Yes, Mr. Chief Statistician, the last time I saw you, you were having a CPI-adjusted breakfast over at the local diner in Manotick. It was great to see you in person then, and I hope that I will see you again in person soon. Thank you for being here today.
When Justin Trudeau took power, the typical home cost $434,500. Now it's $811,700, according to the MLS housing price index of the Canadian Real Estate Association. That's over 85% inflation in six years. Last year, home inflation hit over 25%, which the real estate association's chief economist called the “biggest gain of all time”. That followed the $400 billion of newly created cash that the government pumped into financial markets, much of it lent out in risky variable mortgages at interest rates well above inflation. These negative real rates literally pay people to borrow and bid up prices.
Housing inflation is homegrown, Mr. Chief Statistician. Bloomberg reports Canada has the second most inflated housing bubble in the world. The average family must spend two-thirds of their gross income on monthly payments for the average home in Toronto or Vancouver, which Demographia calculates are respectively the world's fifth and second most unaffordable markets. Banking rules, mortgage insurance, monetary policy, money laundering are all federal. So is housing inflation, here and now under this government. That is Justinflation.
How are you, over at Statistics Canada, including real estate costs in your CPI? Of course, you don't use real estate prices as part of the consumer price index basket. Rather, you use “shelter”, which is itself a bundle of different measures, including interest costs—which, as I mentioned earlier, are artificially suppressed—energy costs, utilities, insurance and so on. How do you capture within that “shelter” subset the extraordinary rise in year over year house prices?
Anyone can take that question.