Housing cost talk missing in Ottawa
Maybe in coffee shops, but not question period
OTTAWA • Housing may be the topic you’re most likely to hear discussed at the local coffee shop or see on the neighbourhood Facebook page, but it’s not dominating question period.
It may seem like a slam dunk political issue for either the government to solve or the opposition to make some hay out of, but housing affordability doesn’t lend itself to easy answers. And, when those answers do come, they often take months or even years to have an effect.
New Democratic Party Leader Jagmeet Singh is the only federal politician actively campaigning on the issue. However, Singh’s interest may stem from the fact he plans to run for a seat in an upcoming byelection in British Columbia’s Burnaby South riding, where, the party says, two in five people struggle to afford housing.
While the Liberal government unveiled a $40-billion national housing strategy last year, it’s mainly focused on tackling homelessness and low-income housing. Other than reducing mortgage fraud in Vancouver and Toronto, it doesn’t have much to offer current or prospective homeowners battling a hot market. And The Canadian Press reported Monday even the government’s plan for a watchdog and adjudication system to oversee the strategy is likely to be watered down.
Conservative Leader Andrew Scheer has sympathized with Canadians concerned about a housing crisis, and made comments to local media about increasing housing supply and helping Canadians save for down payments, but he hasn’t elevated it to a national issue.
Still, about 60 per cent of young Canadians a think the housing market is deteriorating and want the government to do something.
The NDP plans to hammer away on the issue until next year’s election, but some aren’t so sure there’s much left to do at the federal level, after a recently beefed up mortgage stress test and measures taken by the provincial governments in Ontario and British Columbia.
There’s also a question of whether Canada’s housing crisis is simply a tale of two cities. While there is an affordability problem in Vancouver and Toronto — National Bank of Canada says the average mortgage would consume 99 per cent and 73 per cent of the median household income in those two cities, respectively — the story is different across Canada. Edmonton, with its relatively high incomes and modest home prices, sees average mortgage payments of 23 per cent of household income, for example.
And if foreign money is the primary problem in Vancouver, Toronto and their suburbs, it makes sense for the provincial governments to do the legwork, said Joshua Gordon, an assistant professor at the school of public policy at Simon Fraser University.
“They have the tools that can address those specific markets and not have a blunt effect on the rest of the country,” Gordon said, adding that recent changes in the B.C. budget “have us moving towards affordability again, in a strong manner.”
An Abacus Data poll published in October found that millennials are consumed by the idea of home ownership: Eighty-six per cent of young Canadians who don’t own a home would like to, someday, and two-thirds of them are passionate about it.
Millennials are also getting increasingly anxious about home ownership, and that fear is backed up by the data. At the end of September, an RBC report declared that Canadian housing affordability was at its worst level in nearly 30 years.
Singh says he’s been hearing that message from Canadians and his thinking has changed on the affordability problem since taking over as leader of the NDP.
“I used to think it was limited to Vancouver and Toronto but since I’ve been leader I’ve toured across the country and I can say with absolute confidence that this is a national crisis,” Singh told the Post. “It’s a top-of-mind issue.”
The paradox for first-time buyers is that action taken to cool off the housing market has made it tougher for them to buy.
The federal government’s stress test shut the door on some buyers and forced others to lower expectations. It’s frustrating for buyers, but that’s how it is supposed to work, said Matthieu Arseneau, the deputy chief economist at National Bank of Canada.
“This stress test is protecting first-time buyers from taking too much leverage and now prices are adjusting,” said Arseneau. Young buyers just need to be patient as prices slowly come back to reality.
THIS STRESS TEST IS PROTECTING FIRST-TIME BUYERS.