Canadian capitalism has stagnated for a decade. Businesses won’t invest because they don’t expect to make a profit. Instead, they’re sitting on a growing pile of “dead money.” And when businesses don’t invest, people don’t work. So, employment is low, and wages are stagnant.
Over this long period of stagnation, the mainstay of the Canadian economy has been the housing boom. Money has been flowing from the banks and private lenders to households. Growing mortgages have been pumping up house prices, making construction highly profitable. And with profit margins in the order of 26%, real estate agents have been making a pretty penny in the process.
But the housing boom is premised upon growing household debt.