Sunday, February 11, 2024

 

How Long Has Humanity Been at War With Itself?


Deborah Barsky 


Is large-scale intra-specific warfare Homo sapiens’ condition or can our species strive to achieve global peace?

How can we Understand Passage of Time?

Image Courtesy: Wikimedia Commons

The famous American astronomer Carl Sagan once said, “You have to know the past to understand the present.” But can we ever know the history of human origins well enough to understand why humans wage large-scale acts of appalling cruelty on other members of our own species? In January 2024, the Geneva Academy was monitoring no less than 110 armed conflicts globally. While not all of these reach mainstream media outlets, each is equally horrific in terms of the physical violence and mental cruelty we inflict on each other.

Chimpanzees, our closest living relatives, are known to partake in violent intra-specific skirmishes, typically to preserve privileged access to resources in response to breaches in territorial boundaries. But only humans engage so extensively in large-scale warfare.

Do massive acts of intra- or inter-populational violence conform with Darwinian precepts of natural selection, or is this something we do as a competitive response to the stresses of living in such large populations? Looking back in time can help us find answers to such questions.

Evidence preserved in the archaeological record can tell us about when and under what conditions the preludes to warlike behaviours emerged in the past. Scientific reasoning can then transform this information into viable hypotheses that we can use to understand ourselves in today’s world.

As archaeologists continue to unearth new fossil evidence at an increasing rate, so too are they piecing together the human story as one of complex interactions played out by (a growing number of) different species of the genus Homo that lived during the tens of thousands of years preceding the emergence—and eventual global dominance—of our own species: Homo sapiens.

In fact, scientists have recognised more than a dozen (now extinct) species of Homo that thrived over the millennia, sometimes sharing the same landscapes and occasionally even inter-breeding with one another. Millions of years of hybridisation is written into the genomes of modern human populations.

Although we know very little about what these paleo-encounters might have been like, progress in science and technology is helping archaeologists to find ways to piece together the puzzle of interspecific human relationships that occurred so long ago and that contributed to making us who we are today. In spite of these advances, the fossil record remains very fragmentary, especially concerning the older phases of human evolution.

First consider Homo, or H. habilis, so-named because a significant increase in stone tool-making is recognised following its emergence some 2.8 million years ago in East Africa. The evidence for the beginnings of this transformational event that would set off the spiralling evolutionary history of human technological prowess is relatively sparse. But such ancient (Oldowan) toolkits do become more abundant from this time forward, at first in Africa, and then into the confines of Eurasia by around 1.8 million years ago.

Throughout this period, different kinds of hominins adopted and innovated stone tool making, socialising it into normalised behaviour by teaching it to their young and transforming it into a cutting-edge survival strategy. We clearly observe the positive repercussions of this major advancement in our evolutionary history from the expanding increases in both the number of archaeological sites and their geographical spread. Unevenly through time, occurrences of Oldowan sites throughout the Old World begin to yield more numerous artifacts, attesting to the progressive demographic trends associated with tool-making hominins.

Tool-making was a highly effective adaptive strategy that allowed early Homo species (like H. georgicus and H. antecessor) to define their own niches within multiple environmental contexts, successfully competing for resources with large carnivorous animals. Early humans used stone tools to access the protein-rich meat, viscera, and bone marrow from large herbivore carcasses, nourishing their energy-expensive brains. The latter show significant increases in volume and organisational complexity throughout this time period.

But were these early humans also competing with one another? So far (and keeping in mind the scarcity of skeletal remains dating to this period) the paleoanthropological record has not revealed signs of intraspecific violence suffered by Oldowan peoples. Their core-and-flake technologies and simple pounding tools do not include items that could be defined as functional armaments.

While a lack of evidence does not constitute proof, we might consider recent estimates in paleodemography, backed by innovative digitised modelisation methods and an increasing pool of genetic data that indicates relatively low population densities during the Oldowan.

