More supply needed to ease housing price crunch, but always more to do, Freeland says

OTTAWA — Finance Minister Chrystia Freeland says the country needs a boost in the supply of housing to help make prices more affordable, but suggests there may be other steps governments can take.

Speaking at a virtual event on Thursday, Freeland said the federal government wants to work with lower levels of government on the issue, saying there is more that cities, provinces and Ottawa can do together.

Freeland didn’t detail what other options could be during her hour-long talk with the Greater Vancouver Board of Trade.

Monday’s federal budget promised $2.4 billion over five years, beginning with nearly $1.8 billion this fiscal year, for affordable housing and pledged to tax foreigners who own vacant homes in Canada.

Freeland said the government would take into account concerns from places like Whistler, where a vacancy tax may be problematic for Americans who own vacation properties in the area. While housing shouldn’t be used by foreign buyers to store wealth offshore, Freeland said that affordability concerns are largely an issue of supply.

“Something that we want to work with provinces, municipalities on is really finding more and more creative ways to increase housing supply in Canada,” Freeland said during the event, one of several designed to promote budget measures.

“Having said that,” she added, “I think it’s also important to be sure that there are measures in place to discourage speculation, and in particular measures in place to ensure that houses in Canada don’t become vehicles for storing offshore wealth. That’s not their purpose. Houses in Canada are for Canadian families to live in.”

The federal government has faced increasing pressure to intervene in Canada’s hot housing market where the average sale price in March reached a record $717,000, a year-overyear increase of 32 per cent, according to the Canadian Real Estate Association.

High household debt was a key concern prior to the pandemic, and a research note this month from staff at the Bank of Canada pointed out that although mortgage rates are at all-time lows, highly indebted households remain financially vulnerable.