Amid soaring house prices and tight housing supplies, Prime Minister Justin Trudeau said the onus lies mainly with the provinces and territories, but experts say the federal government is playing a role. most important in shaping housing policy in Canada.
In a Hamilton housing ad on Monday, Trudeau said the problem is primarily one of provincial jurisdiction.
“I will also be blunt: Housing is not a primary federal responsibility. It’s not something we have direct responsibility for,” he said.
“But it’s something we can and should help with.”
Housing has become a major political issue as prices continue to rise. The Canadian Real Estate Association reported earlier this year that the median home price in Canada is $716,000.
Conservative leader Pierre Poilievre attacked Trudeau and his government on Tuesday over rising housing costs, saying the federal government is responsible for many policies and institutions that affect housing.
Poilievre has pledged to withhold federal infrastructure funds from municipalities that block housing developments.
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Trudeau said he would like to see more efforts from the Ontario government.
“I would love to be able to share this stage right now, not just with the mayor of Hamilton, but with the province,” Trudeau said.
“They also need to step up their efforts, particularly on affordable housing. That’s something the federal government is taking very seriously, but we need all of us to work together on [it]And that’s what we’re here to continue to do.”
But experts told Breaking: that while Trudeau’s comments are technically accurate, they simplify a complex issue that Ottawa could be doing a better job on.
Ottawa Moves Into Housing File: Experts
The Constitution or legislation sometimes explicitly states which level of government is responsible for a particular issue, but this is not the case for housing.
“If you read the Constitution, the word housing doesn’t appear there,” said Steve Pomeroy, professor of industry and executive adviser to the Canadian Housing Evidence Collaborative at McMaster University.
“However, the jurisprudence has generally interpreted the Constitution in the sense that local matters are considered provincial competence. Therefore, the legal interpretation of the Constitution in a very strict revision would assign the responsibility of housing to the provinces”.
But the federal government controls many institutions and policy areas that affect the price and availability of housing in Canada, Pomeroy said, such as federal tax policy and banking regulation.
The Canada Mortgage and Housing Corporation (CMHC), which is responsible for implementing the Canada National Housing Act, is a federal crown corporation. CMHC says that it “exists for one reason only: to make housing affordable for everyone in Canada.” according to their website. The organization provides mortgage insurance, sets rules about who can qualify for mortgage insurance, collects data on housing in Canada, and more.
There is also a federal housing minister. Sean Fraser, former Minister for Immigration, Refugees and Citizenship, took over in the recent cabinet reshuffle.
Ottawa’s desire to participate in the housing sector has fluctuated over the decades, Pomeroy said, adding that the Trudeau government has wanted to play a bigger role.
The government developed a National Housing Strategy, which includes a plan to build up to 160,000 new homes and cut chronic homelessness in half. He has also campaigned on a number of housing policies, including a fund for municipalities looking to increase housing supply, as well as a savings account for first-time homebuyers and a new tax on foreign buyers.
“The pendulum has swung back to a very proactive federal role, despite the fact that the Constitution doesn’t really give them the responsibility to be there,” Pomeroy said.
But Lydia Miljan, a professor of political science at the University of Windsor, said campaigning by federal parties and governments outside their jurisdiction is unprecedented. She added that money is also a factor, as the federal government has the largest budget.
“The federal government has the power of money,” he said.
“And historically, they’ve done things to make housing more affordable, whether it’s providing housing for low-income Canadians through rental subsidies or social housing.”
“To some degree, people look to the federal government primarily because it’s the level of government with the greatest fiscal powers,” he said.
“The challenge for cities is that they simply don’t have the capacity to generate revenue. Building affordable housing or social housing is a very expensive proposition.”
The government values the National Housing Strategy at more than $82 billion, though some of that money is borrowing rather than new spending.
But Pomeroy said the federal government must be held accountable for flaws in its approach to housing.
“To be completely frank, I think they have not done a very good job, even though they have started to spend a lot of money,” he said.
“The way they have designed the initiatives has been very cumbersome.”
Pomeroy said a better approach would have been to leave responsibility for housing programs to the provinces while increasing federal funding, slowly increasing the federal role over time.
Immigration vs housing supply
Immigration, an area of federal jurisdiction, has also been a contentious issue when it comes to housing. Canada welcomed 437,180 new arrivals in 2022, and the record number of immigrants is a factor driving demand for housing.
“You can’t just leave a bunch of newcomers in Canada when we have a housing shortage and hope the provinces pick up the slack,” Miljan said.
Following his appointment as housing minister, Fraser said that closing the door on immigrants is not a solution to Canada’s housing problems.
Pomeroy said he would like to see better collaboration between the federal government and the provinces, but added that he thinks Ottawa has already gone too far into provincial jurisdiction when it comes to housing.
“I think that, to some extent, the federal government is its own worst enemy in this case,” he said.