Isolated groups consisted of few individuals, organised perhaps into clan-like social entities, widely spread over vast, resource-rich territories. These hominins invested in developing technological and social skills, cooperating with one another to adapt to new challenges posed by the changing environmental conditions that characterised the onset of the Quaternary period some 2.5 million years ago.

Complex socialisation processes evolved to perfect and share the capacity for technological competence, abilities that had important repercussions on the configuration of the brain that would eventually set humanity apart from other kinds of primates. Technology became inexorably linked to cognitive and social advances, fuelling a symbiotic process now firmly established between anatomical and technological evolution.

By around one million years ago, Oldowan-producing peoples had been replaced by the technologically more advanced Acheulian hominins, globally attributed to H. erectus sensu lato. This phase of human evolution lasted nearly one and a half million years (globally from 1.75 to around 350,000 years ago) and is marked by highly significant techno-behavioural revolutions whose inception is traced back to Africa.

Groundbreaking technologies like fire-making emerged during the Acheulian, as did elaborate stone production methods requiring complex volumetric planning and advanced technical skills.

Tools became standardised into specifically designed models, signalling cultural diversity that varied geographically, creating the first land-linked morpho-technological traditions. Ever-greater social investment was required to learn and share the techniques needed to manipulate these technologies, as tools were converted into culture and technical aptitude into innovation.

In spite of marked increases in site frequencies and artifact densities throughout the Middle Pleistocene, incidences of interspecific violence are rarely documented and no large-scale violent events have been recognised so far. Were some Acheulian tools suitable for waging inter-populational conflicts? In the later phases of the Acheulian, pointed stone tools with signs of hafting and even wooden spears appear in some sites. But were these sophisticated tool kits limited to hunting? Or might they also have served for other purposes?

Culture evolves through a process I like to refer to as “technoselection” that in many ways can be likened to biological natural selection. In prehistory, technological systems are characterised by sets of morphotypes that reflect a specific stage of cognitive competence. Within these broad defining categories, however, we can recognise some anomalies or idiosyncratic techno-forms that can be defined as potential latent within a given system.

As with natural selection, potential is recognised as structural anomalies that may be selected for under specific circumstances and then developed into new or even revolutionary technologies, converted through inventiveness. Should they prove advantageous to deal with the challenges at hand, these innovative technologies are adopted and developed further, expanding upon the existing foundational know-how and creating increasingly larger sets of material culture. Foundational material culture therefore exists in a state of exponential growth, as each phase is built upon the preceding one in a cumulative process perceived as acceleration.

I have already suggested elsewhere that the advanced degree of cultural complexity attained by the Late Acheulian, together with the capacity to produce fire, empowered hominins to adapt their nomadic lifestyles within more constrained territorial ranges. Thick depositional sequences containing evidence of successive living floors recorded in the caves of Eurasia show that hominins were returning cyclically to the same areas, most likely in pace with seasonal climate change and the migrational pathways of the animals they preyed upon. As a result, humans established strong links with the specific regions within which they roamed.

More restrictive ranging caused idiosyncrasies to appear within the material and behavioural cultural repertoires of each group: specific ways of making and doing. As they lived and died in lands that were becoming their own, so too did they construct territorial identities that were in contrast with those of groups living in neighbouring areas. As cultural productions multiplied, so did these imagined cultural “differences” sharpen, engendering the distinguishing notions of “us” and “them.”

Even more significant perhaps was the emergence and consolidation of symbolic thought processes visible, for example, in cultural manifestations whose careful manufacture took tool-making into a whole new realm of aesthetic concerns rarely observed in earlier toolkits.

By around 400,000 years ago in Eurasia, Pre-Neandertals and then Neandertal peoples were conferring special treatment to their dead, sometimes even depositing them with other objects suggestive of nascent spiritual practices. These would eventually develop into highly diverse social practices, like ritual and taboo.

Cultural diversity was the keystone for new systems of belief that reinforced imagined differences separating territorially distinct groups.

