As the cost of everything keeps rising and inflation edges up again, home ownership remains out of reach for many Canadians. Interest rates are holding for now, but they are still high and for those facing mortgage renewals this year, there will be some serious “payment shock” as their costs will double or triple. 

The affordability/housing crisis has quite rightly seized top spot on the political agenda. It was predictable.

What could possibly go wrong given the relentless migration from rural to urban areas, a record immigration surge, strained and aging infrastructure, and the tattered social safety net? But let’s focus on housing.

Under the stewardship of this government, we have seen promises and optimistic announcements, but there is little evidence that — despite the spending — we will be able to meet the gargantuan housing need which experts agree is as many as four million new homes in the next six years.

In fact, despite the promise of more houses faster, housing starts overall were actually down 7% in 2023. And there was a shocking 25% drop in construction of single-family homes.

The recent Senate Banking Committee housing report heard from the industry leaders, and all agreed the housing crisis is just that — and growing. Interestingly, and in a way assuring, was that everyone who offered testimony suggested similar solutions. Cut the red tape. Regulatory regimes are confusing and contradictory and are making construction prohibitively expensive. Access to capital should be streamlined to ensure all different kinds of housing are funded, and that private investment is encouraged. And we need to get our heads around that fact that, going forward, not everyone will have access to a single-family home with a yard and a picket fence, especially in our growing cities where density will have to increase, and buildings will have to go ever higher.

And all witnesses made the point that despite record levels of people flowing into the country, we are not recruiting those with the skills needed to build the new “homes,” and there is no real plan to put a roof over the heads of the next generation of Canadian kids or the newcomers.

The government ignored warnings two years ago from its own Immigration Department that the growing numbers of people arriving on our shores would exacerbate the housing affordability crisis.

The federal government has tremendous influence with the money it hands out to attach conditions for provinces or cities, such as tying public transit funding to housing densification plans, or waiving excessive development fees for multi-unit residential buildings that mitigate climate concerns. Municipal development charges can run as high as $148,000 for a three-bedroom apartment.

The Housing Accelerator Fund and the National Housing Strategy could help improve affordability if the dollars are targeted, and if we get the politics out of housing announcements. Money can’t flow just to ridings where governments need to shore up support. Even the GST holiday for rental-home construction may have unintended consequences.

Industry needs a predictable playing field, and Ottawa should take a more creative approach to both financing and regulation, including for social housing to help those facing unconscionable rent hikes or persistent homelessness.

As the Canadian Credit Union Association’s Michael Hatch testified: “Competition should be the principle that underscores all policy that comes out of Ottawa so that ultimately, we can all play our part in solving not just the housing crisis but the cost of living and affordability crisis that exists in this country as well.”

The crisis playing out before us will affect generations of young Canadians and newcomers for decades if we don’t course correct and get this right.

Senator Pamela Wallin represents Saskatchewan. She is chair of the Senate Committee on Banking, Commerce and the Economy.

This article was published in The Hill Times on January 31, 2024.