[♪♪]>>Let’s start with the Trump-Canada story, as the U.S. President basically calls us a disgrace today. It is all over trade issues ranging from dairy products to lumber and timber. Some tweak. So, let’s talk. Chantal is here in Toronto.Maclean’spolitical editor Paul Wells is in Ottawa. And joining us from Vancouver, Angus Reid Institute’s executive director, Shachi Kurl. Let’s start by actually reminding ourselves of what Donald Trump actually said today. Here is a short clip.>>Canada, what they have done to our dairy farm workers is a disgrace. It’s a disgrace. I spent time with some of the farmers in Wisconsin, and as you know, rules, regulations, different things have changed. And our farmers in Wisconsin and in New York State are being put out of business, our dairy farmers. And that also includes what’s happening along our northern border states with Canada having to do with lumber and timber.>>And he also talked a little bit about energy. So what does all this say from the guy who was saying just a little while ago, any changes are just minor tweaks? Now we are into much deeper rhetoric. Chantal?>>That what Donald trump says when he is next to you is probably valid until you step out of the room, and his priorities electorally or politically move on, that whoever is going to be negotiating these issues with Canada is going to be under pressure from the White House to wrestle major concessions, and that Justin Trudeau is going to be under pressure from his own voters to respond in kind at some point.>>Paul, you saw Justin Trudeau today as he was talking about trade issues and the relationship with the States. But it was before that exchange that Donald Trump had.>>Yeah, and Trudeau has — this debate has been– or this discord has been a few days coming. And the response of the Trudeau government has been to have the ambassador David McNaughton send angry letters to the mayors of two border states, New York and another one. That’s traditional. That’s the way a rational government interacts with a rational set of governments, including state governments in normal times. But that is not what we have here. It’s clear that Donald Trump listens to the last person he talked to. Somehow, he got out of his bubble and talked to some mid-western dairy farmers. And now, it is starting to look like Justin Trudeau is going to have to get on a plane and become the last person that Donald Trump spoke to again. He’s going to have to go to the White House. And I would not be at all surprised if that happens within the next three or four weeks. To me, the most telling part in the clip you played is where the President says, “Rules, regulations, whatever have changed.” That’s the level of attention to detail this guy has. He is not interested in arguments about the fact that American dairy farmers sell into our market for hundreds of millions of dollars more than we sell into theirs. That’s not interesting to him. What’s interesting to him is that mid-western dairy farmers are complaining, and so Justin Trudeau, I think, is probably going to have to make the case in person again.>>You know, Shachi, you look at data, I don’t know whether you’re ever asked these kind of questions, but is there — do you think there is a sense among Canadians that they want Canada to up its, you know, verbal exchange with the U.S. if that — if hard ball is the way that Donald Trump wants to play it?>>Well, there is sort of an existential angst in this. Because on one hand, yes, they do want to see Justin Trudeau throwing some flames of his own and upping the ante and taking a hard line to meet Donald Trump’s hard line. But at the same time, they express a lot of concern and not a lot of confidence in Canada’s ability and the Prime Minister’s ability to really be effective in doing that or to win that spitting match. And it has less to do in some cases with the abilities of the Prime Minister, or of Justin Trudeau particularly, and more just to the fact that Donald Trump is a loose cannon. We know this. And so no matter what we do, it may be very hard to win.>>Do we take from today that the game on this issue has changed, though, or? Chantal?>>What we have to take from this week is that the strategy of being off the radar in the negative sense, not being mentioned, not being on the hit list is so far failing; which is why, yes, I agree with Paul that Justin Trudeau may head to the White House again. And then when he leaves, what happens three days, three weeks later when the President speaks to someone else, is the big question. We are not dealing here with a professional president who is dealing with the issue in a professional way.>>Peter: All right. I want to move to housing. Because it’s been at top of mind to a lot of people this week. Governments, homeowners, and those who wish they could buy a home. Government’s involving themselves, as we have seen, this week in Ontario, three levels. We’ve seen it before in B.C. Shachi, in general, how big an issue is housing when it comes to politics?>>It’s huge. I mean, in metro Vancouver, it is the number one issue. Top of mind. Particularly on the backs of and driven by the anxieties and discontent of young professional people in this region who can’t- forget access the real estate market, they can’t even find a place to rent. And they’re not underemployed. In the GTA, people are overwhelmingly inclined to say that housing prices and at the rate at which they’re increasing is hurting the region, not benefiting it. So what this is doing is it’s creating winners and losers. People who are already in the market who have something at stake, they don’t want to see their equity chipped away at by government interfering or trying to cool the market. And you’ve got those, I don’t like to call them losers, but people who are not in that winning column and are trying to get there and they just can’t right now.>>Peter: What, you know, you’ve kind of touched on a couple areas. But Paul, give us a sense of what risks there are for governments when they start playing in the housing issue?