The Bridge with Peter Mansbridge - A Moore-Butts Conversation -- Is Affordability An Issue That Governments Can Even Solve?

Episode Date: January 6, 2026

There are hardly any governments in the world right now who aren't faced with an "affordability" crisis? Voters want action but what action is even possible? That's the question on our first Moore Butts Conversation of 2026. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And hello there, Peter Mainzbridge here. You're just moments away from the latest episode of the bridge. It's Tuesday. That means this Tuesday, it's the Moore-Buts conversation. The question is about affordability and whether any government can do anything about it. We'll get to that right after this. And hello there. Welcome to Tuesday.

Tuesday, our first Tuesday of the new year, and our first Moore-Buts conversation for 2026. The issue is affordability and whether or not any government can do anything about the issue that most voters in many different countries say is their number one issue. We'll get to that after a reminder of the question of the week, and it's pretty straightforward for the beginning of New Year. asking you to make a prediction for 2026. It can be about anything, Canadian or international. It can be about politics.

It can be about the environment, the economy, the military. It could even be about sports. One prediction only. Not a series of them. What's your one prediction? And why do you feel so strongly about it? So we look forward to reading. your letters on that send them to the mansbridge podcast at gmail.com keep them under 75 words

make sure you include the name your name and the location you're writing from the city the town the village that you're running from so look forward to getting all of those in by 6 p.m. Eastern time tomorrow all right So we've already had a lot of entries and look forward to many more. 6 p.m. Eastern time tomorrow. That's the deadline. All right. Let's get to the Moore Butts conversation for this week.

Tuesdays we alternate between Moore Butts and Raj and Russo. This week's kicking off the new year. James Moore, the former Conservative Cabinet Minister. and Jerry Butts, the former principal secretary to Justin Trudeau. So you ready? I'm ready. Let's get started. Here we go. More butts right here on the bridge. All right, gentlemen, I think it's safe to say that most governments, certainly most Western governments, when they look at the issues that confront them and certainly what the people,

people are saying in their countries. Affordability is either at the top of the list or it's close to the top of the list. And it has been that way for some time through a number of different governments in different countries. And it leads me to wonder whether, is the affordability crisis something that governments can even solve if they had a plan? If they had the plan to solve affordability, is there such a thing for governments to be able to put on the table. Why don't you start, Jerry? Well, I think it's really difficult, Peter, for sure. And one of the, I'll make a plug for my day job at Eurasia Group back when the current or the past inflation cycle started. We looked at what happens historically to governments if they happen to have the

misfortune of governing through a period of extraordinary inflation. And it turned out, this is geeky, but I'll explain it in a second. you were two standard deviations more likely to lose the next election if you went to the polls within 18 months of inflation's peak. In other words, it didn't matter whether you were a social Democrat in Finland or a conservative in Great Britain or whatever the heck, Yaira Bolsonaro was in Brazil. It didn't really matter what side of the ideological spectrum you were on. if you happen to govern through inflation and go to the polls before it abated, you were in very serious trouble.

And of course, I'm conflating two terms there, inflation and affordability, because I think the inflation cycle that we've just come out of in, well, basically globally, has reminded people of what a real affordability crisis looks like. Now, there are different things that accentuate whether it's more or less severe in any given country in can. Canada, we have a particular generational problem in the housing market that has made affordability that much more difficult. And of course, it hit households, homeowners, pocketbooks very directly as the Bank of Canada had to increase interest rates in order to fight that inflationary cycle. So Canadian families got hit doubly hard, or at least in two different directions, one on what is usually the most important. important element of your monthly budget, which is your mortgage payment, right? And that makes it really difficult for the government to deal with. And it's whether it's this government, the last government, some future government,

in those moments when inflation drives up prices on everything, but in particular on housing, food and energy, there's very little the government can do. Wow. That sounds depressing. James, can you make it any less? so? Donald Trump got heat just before Christmas by saying that affordability is a made-up Democrat word. And he was wrong, but he wasn't wrong. He was wrong in the sense that he had dined out on the issue of affordability when President Biden was president of the United States. He had used the word, et cetera, et cetera. But he's not wrong in the sense that it's a word

that has come to become an umbrella word for a lot of things that are very complicated. And it's it has become a mask for a whole bunch of things. It's sort of like saying, are you in favor of dealing with the issue of sport? Well, what sport? Professional, amateur, hockey, football, kids sport, like what? So affordability, well, what? The conversation in Canada on affordability,

as Jerry points out, is very different than the conversation in the United States on affordability. And affordability is the dominant issue, by the way, in American politics, leaving aside the situation in Venezuela and the usual push and poll of dramas around Donald Trump. But if you look at the underlying issues in the United States and the special elections that have happened, the election of And Dominion, in Donning, New York and other things that are happening in both Republican and Democratic politics. But in the United States, the conversation on affordability is around, you know, Marjorie Taylor Green split with the Republican Party over health care, the cost of health care.

