Analysis & Context

The complainant, Choudary Kothapalli, found a business analysis piece that compared real estate investment to stocks or gold to be “obscene.” He challenged Peter Armstrong’s motive in questioning the value of intervening on the pricing side of housing, and not looking at the bigger picture around ownership. Disagreeing doesn’t make it in violation of policy. Pointing out some missing information made the piece stronger.


You thought an analysis piece by business reporter and host Peter Armstrong was wrong and ignored important information. You believed Mr. Armstrong was making the argument that real estate was the same as other types of investment - like stocks or gold - and since the government does not intervene in the stock market it should not interfere in the real estate market.

You said this was wrong because the “government already interferes with real estate investing in a massive way.” You also pointed out that there were some “basic facts” that should have been included, and their absence means the “reporters should be fired from business reporting” - either fired entirely if they respectively didn’t know these facts, or if they willfully withheld the information. These are the salient facts you thought were absent:

a) All the loans issued for real estate investment are massively subsidized by Canadian government through CMHC whereas Canadian government does not underwrite or insure my gold investments.

b) Canadian government explicitly has the back of major Canadian banks. That means even if mortgages related to real estate investments fail, government will buy those loan portfolios from the banks to allow banks to continue lending. This happened during the 2008 financial crisis. So we need to assume that Canadian government will do it again if the need arises unless the government explicitly says that it would not. There was no explicit statement or law that says that government would not backstop the banks' losses. This allows Canadian banks to provide loans for real estate investments which they might not do if they are not backed by the government.

You said that “considering the massive support from the government of Canada to the housing market, the rhetorical questions asked in the article belong more to a blog of somebody hustling real estate than to CBC.”

You wondered if CBC had a process to ensure that reporters were not being corrupted by bribes from members of the real estate industry, although you were not accusing the reporter or the head of the business unit of such behavior.

You also asked about how CBC deals with corrections when a period of time has elapsed, and how does it ensure that it is widely read.


The Senior Producer of the Business Content Unit, Michael Colton, replied to your concern. He told you that while he did not agree with your characterization of the column, he did agree that there was one gap and that a paragraph was added to fill it. He agreed that there was not a mention of the fact that there are “long-standing government policies that have shaped the housing market in Canada.” He told you that Mr. Armstrong had actually included the information in a draft of his piece, but due to an editing error it was omitted. After receiving your complaint, it was added back.

He explained the point of this particular piece was not to explore the role of government in the housing market, but to suggest that other than the proposed intervention by some jurisdictions, there were additional policy options to consider:

The author of the story you call our attention to had a very simple goal in mind but it was not to fully explore the role of government policies in the housing market. Rather, it was to suggest that perhaps, in a time of some crisis in the housing and rental markets, we as a society might find value in reviewing, if not rethinking, our collective assumptions about what our housing stock is for and the types of government interventions that have over time favoured housing as an investment rather than as a social and economic good that needs to be widely and fairly shared.

He added that on all platforms, CBC News has examined and explored “all aspects of the Canadian housing market, and this piece was limited in its scope.”


You are concerned that this piece of analysis ignored some important facts and is making the case that real estate is like other investments and should be treated that way. You imply this might be because of undue influence of the real estate business because you believe this is the position of the industry. CBC Journalistic Standards and Practices (JSP) allows experienced and specialized reporters the room to provide professional judgment based on facts and expertise.” Mr. Armstrong was exploring an idea. To do so, right from the outset, he defined his terms:

There's a difference between housing and real estate. Housing is where we live; real estate is an investment. It's a pedantic but critical distinction. In all the breathless debates over housing bubbles and policy options, we look primarily at the investment.

He was examining the idea that tackling the housing policy question by framing it in terms of cost and affordability may not be the most effective way to deal with it, or to get at some large public policy issues. He pointed out that there are no other assets that are necessarily protected in the same way. Later in the article, he elaborated on the distinction he made between home ownership and real estate investment, and suggested some other ways to look at the issue.

The ability to invest in the housing market may not be a right, but having a secure place to live and raise a family certainly should be. If we focused on that side of the equation, we'd spend less time focused on foreign buyers, speculators and the spectre of an ominous housing bubble that could burst at any moment.

Governments could review zoning ordinances and the permit process to ensure we build more purpose-built rentals. They could consider building a stock of housing that meets the needs of the market, rather than the profits of the developers.

This is not an argument that calls for a hands-off approach or to allow for unbridled profits - it is a discussion of alternate ways of looking at the problem. In a conversation with me, Mr. Armstrong pointed out that much of the regulation in place protects the industry. You may disagree with the way he made the argument or the analogy he used, but it does not make it unacceptable or a violation of policy. You were correct in your assessment that it lacked some context. Your intervention, as Mr. Colton told you, improved the analysis in that it now includes some of that context - that governments are heavily involved and influence policy on the buying and selling of property. The following statements were added from the original publication:

Governments have been nurturing, protecting and underpinning the housing market in multiple ways for decades. Among the most notable supports are the mortgage insurance backing provided by CMHC and the fact that, on the sale of a principal residence, homeowners are not obligated to pay capital gains taxes.

You wondered about the process for updating and noting changes to stories. When there are errors, CBC news staff are obliged to note the change in online pieces - and that notation is generally placed at the end of the article. In this case, the change was noted by providing the time and day it was updated; this fulfilled the policy requirement. There is no realistic way to ensure all who read it before would see it again. For significant errors, I would agree with you that it should be carefully flagged, but even in that circumstance there is no guarantee.

While he may not have explored the degree of government involvement to your satisfaction, he did not state or advocate that there should be no government intervention in this sector or that it should be unregulated.

You asked how CBC ensures that its journalists are not unduly influenced or corrupted by members of the real estate industry. There is a system of checks and balances in place in the editing and assignment processes, and the JSP is the underpinning. In addition, there is a Conflict of Interest Code and a Values and Ethics Commissioner. To suggest that there is undue influence here is a disservice and I found that there was nothing in this article that would lead one to believe there is a position being advocated that would benefit one sector. Rather, it is the laying out of some ideas on a matter of public policy and public interest for the consideration of citizens. It is also one of countless articles and analysis on real estate, housing and cost. This piece itself links to five other different articles for further information and perspective.


Esther Enkin
CBC Ombudsman