>>First of all, there is a risk in not addressing these issues. Because suddenly they can go from not being salient, from not being something that people make their voting decisions based on, to suddenly mattering a lot. Remember, in the 2006 provincial election in New Brunswick, Bernard Lord was the premier there. He got laid low over energy prices, which had not been particularly a political issue until a few months before he lost power. That sure got noticed by a lot of people in Ottawa, at the time. Similarly, the opposition party, the main opposition party in Ontario led by Patrick Brown, the Conservatives, have been making a lot of hay over housing prices lately and would have capitalized on it if the Wynne government in Ontario had done nothing about it. But the problem is, if you jump in and you implement some measures that seek to cool the housing market, then you own the issue. And if you’re not successful, or if there are unintended consequences, as there almost always are when the government jumps into the market in a big way, then you own those consequences, too.>>Peter: Chantal?>>Two points– the first, it is very difficult for the federal government to act in a meaningful way in the sense that the federal governments do things for the entire country, and these are situations that are localized in B.C. and now Ontario. The problem for the federal government, whatever Ontario does might have a spillover effect on real estate markets in Quebec, for instance. And so the problem starts getting bigger. Second point, yes, politically, provincial governments, especially those that are facing elections, have to act. I am old enough to have covered an election in ’75 where Bill Davis lost his majority over rent control. So when the rent control issue starts to spring up in Ontario and in the Ontario electorate, it can take down parties and governments in its wake.>>I would just say that there is nothing more visceral for people. And I think Paul and Chantal have covered that. But you know, when you’re talking about where people sleep, where they eat, where they raise their kids and entertain their friends, this is so vital. And so yes, the policy criticism may be around don’t interfere, and in fact, it may not be affective. You know, a lot of people believe that there is not a lot that government can really do to change market forces. But, the appearance of being tone deaf and disengaged on this issue could be political suicide. And so, you know, at some point you reach a tipping point where ignoring the issue or saying there is no story here, there is not much we can do, may be the right policy approach, but it’s certainly not the political approach that politicians want to be taking.>>All right, well, let me take part of that answer. What can– Paul, you start us– what can governments do to have an impact on the market?>>Well, I think there is a relatively new element to the very hot housing markets in Ontario and in B.C., which is non-resident speculators. People from offshore who are buying and flipping land. And I do think it’s appropriate for governments to take specific aim at that, which first the Christie Clark government in B.C. did, and now Kathleen Wynne’s government has done in Ontario. A 15 per cent tax on non-resident investment. But that’s dangerous because in both provinces, in both Vancouver and in Toronto, the local economy depends a lot on people moving in from outside. Both at low income levels and at high income levels. And you don’t want to discourage that. So it’s really hard to differentiate between someone who lives in Moscow or Beijing and is flipping for fun and profit, versus someone who actually wants to come here and contribute to the economy. You begin to see the challenges in fine-tuning any policy approach.>>And remember, this isn’t just an issue for people who actually have houses; it is an issue for people with kids who are looking for houses. So it’s a societal issue, and that’s why it’s got legs. Now, you will notice that while the federal government is not doing a lot, and I don’t think that they could or should, they are starting to keep track — or closer track of what is happening. As of this year, you have to report the sale of your home. It doesn’t mean you’re going to be paying income tax on it, but you didn’t have to, in the past, report on your income tax that you’d sold a home over the previous year. So you can see that they are trying to get at least a handle as to who is buying what and doing what.>>Shachi, I’ll give you the last word here. Some people think we in Canada are naive. That we live in a world where cities the size of Toronto and the importance of Vancouver are paying much higher prices for their homes, whether they are houses or condos, than we are. You know, and I’m sure that argument has played out somewhat in Vancouver over time. Does anyone buy that?>>You know, a lot of that has to do with how housing prices and housing costs are tied to income. So in London, in Moscow, in Beijing, income levels in New York are very much based on if you want to live in the city, employers have to be able to pay you to be able to live in the city. And there are enough corporate head offices, there is enough industry, there is enough business going on in order to support that. What we risk, particularly in metro Vancouver, but it could go the same way in the GTA, is creating resort communities, where if you can’t pay workers enough to be able to live in the city and pay the premium to be in an area where they need to get to work on time, you are going to really just create ghost towns where very few who are able to afford it can be there and everyone else is dealing with a very long, painful commute. And it becomes unsustainable over time. And employers are already telling us that.>>Peter: All right, we’re going to leave it at that. Good discussion. We thank you all. Shachi, Good to have you back with us. And Paul, you too. Chantal, you’re in Toronto tonight.