How convoy protests could affect Canada’s housing market

It might look boring from abroad, but Royal LePage CEO Phil Soper has long maintained that Canada’s reputation for political stability is a key underpinning of our housing market, one of the country’s chief economic drivers.

That reputation has taken a hit recently, as the world watched the chaos in Ottawa, while billions of dollars in trade were held up at the borders in Windsor, Ont., and Coutts, Alta.

Soper says that what happens next will determine whether immigrants and their money continue to view Canada as an attractive alternative to other global destinations, particularly the US

“If this is over quickly, it’s a one-off incident. If the politics of division migrate their way from the US into Canada, it could impact our economic future in a significant way,” he said.

“Safety and security and tolerance are the qualities that make Canada and a handful of other countries like New Zealand stand out on the world stage,” said Soper.

In the short-to-medium term, people from other parts of the world aren’t going to change their plans to come to Canada because immigration is a long process, he said. But if the issue isn’t put to bed in weeks or months and goes into years, it could persuade an engineer in Mumbai, for example, that there is no difference between Canada and the US

Douglas Porter, chief economist at BMO Financial Group, doesn’t think the Ottawa occupation will discourage any investment or people from coming here. But he is concerned about the impact on trade at border crossings closed by protesters.

“In the future we have to do everything we can to protect our infrastructure and make sure that sort of thing doesn’t become the norm in any way, shape or form. That truly is a risk to our reputation as a good place to do business,” he said.

“There is a lot of talk going into where electric vehicle investments are going to be made. The last thing we want to do at this time is to be sending a message that Canada’s not a 100 per cent reliable place,” said Porter.

It takes a seismic event to seriously impact the economy, he said. Canadians need only as far back as last fall’s dramatic floods in BC

“You’d be hard-pressed, digging through the economic numbers to really find a major impact on the economy even though it was very significant, very costly, it affected a lot of people, it was incredibly dramatic,” he said.

“It did ding BC’s economy a little bit for a few weeks, but for the national economy, it basically didn’t move the needle.”

Soper said a more immediate impact of the recent protests could be higher real estate prices in places such as Ottawa and Windsor. Both are hot housing markets that are facing a similar shortage of listings and fierce demand that the Toronto area is experiencing this winter. This will likely increase the reluctance of some homeowners to list and have strangers walking around their house.

Then there is the cost of lost trade at the borders, stores closing in downtown Ottawa and factory workers being sent home for lack of auto parts, he said.

“It makes people poorer and, therefore, impacts their ability to buy bread, let alone houses.”


Conversations are opinions of our readers and are subject to the Code of Conduct. The Star does not endorse these opinions.

Leave a Comment