address the immediate need, and it’s hard to disagree).
Instead, a persistent generational housing shortage takes things that ought to be good news and reflects them back to us like a funhouse mirror. Because in a housing crisis the landlord or bank gets paid first, higher wages simply get siphoned away by landowners as increased rents or home prices. Increases in population — whether from immigration or natural birth — simply put new families in competition with existing homeowners. (This is how you find yourself saying, “Well, when the baby boomers start dying...”) The most basic things we want from the economy — growing families, growing incomes — are not just more difficult in a housing crisis: they actually make the crisis worse.
There are all sorts of obvious human reasons to want this state of affairs to end; reducing one of the central causes of people’s misery ought to be uncontroversial. But as that doesn’t seem to be enough to motivate our leaders, they might want to consider that there’s also a pretty basic political reason to tackle the housing crisis more seriously: governments like to announce good economic news, and good economic news helps governments get re-elected, but until we address the housing crisis — until we have a housing system that can readily accommodate both increasing wealth and increasing population — as far as voters are concerned, good economic news might as well not exist.
For now, there’s little sign that the provincial government is going to act with anything like the urgency the crisis demands. So I wouldn’t bet against the province’s food banks reporting another record year next fall.
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