Canada’s In A Housing Crisis. Here’s How Each Party Is Promising To Address It

In the lead-up to the federal election on September 20, Canada’s housing crisis has become one of the most pressing issues among campaigning political parties. For decades, housing prices have risen faster than incomes, and as a result, both owning and renting a home is unattainable for a growing amount of Canadians. A report by Oxford Economics released in May 2021 found that homes in Canada are 34 percent more expensive than the median income household can afford. (That report also found that, of the 25 North American cities studied, Vancouver, Toronto and Hamilton are among the least affordable.) In the first year of the pandemic, the average home price across Canada soared more than 30 percent—but even before COVID-19 hit, housing affordability was out of reach for many. Here’s a look at how we got here, and what each party is promising to do about it.

How did the housing crisis happen?

Canada used to have a housing system in place that addressed those most in need. From the mid-1960s to the early 1970s, the federal government implemented a national social housing supply program that focused on creating non-profit and co-op housing. Canada began producing about 20,000 new non-market housing units a year—meaning housing that is protected from market forces and which offers ongoing affordable rent or ownership. Until the 1990s, approximately 550,000 non-market social housing units were built. But after that, the federal government decided to stop funding new social housing, and the responsibility for addressing housing need was passed down to the provinces, and in some cases, down to municipalities. For the most part, there was not enough provincial/municipal funding allocated to support those most in need, thus leaving Canada's housing system almost entirely to the marketplace. “When the government started to retreat away from the housing market, we started to shift the blame onto individuals. So then it became an individual's fault that they couldn't afford housing,” says Julieta Perucca, deputy director of housing advocacy organization The Shift.

The federal government reclaimed some responsibility for housing in 2017, when Justin Trudeau launched the National Housing Strategy (NHS), a plan that pledged to spend $70 billion on housing over the course of 10 years through several initiatives led by the Canada Mortgage and Housing Corporation (CMHC). And in 2019, the government legislated housing as a human right through the National Housing Strategy Act. But a recent report by the Parliamentary Budget Officer that looked into the NHS’s rollout found that funding for low-income housing is declining, while spending on new construction was less than promised. The report also found that, since 2017, the federal government has built just 63,300 new housing units. It projected that in the coming years, the number of households in need of better housing is set to increase by 1.8 million, unless more funding is allocated.

Ahead of the election, political parties are making big promises to address housing. Here's how they stack up.

The Liberal Party

The Liberal platform builds on the NHS, with new promises that are mostly geared toward homeowners and aspiring homeowners. The party promises to “build, preserve or repair” 1.4 million homes in four years, convert empty office space into housing, and allocate more funding for affordable housing by increasing the already-existing National Housing Co-Investment Fund—a CMHC program that funds non-profit housing development—to $2.7 billion over four years. Noha Sedky, a British Columbia-based planning consultant in housing and land development, says it is not clear how many of the proposed 1.4 million homes will go toward affordable housing. Taking into consideration the NHS’s slow ramp-up, she says the goal of 1.4 million homes and a $2.7 billion investment in four years is likely not achievable due to the layers of requirements needed for affordable housing financing. She adds that in order to commit to this short timeframe, the Liberals would need to significantly speed up the funding delivery process.

To help home buyers, Trudeau has proposed a Home Buyers’ Bill of Rights, which includes a ban on “blind bidding”—when prospective buyers submit their offers without knowing the bids already made, leading them to pay well above the asking price. Trudeau has laid out several other promises for Canadians who are trying to buy a house, including jump-starting savings for aspiring homeowners under 40 by creating a tax-free savings account; doubling the first-time buyers’ tax credit; and reducing the price of CMHC home insurance by 25 percent.

While these measures would help individuals enter the housing market, they will inflate already rising prices, warns Perucca. “When you have more people within the same market, what you're doing is creating more demand, which then kind of fuels the price of those houses,” she says.

Trudeau has proposed a complete ban on new foreign ownership of Canadian houses for the next two years, and a promise to expand on the tax for foreign-owned vacant housing to include vacant land within urban areas. But both Sedky and Perucca say that foreign ownership actually isn't the driving force behind Canada's housing crisis.