The issues in the United States around food affordability. It's a very different conversation. In Canada, we have housing affordability issues. We have food affordability issues. When I was in government, just over a decade ago, when I was Minister of Industry, you'll remember in 2013, 2014, we had the famous wireless wars with TELUS Bell and Rogers and the big three in the telecommunications industry, because at the time it was seen that wireless rates were unaffordable and unfair. We didn't have sufficient competition. That was an affordability issue. And then here we are a decade later.

And all kinds of issues of affordability are raised, but not that. Because on that issue, the cost of wireless coverage for the vast majority of Canadians has gone way down and services have gone way up. So, you know, the issue of affordability is kind of everywhere at all time because politicians have gotten smart enough to know, including Donald Trump, have gotten smart enough to know that you can't convince the public that they're not experiencing what they're experiencing. And the public is clearly experiencing a gap between the cash that they're earning in their jobs and the cash that they're spending on a daily basis. And these two lines are not meeting up. Stuff is getting more expensive, whether it's gas, food, mortgage costs, daily costs, you know, costs for clothing, whatever, going out for a meal. Things are costing more and my paycheck isn't catching up.

We will call that the affordability crisis. And it's presenting itself differently in different parts of North America and the world. But the politics of it is real. Let me tick off a few of these different affordability issues. So let's start with housing, seeing as you both mentioned it. You know, if you kind of Google with AI sort of, you know, how do you solve the housing crisis? Usually the first line is build more, right? Sounds simple.

Obviously, it's not simple. Or somebody would have figured that out by now. What is the issue on housing if it's not simply build more? Well, an unsatisfying, an unsatisfying answer would be, depends on where you are in Canada. You know, here in British Columbia, we've been wrestling with this issue for a long time, in part because the city of Vancouver, you know, two-thirds of British Columbians are more than that, live in Lower Mainland in Vancouver. One-third live outside of the Lower Mainland.

And the Lower Mainland in Vancouver is bracketed by the coastal range of the mountains. And so we have less land. We also have the Aboriginal, the Agricultural Land Reserve in the Lower Mainland. We have all kinds of densification issues. We have traffic patterns. We have the Fraser River. We have floodplains. So we have limited physical space relatively in the lower mainland.

And also we have tons of nindianism, right? One of the lines I often use in politics, Jerry will love this line, is a developer is someone who wants to build a house in the woods. An environmentalist is someone who already has a house in the woods. And there is a lot of that in British Columbia. And there's a lot of that in the lower mainland. And so the housing issues in British Columbia is also, has also for a long time been heavily dependent and leveraged on foreign owners and speculative buyers. And so the housing crisis in British Columbia and the lower mainland is very different than what you have in Toronto and very different than what you would have in other urban centers around the country. So on that, and there is an issue.

I mean, Pierre Pahliav did have this right for sure a couple of years ago when he was talking about gatekeepers and zoning laws and the burdens that are in place with regard to building housing and places. where you need it. That is very true. And also, I think that, you know, the NDP government, British Columbia and others have gotten it right when it comes to pushing away foreign buyers. So there are some market forces that ran out of control that have been re-rationalized and prices are coming down. They are coming down in a way that will be accretive to a new generation of home buyers. So I think slowly, in a broken way, we are on the housing side getting to a better place. Well, I'm I'm going to date on the developers versus environmentalist

peace James but though that is a very funny line I find that very funny I think the the housing issue listening to James describe it it's a perfect example of how affordability becomes a problem

right James identified three or four structural factors I would accentuate the last one that we've allowed homes to become financial and speculative assets that are bought, sold, and traded like commodities. And I think that's a real problem. And it used to be, you know, I look around my neighborhood here in Ottawa, there's still a few of those famous strawberry box post-war houses that were built, God forbid, for families to live in, rather than something to be invested, traded, sold, apportioned, and traded in parts. and I think that's a big problem. But all of the other factors that James mentioned