Anatomically modern humans (H. sapiens) appeared on the scene some 300,000 years ago in Africa and spread subsequently into lands already occupied by other culturally and spiritually advanced species of Homo. While maintaining a nomadic existence, these hominins were undergoing transformational demographic trends that resulted in more frequent interpopulation encounters. This factor, combined with the growing array of material and behavioral manifestations of culture (reflected by artifact multiplicity) provided a repository from which hominin groups stood in contrast with one another.

At the same time, the mounting importance of symbolic behaviours in regulating hominin lifestyles contributed to reinforcing both real (anatomic) and imagined (cultural) variances. Intergroup encounters favoured cultural exchange, inspiring innovation and driving spiralling techno-social complexity. In addition, they provided opportunities for sexual exchanges necessary for broadening gene pool diversity and avoiding inbreeding. At the same time, a higher number of individuals within each group would have prompted social hierarchisation as a strategy to ensure the survival of each unit.

While much has been written about what Middle Paleolithic inter-specific paleo-encounters might have been like, in particular between the Neandertals and H. sapiens, solid evidence is lacking to support genocidal hypotheses or popularized images of the former annihilating the latter by way of violent processes.

Today, such theories, fed by suppositions typical of the last century of the relative techno-social superiority of our own species, are falling by the wayside. Indeed, advances in archeology now show not only that we were interbreeding with the Neandertals, but also that Neandertal lifeways and cerebral processes were of comparable sophistication to those practiced by the modern humans they encountered.

At present, apart from sparse documentation for individual violent encounters, there is no evidence that large-scale violence caused the extinction of the Neandertals or of other species of Homo thriving coevally with modern humans. That said, it has been observed that the expansion of H. sapiens into previously unoccupied lands, like Australia and the Americas, for example, coincides ominously with the extinction of mega-faunal species.

Interestingly, this phenomenon is not observed in regions with a long record of coexistence between humans and mega mammals, like Africa or India. It has been hypothesised that the reason for this is that animals that were unfamiliar with modern humans lacked the instinct to flee and hide from them, making them easy targets for mass hunting.

If large-scale human violence is difficult to identify in the Paleolithic record, it is common in later, proto-historic iconography. Evidence for warlike behaviour (accumulations of corpses bearing signs of humanly-induced trauma) appear toward the end of the Pleistocene and after the onset of the Neolithic Period (nearly 12,000 years ago) in different parts of the world, perhaps in relation to new pressures due to climate change.

Arguably, sedentary lifestyles and plant and animal domestication—hallmarks of the Neolithic—reset social and cultural norms of hunter-gatherer societies. Additionally, it may be that the amassing and storing of goods caused new inter-relational paradigms to take form, with individuals fulfilling different roles in relation to their capacities to benefit the group to which they belonged.

The capacity to elaborate an abstract, symbolic worldview transformed land and resources into property and goods that “belonged” to one or another social unit, in relation to claims on the lands upon which they lived and from which they reaped the benefits.

The written documents of the first literate civilisations, relating mainly to the quantification of goods, are revelatory of the effects of this transformational period of intensified production, hoarding and exchange. Differences inherent to the kinds of resources available in environmentally diverse parts of the world solidified unequal access to the kinds of goods invested with “value” by developing civilizations and dictated the nature of the technologies that would be expanded for their exploitation. Trading networks were established and interconnectedness favoured improvements in technologies and nascent communication networks, stimulating competition to obtain more, better, faster.

From this vast overview, we can now more clearly see how the emergence of the notion of “others” that arose in the later phases of the Lower Paleolithic was key for kindling the kinds of behavioural tendencies required for preserving the production-consumption mentality borne after the Neolithic and still in effect in today’s overpopulated capitalist world.

Evolution is not a linear process and culture is a multifaceted phenomenon, but it is the degree to which we have advanced technology that sets us apart from all other living beings on the planet. War is not pre-programmed in our species, nor is it a fatality in our modern, globalised existence.

Archaeology teaches us that it is a behaviour grounded in our own manufactured perception of “difference” between peoples living in distinct areas of the world with unequal access to resources. A social unit will adopt warlike behaviour as a response to resource scarcity or other kinds of external challenges (for example, territorial encroachment by an ‘alien’ social unit). Finding solutions to eradicating large-scale warfare thus begins with using our technologies to create equality among all peoples, rather than developing harmful weapons of destruction.