On the rental front, the Liberals are proposing to stop renovictions—when landlords evict tenants to complete major renovations and then hike up the rent—by having landlords report the rent they receive before and after renovations and imposing a surtax on “excessive” rent increases. They pledge to invest $1 billion in grants and loans to develop rent-to-own projects where renters can work toward homeownership.

The Liberals also say they will support Indigenous housing by co-developing an Indigenous Housing Strategy with Indigenous partners and creating a National Indigenous Housing Centre.

And the Liberals pledge to move forward with a $567 million investment to end chronic homelessness. But the plan falls short, says Perucca, because it only addresses homelessness that is ongoing. “The idea of chronic homelessness is [that] you have to live in homelessness for more than six months,” she says, adding that the plan doesn’t address the reality that being homeless for any amount of time results in difficulty finding housing and a greater risk of trauma, mental health issues, and addiction.

The Conservative Party

The Conservatives’ plan focuses on increasing supply by incentivizing the private sector to build housing. Erin O’Toole proposed to build one million homes in three years. His plan includes: switching 15 percent of federally owned real estate to housing and exploring converting unused office space to housing; tying federally funded transit to be near higher-density housing to allow for easier travel between homes and jobs; and encouraging developers to build rental housing by allowing them to defer capital gains taxes when selling a rental property and reinvesting it into rental housing.

But Perucca and Sedky say leaving supply up to the private market will not lead to the affordable housing we need. “[The] pledge a million units, but they don't specify what these units are going to go for,” says Perucca. “We need deeply affordable housing. So if you're just going to put a million units into the market, and not regulate where these units should go and what demand they're actually going to meet, we're not going to really make a dent in the 1.6 million people in this country who are in core housing need.” (The Tories say they’ll incentivize corporations and private landowners to give land for affordable housing, but don’t specify how much.)

Like the Liberals, homeownership is a big part of the Conservatives’ platform. They propose seven-to-10-year mortgage terms to reduce mortgage payments, while also relaxing the “mortgage stress test,” which requires banks to check that someone can make their mortgage payment at a higher rate than what they actually pay in case interest rates go up. By relaxing the stress test, it will be easier for more Canadians to qualify for a mortgage. They say they’ll stop foreign investors who don’t live in or aren’t moving to Canada from owning homes for two years, and will instead encourage foreign investment in rental housing.

The Conservatives promise to create a “For Indigenous, By Indigenous” housing strategy, which they say will give Indigenous communities autonomy to address their own housing needs without unwanted government interference.

When it comes to homelessness, they say they’ll invest $325 million over the next three years to create 1,000 residential drug treatment beds and build 50 recovery community centres. But Perucca says this falls short in addressing the homelessness crisis, because it connects all unhoused people to those experiencing addiction or mental health issues. “We know that our population living in homelessness is far greater than just those who are experiencing addiction and mental health issues,” she says, adding that many people have fallen into homelessness as a result of the pandemic, renovictions, or domestic violence.

The NDP

The NDP’s plan focuses on affordable housing and rental more than that of the Liberals or Conservatives. Jagmeet Singh is proposing to spend $14 billion on 500,000 affordable housing units in the next decade. Although the NDP’s building target isn’t as ambitious as the Liberals or Conservatives, it’s probably more realistic, says Sedky.

The NDP is also proposing “fast-start funds,” which will accelerate the application process for co-op and non-profit social housing projects. Sedky says this initiative would do a lot to help streamline funding for affordable housing. “Federal government funding is not usually able to kick in until a project is pretty much ready to go,” she says. “Meanwhile, the nonprofits and the co-op housing groups and others that are trying to build affordable housing have no way to fund all that pre-development work that needs to happen.” The proposed fast-start funds would get affordable housing projects off the ground quicker.

For homeowners, the New Democrats promise to double the home buyer’s tax credit and help people borrow more by increasing the mortgage amortization period—the total length of time it takes to pay off a loan—from 25 to 30 years. Both Perucca and Sedky say that while this type of plan helps individuals access more money, it only drives up demand, thus worsening the housing crisis in the long run. The NDP, too, cites foreign ownership as a reason for housing unaffordability, and the party says they’ll impose a 20 percent tax on the sale of homes to buyers who aren’t citizens or permanent residents. “The prices are impacted by the limited supply and interest rates, and [a] foreign buyer tax… is not where I would be putting my emphasis,” says Sedky.