were 30, 40 years in the making and they happened at a time when people's incomes became divorced from productivity growth in the economy at large. This is the big problem in the United States. I posted this chart from the Economic Policy Institute on my LinkedIn feed last week and watched the fireworks go

because it was like a Roar Shock test to see where everybody stood on the ideological spectrum. But there's no doubt that it used to be in the post-war period, incomes grew with productivity in the United States. And somewhere in the early to mid-70s, those two things got divorced. More of the fruits of the economy's labor was absorbed by the wealthiest people in the U.S. And people who had to work for a living got less and less. and over that entire time period, their housing prices kept going up and up and up. And now we're in a position here in Canada to move back home for a second, where we have the largest, I think, the worst ratio of household income to housing prices in the OECD.

That's an amazing thing when you think about it. And part of that is a generation of free money when interest rates were relatively low and by historical standards. Certainly, Peter, you would recall when interest rates were 12, 13, 14% in the early 80s. So people invested all of the policy signals, all the signals in the economy

were telling people to invest in their own homes. And so you have a whole generation, two, maybe even three generations of Canadians who are comfortable in their own homes and therefore comfortable with their economic status, but if you're trying to break into it now, it's hell. But those are probably, problems that you can't fix with one budget or one – there's no magic wand that anybody in Canada can wave and make housing affordable for everybody again.

But it's a slow battleship that's being turned around, right? But in my view, it is. There are market forces here that are working, and Canadians are – they're up off their back sides in the sense that they're engaged politically in a way that in the past, people were quite passive-aggressive about it. Now it's a dominant conversation. people are staring politicians in the face and saying, what are you going to do about this? And they're actually demanding really specific things and they want to know because they want to counterbalance

the pressures of their kids being able to get into the world and not be depressed about this wall of debt that they would have to absorb and actually become upwardly mobile and get out of their houses and have positive, constructive lives where they accumulate assets and build wealth and build a life for themselves, build independence and all that. But on the other hand, they have to, of course, counterpressure that with, However, my house that I bought for 850, that's now apparently worth 1.7, I don't want that to crater down to 1.2 because that vector of 500 grand is kind of important to me in the next 10 years as I make a decision about my capacity to downsize. And so the ability of politicians to balance that. So coming full circle, Peter, to your question then, right, is can governments do stuff about this? Yes and no. You can do stuff that is conducive and responsible and effective. And I think some of those things are happening, mostly with the consent of the public because they, they

see the balancing act on those two points that need to happen. And I think that they are happening. And you can't overreach and get it wrong. So can politicians do things in the short term that sound really good? Yeah, you can propose a 50-year mortgage like Donald Trump proposed to do in the United States. That would deal with an affordability crisis in terms of a cash crunch in the next five years, which would get you into a political electoral cycle. And people would see their mortgage payment go from $2,500 a month to $2,200 a month.

But, of course, the long tail on that mortgage. would cast out over, you know, another generation of family members and your cost of borrowing would eclipse probably 2x, 3x, the value of the home. But your affordability issue in the next, you know, 36 months as you think about who you're going to vote for, that will get depressed down. But you have to hope that the public's economic literacy will catch up to the politicians and hold them accountable for such a dumb idea. What, just the last point on the, on the housing issue. What do, what do you, what do you to say to the younger generation, sort of those in their 20s or 30s, the ones who are saying,

I'm never going to be able to have a house. I can never afford a house, giving up on that dream. What do you say to them? Some of whom are being helped out because their parents are deciding, well, you know, they shouldn't have to wait until I die to give them, you know, some inheritance. I can figure out a way to do that now to help them in that. position but for the overwhelming majority who seem to be saying I'll never own a house

what do you say to them who wants to go first Jerry no I would say go yeah go Jerry well I first of all I think you have to start with empathizing with where they are and realizing that it's a you know it's a real thing and I remember when this issue first popped up in the United States and

a generation of older pundits and politicians said, well, stop spending so much money on avocado toast and maybe you'll be able to afford a down payment for a house. So, you know, first of all, you got to realize that this crisis is real. And it's something that I've been thinking about a lot, certainly since the last campaign where I watched, you know, 30, 40 focus groups of young Canadians over the course of a couple of months, these people are in total despair. And they, you're right, they worry about whether or not they're going to be able to afford a house or have the number of kids they want to have or just in general lead what we would have called in the oldie timey days as my kids would

call it a regular middle class life. I think that that's a problem. And part of my advice, which is not the easiest thing to swallow, is to get involved in politics and shape an agenda that works for you in your generation because the people who came before you sure did. And that's partly why you're living downstream of all of these costs that people who are older than you didn't feel like absorbing. Now it's time for you to make the country a better place for you and your peers than the way that your predecessors did. I think all that's true.

