John Ivison: Carney shifts to damage control on his condo developer bailout

Canadian Prime Minister Mark Carney speaks during a news conference at the National Press Theatre in Ottawa, Canada on June 25, 2026. Carney is holding a wide-ranging news conference to mark last week's end to the parliamentary sitting. Photo by DAVE CHAN /AFP via Getty Images

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Nobody could accuse Mark Carney of lacking intellectual suppleness. A week after enthusiastically endorsing the federal government’s involvement in moves to buy and convert up to 2,500 Vancouver condos that developers can’t unload, on Thursday the prime minister downplayed Ottawa’s role in the scheme.

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At a press conference to mark the end of the parliamentary session, Carney said the whole idea was cooked up by the province of British Columbia and the federal government’s funding of the purchase will be limited to around 10 per cent of the total.

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It was the kind of manoeuvre known in the public service as a “flexible application” of the project — in short, dropping it but not wanting to admit to doing so in public.

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Last week, standing alongside B.C. Premier Dave Eby, Carney said developers did not want to sell at a loss but couldn’t afford to hold the empty units indefinitely. He said the glut of condos on the market was acting as a disincentive to new construction that was unsettling lenders and freezing the housing market.

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Opposition Leader Pierre Poilievre leapt on what he called the “Carney condo bailout” as a transfer of wealth from “elites and insiders” to embattled taxpayers.

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The prime minister has clearly been warned by his advisers about the potential for this issue to stick to the Liberal government, which likely explains why Carney distanced himself from the $1.4-billion project on Thursday.

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He was asked if developers who attended a Liberal fundraiser had lobbied for the bailout.

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The prime minister said they had not. He admitted that he had not done a particularly good job at rolling out the policy and downplayed his earlier comments about developers being stuck with inventory they couldn’t sell.

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“We start, as we always do, with Canadians. We don’t start with developers,” he said.

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The province of British Columbia initiated the idea to convert some of the vacant condos into affordable housing, he said. “There are so many cases, young families, of people who don’t have money for a down payment, but who can build that equity over time through rent-to-buy. There’s an opportunity there.”

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Carney said the federal government would provide about 10 per cent of the financing — $145 million — to buy the distressed condos.

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“But we don’t care about the developers, we are about the person or the family that can potentially move into the home,” he said.

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Given a significant portion of the available condos are said to be around 500 square feet, any family considering one of these shoeboxes would have to be equally as distressed as the condo market (the average family home in Canada is around 2,000 square feet).

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But the caveats offered by the prime minister — that this is B.C.’s initiative and federal exposure is limited — are not mitigating circumstances.

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The correct allotment of federal funding should be zero per cent, otherwise the government is guilty of the moral hazard of privatizing gains and socializing losses.