From the emergence of early Homo, natural selection and technoselection have developed in synchronicity through time, transforming discrete structural anomalies into evolutionary strategies in unpredictable and interdependent ways. The big difference between these two processes at play in human evolution is that the former is guided by laws of universal equilibrium established over millions of years, while the latter exists in a state of exponential change that is outside of the stabilising laws of nature.

Human technologies are transitive in the sense that they can be adapted to serve for different purposes in distinct timeframes or by diverse social entities. Many objects can be transformed into weapons. In the modern world plagued by terrorism, for example, simple home-made explosives, airplanes, drones, or vans can be transformed into formidable weapons, while incredibly advanced technologies can be used to increase our capacity to inflict desensitised and dehumanised destruction on levels never before attained.

Meanwhile, our advanced communication venues serve to share selected global events of warfare numbing the public into passive acceptance. While it is difficult to determine the exact point in time when humans selected large-scale warfare as a viable behavioural trait, co-opting their astounding technological prowess as a strategy to compete with each other in response to unprecedented demographic growth, there may yet be time for us to modify this trajectory toward resiliency, cooperation, and exchange.

Deborah Barsky is a writing fellow for the Human Bridges project of the Independent Media Institute, a researcher at the Catalan Institute of Human Paleoecology and Social Evolution, and an associate professor at the Rovira i Virgili University in Tarragona, Spain, with the Open University of Catalonia (UOC).

SOURCE: Human Bridges

CREDIT LINE: This article was produced by Human Bridges.

Canada Post aims to increase price of stamps; changes would take effect in May

It may soon cost more to send letters in the mail.

Canada Post is aiming to raise the cost of stamps by seven cents, to 99 cents, for stamps purchased in a booklet, coil or pane, which it says account for the majority of sales.

The price of stamps purchased individually would go up to $1.15 from $1.07 for a domestic letter.

Other products, including U.S., international letter-post and domestic registered mail, would also be affected by the rate changes.

The price increases were announced for public comment today and, subject to regulatory approvals, would take effect on May 6.

Canada Post says domestic letter mail rates have gone up twice in the last decade: by five cents in 2019 and two cents in 2020. It says the last "major pricing change" was made in March 2014.

The agency says the proposed price increase comes as it faces "considerable" financial pressure due to inflation and the fact that each year, there are fewer letters to deliver to more addresses.

It says the impact of the change is estimated to be about 65 cents per year for the average Canadian household, and about $12.07 for the average Canadian small business.

This report by The Canadian Press was first published Feb. 9, 2024.

POM POM GIRL FOR BIG OIL

Alberta’s premier Smith sees U.S. LNG export pause as opportunity

U.S. President Joe Biden’s decision to pause approval of new liquefied natural gas export licenses is an opportunity for Canada as the country prepares to start exporting the fuel, Alberta’s premier said.

“I note, with interest, that the Americans may be pausing on their LNG export,” Danielle Smith, head of the country’s fossil fuel-producing heartland, said on Bloomberg TV. “I look at that as an opportunity for us. If we can be an additional supplier to the world of this vitally important energy source that’s also lower emissions, and lower polluting, I think we have a role to play.”

After years of delays, Canada’s first LNG export plant is scheduled to start operation as early as 2025, shipping as much as 14 million metric tons annually from British Columbia to Asia. A number of additional projects off the Pacific Coast are at various levels of development and more than a dozen have been proposed over the years. 

The U.S., which moved earlier and more aggressively than Canada to become an LNG exporter and is today among the largest producers, halted approving new export licenses in an effort to study how shipments affect climate change, the economy and national security. The moratorium is expected to disrupt billions of dollars in projects. 

Smith spoke during her first visit to Washington as premier, hammering home her province’s status as a major North American energy provider and pushing for expanded access, such as new pipelines. President Joe Biden killed the Keystone XL Pipeline upon taking office.

