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John Ivison: Carney’s condo developer bailout is a hazardous look

Even paying half off, the cost will eat half of the new $3-billion cash infusion. At that price, wouldn’t they sell on the market?

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In economics, the concept of “moral hazard” describes a situation where an individual or institution is more likely to take reckless risks because they do not bear the negative consequences of those risks.

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It is an idea with which Prime Minister Mark Carney is very familiar, having been a vocal critic of the claim that banks were “too big to fail” during the financial collapse of 2008; benefitting from privatized gains and socialized losses.

John Ivison: Carney’s condo developer bailout is a hazardous look Back to video

Yet this is exactly the approach he unveiled in Vancouver last week, saying the federal government will buy and convert up to 2,500 condos that developers can’t sell, and then either rent or resell them.

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