Improving the bleak supply and affordability outlook will be no easy feat for the next PM
Canada is preparing for its first new Prime Minister in nearly a decade – and while the identity of Justin Trudeau’s successor is yet to be decided, a daunting challenge on the housing file awaits whoever takes the reins next in Ottawa.
Surging property prices have helped push affordability out of reach for scores of hopeful homebuyers across the country in recent years, while the bleak outlook for construction – with the country likely to be millions of homes short of what’s needed by 2030, according to Canada Mortgage and Housing Corporation (CMHC) – only worsening that crisis.
A Liberal Party leadership contest in the coming weeks will determine who replaces Trudeau at the helm, with chances of a no-confidence vote in the governing Liberal minority pushed back until Parliament returns from prorogation on March 24.
But with the Liberals flailing in the polls, the next PM likely faces an uphill battle to narrow the gap to the leading Conservatives before the federal election, which must take place on or before October 20.
Trump threats will loom large over next PM
Dealing with the grave challenges posed to the Canadian economy by US president-elect Donald Trump will be the top priority of the next Prime Minister, mortgage brokering sector advisor JP Boutros (pictured top) told Canadian Mortgage Professional, pushing housing a rung or two down the ladder.
Growing the economy will likely mean scrapping certain Trudeau policies, he said – and while those may not be directly tied to housing, a better economic outlook would likely mean a stronger housing market.
“The single biggest challenge for Canada’s next elected government will be how it balances the fealty President Donald Trump expects of it and the independence Canadians will insist we retain,” Boutros said.
Toronto may surpass Vancouver as Canada’s most expensive housing market this year, as economic factors drive up real estate prices in Ontario’s largest city, a report from CP24 highlighted.https://t.co/VZ3L2AnRoc
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 10, 2025
“In order to improve our economic prospects, there will be great pressure to reverse some of the virtue-driven economic policies of the Trudeau government including the carbon tax and other environmental decisions. That’s not housing policy, but without strong employment and economic prospects, the housing market can’t prosper.”
Low inventory could remain a prominent problem for Canada’s housing outlook
The federal government has unveiled a flurry of measures aimed at accelerating home construction across the country in recent years – but faces a daunting task to build the 3.5 million homes needed by 2030, according to CMHC’s 2023 projections, to restore housing affordability.
It’s also recently hiked the cap for insured mortgages to $1.5 million and scrapped the need for homeowners to undergo a stress test when they switch their mortgage lender at renewal time. Those measures might help some buyers get into homes – “but they will not address the housing crisis,” Boutros said. “That’s a supply issue, and the provincial and municipal governments are primarily to blame for our lack of housing supply.
“The Feds should incentivize provinces and municipalities to increase housing supply. They should also not repeat their screwups on immigration.”
After the COVID-19 pandemic, Trudeau’s government rolled out plans to welcome millions of new immigrants to Canada by 2026. But he recently scaled back those targets, admitting his administration “didn’t get the balance quite right” on immigration – and Boutros said that misstep proved a costly one for the housing outlook.
“The only part of the housing crisis which can clearly be assigned to the federal government is on immigration policy,” he said. “Team Trudeau had no plan to adequately shelter the record number of immigrants they insisted on welcoming.
“In 2019 and 2021, our industry insisted that Trudeau’s immigration policies needed to take into account Canada’s anemic housing supply, the number of homes which would actually be available for existing and aspiring Canadians to buy or rent. Trudeau’s ministries of housing and immigration, respectively, did not listen to us. They have now accepted their abject failures through recently reduced limits on immigration to Canada.”
Canada needs immigrants, he added – but “Trudeau’s planning for how and where to house new Canadians was non-existent.”
Poilievre has vowed to further cut the number of immigrants entering Canada each year – and Boutros also said power would likely remain less concentrated in Ottawa in the event of a Conservative win at the election.
“Of the likely incoming Conservative federal government, I expect they will have a more decentralized way of dealing with crises,” he said. “The provinces can and should be entrusted and better empowered to deal with housing issues, as per constitutional responsibilities. Cooperation and better planning overall is essential.”
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