How the Parties Plan to Fix the Housing Crisis

This election is being fought under the looming shadow of threatened tariffs and U.S. aggression towards Canada.

But it didn’t take long for political leaders to turn to a particularly Canadian problem that has dominated elections at the federal, provincial and municipal levels for years: the soaring cost of housing.

In the first two weeks of the campaign, the leaders have all introduced new pledges.

Mark Carney, the Liberal leader and Canada’s current prime minister, promised a major new program that would develop publicly owned land into housing.

Conservative Leader Pierre Poilievre promised to increase the GST exemption for new home purchases. It currently applies to homes under $450,000. Poilievre has promised to raise it to $1.3 million. (Carney had previously promised to raise the GST exemption to include homes worth up to $1 million.)

The NDP announced a $3.3-million retrofit program to make housing more energy efficient and is promising low-interest mortgages for first-time homebuyers, backed by Canada’s federal housing agency, the Canada Mortgage and Housing Corp., or CMHC.

Let’s break down these promises and look at how they fit into existing housing plans and whether they’ll actually make housing more affordable.

Liberals promise new agency to build housing on public land

Carney tied his promise of a new government agency called Build Canada Homes to the threat of U.S. tariffs. (While Canada has been exempted from most of the tariffs threatened by U.S. President Donald Trump, Canadian automakers will still face 25 per cent tariffs and Trump’s chaotic approach is creating ongoing economic uncertainty.)

Carney is painting Build Canada Homes as an ambitious government infrastructure project, something that will boost jobs while providing badly needed affordable housing. The idea is that the federal government will act as a housing developer, using prefab construction methods to quickly build homes on publicly owned land.

Carolyn Whitzman, a housing researcher and adjunct professor at the University of Toronto, said the idea is new. “As the platform says, the federal government hasn’t gotten involved in building housing since the 1940s.” But it’s not that different from some models that are already in place: the Canada Lands Co. is a federal Crown corporation that develops real estate and is currently developing the Jericho Lands in Vancouver with the Musqueam, Squamish and Tsleil-Waututh First Nations. B.C.’s Community Land Trust is another similar model.

Tom Davidoff, a professor of economics at the University of British Columbia who specializes in real estate, said he prefers the idea of offering rent subsidies so the private sector will build more social housing.

But building housing does make sense as an infrastructure stimulus during a recession, he said.

“When you have a recession, it makes sense to borrow money and do stimulus,” he said. “To the extent that there’s a big public spend on hiring people to build stuff, housing would certainly be high on the list.”

When the Liberals were elected in 2015, they revived the role of the federal government in housing with their National Housing Strategy. CMHC was also revamped to focus once again on funding and building rental and social housing, after decades of focusing solely on insuring mortgages.

While housing experts praised the move, they’ve said the Liberals had consistently failed to devote enough money and resources to the National Housing Strategy — and especially to create housing that is actually affordable to the people in greatest need.

Whitzman said she’d like to see the federal government work on identifying how much housing needs to be built for different income levels. As it stands, many rental projects built with government help — and advertised as being affordable — are still out of reach for many renters with low or moderate incomes.

The federal NDP is touting help for first-time homebuyers as an alternative to new rental apartments built with support from CMHC — projects that were supposed to help ease the tight rental markets in many cities. The NDP is describing this as CMHC “supporting billion-dollar rental projects” that benefit real estate developers “while first-time buyers are left behind.”

The NDP has also promised to use public land to build new housing, but unlike the Liberals, it has promised that those units would be rent-controlled. (The Liberals have only promised “more homes that Canadians can afford.”)

The NDP has also promised to create federal incentives for municipalities that take action to prevent renovictions, the practice of evicting tenants in order to renovate a unit and rent the apartment to new tenants at a much higher rate.

NDP Leader Jagmeet Singh has repeatedly emphasized Carney’s own role in the housing market: Carney was chair of Brookfield Asset Management, a firm that has bought up rental properties in both the United States and Canada.

Liberals and Conservatives share some housing policies

While the Liberals are promising to expand the role of the federal government in housing, the Conservatives are promising to boost the private real estate market and would cut $8 billion from current federal housing spending.

But the Liberals and Conservatives share more than one housing promise. Both are promising to encourage rental housing construction through tax incentives — reminiscent of a 1970s-era program called MURB that is credited with boosting the construction of much of the affordable rental stock that still remains in our cities today.

Part of the reason we’re in such a housing crunch today is that when the MURB program ended, and condominiums were legalized, developers largely abandoned rental construction for condos, leading to a huge gap in rental supply.

The Conservatives are promising to end the existing Housing Accelerator Fund and use the money to give developers a break on the GST of “any new homes with rental prices below market value.”

The Liberals say they’ll reintroduce “a tax incentive which, when originally introduced in the 1970s, spurred tens of thousands of rental housing across the country.”

For decades, existing homeowners have had a lot of political power to block denser housing in their neighbourhoods, and some municipalities have used zoning rules to prevent new housing from being built. Another area where the Conservatives and Liberals have similar policy proposals is their focus on encouraging (or threatening) municipalities to make it easier to build higher-density housing.

The Liberals prefer a “carrot” approach, saying they’ll cut “municipal development charges in half for multi-unit residential housing” while giving funding to municipalities to replace the lost revenue.

They’re also promising to harmonize regulations across provinces and territories to cut red tape for homebuilders.

Whitzman said working on building regulations across Canada, such as allowing single-stair apartment buildings, would be a big step forward to make it easier to build multi-family housing.

“It shouldn't be 725 municipalities that have over 10,000 population doing it — it shouldn't even be 13 provinces and territories,” Whitzman said. “It should be the federal government that goes, ‘OK, these are the changes we need to make to the building code.’”

The Conservatives are also tackling the zoning problem, but they’re using more aggressive language that casts blame on government bureaucrats and civic politicians for being “gatekeepers.” The party is promising a “stick” approach, threatening to withhold funding for transit and other infrastructure cities need to grow unless they loosen zoning and other regulations related to housing development.

For years, federal parties focused almost solely on how to help homeowners, and Whitzman said it’s heartening to see multiple parties finally take a more holistic view of Canada’s housing system.

“In my most optimistic moments, I think: ‘Finland decided it was going to end homelessness in 1989, and whoever has been in power in Finland has kept that [promise]. France decided that every municipality was going to have 20 per cent non-market housing... and France has fluctuated between quite left-wing and quite right-wing governments... and it's kept that commitment,’” Whitzman said, expressing hope that federal parties are starting to adopt consistent policies around housing.

But Whitzman pointed out both parties are still offering tax cuts that will benefit the wealthiest homeowners — not the Canadians who are homeless or at risk of being evicted. She said she doesn’t yet see enough information about how the parties will help house homeless people or prevent evictions.

“I look forward to hearing more details about how the needs of those who are most in need are going to be met through that combination of government land and direct development financing,” she said.