She said she was set to meet with Republican Senators J.D. Vance, Rand Paul, Markwayne Mullin, Marsha Blackburn, Steve Daines, Lisa Murkowski and Democrat Joe Manchin.

PROFITEERS BLAMING GLOBALIZATION

How the grocery supply chain works, from wheat fields to weekly flyers

Over the past year, the CEOs of Canada’s biggest grocery chains have become familiar faces to lawmakers studying food prices.

Executives have faced questions from MPs and battled accusations of profiteering as their earnings rise. 

But experts say the main factors that have driven grocery prices up over the past couple of years are global.

“The supply chains we have depended on for many decades now have come under massive stresses over the last five years — COVID, conflict, climate change being the most notable examples of big global macro stresses — and that is translated into broad-based inflation for all goods across the global economy,” said Evan Fraser, director of the Arrell Food Institute at the University of Guelph. 

Consumers are acutely aware of increases in food costs because other costs, especially housing, are also skyrocketing, said Fraser, and so food prices have become emblematic of a wider problem.

Because consumers don’t really understand the ins and outs of the supply chain, the bulk of the blame is often placed on the retailer, said Michael Graydon, CEO of the Food, Health and Consumer Products of Canada association. 

“People are significantly pressured from a cash flow perspective. And so ... they're seeking to blame,” he said. “And that's a bit of a challenge that the whole industry is facing.”

Higher interest rates have slowed inflation since it peaked in 2022, but grocery inflation continues to outpace the overall figure. The annual headline inflation rate was 3.4 per cent in December, while food prices rose at a rate of 4.7 per cent. 

The major commodities that soared in price and drove breakneck food inflation due to factors including the war in Ukraine have moderated, but are still higher than pre-pandemic levels, said Karl Littler, senior vice-president of public affairs for the Retail Council of Canada.

“There’s no return to the status quo,” he said. 


The supply chain

At its most simplified, the food supply chain comprises three levels. Farmers or producers are at one end and retailers on the other. In the middle are processing, shipping and manufacturing companies, making everything from packaging to ingredients to food products, and buying and selling between each other on their way to bring products to the grocery store. 

Farmers are “price-takers,” meaning the prices they’re paid for what they produce are mainly dictated by global commodity markets and not by negotiations with buyers, said J.P. Gervais, chief economist at Farm Credit Canada.

Companies in the middle section of the supply chain, such as processors and manufacturers, are also dealing with rising costs like packaging materials, wages and energy, he said. 

“While those costs may not be going up at the same pace as before, they've not come down for the most part,” he said. 

“There's a lot of pressure in the supply chain overall on margins.”

In order to mitigate rising costs, processors may change their packaging, invest in automation or alter recipes, said Graydon. But higher interest rates are making it harder to invest in adaptations.

When they’ve done all they can to mitigate rising costs, processors then turn to negotiations with grocery retailers, said Graydon. 

Over the past couple of years, retailers have been "very responsive" to price increase requests, he said. That's likely in part because the retailers have their own private-label brands and are aware of the forces driving costs higher. 

But Graydon said the consolidated nature of the grocery retail industry means retailers often have more power in negotiations, which is why the industry has been working on a code of conduct intended to level the playing field. 


The grocery store

It’s the retailers that have borne the brunt of scrutiny over food prices — and their rising profits have made them an easy target, though some industry watchers have been at odds over whether the companies are unduly profiting off of inflation.

Some of the global pressures affecting other parts of the supply chain affect retailers directly too, said the Retail Council’s Littler, like fuel prices, rising labour costs and interest rates. The others affect retailers indirectly through negotiations with suppliers. 

Requests for price increases soared over the past couple of years in frequency and in magnitude, said Littler, and it’s up to the retailer to figure out “how much is legitimate, and how much is opportunistic.” 

“They can't reasonably expect people to operate on a loss or on unsustainable margins. So if they don't accept reasonable price increases, then they won't be getting the product,” said Littler.

