It’s been quite the run for Prime Minster Justin Trudeau, who announced on Monday morning that he will be stepping down after a historic but increasingly polarizing tenure. Trudeau told the press that Parliament has been “paralyzed” and “entirely seized by obstruction and filibustering and a total lack of productivity over the past few months,” citing his exit from the role as a way to “reset.”
Trudeau has come under fire in recent years especially for his management (or, mismanagement, as some would argue) of the country as it faced pressures brought on by unbridled immigration, soaring inflation, and a worsening housing crisis (amongst more).
Speaking just to the housing aspect: despite plans and targets designed with the housing crisis in mind, and millions (and in some cases, billions) funnelled into programs like the Apartment Construction Loan Program, Affordable Housing Fund, Housing Accelerator Fund, and Rapid Housing Initiative, housing has remained unaffordable and unaccessible, and the Trudeau government has absorbed the blame. (On that note, here's a rundown of what happened, and didn't happen, under Trudeau on the housing file.)
In any case, Trudeau told reporters on Monday that the House will be prorogued until March 24, and that he will continue in the role until a new Liberal leader is selected. “This country deserves a real choice in the next election, and it has become clear to me that if I'm having to fight internal battles, I cannot be the best option in that election,” he said.
What’s next for leadership…. and housing policy?
The implication is that the Liberals will have a new leader in place before the federal election — former Finance Minister Chrystia Freeland and former Bank of Canada Governor Mark Carney appear to be the top contenders rumoured to be in the running — but it’s hard to imagine a world where the party will get the votes it needs to come out on top. As one reporter present at Monday’s press conference pointed out, Trudeau’s successor might have “mere weeks” to campaign before heading into an election. And meanwhile, the Conservatives, led by Pierre Poilievre, have established a firm lead in the polls.
With Poilievre looking to be to a shoo-in for Prime Minister, it seems safe to say we can kiss some housing policies and levers introduced by the current Cabinet goodbye. In fact, Poilievre said outright in October that he intends to cut programs like the Housing Accelerator Fund and the Housing Infrastructure Fund when he pledged to “axe” the goods and services tax on new homes sold for less than $1 million. At the time, he called both programs ineffective and purely bureaucratic, and told reporters that getting rid of them would save the government a total of $8 billion over several years.
The axe the tax initiative itself is one that got a lot of positive buzz amongst development sector stakeholders when it was announced, and it's also something that many hope to see put into play if the Conservatives take power. The Conservatives have estimated that the measure will reduce the cost of an $800,000 home by $40,000, and claim that it would stimulate housing supply, spurring construction of an additional 30,000 homes per year.
For more of an idea on the type of housing policy we might see with Conservatives in the driver's seat, it’s worth taking a look at the Party’s Building Homes Not Bureaucracy Act (Bill C-356), which was unveiled in September 2023. Though it failed to pass in May 2024, it still speaks to ideology.
Some of the key points from the plan included the requirement for “big, unaffordable cities” to increase the number of new homes built by 15% (compounded) each year, with a penalty associated with missing that mark being a clawback in federal funding, including funding for infrastructure. The same type of tit-for-tat approached was outlined with respect to transit development, in that transit and infrastructure funding was proposed to be withheld from cities “until sufficient high-density housing around transit stations is built and occupied.” In the same vein, the plan specifies bonus funding for big cities that removed “gatekeepers” from getting home builds, as well as municipalities that exceeded their housing targets.
The coming months will be telling
The ‘axe the sales tax’ initiative from the Conservatives has been well received, as mentioned, and Economist and Executive in Residence at the Smart Prosperity Institute Mike Moffatt goes as far as to call it a “fantastic” idea. “It does kind of leave out the Greater Toronto and Greater Vancouver areas where housing, even entry level housing, could be over a million dollars,” he notes. “So it's not a perfect plan, but it's quite a bold one.”
Moffatt tells STOREYS that he would like to see the Conservatives amend the rebate — in an article from The Hub, he floats “a phase-out to $1.5 million” so that it would cover more homes in pricier regions — and in the same breath, he expresses that he doesn’t think it should be implemented at the expense of the Housing Accelerator Fund and the Housing Infrastructure Fund.
“I think the core idea of these programs is sound in that the federal government has money and a limited direct ability to influence reform. But what they can do is use that money to get municipalities to reform,” he says. Speaking to the Housing Accelerator Fund in particular, Moffatt says he understands the Conservatives' argument that it's been ineffective thus far in terms of resulting in actual housing being built. He believes that the program would benefit from “better oversight” to ensure that municipalities are following through once they receive funding.
Beyond the rebate, Moffatt worries that not enough has been said, in specific terms, about what the Conservatives will do on the housing file. Bill C-356 might have been mouthy, but he worries it was much too vague.
“One of things Poilievre hasn’t mentioned is the GST cut on purpose-built rental. That measure is time-limited, so it would be interesting to see whether or not they will continue on in that measure and make it permanent,” he says. “You would think it would be the kind of thing that a Conservative government would be supportive of: reducing taxes on rental construction. But they opposed the measure [when it was proposed], and they haven't really committed one way or another on what they would do going forward.”
In any case, Moffatt expresses that the coming months will be telling. The Conservatives’ lead notwithstanding, opposition parties have an indispensable opportunity to show that they are in touch with what Canadians and the Canadian housing market needs.
