Here’s a sign of the times from Vancouver:
Nearly six years after Vancouver became the largest city in Canada to commit to a living wage, councillors voted to end the initiative.
In a closed-door meeting in January, council approved the action and directed staff to implement what it calls a “fair wage,” by calculating the average of five years of living wages.
The city says in a statement that the living wage rate for 2023 would have gone up more than 17 per cent to just above $24 an hour, immediately influencing its pay structure.
…
The living wage is the hourly amount two adults working full time must earn to support the basic needs of a family of four, but it does not cover debt repayment or savings for retirement.The hourly living wage for Metro Vancouver is set at $24.08, but Anastasia French, with Living Wage for Families BC, says Vancouver’s change will cut earnings for its workers and contractors to at least $20.90 an hour.
We wouldn’t want to hike the property tax now, would we? But it could also be a good-faith effort to incorporate the subsidizing effect of rent control into the Living Wage calculation. The discussion of the calculation is interesting:
The BC living wage calculation has relied on the Canada Mortgage and Housing Corporation (CMHC) annual rental market survey for our estimate of rent, using its data for median monthly rent for units with three or more bedrooms in the primary rental market.
This number has always represented a very modest rent budget in Metro Vancouver and understated the financial pressures faced by families that have to move because it aggregates the rents paid by long-term tenants who have benefitted from BC’s rent control measures and those who have recently moved and typically pay higher rents. However, as vacancy rates have declined and housing prices spiked in Metro Vancouver and many other BC communities over the last 14 years, the difference in rents that new and long-term tenants are paying has sharply widened. Further complicating matters, the CMHC data only include purpose-built rental units, which are referred to as the primary rental market. The secondary rental market (i.e., renting privately owned houses and condos or basement and other secondary suites) has grown significantly since the living wage methodology was first developed but is not captured in the median rent figure.
As a result, the CMHC data on primary rental market median rents became an increasingly less reliable measure of the rents families are paying, and it now no longer reflects a realistic rent budget for a family with two young children (and likely hasn’t for the last few years). This is true both in Metro Vancouver and elsewhere in BC, as we heard loud and clear from our community calculation partners during the 2021 round of living wage calculations. To develop a more realistic estimate of the rent cost faced by families, we used 2016 census data to estimate the “moving penalty” faced by households who had to find housing within the previous year. We use the 2016 census data to estimate this moving penalty because it is the latest census data available at the time of writing.
The census data confirm that families with children move frequently. Within the previous year, 25 per cent of BC couple families with children had moved.6
These families paid considerably higher median rents—12 per cent higher in 2016 compared to the overall median (i.e., including longer-term and new tenancies). The data also show that the moving penalty is higher for households living in three-bedroom housing than for those living in one- or two-bedroom units.
We apply this moving penalty to the CMHC median rental figures for 2022 to get a more reliable estimate of the rent cost pressures faced by families in BC.
For Metro Vancouver, the moving penalty increases the living wage family’s rent costs from $1,952 (the CMHC median rent figure) to $2,186 monthly.
So if I’m reading that right, the Living Wage people are assuming that their model family moves each and every year and never gets any benefit at all from rent control. That doesn’t sound right. The basic idea sounds good, but it seems to me that their implementation assumption is a little extreme.
I have long thought that rent control has the unanticipated result of decreasing labour mobility, so it’s nice to see the concept get a nod here. I don’t advocate eliminating rent control; but I think the annual allowable increase should be inflation plus an increment (say, 1%?), rather than inflation with a cap or even a freeze, depending on which way the wind is blowing.
On a positive note, TC Energy’s pumped storage project took a step forward:
TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) announced today that Meaford Municipal Council passed a resolution of support for the Company’s proposed Ontario Pumped Storage Project subject to conditions outlined below.
This development project is a transformative 1,000-megawatt clean energy storage facility, proposed for construction on the Department of National Defence’s 4th Canadian Division Training Centre in Meaford, Ontario. As one of Canada’s largest energy storage proposals, the project would provide safe, reliable power, support made-in-Ontario economic growth, and aid in the transition to emission-free power generation.
