Political platform comparison: real estate, energy, and defense
With the conservative fiscal and costing plan released today, we now have the numbers we need for a side-by-side comparison between the two platforms.
Naturally, both plans have drawn criticism from either side of the aisle, who’ve called into question the accuracy of the opposing numbers.
Regardless, the platform distinction is clear: Carney is focused on near-term stimulus and more government involvement, while Poilievre is focused on leaning out government and incentivizing the private sector.
Real estate: same goal, carrot vs. stick
If you’ve been reading our work for any length of time you’d know our thoughts on the state of the housing market: shambles.
The reality is that we’re not building homes at anywhere near the clip we need to be, and there’s a stark contrast between each party’s approach to solving it:
Topic | Carney | Poilievre |
|---|---|---|
Housing supply target | 500k/yr over 10 years | 2.3M over 5 years |
Federal entity? | Build Canada Homes | None, incentivize municipalities |
Financing | $25B debt + $1B equity for prefab, $10B debt for affordable housing | No direct financing, reimburse municipalities for tax cuts |
Tax incentives | GST removal for first-time buyers <$1M, MURB tax allowance | GST removal on all new homes <$1.3M |
Municipal charges | Halve charges for 5 years | Reimburse 50% of municipal tax cuts up to $50K/home |
Enforcement | Streamline approvals, reduce red tape | Require 15% annual increase in building or lose federal grants |
While we’re skeptical of either party’s ability to hit these construction targets, one area we think would be well positioned regardless is modular construction, given the focus of both parties on affordability. ATCO Ltd. (ACOX) and Brookfield Business Partners (BBU-U) are the clear Canadian leaders in this category.
Energy: different paths to independence
Energy is a core part of both platforms, though the approach and end goals are much different:
Topic | Carney | Poilievre |
|---|---|---|
Focus | Expand clean energy projects | Expand oil & gas production |
Regulatory approach | streamline through “one window” system | repeal C-69, 6-month approvals |
Industrial carbon tax | keep | remove |
Emissions cap | keep | remove |
Infrastructure | East-West electricity grid | National Energy Corridor |
Should Carney be at the helm, we’d expect diversified power producers like Northland Power (NPI), regulated utilities, and all companies downstream from a grid buildout to benefit (ex. transformers).
Should Poilievre take the reins, we’d expect producers to catch a bid on sentiment alone, with looser regulation opening the door for development and pipeline infrastructure allowing for better price discovery.
Defense: an expensive point of alignment
On an accrual basis, both parties are set to spend over $17B on defense during their four-year term, as Canada aims to reach it’s 2% of GDP NATO spending target.
Given equipment is taking a growing share of total defense spend and a lot of emphasis has been placed on arctic and naval security, names like Kraken Robotics (PNG) could be well positioned.
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