I also think, first of all, I think it's not true. And I don't think young people should think that. I think that they can own a home. I do think that their time horizon expectations and the idea of, you know, of, you know, your first home is going to be your forever home is something that has not been true for a very long time. And people have to know that you have to climb a ladder. I climbed a ladder from a condo to a smaller house to my current house. I almost bought another house.

But then I decided that for lifestyle reasons, I didn't want to do that and I didn't need it. And I've got a brilliant place that I live in now. And I'm very happy with it. So you have to make decisions. I also think that if you're a parenting, you have children, you're very anxious about it in their upward mobility. It kind of doesn't make a lot of sense for your children to come out of university. to have a ton of debt, be struggling to organize themselves professionally,

struggle to live a good quality of life, and then to become upwardly mobile and start a family, say, before the age of 30 or 35, when the health risks associated with it are in sort of their prime zone. So you can't have a child and all that. It doesn't make a lot of sense then, frankly, to live to age 80 or 85,

and then to pass on your kids and inheritance of a couple hundred thousand dollars when they're now 40 or 50 years old. They could have used the money when they were 30. And so I do think that there's an argument out there for people if they can to shape and organize their estate planning such that you can front to your children earlier in life an inheritance that they, at a time in their life that they can use.

It makes a lot more sense to give your kids, say, $200,000 or if you have that capacity, and I hope about speaking numbers that put me completely out of touch with an audience. But you get what I'm saying is that, you know, if you, if you, if you can to organize your estate in such a way that you can front your children the money earlier and do estate planning in an appropriate way so that they can have the money when they need it most to become upwardly mobile and own some assets that they can diminish the stress in their lives of homeownership find a way to do that and I think that those options are becoming more and more viable and that is actually a place where a government public policy can come into place that's what

I was going to say yeah that's what I was going to say because our original question is how What can governments do? So on that point, what could governments do to encourage... You could modify... You could modify, you could modify, you know, RRSs and TFSAs. You would have to do it. It would have to be policed in a particular way to avoid abuse and all that, and obviously to avoid inflationary pressures on the cost of housing.

But I stand by my point, though, that there are, I think, thoughtful ways to do estate planning in a way that you can advance the margin of what people's inheritance would be because by the time your kids are 50 and you're 80, giving them $200,000 as a bonus at the end of their life. And it does not particularly help. They really could have used that money when they were 30. Yeah, if we brought in the question back out to the original one, Peter, which you just restated, how, what can governments do?

I think broadly speaking, there are two kinds of things governments in this country can do. One is, obviously, you can directly affect people's immediate costs through the tax system. I think the Canada Child Benefit, for instance, which the Trudeau government that I was part of brought in in 2015, relieved a budding affordability crisis with young families. It gave, you know, I'm old-fashioned when it comes to this stuff, but I think one of the main problem that poor and lower income people have is they don't have enough money. So you have to figure out a way to get them more money. And one thing we didn't think of at the time was just as we were bringing that in, this is an overstatement for a fact. But young Canadians would either stop having children or forego having children until much later in life.

So now the target audience that we were looking at for the Canada Child Benefit, for instance, they don't benefit from it because they don't have children. and there's no benefit out there for single people or for couples who don't have children and I think that's a public policy gap that current policy makers both at the federal and provincial level would do well to look at.

But then there are bigger structural things in the Canadian economy and here it's going to sound like to your listeners that James and I have changed places because I've always been a big advocate for competition in the economy and I think that, which sounds like a good, conservative point of view, but it shouldn't be. It should be a liberal point of view as well. And we have an economy that, let's face it, in big sectors like telecom, like financial services,

and for all intents and purposes in our big cities like housing, where three or four developers control the vast majority of buildable land, which they bank and only build on when the prices go to a certain amount. And it's got nothing to do with how many trees are on their lots, by the way. It's got everything to do with the value of the lot. lot. The government's got to foster more competition in the economy, which ultimately, from a market perspective, is the only way to drive down prices. And if we've only got two or three providers of all of the major components of your average Canadian family's household build, then those costs are going to be higher than they are elsewhere. Okay. I've got to take a break,

but I got to give James the opportunity to, if he wants, to say something on that. No, no, I don't, yeah, I don't, I don't, I don't, certainly don't disagree with that. And it's, it is complicated. I think the land ownership development issues are, are complicated. And, look, people, the idea that public policy can be passive in the face of people's genuine anxieties about the basics of life, right? Shelter, food, and fuel and the ability to choose a life for yourself and that public policy has closed doors for people. and they feel trapped economically and uninspired. I mean, this is what causes the smartest, most talented people to leave the country.

