But a real pivot has to include both immigration and housing….
Chris Burke and his fiancée have been less than a year away from buying their first home for the past three years.
Saving for a down payment was the first challenge. Now, rising interest rates have kicked home ownership down the road again, stalling the couple’s plans to get married and have children.
“Any gains we make towards purchasing a house, we’re watching the goalposts move further and further away,” the 31-year-old Ottawa resident said.
Feeling “stuck,” as Burke put it, is a sentiment shared by many young Canadians who are increasingly pessimistic about their home ownership prospects.
For the federal Liberals, the growing discontent with the state of the housing market is becoming a political threat.
“I’m a former Liberal voter,” Burke said. “I certainly wouldn’t be voting for them this time around.”
Experts say the housing crisis poses a great risk to the incumbent government in the next election if it doesn’t take drastic action soon.
“This has become probably the most important both economic and political problem facing the country right now,” said Tyler Meredith, a former head of economic strategy and planning for Finance Minister Chrystia Freeland.
“And especially given the significant emphasis the government has put on immigration and the relationship between immigration and the housing market, there is a need to do more.”
Conservative Leader Pierre Poilievre has taken direct aim at the Liberals for the state of the housing market, highlighting the dramatic increases in home prices, rents and even interest rates.
According to the Canadian Real Estate Association, the national average price of a home sold was $709,000 in June 2023, up from $455,000 in Oct. 2015, when the Liberals first came to power.
And the cost of getting a mortgage has soared, following a series of aggressive interest rate increases by the Bank of Canada in response to rising inflation following the COVID-19 pandemic.
Rent prices have also skyrocketed, with some cities seeing double-digit increases over the last year.
Trudeau has tried to deflect for the housing crisis, recently saying there are limits to what the federal government can do.
“I’ll be blunt as well: housing isn’t a primary federal responsibility,” Trudeau said during a housing announcement in Hamilton on July 31.
“It’s not something we have direct carriage of. But it is something that we can and must help with.”
His remarks were quickly blasted by Poilievre, who reminded people of earlier promises Trudeau had made on housing.
“(Trudeau) held a news conference … to tell you all he’s not responsible for housing. That’s funny, because eight years ago, he promised he was gonna lower housing costs,” Poilievre said in a news conference the next day.
Most experts agree that Ottawa isn’t solely responsible for the problem. But many say the federal government could still be doing more to alleviate the shortage of housing at the root of the affordability crunch.
The Canada Mortgage Housing Corp., the national housing agency, warned last year that the country needs to build 5.8 million homes by 2030 to restore affordability.
If the current pace of building continues, then only 2.3 million homes will have been added to the housing stock by then.
There are several things experts say the federal government could be doing, such as better calibrating its immigration policy with housing and reforming tax laws to incentivize rental developments. It could also push local governments to get housing built faster.
The federal government has been hearing from stakeholders and housing experts on these potential solutions, as rumblings grow about a focus on housing in the coming fall economic statement and next year’s budget.
A senior government official who spoke on the condition of anonymity so they could discuss matters not yet made public, says the Liberals plan to take steps over the next year to get other levels of government, the private sector and the not-for-profit sector to build more homes.
Trudeau’s recent cabinet shuffle might be an early sign that the federal government plans to prioritize housing. The prime minister appointed one of the stronger communicators and a rising star on the Liberal bench, Sean Fraser, to take on housing and infrastructure as one, amalgamated file.
“The prime minister said something to the effect of, ‘I’ve got a big job for you to do,'” Fraser said in an interview.
Fraser said he hopes to help restore a housing market closer to the one he grew up with in small-town Nova Scotia: one where having a job was enough to buy a home.
“It might take a bit of time for us to solve the housing challenges that are before us,” he said. “But man, is it a challenge we’re solving.”
That challenge includes overcoming jurisdictional issues. Many of the policy levers that could help spur more housing development are at the provincial and municipal levels of government.
Urban planning, zoning laws and red tape are the purview of local governments, which have decision-making powers that can help or hinder housing development.
Ben Dachis, associate vice-president of public affairs at the C.D. Howe Institute, says the predicament the Liberals find themselves in speaks to the “insidious nature of consistent federal overreach.”
“The cautionary tale is that the federal government needs to stick with jurisdiction,” Dachis said.
