Many Canadians are listing housing affordability as a key election issue, and the politicians vying for votes have taken notice.
All major party platforms include a promise to build thousands of additional new houses in Canada. The NDP says 500,000 over a decade. The Liberals say 1.4 million in four years. The Conservatives say one million in three years.
But as is the case with most election promises, the devil is in the details.
Breaking down those numbers, both the Liberals and the Conservatives are including the average number of new houses built now in their totals. The NDP is not.
About 286,000 new homes are currently built annually, based on the most recent data from the Canada Mortgage and Housing Corporation.
The Liberals are also including 130,000 “revitalized” units, fixing affordable housing that is in such disrepair it is in danger of being lost.
When those numbers are taken out of the equation, the picture looks more like this:
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The NDP say they’ll add an average of another 50,000 new homes a year for 10 years, the Conservatives say 47,333 more a year for three years, and the Liberals say 30,000 new and 32,500 salvaged affordable units annually over four years.
But how do they plan to build these homes and how many does Canada need?
The Conservatives say they’ll get to their housing target by building transit to connect homes and jobs, release 15 per cent of the federal government’s real estate for housing purposes, and encourage construction of rental properties by deferring capital gains taxes when profits from the sale of one rental are reinvested in new rentals.
The Liberals promise $4 billion for incentives for cities that increase their annual new housing builds and double the allocation to the National Housing Co-investment fund which offers forgivable or low-interest loans to build new or revitalized community or affordable housing units. They also plan to double the budget for converting empty office and retail space into housing, including federal and commercial buildings.
The NDP’s plan will include a “fast-start” fund to streamline applications for housing programs, turn unused or underused federal lands and buildings into housing, and waive the federal sales tax on construction of new affordable rentals.
In a May report on housing, Scotiabank chief economist Jean-Francois Perrault said “there is no clear way to determine what the optimal level of housing might be.” But he and most housing experts agree that supply limitations and insatiable demand are the biggest problems.
Perrault said Canada’s housing supply has not kept up with population growth — in 2016, there were 427 housing units for every 1,000 Canadians, and in 2020, it was 424. During that period Canada’s population grew by more than 1.3 million people.
Statistics Canada reports that 964,727 homes were completed in those five years, about one-third of them single-detached homes, and the rest a combination of multi-dwelling units including condo and apartment buildings and townhouses. Perrault said the housing ratio would have stayed stable if another 100,000 homes had been built in those years.
Perrault also noted that Canada has the lowest number of housing units per capita of any G7 country, and just to bring Canada up to the G7 average, we’d need to build 1.8 million new houses, on top of what we’re building now.
None of the federal parties come close to that number, though Perrault said that is also not the only way to determine housing needs, because every country has different demographics and geography driving housing needs.
“There is unfortunately no easy near-term fix, but the more urgency is attached to the problem, the sooner we will see impacts,” Perrault said.
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