Canada lost dozens of years when it comes to establishing effective public policy on housing, says Sheila Copps
Canada’s housing crisis is a direct product of a less-than-ideal policy approach that began in the 1980s, when the federal government left the issue to the provinces, according to former deputy prime minister Sheila Copps
“The decision that was made back in 1987 to get out of housing at the federal level has resulted in 30 years of underbuilt housing, and also 30 years of not really analyzing good public policy on housing,” Copps said in an interview with BNN Bloomberg.
“I think that’s a big issue,” she said. “Sometimes a national government needs to be at the table to fix problems and leaving it up to 10 provinces and three territories is not always the right way to go.”
Copps said that this was a far cry from the 1970s, which saw the Canadian government being more directly involved including in issues such as the development of seniors and Indigenous housing.
But come the 1980s, “when the provincial governments took over the money [intended for housing], a lot of them didn’t actually spend it on housing,” she said.
The hands-off approach lasted for decades until 2017, when Justin Trudeau’s Liberal administration decided to “insert itself back into the housing game” – but the results have yet to bear fruit.
“Five years later, we’re looking at a problem that has been percolating since we signed off on housing back in 1987,” Copps said.
Contrary to Prime Minister Justin Trudeau's recent statements, academics argue that housing remains a direct federal responsibility. https://t.co/n4mDyZlPqU#mortgagenews #mortgageindustry #housingmarket #housingpolicy
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 10, 2023
Cross-provincial activity is key
Copps said that aside from boosting supply, the federal government should also incentivize greater inter-provincial migration to help take off the pressure on the markets that are seeing the strongest demand.
“The other thing we need to look at is what the housing prices are in rural and remote communities versus urban areas and how we can encourage people to move around,” she said.
“There’s lots of opportunities to make people think about migrating elsewhere and getting maybe extra points for a registered home ownership investment plan. These things should be built into the thinking and to have that you really need to have a national government that is not just looking at building housing.”
Such easing might be needed sooner than later, as in July alone, nine out of 10 provinces saw increases in the income needed to purchase an average-priced home.
The report from nesto noted that while sales activity fell by 0.7% on a monthly basis in July, the aggregate composite price grew by a “larger-than-normal” 1.1% during the same time frame.
