At some point a duck needs to be called a duck: Any reliable source will show that Canada’s real estate market has been inflating proportionately higher than all other economic sectors for the past 20 years or so. If we look at the real cause and real effects of this, we’ll see very easily that no one, including the middle class, have to be left behind, problems such as homelessness can be greatly alleviated, and all that has to change is for government to do a better job of managing the economy.

Simply reading the definition of the term ‘hyperinflation’ on an economics site plainly shows that the real estate sector in Canada qualifies. Canada, like most western democracies, has been increasing its money supply while lowering interest rates since the 2008 financial crisis and even since the dot com boom and bust in 2000.

As is cultural practice and tradition, the middle class has been moving more and more of what is available to them of this new and cheaper money into real estate. This increase in money availability of course increases demand while flow of course raises prices.

The easy money and low interest rates also attract international investors into the sector, who in turn drive up prices even higher and faster. Of note is that a few recent policies, in Vancouver and Toronto for example, have finally begun to target international real estate speculators in Canada.

Where does this new money come from? The Bank of Canada, of course. Like all western democracies, Canadian currency is managed by a central bank with the goals of maintaining a healthy economy and keeping inflation low but still positive.

To do this in the past two decades, the Bank of Canada has had to increase the overall money supply and lower interest rates to such a degree that as a side effect it has substantially contributed to pushing Canada’s real estate sector into hyperinflation mode. Now, the Bank of Canada of course does not choose to or have the goal of facilitating hyperinflation in any sector, and of course not one as important as Canada’s real estate market.

Let’s ask why our central bank, which always acts in the public interest generally, has been increasing the money supply and keeping interest rates historically absurdly low. The reason is the overall poor management of the economy. Who manages the economy? Government, of course. The central bank is only a reactionary institution to overall economic trends and not a policy setter itself, all proactive policy is set by government.

Successive federal, provincial and municipal governments have been serving the needs of investors above and beyond those of the general population. When this happens, investors are put at the helm of the whole economy and any problem with the investor class needs to be solved above all problems.

If the stock market crashes or there is a dot com boom and bust or an international financial crisis, investors are propped up by subsidies and policies by governments with almost no questions asked. Central banks don’t have much choice but to follow suit and prop up investors as it has become their sole means of saving the overall economy.

All three levels of government have been serving investors above all, from federal corporate welfare and industry-specific subsidies at the provincial level, to permits, zoning changes and subsidizing gentrification at the municipal level. This policy direction from governments has itself also contributed to real estate hyperinflation through increasing the availability of investment capital for real estate purchases, increasing pressure for apartments to be converted into condos and for land to be sold to real estate developers.

The middle class acts as a whole with one of their primary or main goals remaining home ownership. They divert more and more of their disposable income into real estate, furthering the upward spiral of real estate prices and rendering much of them ‘house-poor’ and otherwise lowering their consumer purchasing power until their home is finally paid off.

As government funds are diverted to investors, fewer funds proportionately are available for public services. Health care and schools suffer, just for example. People become less healthy and educated negligibly on a yearly basis, but considerably over time.

Advocates and activists for societal causes such as homelessness have fewer resources while the number of homeless increases. The reduced availability of affordable apartments due to gentrification and condoization further causes an increase in homelessness. Hyperinflation in the housing market forces some middle class members to entirely abandon home ownership and choose rental apartments instead, further crowding out those in the rental market and increasing homelessness further.

While it is true that profit and investment gains are ultimately good for everyone, this goodness is allotted extremely unequally, with top investors benefitting greatly and lower income earners benefitting almost negligibly. The middle class can be easily persuaded to feel good about their investment gains while reaping a proportionately low percentage of these gains and having to divert increasingly larger amounts of their budgets toward housing. Government overly pandering to investors therefore causes the economy to be incapable of providing conditions favourable to universally affordable housing.

The simple subsidizing of social housing is often cited as a key solution by activists in response to this situation. This is a band-aid only, at best, as causal problems are not solved. The best long-term solution would be a large-scale shift in political momentum toward long-term investment in everyone’s health, education and well-being, which will create a society of more innovation, able and productive people.

Increasing funding of public services while simultaneously reducing funding of the investor class re-allocates resources from inflationary and already well-off recipients, to include disadvantaged and potentially seminal ones. Creating broad improvements in prosperity and economic conditions rather than simply inflating investment values requires less central bank corrective intervention, which in turn reduces inflationary pressures on the real-estate sector.