The knock-on effect of not addressing these issues is catastrophic, genuinely catastrophic. Okay. Well, we'll get to another one of the issues in a moment. But first, we're going to take a quick break. We'll be back right after this. And welcome back, the latest of our Moore-Buts conversations. The first one for 2026 is underway. James Moore, the former Conservative Cabinet Minister, Gerald Butz, the former Liberal Senior Aid to Prime Minister Justin Trudeau

back in 2015 after that election, are both with us for a continuation of the conversations they've been having for the last couple of years on the bridge, and they've been highly valued by our audience, I must say. we're dealing with the affordability issue on today's program and how if at all governments can deal with it. It's not sort of a, it's more the general question. Is affordability such a hard nut to crack

that it's kind of out of the realm of governments to be able to deal with it? We talked about housing. I want to talk about food. You know, it was a couple of years ago that a parliamentary committee kind of called in all the top grocery store

managers and owners and kind of put them under the microscope as to where their profits were going and how their profits got so high and where was the money all going and why were they screwing the consumer et cetera et cetera so that was all you know made a few headlines

and there was some sparks in those in those meetings but at the end of the date and anything really changed I'm not sure you could say it did. So on food, in a way, I don't know, it may be even more difficult than housing for a government or for anybody to tackle it because there's so many things impact the cost of food.

Who wants to start on food here? I went first on housing, so you can go. Yeah, well, this is actually a perfect one in this. sense of where it it to the point of i think this episode right where it is the perfect collision of an obvious need and frustration for can i mean we all go to grocery stores we can all recount the the the nightmares like it was 75 dollars a year ago now it's 138 dollar like the exact same and so but this is the perfect collision of politics versus the reality of the people are experiences on our day lives where it frustrates Canadians so we had in the previous parliament

this big investigation on on uh the cost of food and all the that and what happens politically. The NDP subs out. Their typical critic, Drug Meetson, goes to the committee and turns it into a political show where he goes there and postures and is a tough guy and says, the reason why this is happening is because of corporate greed of the grocery stores and the food distribution network. This is all about, as though corporate greed didn't exist prior to the contemporary, like it's

never been, like all of a sudden it just dawned in them, oh, we should make more. And then, of course, all the data and facts come out and it shows that the, the, margin for economic victory for grocers is so narrow and so like it's it's it's laughable but but the ndp instead of taking an opportunity to flex their their might in a minority parliament to do something meaningful they postured on this so on the other hand frankly both liberals and conservatives they're asked about the cost of food and they're they're forced to deal with the question of supply management and they run for the hills because the politics of it makes them run for the hills and so on the one hand and then on the other hand and then everybody turns into chocolate soldiers and they

melt under the heat of the pressure and nobody, nobody withstand and everybody was kind of saying, say, wait a minute, I thought like we were going to do something and what happened and and then everything just kind of falls apart because the politics of it are so obvious and so clear and the temptation on the one hand and the lack of courage on the other to have an honest conversation about the real cost of things causes everybody to run for the hills and we get nowhere. I don't know what I can add to that, Peter. I think that again to use the metaphor of Rorschach test, everybody sees their own ideological predisposition in these crises. So you have people on the right saying the solution to all these problems is to cut people's

taxes, which, as we all know, taken to its extreme, can undermine the things that make life, you mentioned health care earlier, James, that make life relatively more affordable in Canada than it does in the United States. and on the other extreme on the left, it's always the problem of corporate Canada and the way to deal with it is to call Galen Weston and the Sobe family in front of a parliamentary committee and yell at them for the TV cameras.

And of course, neither of those things is going to be in any way effective in lowering the monthly grocery bill of your average Canadian. The truth, however, as usual, is a mix of less extreme versions of both, which is that, yeah, we probably should have more competition in the provision of food in the country. It's easy to say that.

