Canada Housing Crisis

by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East Canada’s housing problem is not just a national crisis. It is a stark example of what happens when the Federal government neglects an area of responsibility in the name of good government. This is the result when the three levels of governments do not work together for Canadian taxpayers, but only for themselves, forgetting that there is only one taxpayer paying for their illustrious mismanagement. Starting back in the mid 1980s, the national government signed agreements turning over housing responsibility to provincial governments in an effort to shift responsibility. It was not until 2017 that the federal government joined forces with most provincial governments to launch a National Housing Strategy (NHS). It included a 10-year, $40-billion plan to house 530,000 families and reduce chronic homelessness by 50 per cent. However, the province of Quebec has refused to participate in the national strategy, claiming it “intends to fully exercise its own responsibilities and control over the planning, organization and management of housing on its territory.” Prime Minister Justin Trudeau was criticized when he claimed recently, that “housing isn’t a primary federal responsibility. It’s not something that we have direct carriage of. But it is something that we can and must help with.” As expected, Conservative Leader Pierre Poilievre has a simple solution. He promises to withhold transfer payments to local governments who do not fast-track housing. Anyway, this housing crisis has been in the making for many years but it is only now that the bubble has burst. There were years and years of neglect, with governments taking the position that it will resolve itself. If we take a look at history, an unfashionable activity these days, an in-depth review of the demise of housing availability in Canada should start with a document released decades ago by Bill McKnight. As the minister responsible for the Canada Mortgage and Housing Corporation (CMHC) back in 1986, he released a document entitled, “A National Direction For Housing Solutions.” At the time the CMHC was also known as, “Canada’s housing agency,” but this report was the first step in dismantling a national housing policy in favour of multiple provincial policies. Back in 1984, the federal government spent $1.4-billion annually on housing. However, the McKnight document relegated the federal role in housing to solely that of funder, with provincial governments responsible for building housing and developing sound policy. We see here that the model proposed and followed is the same as that of the health care system. The only difference being, that here the Federal government had the opportunity to insert control measures, which do not seem to have been exercised. The lack of controls slowly created the current housing crisis situation. We can affirm then that the Federal government divested and shifted responsibility to provincial governments on the bulk of housing issues. In plain language, they washed their hands of housing related responsibilities. The only areas that remained in federal hands included co-operative housing developments, urban Indigenous housing, and some housing rehabilitation programs. The rest were transferred to provinces, and it took more than 30 years for the federal government to re-insert itself into the conversation in 2017. Thirty years of stagnation in housing and social housing construction has certainly come with huge consequences. Now, when a national push for housing arises, the focus is on reducing the number of people who need houses, not decreasing the size of our housing footprint, for example. The relative house size in Canada is more than double that of the United Kingdom. In the UK, people inhabit an average 818-square-foot home, compared with 1,948 square feet in Canada. China’s average urban house size is 646 square feet. At the same time, fewer people are living in increasingly bigger homes. So, when we are looking at housing policy, we have to consider that size matters. Simply cutting back on immigration is not the entire solution to this problem. If we really want to tackle the housing problem, we need to look at a national housing strategy that does not encourage people to be over-housed, living in underutilized structures. Older Canadians remember the time when a 500-square-foot house provided habitation for a family. Now we have mega homes that often house only two or three people and the costs are big. In addition, it is time for a country like Canada to think about creating new settlements in sparsely populated areas as other countries like Brazil and Australia have done, in order to develop the country. Canada has a population of approximatively 39 million people, mostly concentrated within 50 km of the border with the United States, despite being the country with the second largest territory in the world. Let us hope that in continuing to build the nation, politicians and public servants will start to really look at the interests of Canada, instead to just following their own interests. The current focus is on building new homes, but renovations should also be included in the discussion. Urban planners are trying to figure out what to do with vacant office buildings and shopping destinations. Landfill sites across the country are being cluttered with building materials from houses that have been torn down because their inferior building quality was designed for obsolescence after 30 years. These questions are complex. A single government is not going to fix them. A true and open cooperation at all three levels of government is what is needed here. Removing the federal government from responsibility for housing policy in 1986 was a serious error that we are paying for today. It has taken us 30 years to move toward a fix. The active role of the Federal government is required, and they finally stepped in in 2017. However, five years have passed, during which time Covid-19 hit, and nothing seems to have been done to mitigate the housing crisis. Rampant inflation and the Bank of Canada rates going to unprecedented heights only exacerbate the crisis and affordability of housing. According to Statistics Canada, the Canada Mortgage and Housing Corporation’s average five-year mortgage lending rate rose to 5.99 per cent in July, the highest since December 2008. It is great to build houses, but it is even better to be able to sell them to people who have the financial resources to buy them. As far as social housing goes, there should be a realistic plan and it should certainly be coordinated with immigration policy. In conclusion, a problem that took over 30 years to develop will take at least another 10 to fix. This should be a priority for any Federal government in Canada, in cooperation with provincial and municipal governments. Obviously, we need to follow sound proposals, rather than making hasty decisions in an unprofessional manner that jeopardize agricultural and sensitive lands. This happened in Ontario recently, notably in the Durham region city of Pickering. What is your take on it?