But housing expert Carolyn Whitzman has a different take. The University of Ottawa adjunct professor says the federal government can’t turn its back on Canadians in the middle a crisis.
“The federal government: it’s where the buck stops,” Whitzman said.
“If housing and climate change are the crises that they’re certainly treated (as), the federal government is going to have to put on its big kid pants and actually deal with it.”
Source: Long way home: Blamed for affordability crisis, Liberals look to pivot on housing
Related article: Canada ‘absolutely’ can’t build more houses without more immigrants, minister says
Canada’s housing crisis “absolutely cannot” be solved without the aid of new immigrants who bring their skills here, Immigration Minister Marc Miller told reporters on Friday
“The federal government is making housing more affordable and bringing in the skilled workers required to build more homes,” Miller said in Montreal.
“Without those skilled workers coming from outside Canada, we absolutely cannot build the homes and meet the demand that exists currently today.”
Miller was asked by reporters if he was considering slashing Canada’s immigration targets, which are currently at historic highs, in response to a recent Bank of Canada report that new immigrants are adding to housing demand.
The minister said he was not.
“People coming to this country are resourceful. When they bring capital, they are able to acquire houses,” he said.
“If people are asking us to slash, what does that mean? Does that mean slashing the skilled workers that we need to actually build those houses? Slash family reunification, which can be devastating for the mental health and well-being of the families that are already here?”
Canada aims to welcome 451,000 new immigrants in 2024.
By 2025, the number is expected to go up to 500,000 new immigrants in one year.
Miller said around 60 per cent of new immigrants to Canada are economic migrants, many of whom are the kind of skilled workers needed to build more housing. Family reunification visas account for around 20 per cent of those migrating. The rest, he said, are refugees and asylum seekers.
“We have a humanitarian duty towards people that are fleeing war and persecution,” Miller said.
Last week, a spokesperson from Miller’s office told Global News that fulfilling Canada’s labour shortages is one of his key priorities, and a key goal of the government’s immigration targets.
“Strategies like Express Entry, and the historic Immigration Levels Plan, which is largely made up of economic migrants, are a great asset to our nation as they will directly help combat the ongoing labour shortage. This is especially true when it comes to the housing sector,” Bahoz Dara Aziz, press secretary to the immigration minister, told Global News.
“With provinces like Ontario needing 100,000 workers to meet their housing demands, it is clear that immigration will play a strong role in creating more homes for Canadians.”
The federal government increased its immigration targets in November 2022, and Miller has suggested those targets may need to keep rising.
The construction industry is short tens of thousands of workers, and experts say a coming wave of retirements could make the problem worse.
Meanwhile, Canada is millions of homes behind what’s needed to reach housing affordability this decade.
The job vacancy rate in construction is at a record high with around 80,000 vacancies in the industry, CIBC deputy chief economist Benjamin Tal said in a recent note.
Those vacancies, which push up building costs and impede productivity, come at a time when the residential construction industry is under pressure to meet the demands of a growing population.
Canada Mortgage and Housing Corp. forecasts a need for 3.5 million more homes by 2030 than the country is currently on track to build.
The number of new homes built, however, has been in decline, from just over 271,000 in 2021 to 260,000 in 2022. And in May this year, the annual pace of housing starts dropped 23 per cent month over month, leading the CMHC’s chief economist to predict that just 210,000 to 220,000 new homes will be built by the end of the year.
Last week, the federal government launched a separate stream of entry for newcomers with work experience in skilled trades.
“It’s absolutely critical to address the shortage of skilled trades workers in our country, and part of the solution is helping the construction sector find and maintain the workers it needs,” Miller said in a statement, making his first major announcement as Canada’s new immigration minister.
“This round of category-based selection recognizes these skilled trades workers as essential, and I look forward to welcoming more of these talented individuals to Canada.”
Immigration, Refugees and Citizenship Canada (IRCC) said that by welcoming people in skilled trades such as carpentry, plumbing and welding, Canada can help its construction sector attract skilled workers.
But there remain questions about how the government can ensure those bringing the skill set to work in construction actually end up working in the sector and are able to navigate the certifications processes across the country.
Source: Canada ‘absolutely’ can’t build more houses without more immigrants, minister says
Multicultural Meanderings 