It's hard to make it happen. And it's also true that the government should be thinking of progressive ways to make people's household budgets a little more, to get them a little more revenue in their household budgets. But I do think that the macroeconomic factors, which are the only durable solution, tackling the macroeconomic factors, the only durable solution to an affordability crisis is to figure out a way to get people on the one hand better paid for the work they do. And on the other hand, more competition in the economy so that there is more competition for their hard-earned dollars once they make them. and there's a whole panoply of policies that could make both sides better,

but it doesn't sell, I was going to say newspapers that will date me, not that anybody's suffering from the affordability crisis would read about one and read about it in a newspaper to begin with. These things are not sexy, right? And that's what I meant at the outset when you asked, is there anything the government can do about it? Tomorrow, no. but a dogged determination to develop an agenda that increases people's incomes and cuts their costs.

There are economic policies out there that do that, but they're fought every step of the way by entrenched interests that are well served by the current unfair system. This is the pivot that I think, Peter, that has to happen in public policy. And I'd like to see more of it, right, as opposed to the hand-to-hand combat on specific commodities and all that that often happens in politics because there happens to be a big story on CBC about the cost of coffee or the cost of produce or the cost of lettuce in the north or whatever. But actually have a broader conversation because prices should kind of go up over time. It's expected to do that. But, you know, real incomes minus the consumer price index, there's your vector of the capacity of the affordability crisis, right? So if the cost of groceries is going up, I think this year, I was looking at some numbers. It's 4.7% year over year, month over, month, year over year, for like November to November of 24 to 25.

So they're going up 5%. And that's like a 5% escalator over and over and over every quarter. Then that's utterly unsustainable because Canada's GDP is barely cracking 1%. And household incomes, we know, adjusted for population growth, that real GDP. GDP for everyday families is going down or it's flatline for the past five or 10 years. So people have less money to spend relative to the cost of things. So the question is, yes, on the commodity side, whether it's a house or produce or or textile items or whatever, we have to deal with those issues and getting more competition,

more supply, et cetera, all that's true. On the other hand, we've got to get our incomes up. We've got to get the economy going. We've got to become more productive as an economy. We need to start building things and doing things and leaning forward and being more effective. It's true to say, for example, that as Pierre Paulyev, again, made the argument, get rid of the consumer carbon price and the cost of gasoline will go down. Gasoline, but in lower mainland, we have the highest gas prices in the country. It was $2.25 a liter about 18

months ago, two years ago. It was $1.35 yesterday when I drove to and from downtown. So getting rid of the consumer carbon price plus things that are happening around the world, et cetera, that has. But the argument that was also levered by conservatives that if we just get rid of the consumer carbon price, then that'll have a watershed effect on the whole of the economy and prices and everything will go down. That's not true. And it hasn't happened. It happened on

one specific commodity, and it was much more complicated than just that. But it did have an effect and did work in that one area, but it didn't have a broader impact. And so doubling down on that argument and saying we need to get rid of the not the consumer carbon price, but the industrial carbon price, and that'll have an impact.

That's not true. It might help, but it's not going to have the broad-based impact. act that I think we're looking for, which is the real need to get incomes to rise relative to the cost of goods in our economy. All right. You mentioned fuel prices, and that's another one of these areas of affordability. I'm interested to hear you say that in lower mainland, the price, the last one you posted one you saw was a $1.34 a liter.

Here in Stratford, Ontario, $1.14, the last time I drove by a gas station, which is a $1.14, which which is a mind, you know, it's a drop that is surprised a heck of a lot of people. And I assume that Venezuela may now, now there's going to be this abundance of oil and it's all going to be controlled by Donald Trump and everything's going to come down how it'll affect Canadian thoughts about exporting oil is another question. But fuel prices, probably of the three. things we're discussing here governments aside

from taxes they tap onto the price of oil probably have little control over this yes or no yeah for the most part that's true although you know I feel compelled to revert to type here maybe and talk about during the inflationary period how much money oil and gas

companies made and convinced everybody it was the carbon price It was ridiculous. In the first 18 months after the first bullets were fired in Ukraine by the Russians, the oil and gas industry globally made in the neighborhood of $2 trillion in unplanned for profits. Two trillion with a T. That's like two-thirds the size of the Canadian economy.

