As a close watcher of Canadian politics, here's the best summary I can offer for those not familiar: Overal Picture Canada has seen gdp-per-capita decline for nearly every quarter over the past 3 years. Large stimulus spending during the pandemic fueled the housing crisis and added massive inflation. Stimulating the economy through similarly massive increases in Non-Permanent Residents has kept GDP afloat, but come a…
> stimulus spending during the pandemic fueled the housing crisis not very informed on canadian politics/economy so apologies if it is an obvious question, but what is the connection of stimulus spending and the housing crisis?
* This sort of double-counts the same phenomenon, but stimulus is largely implemented via interest rate policy. When interest rates fall, people are more willing to pay higher prices for the big-ticket items that will be financed for many years (since the sticker price is offset by lower amortization costs; what people really care about is what their monthly bill will be after all the math is done).
* The pandemic itself directly motivated some demand for housing in smaller centers, as wealthy people got the idea that they could reduce their COVID risk by living somewhere less densely populated. This was also seen in the US e.g. https://www.nytimes.com/2021/04/15/style/rich-people-fled-ne... . Even if they put up their city residences for sale at the same time, they'd have to find buyers. (Housing, as an asset, is not particularly liquid or fungible. While economists strongly agree that rent controls don't work and the way to solve the problem is to build more housing, it also needs to be housing in places where it actually helps. Which is realistically going to require major zoning reform - the simple existence of millions of square kilometers of undeveloped land isn't really relevant.)