…
The Meaford Council’s support is contingent on TC Energy fulfilling the following conditions: 1) Reasonable cost recovery by TC Energy for all costs incurred by the Municipality; 2) Development of a regulatory plan to address the Municipality’s role throughout the project’s lifecycle; 3) Successful negotiation of a Community Benefits Agreement with the Municipality; and 4) Completion of all applicable federal and provincial environmental assessment processes and obtain all associated permits and approvals.
The IMF has published an article by Claudio Borio titled MONETARY POLICY UNDER TEST:
In the latest Bank for International Settlements Annual Economic Report, we offer a different perspective on the inflation process, one that yields a more sobering message. It sees inflation as a two-regime process—a low- and a high-inflation regime —with self-reinforcing transitions from low to high.
Inflation behaves very differently in the two regimes.
When inflation has settled at a low level, what we measure as increases in the overall price level mostly reflect price changes in specific sectors that are only loosely correlated with one another. Those price changes tend to leave but a temporary imprint on the inflation rate itself. Equally important, wages and prices, which are at the core of the inflation process, are only loosely linked to each other. As a result, inflation has certain self-stabilizing properties.
By contrast, a high-inflation regime has no such properties. The importance of the common component of price changes is much greater, wages and prices are more tightly linked, and inflation is especially sensitive to changes in salient prices, such as those of food and energy, as well as to fluctuations in the exchange rate.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,556.4 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 4,903.1 |
| Floater | 8.82 % | 9.02 % | 51,375 | 10.26 | 2 | 0.0000 % | 2,825.7 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1713 % | 3,357.4 |
| SplitShare | 5.01 % | 6.96 % | 50,509 | 2.75 | 7 | 0.1713 % | 4,009.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1713 % | 3,128.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.6173 % | 2,739.5 |
| Perpetual-Discount | 6.23 % | 6.36 % | 65,140 | 13.36 | 35 | -0.6173 % | 2,987.3 |
| FixedReset Disc | 5.42 % | 7.79 % | 86,382 | 11.74 | 61 | -0.0669 % | 2,268.7 |
| Insurance Straight | 6.14 % | 6.21 % | 87,452 | 13.67 | 20 | -0.1314 % | 2,925.7 |
| FloatingReset | 9.86 % | 10.11 % | 32,934 | 9.54 | 2 | 0.3772 % | 2,591.6 |
| FixedReset Prem | 6.53 % | 6.42 % | 219,589 | 3.98 | 2 | -0.1371 % | 2,366.9 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0669 % | 2,319.1 |
| FixedReset Ins Non | 5.29 % | 7.25 % | 64,682 | 12.16 | 13 | -0.1026 % | 2,453.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| POW.PR.A | Perpetual-Discount | -4.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 6.63 % |
| BIP.PR.A | FixedReset Disc | -2.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 9.45 % |
| CU.PR.E | Perpetual-Discount | -2.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 6.33 % |
| FTS.PR.G | FixedReset Disc | -2.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 18.15 Evaluated at bid price : 18.15 Bid-YTW : 7.95 % |
| CU.PR.D | Perpetual-Discount | -2.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 6.33 % |
| CU.PR.F | Perpetual-Discount | -1.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.69 Evaluated at bid price : 17.69 Bid-YTW : 6.41 % |
| TD.PF.D | FixedReset Disc | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 18.96 Evaluated at bid price : 18.96 Bid-YTW : 7.83 % |
| RY.PR.M | FixedReset Disc | -1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 18.00 Evaluated at bid price : 18.00 Bid-YTW : 7.87 % |
| TRP.PR.C | FixedReset Disc | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 11.85 Evaluated at bid price : 11.85 Bid-YTW : 9.44 % |
| GWO.PR.G | Insurance Straight | -1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 6.20 % |
| IFC.PR.G | FixedReset Ins Non | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.52 Evaluated at bid price : 21.85 Bid-YTW : 7.16 % |
| BN.PF.C | Perpetual-Discount | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 19.01 Evaluated at bid price : 19.01 Bid-YTW : 6.51 % |
| ELF.PR.H | Perpetual-Discount | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.63 Evaluated at bid price : 21.88 Bid-YTW : 6.38 % |