But similarly, he said grocers also can’t be expected to “operate with no margin or a margin that's cut to the bone.”

Large multinational suppliers of major brands are the chief concern when it comes to unreasonable requests, noted Littler.

Once a price increase request has been accepted, the grocer has to decide how much of it to pass along to the consumer, he said. 


The outlook

The good news is that things are starting to normalize along the supply chain, said Gervais, with commodity prices coming down and prices at the manufacturing level stabilizing. 

But it may take a bit more time for that to translate to the retail level, he said, as some costs — like wages and transportation — remain elevated. 

"We're one major supply shock away from seeing some disturbances in the marketplace," he noted.

"But the bottom line is, we've seen commodity prices come down, we've seen the price that food manufacturers get for their products (come down), we've seen that inflation come down." 

Littler says food inflation and headline inflation will continue to converge as the factors that have made food inflation stickier are abating.  

“I think we can look forward to a more stable period.” 

This report by The Canadian Press was first published Feb. 9, 2024.


Feb 8, 2024

Competition Bureau investigating use of restrictive property clauses in grocery

The Competition Bureau is investigating the use of restrictive real estate clauses in the Canadian grocery sector.

Deputy commissioner Anthony Durocher told a House of Commons committee studying food prices that these measures, often called "property controls," can be a major barrier to entry and expansion in the Canadian marketplace. 

"We are actively pursuing an enforcement investigation in the grocery sector relating to the use of property controls," Durocher told MPs on Thursday. 

The Competition Bureau confirmed the investigation via email, noting there's no conclusion of wrongdoing at this time. 

In the Bureau's June 2023 report on competition in the grocery sector, it described property controls as clauses added to a lease or deed that limit how real estate can be used by competitors.

This can include limiting the kinds of stores that can open in a mall, or limiting the kind of store that’s allowed to open in that location after a tenant leaves the property. 

For example, if a grocery store is moving to a nearby location, the property control clause could prevent a competitor from entering the old store. That might be a rival grocer or even a more specific business such as a bakery. 

The clause might also limit other stores from selling similar products. 

"The effect is they can ultimately just make it harder for a competitor to get into the same space," explained associate deputy commissioner Bradley Callaghan at the committee meeting. 

"It could be the same commercial mall, but it also could cover a wider geographic area."

The Bureau's report recommended that governments limit use of the clauses in the sector, saying they make it harder for new supermarkets to open, and can curb competition. 

Durocher said that recent amendments to the Competition Act have given the Bureau more tools to protect and promote competition, particularly through Bill C-56, which became law in December. 

"The Bureau is committed to using the new tools made available through these amendments wherever necessary to protect competition," said Durocher. 

"We are encouraged to see the Bureau is already looking to use its new powers," Audrey Champoux, a spokeswoman for Industry Minister Francois-Philippe Champagne, said in an email. 

"Canadians expect this and we are glad to see they are taking swift action." 

Keldon Bester, executive director of the Canadian Anti-Monopoly Project, welcomed the announcement of an investigation by the Bureau. 

“I’m glad to see the bureau moving quickly,” he said. 

One key amendment in C-56 broadens the scope of the kinds of agreements the Bureau can look into, said Bester. 

Previously, the Competition Act had provisions against competitors making agreements that could prevent or lessen competition in a market. Now, those provisions include agreements that aren't just between two competitors -- such as an agreement between a grocer and its landlord, explained Bester. 

Property controls also make it more attractive for companies to consolidate as a way of expanding, said Bester.

"If the prime real estate is wrapped up in these kinds of agreements, if a company wants to expand, they are encouraged to buy up and reduce competition," he said. 

The bar will be high for the Bureau to prove that such clauses are being used on a widespread basis, and that their widespread use is hurting competition, said Michael Osborne, chair of the Canadian competition practice at law firm Cozen O'Connor.

“It’s not an easy case to make, nor should it be,” he said. 

“The Competition Bureau must still prove that, overall, it causes a substantial lessening or prevention of competition.”

