Most Canadians are feeling the financial pinch, from the grocery store checkout to filling up at the gas station. One of the biggest impacts on household budgets in the last year has been skyrocketing mortgage and rental payments – that is, if Canadians can even find an affordable home to begin with. As budgets get tighter, the collective Canadian patience for solutions to the affordability crisis is wearing thin. And while political leaders are grappling with these issues (as evidenced by recent legislation), tangible solutions that can be quickly implemented appear to be elusive for the government.
Last Thursday, the federal government announced that they have approved Halifax’s bid for federal housing money via the Housing Accelerator Fund, which will be used to fast-track the construction of 2,600 new units in the municipality over the next three years. The Trudeau government has committed over $79 million to the city in order to build 10,000 new homes over the next decade. This announcement comes on the heels of the City of London receiving $74 million last month to build 2,000 new units over the next three years, and $20M for Yellowknife via the Rapid Housing Initiative.
The Housing Accelerator Fund is one of the recently announced tools that the government is leveraging in response to the housing crisis. It looks to specifically tackle one of the pressing issues: a lack of supply. According to a recent study from the Fraser Institute, between 1972 and 2022, Canada’s population increased on average by 1.9 people each year for every new home built. Since 2016, the average rose every year from 2.3 people per home built to peak in 2022 at 4.7 people. The market is nowhere near catching up to the demand.
The government’s plan to accelerate the construction of new homes is in turn meant to address housing affordability. If there is more housing stock, than the cost of these units, in theory, should not be as prohibitive for new buyers. And while this is a much longer term solution than other quick-fix approaches (such as subsidies for first-time buyers), Canada’s population growth will certainly blunt the impact this would otherwise have on increasing affordable market housing. And in the meantime, this offers little comfort to those who are struggling to make ends meet or who are being pushed out of the market today.
Of course, it is not just the Liberals contending with the housing affordability crisis – it has equally seized opposition parties. This past weekend, as the NDP gathered in Hamilton for their policy convention, the conversation of affordability was centered around housing. During the affordability session, three out of the ten resolutions debated were related to affordable housing and building more homes in Canada. Meanwhile, the Conservatives have outlined their own plan to boost housing stock, including incentives for municipalities that meet and surpass building targets (and clawbacks for those who don’t).
Whichever party is able to meaningfully address the housing crisis (or, be seen to by voters) has much to gain electorally. A recent survey from Abacus Data found that young Canadians, a core voting block of the current Liberal government, are concerned about housing. Affordable housing was identified as the priority issue for 89% of respondents between 18-34 years old, a key demographic for the government’s re-election hopes, but one that has already shown a significant decline in support. These voters are making changes to their monthly budgets in order to afford housing, such as cutting down on groceries, debt payments, and emergency savings.
And while voters might understand that the housing affordability crisis is not the federal government’s problem to fix alone, they are growing tired of the blame game. Canadians are looking for concrete action – and eyes are on Ottawa to do something tangible. The federal government seems to understand their role in the bigger picture, and are putting a lot of effort, and money, into addressing it. Time will tell if it pays dividends when the next election is called, or if Canadians will have moved onto a new challenge.
