Global Courant
Calls for coordinated action at all levels of government to address Canada’s housing crisis are mounting as affordability worsens and the country threatens to fall even further behind in building more homes.
As it stands, Canada is not on track to build the 3.5 million additional homes – over and above the current rate of construction – that the federal housing agency says are needed to restore affordability by 2030.
In a recent roundtable with The Canadian Press, Canada Mortgage and Housing Corporation officials said reversing this trend requires a “Team Canada” approach, in which all levels of government work together to address the shortfall.
And while the solutions proposed by officials — building denser cities, boosting private investment in housing, and boosting public investment in social housing — are shared by many housing experts, no one has yet presented a plan to drive these ambitious changes across all levels of government. to feed.
Instead, politicians have been quick to place the blame elsewhere, particularly targeting municipalities that stand in the way of new developments.
“No level of government controls all the policy levers that affect both housing demand and supply. And it is one of the things that has made this such a tricky problem because there is a lot more finger-pointing,” says Mike Moffatt , an economist and assistant professor at the Ivey Business School at Western University in London, Ont.
“We need some kind of national roundtable or unified plan where the federal government, the counties and some of the larger municipalities come together and agree on reforms.”
Construction cranes rise above the Toronto skyline, where housing affordability has been a major issue in the ongoing campaign to elect a new mayor. (Patrick Morrell/CBC)
Moffatt, an outspoken voice on housing policy, has sounded the alarm about the political implications of inaction. He warned that young people are ready to give up the current political system.
“I’ve never seen a cohort of 22-year-olds who were as angry and wanted to burn down the system as the group I’ve been teaching over the years. And I can’t really blame them for feeling that their future is of is taken away from them, that they can never afford a house,” he said.
Moffatt, who was economic adviser to then-Liberal leader Justin Trudeau before being elected prime minister, said the Liberal government was elected in 2015 in part because millennial voters were buoyed by the party’s progressive policy proposals, including legalizing cannabis.
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Now those millennials are struggling to find homes they can afford, he said.
“There is a real risk here that the same people who elected the Liberals in 2015 will be the ones who will defeat them in the next federal election,” Moffatt said.
The call for urgent measures in the field of housing is growing from all sides. The International Monetary Fund recently recommended establishing a permanent discussion forum between government levels and stakeholders to find ways to increase the country’s housing supply.
And a report published in May by Desjardins warned that the affordability index reached an all-time low in the last quarter of 2022, indicating “historically stretched affordability.”
“We do not expect a significant improvement in affordability in the coming years,” the report said.
For young people, the report highlights how housing affordability is changing life choices. For example, young people who spend more than 30 percent of their income on childcare will have children at a later age.
Lack of capital a major bottleneck: expert
Conservative leader Pierre Poilièvre has focused particularly on speaking to those young people, usually referring to the “35-year-olds still living in their parents’ cellars” in the House of Commons.
Moffatt said that message probably resonates with many young people, especially young men. But when it comes to actual policy proposals, the Conservatives haven’t stood out much from the federal government, he said.
“There’s very little difference between liberals and conservatives on housing policy. I mean, both are essentially saying they’ll use federal spending power to try and influence change at the municipal level,” he said.
Poilièvre has threatened to withhold federal funding from cities that don’t build enough homes.
Shown at the House of Commons in Ottawa on June 13, Conservative leader Pierre Poilièvre has made housing affordability a key part of his agenda. (Adrian Wyld/The Canadian Press)
Meanwhile, this fall, the federal government is launching a housing accelerator fund that offers money to municipalities to encourage more housing construction.
But Moffatt said Ottawa could do much more, particularly to encourage more private investment in housing.
“The biggest bottleneck, I would say, is a lack of capital. And the government can address that through fiscal provisions,” he said.
For example, the federal government allowed apartment building developers in the 1960s and 1970s to claim the structure’s depreciation on their taxes, Moffatt said.
“The irony is that many of the policy tools are essentially the same ones that the federal government is currently using to build the Stellantis plant in Windsor and the (Volkswagen) plant in St. Thomas,” he said.
“Basically, you can use the same set of policy tools to build clean energy projects as you do to build apartment buildings.”