Durocher told MPs that property controls can be an obstacle both for independent grocery stores and chains looking to expand, as well as for foreign players to enter the Canadian market. 

"That is why one of our recommendations in the report, and this is something that a number of other countries have done, is to consider limiting their use or banning them altogether in the grocery sector, because they can be harmful to competition," he said.

Champagne recently said he's been trying to attract foreign grocers to enter Canada as a way of boosting competition.

If the bureau finds that property control agreements in Canadian grocery are limiting competition, it can make its findings public and communicate that these kinds of agreements are "no longer acceptable," said Bester. And if Bill C-59’s further amendments to the Act are passed, it will also have the power to levy fines over such agreements, he added. 

But it would also be good for governments to follow that up with legislation restricting such agreements, Bester said. 

"What we really need to be doing in Canada, at a broad level, is changing what the business as usual standard is," he said.

"By doing that -- and you do need the law to do that -- we can actually get more competition out of existing players." 

This report by The Canadian Press was first published Feb. 8, 2024.


Homebuilders group pushing for 30-year mortgages to boost construction in Canada

The group that represents residential builders in Canada wants Ottawa to offer a 30-year amortization period for insured mortgages on new homes.

The Canadian Home Builders' Association says extending the period an additional five years would help with affordability and spur more construction. 

The move would bring more first-time homebuyers into the market, in turn encouraging developers to build more homes, association CEO Kevin Lee told a news conference Thursday. 

"Canadians would love to buy homes. The problem is they can't afford to buy homes and can't access mortgages that would enable them to buy homes," Lee said. 

"And if we don't have people able to purchase, then builders aren't able to go ahead and build those homes."

The proposal is one of several recommendations made by the association in a new report that lays out ways policymakers can help the industry build more homes. 

Housing expert Mike Moffatt said he likes some of the recommendations made by the group, including setting up an investment tax credit to support productivity growth in the sector. 

But offering a longer mortgage risks boosting demand without addressing the core issues behind the shortage, he said.

"I don't think it's particularly harmful. But I also don't think it's particularly helpful either," Moffatt said in an interview.

The Canadian Mortgage and Housing Corp. estimates the country needs to build 5.8 million homes by 2030 to restore housing affordability. 

Canada's housing shortage has worsened amid strong population growth, which in turn has put more pressure on governments to tackle the affordability crisis.

The Liberal government has been under intense scrutiny for the erosion of housing affordability, with Conservative Leader Pierre Poilievre pinning the blame squarely on the prime minister. 

Housing Minister Sean Fraser has conceded that Canada won't be able to significantly ramp up home construction without innovation. 

The federal government is hoping to boost productivity and speed up construction with modular homebuilding — dwellings that are built in a factory setting and assembled on-site. 

In the fall, Fraser said the federal government would launch a catalogue of pre-approved home designs that would speed up the permitting process and incentivize more factory-built homes. 

About a quarter of homebuilders are using some form of factory-based construction, but there's still plenty of room to grow the technology, Lee said. 

The association wants a refundable tax credit equal to 30 per cent of investment in machinery and equipment, similar to the investment tax credit created for clean technologies.

A strategy similar to what the government has done to boost the development green economy makes sense, Moffatt said. 

"I think that could be exceptionally useful, because we're not going to be able to to scale up homebuilding just by doing more of the same."

The federal government is currently working on a housing plan that Fraser has suggested would be out in the coming months. 

That plan is expected to build on the housing policies the Liberals have already announced, including the elimination of GST charges on new developments. 

This report by The Canadian Press was first published Feb. 8, 2024.


Extension of foreign homebuyers ban 'xenophobic,' won't help housing: experts

Experts say Canada’s extension of the foreign homebuyers ban will do little to quell the housing crunch the country is facing.

The federal government announced last week that it would extend the ban on foreign home buyers for another two years in a bid to help with soaring housing costs in Canada, particularly in Toronto and Vancouver.

“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” Finance Minister Chrystia Freeland said in a statement Sunday.

The measure was first enacted in 2022 with an expiration date of Jan. 1, 2025, but it will now expire on Jan. 1, 2027.