And Canadian oil and gas companies made eye-watering quarterly profit. that would have made Jay Paul Getty blush, had he seen them at the time. And none of that was passed back to Canadian consumers or producers, for that matter. People who consume firms that consume energy and the rest of the economy. So, you know, we were the only country in the world, and I was a critic of my private critic of my former colleagues at the time. We were the only country, one of the only countries in the world that didn't have a windfall tax on oil and producers and pass that directly back to consumers in the form of a rebate.

And why didn't we do that? Because the oil and gas industry is the most powerful lobby in Canada. Is that why? I mean, let me revert to type. Is that really why, though? And by the way, is that a bad thing? Is that a bad thing that the energy sector has profits? Because I know that every, literally, literally in Canada, every single retired school teacher,

every single retired nurse every single public sector union in this country every single one of them has a major investment portfolio that includes Canada's energy sector that is sustaining the retirement well no no that can afford not to what's that who can afford not to when you're making a quarter of a billion dollars in profit correct so is this a bad thing but you you condemn profitability but I I know I do not to that I retired nurses and and teachers across the country whose income is dependent on the strength of these industries, it was not unhappy when these companies do well. Yeah, I'm not condemning profitability, to be clear. I'm condemning profiteering, which is a very different thing. Well, you turn down your next pay raise, Jerry. Let us know when you do. That was a nice little moment.

The first one of the Moore-Buts conversations where there was a hint. I definitely make the case to the government that my industry, I wouldn't because my industry doesn't apply. But if I were in the industry, I would make the case that my industry should be able to take extraordinary profits. But that doesn't mean the government should allow it to happen. Okay, here's my last question. When I think back through a lot of the things that you've both said,

mostly where you've agreed on these things too, one of the things it comes down to is that part of the problem the governments have and trying to deal with some of these issues is there are entrenched issues to use juries or entrenched interests as the term jerry used in dealing with some i think it was on food prices where entrenched interests have an impact on government versus you know the general public consumers and usually it's where consumers

lose out now I'm trying to understand A if that's correct and B why it's that way because the entrenched interests obviously have profits to protect and they're a position in the in the marketplace and they support political parties to as much as they're allowed to

and consumers they decide who's going to be the government. Why is it entrenched interests have more power or clout than consumers? Well, because, you know, Charlie and Rita Butts couldn't hire lobbyists. I think part of that is true. Well, I think part of that is true. But also, I think, look, the big one, the obvious one,

or the most sort of storied one, right, is frankly the supply-managed agricultural sector, right? Broadly speaking, you know, dairy in particular, they figured out the system. That's the truth, right? They figured out how to run really effective campaigns and to impact or have real impacts on leadership races, nomination races, and the capacity of leaders to win leadership reviews and so on and to stack meetings. And they've done it very efficiently and very effectively.

They as an industry as a group, relative to their size of the economy, have done an extraordinary job to the point where, you know, the Block Kibiquot put a motion before Parliament and everybody buckles and says that of all the things, supply management will be left off the table when it comes to Kuzner, renegoti. That would never happen with the auto sector. It doesn't happen to any other sector, but they are so efficiently and effectively organized that they've done that. No, there are all kinds of arguments about the economics of it, but there are certain sectors and certain organizations that have figured out the Canadian political pressure points, and they've put their thumb on it really efficiently and really

effectively and it's a huge part of this dynamic. Yep. It's true of every industry. I mean, I've often said this, Peter, that the most underappreciated power in politics is the power of inertia. And there are lots of people you look at the revolving door in the net of industry Canada, for instance, who spend part of their career in policymaking roles. Then they go into the industries where they were making policy that directly affected those companies. And again, I'm not speaking of any individual involved.

But the system that has been created here, here being Ottawa, I'm looking out at this lovely scene of some kids playing hockey across the street, by the way, to cheer everybody up. Totally free, by the way. There's no, I'm sure their skates probably pinched their

parents' budget, but other than that, they're playing outside in the fresh air for free. you know there are entrenched interests that don't want to see the system change and it really doesn't matter who's in power because the associations that have formed to keep those interests in the forefront of policymakers's minds know how to amoeba like change to make arguments hire people create lobby organizations that maintain the status quo and we've talked about this in specific policy areas in the past. CBC comes to mind.

If you decide you're going to make a big change, let's say, and it's just the first one that comes to my mind, in the way financial services are provided to Canadians. Well, I've got your next six months of meetings lined up for you if you're an official in the prime minister's office or in the industry, Canada, and there are going to be all of the people with a million different reasons why you shouldn't be doing what you're doing, whatever it is you're doing. And there are only two or three of those that a government can take on at any given moment. And that's why the system stays the way it is.

