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Federal Parties Hurry to Address Housing Issues, But Miss Root Cause

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Although housing affordability is a major crisis for Canadians, particularly in Greater Vancouver and Toronto, experts say federal party platforms fail to meaningfully recognize that crisis.

Forty per cent of Canadian renter households are paying rents that they can’t afford, according to a report released Wednesday by the Centre for Equality Rights in Accommodation (CERA). Housing costs are increasing faster than incomes, says the report, adding: “Housing is a major concern for the majority of Canadian voters in this upcoming federal election.”

It’s therefore no wonder that the major federal parties are jumping into deal with housing issues this election, albeit without any meaningful solutions.

Political science professor Stewart Prest, who teaches at Simon Fraser University, Douglas College, and Capilano University, says it’s interesting to see the federal parties finally prioritize housing instead of the usual campaign issues, such as healthcare. And they are more willing to switch their approach to align with the opposition than he’s seen in other elections, such as the Liberals’ sudden adoption of the two-year-ban on foreign buying, which was a copy of the Conservatives’ plan.

Prest calls it the “The Price Is Right effect,” bidding up to get closer to the prize.

“It’s an interesting dynamic in Canadian politics, whereas before, we had these more clearly articulated positions.”

But on the topic of housing, the parties are stymied by the fact that it’s a divisive issue more than ever before, because so many Canadians are banking on the equity in their homes. Any suggestion that homeowners could see a drop in that equity is a problem across the political spectrum, even for the NDP, he says.

READ: Foreign Investors Aren’t Behind the Housing Crisis… But They Are its Scapegoat

“We heard it during the debate last night when [NDP leader] Jagmeet Singh said when we look at choices between maintaining equity in housing and building more affordable housing, we can do both. But I don’t know if we can do both. We can try to protect equity of Canadians already in the housing market, but if average prices of housing were to come down, that would eat into that a bit. And that’s not necessarily a bad thing, given how much prices have skyrocketed over the last 25 years.

“I think [housing] is creeping back into the federal conversation in a way we haven’t seen before, but I think federal parties are still trying to be limited in their overall approach,” says Prest. “We haven’t seen a party roll out a set of policies that are going to plausibly address the root cause, which is the unaffordability of housing for a significant subset of the population.”

Prest says that most of the policies being put forward affect affordability at the margins, such as putting a temporary ban on foreign buying in place, or the Liberals’ plan to create a savings account for those trying to buy a house. But those most helped by a savings account are those who already have the ability to save.

“So this unmet need will continue to be unmet most likely. I don’t think we are seeing anything transformational out of these parties.”

From the 1960s to the early 1990s, when the Canada Mortgage and Housing Corporation (CMHC) had a clear mandate to provide low-income housing, the federal government built around 20,000 units of social housing a year. More than half a million units of housing that was affordable to low-income households had been created, but by 1993, the Conservatives and then the Liberals, cancelled the program. A federal program designed to provide adequate, secure housing for low-income Canadians has since become the elusive unicorn, despite the fact that the income and wealth gap is widening.

“I think one of the reasons why we are seeing it bubble up, and also seeing federal parties grapple with it, is because the federal government tried to get out of the business of subsidizing housing to any great degree,” says Prest. “And once they did, the provinces followed suit. So we are reaping results of 25 years of decisions now.”

Today, the term “social housing” has more often been replaced with the vague and arbitrarily defined “affordable housing,” which, in some municipalities, could mean housing to suit household earnings of $80,000. CERA posted the party platforms on its site, and neither the Liberals nor the Conservatives refer to “social housing.” Only the Green and the NDP platforms use the words.

The NDP would add half a million units of affordable housing over a decade, encourage the construction of co-ops and non-profit housing, waive the federal portion of the GST and HST on construction of units, and impose a 20 per cent foreign buyer tax on the sale of homes to foreign buyers. The Greens, for their effort, plan to build more than 300,000 units of “deeply affordable non market, co-op and non-profit housing.” 

And there is a mention to “refocus the core mandate of the CMHC to support the development of affordable, non market housing.”

Each party has a variation on the theme of addressing housing supply while curbing the foreign money that has flowed easily into the Canadian housing markets in the last few decades.

The Liberals promise to revitalize or build 1.4 million additional homes over four years, and boost the first-time homebuyers tax credit. They say they’d put $1 billion towards rent-to-own projects, and create a “first home savings account” for residents under 40 to save up to $40,000 and withdraw it tax-free to buy a home. And they’d introduce measures to make blind bidding illegal, and impose a ban on new foreign ownership for two years.

The Conservatives promise a temporary ban on foreigners buying Canadian homes, and a plan to bring 1 million additional homes online in three years. One way they’d increase housing is by allowing Canadians who are selling a rental property to defer capital gains when reinvesting in another rental property, thereby creating more rental stock. They’d free up 15 per cent of federal government owned land for housing, and they’d require municipalities to allow more transit-oriented development. The Conservatives would also encourage foreign investment in purpose built rental housing.

But Prest says that a lot depends on the details within the plan to limit foreign buying.

“Unless it’s a fairly airtight set of policies to implement, there can be potential work-arounds for people who establish residency and invest in the housing market in ways we don’t know.”

Toronto street nurse and housing advocate Cathy Crowe, co-founder of the Toronto Disaster Relief Committee, said she’s not seeing the level of engagement with groups like her own. She’s not seeing a focus on housing for those who are truly vulnerable, such as the homeless. Instead, she’s seeing more focus on making home ownership available to first-time buyers.

“I’ve been at it for a long time, so I’m quite pleased that housing is such a political issue this time around because in the past we have worked nationally and locally with various activist groups, trying to get housing on the agenda, and it hasn’t been easy.

“And so it’s shocking to see how much it’s on the agenda right now, but the parties are kind of re-interpreting the need, and [making it] about affordable home ownership and various incentives like that. That’s very much dominating certainly the Liberal and Conservative parties’ platforms. I think the people that are writing the policies for the party platforms for the most part are very disengaged from the issue.”

Given that lack of adequate housing, and overcrowding, impacts health and livelihood, and limits opportunities, it’s a pressing foundational requirement, says Prest.

“And it is unfortunate to see that Canadian governments at the federal level, and by and large at the provincial level, have more or less stayed out of the business for going on three decades.

“It’s one of those areas where it’s really hard to get back into until it isn’t. And suddenly it becomes a priority, and money can be found. It’s a question of prioritizing the issue.”

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