Housing in Canada: A Broader Conversation

  • National Newswatch

While much of the public policy discourse surrounding Canada's economy has centred on the “manufacturing vs resources” debate, a major missing ingredient has been an industry that does all its work in Canada, represents $125 billion in GDP, and supports more than 900,000 jobs. In short, the Canadian industry that touches closest to home is … the building of Canadian homes.Despite paying out more than $50 billion in wages each year, the home-building industry is comprised almost entirely of small- and medium-sized enterprises. And it is based in every community across the country – every single community where people live. This means the importance of sustaining a positive public policy process that facilitates the home building industry is a critically important discourse – across levels of government.The most critical issue facing housing policy is affordability – for first-time home buyers and new Canadians, particularly at a time when prices of homes have far outpaced inflation for well over a decade.For generations, home ownership has been a fundamental Canadian aspiration, and owning a home has served as both the physical and financial foundation for Canadian families. The quality and affordability of Canadian homes, coupled with the livability of our communities, has served as a distinct Canadian competitive advantage.In some of our larger urban centres, affordability is under significant pressure. And the issue isn't low interest rates or over-valuation—there are new market fundamentals at play.As municipal governments wrestle with infrastructure deficits resulting from decades of under-investment, new development is being asked to bear a disproportionate share of the costs involved. The result is high taxes on new homes (usually in the guise of “development charges” or other fees and levies) that are ultimately passed on to the consumer – driving the cost of a new home beyond the reach of first-time home buyers.In some regions, this affordability challenge is further aggravated by development policies limiting housing supply. Efforts to “densify” urban areas make sense, but not if the result is a chronic shortage of family-oriented homes, and price escalation fueled by such shortages. We need to get smarter about growing our cities outward, inward and upward.For those in the Millennial generation, this is a very real issue. Since 2005, income growth for this group has virtually stagnated, increasing by only about $1,700 per year. Over the same decade, the price of the average home has shot up by over $158,000. In our largest centres, the increase has been much higher.Having home ownership move beyond the reach of well-educated, hard-working young people represents a huge change in Canada's economic landscape – and poses a range of financial and competitive risks to communities and to existing homeowners. The federal government can play a key role in helping to resolve this situation. Through initiatives like the recently announced Public Transit Fund, and the continued investment through the New Building Canada Fund, municipalities can move away from their over-reliance on new home buyers to meet rising infrastructure costs.Protecting affordability for the next generation of families wanting to become home owners is critical to Canada's economic future, and we need to talk about how best to ensure this happens.And that's just one issue. Innovation, skilled trades, the underground economy – all of these are big concerns where there is an important federal role. As our members meet with parliamentarians in Ottawa over the next several days, these are the conversations we look forward to having, because the stakes are high – but the solutions are possible.Kevin Lee, CEO of the Canadian Home Builders Association The Canadian Home Builders' Association (CHBA) is the 'voice' of the residential construction industry in Canada. From coast to coast, our members develop, build and renovate the homes and communities that Canadians live in.