Past time for Liberals to match words with deeds on housing
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On the way to rejecting builders’ rights to throw up fourplexes in neighbourhoods across Ontario, Premier Doug Ford famously said it would be a “massive mistake” that would cause “a lot of shouting and screaming” in single-family suburbs.
This is the kind of thing Prime Minister Mark Carney’s government faces as it tries to move mountains to address the web of interwoven trends and problems that have produced the country’s enduring housing crisis.
It took decades for the crisis to develop as a result of speculation, selective tax treatment, periods of rock-bottom interest rates, the downloading of housing responsibility from the federal to provincial to municipal level and other factors. And it will by all accounts take many years to significantly improve the situation.
The Liberals won re-election last year in part because of Carney’s promise to again give Ottawa a central role in housing and incite a game-changing construction boom that would double the rate of residential completions.
People are getting impatient
This glowing promise struck a positive note with voters, but nearly a year later, people are getting impatient with the lack of significant change in what for many Canadians is a depressing housing picture.
The price spike from the speculative frenzy during the COVID pandemic has softened, but affordability is still the worst it’s been in Canada since the early 1990s, according to RBC.
Failing to fulfill Carney’s pledge to overhaul the housing situation for the better remains a significant vulnerability for the Liberal minority government, which could face an election at any time. Polling by Abacus Data shows that affordability is Canada’s most pressing concern, with housing costs, including rent, mortgage payments and home prices, the second most cited concern after grocery prices.
Last year, thanks to an increase in housing starts in Calgary, Edmonton and Montreal that offset a drop in Toronto, the national total saw year-over-year growth. But the 259,000 in new housing builds were still way below the 450,000 homes the CMHC says will have to be constructed each year for the next decade to prompt a return to affordability.
And the 2026 recovery in the housing market predicted by the CMHC last year is not materializing as a result of job insecurity amid the continuing trade war with the U.S. In its annual outlook released this week, the CMHC forecast a prolonged slowdown in the housing sector. “New home construction is set to decline through 2028 as developers face high costs, weaker demand and more unsold homes,” the agency said.
Push to make BCH a crown corporation
This month, in its latest attempt to break through the inertia around home construction, the federal government introduced a bill to make Build Canada Homes a Crown corporation. This would give BCH land acquisition rights and the ability to partner with private developers in its effort to accelerate construction of affordable housing.
But political critics and social housing experts criticized BCH for failing to define what it means by “affordable” housing and a lack of planning quotas for new builds.
Asked about this by the media, Housing Minister Gregor Robertson said how many houses get built will hinge on how much private capital the government can enlist as part of its construction drive. "So we'll be pushing to attract as much private capital as possible, getting far more affordable housing built than in the typical model of just public funding."
The overall view among the construction industry and housing analysts is that, while BCH is a welcome start, the federal government needs to significantly upgrade its home-building strategy if it wants to make a measurable difference in the market.
Among the recommendations from experts and industry are:
Cut construction costs by reducing the taxes and fees that drive up new home prices.
Create a new provincial infrastructure funding model to reduce municipalities' reliance on development charges.
Eliminate federal and provincial HST on all new homes.
Maximize development of offsite and innovative construction methods.
Expand public-private partnerships to accelerate housing delivery.
Link federal transfers to population and economic growth by tying them to Canada’s GDP.
In short, at a time when the housing market is shrinking just when Ottawa needs it to be expanding, the federal government needs to examine the full range of possibilities for strengthening and accelerating its housing strategy.