With less real estate inflation, the middle class would once again gradually increase its purchasing power, which in itself is a positive driver of economic conditions, and be able to leave more room in the rental real estate market.

Housing-as-a-human-right type policies can come and go as governments do, election-to-election. Correction of general economic conditions generally outlast any single government mandate and provide the economic conditions necessary for universal housing affordability and solve real estate hyperinflation entirely. Only then will central bank policies be able to be normalized and the housing market will correct.

The investor class must realize that investing in the health and education of everyone will provide them with better employees. Governments must realize that directing public funds to the public, rather than investing in investments, reduces drains on public funds and provides for better economic conditions long-term. The middle class must realize that their own governments are the cause of the real estate hyperinflation they suffer through.

Featured Image: Recreation of the UP balloon house from the National Geographic Channel

While this year’s line-up at Osheaga is heavy on the electronic and hip hop acts, there are still plenty of bands for those of you who want to rock out. And personally, while it’s nice to have the mix, sometimes you just want to rock out.

Here my picks for the best indie rock performers playing Osheaga this year:

Real Estate

Indie pop sensations Real Estate have found themselves at a crossroads with their last LP, with longtime lead guitarist Matt Mondanile leaving the band, but still have the chops to take it all the way.

In Mind (2017), their fourth studio album and one recorded in the absence of Mondanile, shows the band is still very viable. With this album taking them in new directions, the future looks for Real Estate.

Sunday, August 4, 4:30pm @ National Bank Stage

Mac Demarco

I was supposed to avoid writing about the headliners, and let’s face it Mac Demarco is a headliner even if he isn’t the top bill. He has played shows in front of tens of thousands, spawned a resurgence in semi-psychedelic lo-fi sound (and many have tired to copy his trademark sound), and he smokes the king of all cigarettes, Viceroy.

His lo-fi sound started in Mile End but has now reached the four quadrants of the world. And boy has it been one long strange trip.

He’s known for being an oddball and goofing around on stage, so expect to see some serious antics! But his unique sound gives him the tight niche of laid back slacker rock that is just very compelling and very good.

Sunday, August 5, 5:15pm @ Bell Alt TV River Stage

Teke:: Teke

The eclectic coming together of musicians from well-known Montreal bands (Gypsy Kumbia Orchestra, Boogat, Pawa) created Japanese-influenced post-punk psychorockers Teke:: Teke.

If you yen for some traditional Japaneese  surf rock infusion then this might be the band for you.

Friday, August 2 3:45 @ Perrier Tree Stage

Braids

Montreal Art rock band Braids will take the stage a year after winning the Juno for Best Alternative Rock group.

They got me with their 80s electronic beats over Raphaelle Standell-Preston’s vocals, which can be pretty haunting at times especially when infused with some pretty interesting vocal effects.

Sunday, August 4th, 1pm @ Honda Valley Stage

Kurt Vile and the Violators

I’ve been a fan of Kurt Vile ever since the first time I saw him play at Casa del Popolo. He was alone at the time playing his guitar with crazy pedal effects and his sweet nasal voice. Sufficed to say, I was pretty impressed.

His lo-fi sound and voice fills the psychedelia of his songs with wry, sardonic lyrics. His last album Lotta Sea Lice, co-written with Courtney Barnette, was truly inspiring and now he’ll be on stage with the Violators, a band that adds overall emphasis to his unique style.

Friday August 2, 8:15pm @ Honda Valley Stage

We Are Monroe

If you really need to rock out at Osheaga this year then check out Montreal’s own We Are Monroe. They are part classic rock with a new twist Their singer brings a great voice in the singing style of The Black Keys complimented by some terrific backup guitar.

Friday August 2, 2:20pm @ Perrier Tree Stage

Reignwolf

Part metal, part rock, this band knows how to riff out an amazingly catchy song. They flew under the radar for a long time until Rolling Stone magazine called them one of the top 10 artists you need to know.

Now, with their new album out Hear Me Out (2019), they are set to go on tour with The Who later this year. Catch them while you can.

Saturday, August 3, 8:40pm @ Perier Stage

Osheaga runs Friday August 2nd to Sunday August 4th at Parc Jean-Drapeau. Tickets available through Osheaga.com

Featured Image Courtesy of Laura Fedele/WFUV