Over 2.4 million households struggle with affordability as demand outpaces federal efforts
The number of Canadians in need of affordable housing has continued to climb despite significant federal investments, according to a report released Thursday by the Parliamentary Budget Officer (PBO).
The report reveals that 2.4 million Canadian households are currently in "core housing need." This marks an increase of 662,000 households since the launch of Canada’s National Housing Strategy in 2017, despite billions of dollars in federal spending aimed at addressing the issue.
The National Housing Strategy had set an ambitious goal to reduce core housing need for 580,000 households by 2028. However, the PBO projects a shortfall, estimating an additional 926,000 households will be in core housing need by 2028 compared to 2017.
While government measures have prevented an estimated 78,000 additional households from falling into this category, the report highlights the gap between policy intentions and outcomes.
“Core housing need” is defined as households living in homes that require major repairs, lack sufficient bedrooms, or cost more than 30% of gross income when factoring in utilities, property taxes, rent, or mortgage payments. It also applies to households in areas where median housing costs exceed this 30% threshold.
The PBO report attributes rising unaffordability for homeowners to elevated interest rates, particularly during mortgage renewals.
“Although the policy interest rate has been cut in 2024 and we expect the policy rate to continue to decline, the average interest rate for outstanding mortgages is expected to remain higher than in 2017,” the report noted.
For renters, increasing demand, driven partly by immigration, and a shortage of housing stock have pushed rental prices higher. The report suggests that Canada’s revised immigration targets could ease rental cost pressures over time.
The federal government has significantly increased its housing affordability spending, allocating an average of $6.1 billion annually under the 10-year National Housing Strategy. Adjusted for inflation, this represents a 50% increase compared to spending in the decade prior to the strategy’s launch, equating to approximately $168 per person each year.
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“Today’s PBO report shows that, after decades of federal inaction on housing, our federal government is making historic investments to solve the housing crisis,” said housing minister Sean Fraser’s office in a statement.
The Conservatives have strongly criticized the federal government’s handling of the housing crisis. “Justin Trudeau promised to fix the core housing need of 530,000 households by 2027. But instead, things are only getting worse,” Conservative leader Pierre Poilievre’s office said, calling the situation “housing hell.”
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