An all-out Trudeau government push to 'build more homes, faster' appears to be doing nothing
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Despite an all-out push by the Trudeau government to “build more homes, faster,” new estimates from the Canada Mortgage and Housing Corp. show that home construction is actually poised to go down for the foreseeable future.
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This — coupled with an immigration rate that remains at historic highs — means that skyrocketing rents and real estate prices are set to continue until at least the next federal election.
“Rents will rise and vacancy rates will fall,” reads the forecast. Meanwhile, the sale prices of homes will be pushed “beyond previous peak levels.”
Across the country, rents are already at all-time highs, while real estate affordability has never been worse.
Just last week, RBC published new data showing that Canadian home prices as a share of median income had hit a new high. Analysts calculated that the median Canadian household would now need to devote 63.5 per cent of its income just to afford the mortgage on a “typical” home.
But on both rent and real estate affordability, the Canada Mortgage and Housing Corp. (CMHC) predicted that the situation is only going to get worse.
“With the weakness in housing supply, affordability challenges will continue. These challenges will be most evident in the rental sector,” it read.
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Probably the most damning measure in the new CMHC forecast is that Canada’s already lacklustre rate of housing construction is set to go down.
In 2023, the country recorded 240,267 housing “starts.” This number was already a sharp decrease from the 261,849 housing starts recorded in 2022.
But according to even the most optimistic forecasts by CMHC, housing starts are set to become progressively lower until at least 2026.
The absolute best-case scenario for 2024 is that the country records 232,267 housing starts — a deficit of 8,000 homes compared to 2023. But more likely is a “baseline” scenario of 224,485, which represents a decrease of 16,000 homes.
The nine-year tenure of Prime Minister Justin Trudeau has already corresponded with a meteoric increase in housing prices. This trend has attracted recent international attention, with a profile in The Economist, a British weekly magazine, noting that when Trudeau took power in 2015, Canadians earning the median income could cover mortgage costs with 39 per cent of their pay, 25 percentage points lower than the proportion of income paid now.
But the grim news from CMHC comes after months of aggressive Trudeau government messaging that they are working to turn the corner on housing unaffordability. Every few days features Trudeau making a public appearance at another ribbon-cutting for a condo development or housing project built with federal assistance.
The release of the CMHC forecasts, in fact, corresponded with a statement out of the Prime Minister’s Office that included the line “we’ve taken bold action to build more homes, faster, improve access to housing, and make homes more affordable — and we need to do more.”
Canada is home to the most acute housing shortage of any country in the G7. According to 2023 estimates by the CMHC, Canada would need to build at least four million additional housing units to bring affordability to where it was in 2004.
But even at 2023 rates of homebuilding, Canada wasn’t even coming close to patching up its housing gap. In fact, it wasn’t even building sufficient homes for the more than one million newcomers now streaming into the country each year.
According to the most recent numbers by Statistics Canada, the country’s population grew by one million over a single nine-month period in 2023.
Canada is now among the top five fastest-growing countries on Earth, a distinction it shares exclusively with high-birthrate nations in the developing world, such as Syria or South Sudan.
Ontario Premier Doug Ford has issued a letter politely asking the LCBO – the province’s government-controlled liquor distributor – to start issuing paper bags again. Only a few years ago, the LCBO sent customers away with their purchases in free plastic bags. This then became fee-for-use plastics bags, then fee-for-use paper bags and then, finally, a blanket ban on single-use bags of any kind. “This change has left people stuck openly carrying alcohol in public when leaving an LCBO store,” wrote Ford, adding that “the environmental merits of this decision are questionable at best.”
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