It's true. As you have more government in business, you're going to have more business in government. And the cross-pollination of former generals who now work for contractors, former industry Canada, deputy ministers and ADMs, who now work for different companies. in the outside who lobby, as government has gotten bigger, the lobbying industry has gotten bigger and the cross-pollination and the poaching of talent is, frankly, it's everywhere. So where does that, by the way, Peter, coming full circle? So where does that leave the politics then? So the politics then comes back to the short-term immediate political benefit is to then,

because all those things are myriad complex and the payoff is not immediate. The payoff is two election cycles down the road. People won't see the benefit of tackling some of these structural issues, particularly in real estate, because you're talking. about generational investments. Well, the next elections in six months. So what do I put in the window? So you put in the window things like the dental program.

Now, the dental program, the government of Canada has put forward is complex, but the original version of it was, I believe it was a $6 or $800 coupon by the government of Canada that you would give to families and to kids who are at risk. And you would take that to your dentist and say, I've got, I think it was $650 from the government of Canada in order to help my child. who hasn't had proper dental care for a long time and they're at risk. And it sounds great and it's very compassionate and it's very decent. I'm a son of a dentist, by the way.

And then my father told me when I was in all kinds of stories of kids who he helped and tried to help and all that. But the problem is a parent will put their child in a dental chair. They lean back, they open their mouth and a dentist looks in the child's mouth and they see $3,800 worth of work. And they've got a $600 coupon from the government of Canada. Well, what do you do? What do you do with that? now you've teased people into thinking that the government is there and got your back and with not enough money to do anything and you've put dentists in an impossible spot

you've put provincial governments in an impossible spot and you've scratched the surface of a much more complicated problems now we have a different program it's gone from one billion dollars to four billion dollars and it's truncated to a particular at-risk youth and they've put at a ceiling on 90,000 dollars of household income and seniors over the age so it's become this sort of morphed sort of Frankenstein project relative to expectations and it's way more expensive and it doesn't actually deliver what was originally promised because the intent of the political benefit of dealing and triaging one aspect of affordability, which is dental care with one program has become frankly a nightmare and it didn't work because the politics was so tempting and now we have

this program that's kind of rationalized in terms of its cost but it's not comprehensive and it's not meaningful and it's not pan-Canadian and doesn't cover everybody and because the rush to do something was more important than doing something effectively and we were now multiple years into a program that's 4x what its original cost is going to be and frankly the scale of coverage is not near what it could be because the promises got out of control I'm out of time but Jerry I give you 30 seconds if you want it on that I'd I'd sum up and and just say Peter I think you rightly challenge us all the time to tell people who haven't had the privilege that James and I have had of being in these rooms throughout their lives, what happens in them and why, right? That's effectively our raison for this podcast and maybe give people advice.

and my advice is first beware of people who tell you they have simple solutions to complex problems that the affordability crisis in particular for younger people is a complex problem a long time in the making and anybody selling you a short, easy, cheap, doable in 10 minutes solution to this is completely full of shit. all right correct yes okay another great conversation

enjoyed it immensely right down to the last word we will talk again in a couple of weeks thanks gentlemen take care thank you thank you Peter well another memorable

more butts conversation you know, there's a lot to chew on there. And it's always good to talk to these two guys because they, you know, for the most part, there was a hint that they didn't there in the midst of that discussion, but for the most part, they checked their partisanship at the door. And we have a good, a good, full-body conversation

about whatever the issue is for the week. James Moore, Jerry Butts, they'll be back in two weeks' time. Next Tuesday, Althea Raj and Rob Russo with their Reborder's notebook session. Tomorrow, we're going to do a, we're going to do an N-Bit special to launch Wednesdays in-2020. Most Wednesdays will still be on core editions, but occasionally we'll do N-Bit specials. And there's a good one shaping up for tomorrow, lots of good stuff in it. and so we'll do that tomorrow Thursday is your turn and the random renter you heard the question of the week at the top of this show Friday good talk with Chantelle and Bruce they're both back after a little holiday break so we'll look forward to to that as well okay that's going to wrap it up for this day I'm Peter Mansbridge thanks so much for listening and we'll we'll talk again in less than 24 hours Thank you.