Election 2021: Suddenly, housing supply is the answer
September 1, 2021
Federal politicians appear to have experienced an epiphany on the road to the September 20 federal election: suddenly all political parties see increasing housing supply as the route to more affordable homes.
More supply, of course, has been the solution repeatedly recommended by Canadian home builders and economists for years. As Manulife noted in a summer report, the federal government’s aim to dramatically increase immigration must include an emphasis on delivering more new homes.
As an example from the province with highest housing costs, from 2010 to 2020, British Columbia’s population increased by 737,206—mostly through immigration—while only 316,510 new housing units were added, according to the Chartered Professional Accountants of British Columbia.
Now, all four major federal political parties say they would increase Canada’s housing supply if elected. Unfortunately, most of their plans involve spending taxpayers’ money to build social or rental housing—not on encouraging the construction of market homes preferred by most Canadians.
Here is how the election housing supply promises stack up among the federal parties.
Liberals: If re-elected, they would invest $4 billion in new money to construct 100,000 “middle class homes” over the next four years. A close look at this proposal, however, shows most of the funding would go towards subsidizing rental housing. The Liberals further pledge to put up $600 million (double the funding announced in spring 2021 under its space conversion plan) to help transform vacant office space into rental housing.
The Liberals would also put $1 billion towards loans and grants for rent-to-own projects.
Conservatives: They plan to build one million homes over the next three years and release 15 per cent of government-owned real estate for new builds or conversion into rental properties. The Conservatives promise to mandate higher-density residential development near federally-funded public transit. The Conservatives would also encourage private developers by extending the ability to defer capital gains tax when selling a rental property and re-investing in rental housing.
NDP: They propose building 500,000 new affordable homes over the next 10 years—all appear to be subsidized social housing. The NDP’s stated aim to “get big money out of housing” apparently refers to private, not public investing.
Green Party: They promise to build 300,000 units of low-income housing units over the next few years.
Meanwhile, Canadian housing starts are on track to reach 286,000 units this year, based on monthly starts during the first six months of 2021, according to Statistics Canada. The vast majority of these are privately-built homes for homebuyers.