Derek Holt, vice-president and head of capital markets economics at Scotiabank, criticized the extension in a note to clients on Monday.

“It’s a purely xenophobic measure aimed at politically scapegoating foreign buyers that were an immaterial share of home purchases,” he wrote.

“It is designed to politically blame foreign buyers for what is instead the total mismanagement of Canadian housing and immigration policy. Besides, ultra-loose immigration policy, including abuse of the temporary category particularly via international students, resulted in finding other ways of funnelling money from outside of Canada into local housing.”

Christopher Alexander, president of RE/MAX Canada, said he was “surprised” to hear of the extension and called it a “smokescreen” that’s masking other affordability issues in Canada.

“It's been in place for over a year now and it hasn't really contributed to a decline or improved affordability,” he said in a phone interview on Tuesday.

“It's almost insulting to think that the federal government believes that this is going to really help move the needle.”

Alexander said foreign homebuyers only represent about four per cent of home purchases in Canada. He would rather see governments focus on further cutting taxation for new builds.

“We have to build 3.5 million homes in the next eight years and between municipal provincial and federal government taxes and levies, we're looking at almost 30 per cent in some jurisdictions of the overall cost of a unit going to the government,” he said.

Alexander was referring to a 2023 study from the Canada Mortgage and Housing Corporation that found Canada needs to add 3.5 million new homes by 2030 – on top of those already planned – to achieve affordability in the country.

Taxation has been a focus of the federal government’s housing policy, having cut the GST on new rental buildsa move that Ontario later followed.

Thomas Davidoff, director of the University of British Columbia’s Centre for Urban Economics and Real Estate, believes cracking down on vacant homes, regardless of who owns them, is a better policy.

“Going after foreign buyers is pretty good politics. At the level of policy, I don't think it probably has much impact,” he told BNNBloomberg.ca in a phone interview on Monday.

“My general view is it is the use of the property that matters, not the nationality of the owner. So, an empty home owned by a Canadian is worse for affordability than a home rented out to a local, by somebody from overseas.”

Davidoff said an effective policy would also target people who own property in Canada, but don’t pay any income tax in Canada.

“I have shown that there are a huge number of people who own very expensive homes and pay next to nothing in income tax,” he said. “Because Canada is a low property tax country and high income and sales tax, our tax system invites people, whether they're residents of Canada or not, to buy real estate, but not necessarily make a living here.”

If properties were taxed at one per cent of their value, but made every dollar an income tax credit, it would raise an estimated $2 billion in taxes for Toronto and Vancouver, Davidoff said. 

“That's real money and you'd probably free up some housing for the local workforce,” he said.

Karen Yolevski, COO of Royal LePage Real Estate Services, noted that housing prices in Canada have only climbed since the foreign homebuyers ban was first enacted, suggesting it’s had little impact on real estate in the country. 

“Non-Canadian property ownership makes up a small percentage of the overall housing market, therefore a ban on such ownership is not likely to improve access to housing in a material way,” she wrote in a statement.

“Given the imbalance between available inventory and buyer demand, the best way to solve Canada’s housing crisis is to significantly increase supply.”

According to the Canadian Real Estate Association, the average price of a home in Canada climbed to $657,145 in December 2023.

With files from Bloomberg News

 

Algoma Steel says five workers sent to hospital after casthouse incident

Algoma Steel Group Inc. says five workers were taken to hospital after an incident on Wednesday night at the north casthouse of its blast furnace complex.

The company says it believes slag made contact with moisture in the hot iron trough, impacting 12 workers, including five who were treated at Sault Area Hospital and have since been released.

The accident comes after the collapse of a structure supporting utilities piping at Algoma's coke-making plant last month.

The incident at the coke-making plant resulted in the blast furnace being taken offline.

Algoma says the casthouse incident had no impact on its blast furnace recovery and its return to full production remains on track.

The company is a producer of hot and cold rolled steel sheet and plate products.

This report by The Canadian Press was first published Feb. 9, 2024.