Ontario and the Housing Crisis

by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East We are facing an unprecedented housing crisis in Canada, especially in Ontario. The federal government’s practice of increasing immigration to record high levels despite economic problems in the country, is adding to a slow but latent growth in the lack of housing issue. The high cost of housing and rent is a major concern for many Canadians, particularly Ontarians. According to a recent Leger poll, 59 per cent of Ontarians worry about paying their mortgage or rent, and 96 per cent of Ontarians believe the increasing cost of rent is a serious problem. It is not wrong to assume that a lack of coordination between the three levels of government over many years, has caused this problem. Certainly, the high interest rate set by the Bank of Canada does not help people with mortgages. It is time that the Bank of Canada represents the interests of Canadians rather than the interests of International Finance. There is a widening disparity between the number of people wanting to rent or buy homes and the number of actual homes available. As the number of potential homebuyers and renters, increases much faster than the number of homes available for purchase or rent, housing prices go through the roof. Clearly, builders, particularly in Ontario, are not building enough homes. Several studies confirm that we are facing a particularly sharp increase in the number of homebuyers and renters in Ontario relative to the number of new homes completed a gap that has been widening since 2014. Roughly a decade ago, the population in the province was growing by 1.6 people for every home built. As population growth has increased, in 2022 that number has skyrocketed to 5.5 new residents per home built which is the highest number in the last 50 years. The situation is critical in Toronto and the GTA is also impacted. At the same time, builders in Ontario are constructing fewer homes than they did in the 1970s. Housing completions averaged 87,368 per year in the province from 1972-1979. During that time, the number of homes built was roughly in line with the number of new people when the province’s population grew by an average of 98,353 people each year. Circumstances are quite different today. Population growth in Ontario was especially notable in 2022 when the province’s population increased by 445,495 which is the highest annual increase by a wide margin. Yet builders were only able to build 71,838 new houses last year. Considering this data, we can see that housing demand has increased substantially but home building has not kept pace. This housing shortage has pushed prices and rents upwards for Ontarians. Consequently, the Canada Mortgage and Housing Corporation (CMHC) estimates that 1.85 million homes must be built in the province by 2030 to restore housing affordability for Ontarians. Policymakers’ at all three levels of government have taken some desperate and hasty patching measures recently to address housing affordability. However, they must go further and faster with a coordinated effort. Housing starts are trending down rather than up. The longer it takes to approve new housing and the more fees and taxes developers pay, the less housing will be built and the longer it will take. In the meantime the federal government is generously shovelling taxpayers’ money abroad. In desperation, the federal government continues to roll out new programs aimed at making it easier to buy homes. However, throwing money at the demand side of the housing market only serves to boost prices. It is not only a waste of money, it is also counterproductive. However, what can we expect? When was the last time the federal government showed interest in carefully managing hard-earned taxpayers’ money? The reality is, that the federal government is missing in action where the housing crisis is concerned. No plan, no real action, just wavering. On the other hand, in Ontario, the Ford government should be laser-focused on closing the gap between housing supply and housing demand, and should avoid or rescind any new or existing policy that stokes demand. It should be less focused on useless exercises like the ill-conceived green belt fiasco. Governments, including municipalities across the province, should work to relax zoning laws, reduce developer fees, and speed up permit processes to help boost housing supply. The increased bureaucracy at all levels of government is a burden on development. It only creates little empires in the public service, to justify their need for more people and money. People doing no useful jobs, just wasting more taxpayers’ money. Let us hope that reality will check in and governments at all levels will wake up, to deal with the housing crisis that is becoming a serious problem in Canada. Canada needs real, pro-active leadership to deal with this issue, not word smiting legislation and chaotic, mindless, knee-jerk reactions. What do you think?