To encourage developers to build rental units, Singh is promising to waive the federal 5 percent sales tax on the construction of new affordable rental units. The NDP says they’ll tighten the rules surrounding CMHC loans to stop big developers from purchasing buildings and renovicting tenants, and they’re offering $5,000 in annual rent subsidies for families. They’ve pledged to work toward ending homelessness in a decade, and their plan to increase the non-market housing supply will help tackle this, Sedky says.

The Green Party

Out of all the parties, the Greens’ plan puts the most emphasis on addressing the urgent need for social housing. Annamie Paul says the party will declare homelessness and housing “national emergencies” and appoint a federal housing advocate. To address housing supply, Paul pledges to: invest in the construction of 50,000 supportive housing units over a decade; build and acquire at least 300,000 units of “deeply affordable” co-op and non-profit housing over a decade; and appoint a minister of housing to oversee the implementation of these projects.

Sedky says addressing the need for “deeply affordable” housing is important, as it recognizes the nuances of the crisis. “Deeply affordable means it's really targeting those who have very limited income: it’s the lowest-income housing.” That's significant, she says, because it costs the government more to subsidize those housing units since the amount of rent being paid is so low.

To streamline federal funding for co-op housing projects, the Greens say they’ll create a “Canada Co-op Housing Strategy” and re-focus the CMHC’s core mandate to be on the development of affordable, non-market and co-op housing. For renters, the Greens promise to create national standards to establish rent controls and put a moratorium on evictions until the pandemic is over and for “a reasonable time thereafter.”

To address foreign ownership, Paul pledges to raise the “empty home tax” on vacant buildings with foreign owners.

Paul promises to work with Indigenous communities across Canada to create Urban Indigenous Housing Strategies, and lays out a plan of how the party will invest in Indigenous housing, including: changing the legislation that prevents Indigenous organizations from accessing CMHC-financing for housing needs; transferring federal property to off-reserve Indigenous organizations; helping vulnerable Indigenous people find emergency housing accommodations; and establishing a “For Indigenous, By Indigenous” housing support program for off-reserve and urban Indigenous communities.

The Greens’ plan gives the most details about tackling homelessness. They pledge to address youth homelessness by: providing federal grants to existing youth homeless shelters and building more across the country; removing shelter maximum stays for youth; and investing in co-op housing specific to youth. The Greens promise to provide mental health services for youth and other homeless populations while directing funds to municipalities that support unhoused people who use drugs through initiatives like Housing First.

So what do the experts think?

Both Sedky and Perucca say the parties’ platforms are missing a few key points. First, the Liberals, Conservatives and NDP don’t expand enough on homelessness and Indigenous housing—urgent issues that both say should have been central to party campaigns. “Over the last year and a half with a pandemic, the inequities in society have been front and centre,” said Sedky. “But I didn't have a sense from any of the parties that [homelessness] was the priority.”

It's estimated that eighty percent of Indigenous people in Canada live off of reserves, and they are disproportionately at risk of homelessness. One in 15 urban Indigenous people are unhoused, compared to one in 128 non-Indigenous people across Canada. Moreover, people experiencing homelessness are often criminalized, so this issue demands attention, says Perucca. “Given what this country has gone through in the last three months—being made live to the atrocities of the residential school system [and] the Sixties Scoop—it's shocking to me that none of these political parties would have thought to be more bold about what they would do for Indigenous peoples in the area of housing,” she says.

Sedky says the lack of rental housing is one of the biggest problems within the housing crisis, but it isn’t central to any party platforms. “We have seen the decline in our rental housing stock: it’s deteriorating, it’s aging, and we've had very little attention on how to address that. All of our policies [are] focused on interventions and practices to support homeownership,” she says. “There are ways to try and address the lack of new supply and protections for renters. We're just not tackling it.”

Both experts say the Liberal, Conservative and NDP party platforms don’t put enough emphasis—or ambition—on providing affordable housing to those who need it most. “The pandemic really showed us that having a home is a frontline defence,” says Perucca. “But I don't think that any of the plans really manage to lay out the kind of systemic and urgent change that this country needs in order to resolve the housing crisis.”