| TD.PF.J | FixedReset Disc | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 22.46 Evaluated at bid price : 23.35 Bid-YTW : 6.82 % |
| BIP.PR.E | FixedReset Disc | 1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 22.30 Evaluated at bid price : 23.05 Bid-YTW : 7.15 % |
| BMO.PR.W | FixedReset Disc | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.66 Evaluated at bid price : 17.66 Bid-YTW : 8.00 % |
| BIP.PR.F | FixedReset Disc | 1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.15 Evaluated at bid price : 21.15 Bid-YTW : 7.67 % |
| SLF.PR.C | Insurance Straight | 1.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 18.95 Evaluated at bid price : 18.95 Bid-YTW : 5.88 % |
| MIC.PR.A | Perpetual-Discount | 2.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 20.68 Evaluated at bid price : 20.68 Bid-YTW : 6.67 % |
| PVS.PR.I | SplitShare | 3.92 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-10-31 Maturity Price : 25.00 Evaluated at bid price : 23.60 Bid-YTW : 7.11 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.B | FixedReset Disc | 52,963 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.83 Evaluated at bid price : 17.83 Bid-YTW : 8.06 % |
| RY.PR.Z | FixedReset Disc | 47,799 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.91 Evaluated at bid price : 17.91 Bid-YTW : 7.97 % |
| BMO.PR.E | FixedReset Disc | 43,700 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 21.51 Evaluated at bid price : 21.85 Bid-YTW : 7.19 % |
| NA.PR.C | FixedReset Prem | 43,150 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-11-15 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 6.42 % |
| BN.PF.I | FixedReset Disc | 41,399 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 22.18 Evaluated at bid price : 22.74 Bid-YTW : 7.70 % |
| MFC.PR.M | FixedReset Ins Non | 36,200 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-03-03 Maturity Price : 17.64 Evaluated at bid price : 17.64 Bid-YTW : 8.12 % |
| There were 20 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.Z | Perpetual-Discount | Quote: 20.52 – 21.80 Spot Rate : 1.2800 Average : 0.7265 YTW SCENARIO |
| POW.PR.A | Perpetual-Discount | Quote: 21.50 – 22.63 Spot Rate : 1.1300 Average : 0.7928 YTW SCENARIO |
| CU.PR.J | Perpetual-Discount | Quote: 19.16 – 23.50 Spot Rate : 4.3400 Average : 4.1005 YTW SCENARIO |
| CU.PR.F | Perpetual-Discount | Quote: 17.69 – 19.35 Spot Rate : 1.6600 Average : 1.4434 YTW SCENARIO |
| FTS.PR.G | FixedReset Disc | Quote: 18.15 – 18.77 Spot Rate : 0.6200 Average : 0.4115 YTW SCENARIO |
| CU.PR.D | Perpetual-Discount | Quote: 19.50 – 20.10 Spot Rate : 0.6000 Average : 0.4156 YTW SCENARIO |
We wouldn’t want to hike the property tax now, would we?
actually they are raising it a whopping 10.7%!
I’m only partially ok with rent control, but Inflatioon+1 is better than current implementation. A better rentcontrol would be “HomeInflation+1” which would more accurately reflect the up/down cost of supplying housing.
actually they are raising it a whopping 10.7%!
I stand corrected. But the increase would have been higher if they’d followed the Living Wage guideline!
A better rentcontrol would be “HomeInflation+1” which would more accurately reflect the up/down cost of supplying housing.
Yes, it would do that, but it would also mean exposing renters to the up/down cost of supplying housing and the whole objective of rent control is to avoid that! In addition, it allows landlords of extant buildings to make windfall profits which, despite very good economic arguments in their favour, are never ever going to be popular with the general public. Setting it at general inflation +1% would shelter renters from disproportionate increases in a single year, while allowing a gradual return to market rates.
The “moving penalty” penalty calculated by the Living Wage people is my main issue. It illustrates that rent control has gone beyond the objective of increasing certainty in renters’ budgetting and become more like a permanent subsidy to limpets who find a good place and never move. I object to that on grounds of the reduction in labour mobility it causes.
Bear in mind that we not only have rent control in BC but that in each of the past two years that NDP has stepped in and capped rent increases far below the rate of inflation that the rates were supposed to be tied to.
In 2021, Ontario’s Progressive Conservatives froze rent for 2022. This year Ontario inflation was 5.3%, but the legislation capped the increase at 2.5%.
It’s not really a hard-line partisan issue any more.