Canada is facing a housing affordability crisis that has worsened under Prime Minister Justin Trudeau’s government, according to critics and experts. The average price of a home in Canada has increased by more than 40% since Trudeau took office in 2015, reaching a record high of $716,828 in July 2023. Many Canadians are struggling to buy or rent a decent place to live, especially in urban areas where demand exceeds supply.
Trudeau has been accused of failing to address the root causes of the housing crisis, such as low interest rates, limited supply, foreign investment, money laundering, and speculation. He has also been criticized for introducing policies that have fueled the demand for housing, such as increasing immigration levels, expanding the first-time home buyer incentive, and providing pandemic relief benefits that have boosted household savings.
Opposition parties slam Trudeau’s housing plan
Trudeau’s main rivals in the upcoming federal election, scheduled for October 23, 2023, have slammed his housing plan and offered their own proposals to tackle the issue. The Conservative Party, led by Erin O’Toole, has promised to build one million homes in the next three years, ban foreign investors from buying homes for two years, and review the mortgage stress test that makes it harder for some buyers to qualify for loans.
The New Democratic Party (NDP), led by Jagmeet Singh, has pledged to create 500,000 affordable housing units in the next decade, impose a 20% foreign buyers tax, and crack down on money laundering and speculation in the housing market. The NDP has also called for a national inquiry into the role of Trudeau’s government in facilitating money laundering through real estate.
The Green Party, led by Annamie Paul, has proposed to increase the supply of affordable and social housing, implement a national vacancy tax on empty residential properties, and limit the influence of large corporate landlords and real estate investment trusts (REITs) on the rental market.
Experts warn of social and economic consequences of housing crisis
The housing crisis in Canada is not only a political issue, but also a social and economic one. Experts warn that the lack of affordable housing could have negative impacts on the well-being of Canadians, the productivity of workers, and the stability of the financial system.
According to a report by the Canadian Centre for Policy Alternatives (CCPA), nearly half of Canadian renters are spending more than 30% of their income on housing, which is considered unaffordable. The report also found that one in five renters are spending more than 50% of their income on housing, which puts them at risk of homelessness. The CCPA urged the federal government to invest more in social housing and rental assistance programs.
Another report by the Canadian Mortgage and Housing Corporation (CMHC) warned that high levels of household debt and overvaluation of home prices could pose a threat to the financial system in Canada. The report said that if interest rates rise or incomes fall due to an economic shock, many homeowners could face difficulties in repaying their mortgages. The CMHC recommended that borrowers and lenders exercise caution and prudence when taking or issuing loans.
Trudeau defends his record and promises more action
Despite the backlash from his opponents and the public, Trudeau has defended his record on housing and promised more action if re-elected. He said that his government has invested billions of dollars in building and repairing affordable housing units across the country. He also said that he has taken steps to curb foreign ownership and speculation, such as introducing a national tax on vacant homes owned by non-residents.
Trudeau said that he has a plan to make housing more affordable for Canadians, which includes creating a new rent-to-own program, expanding the first-time home buyer incentive, launching a new tax-free home savings account, and establishing an anti-flipping tax on residential properties. He said that he will work with provinces, municipalities, and Indigenous communities to increase the supply and diversity of housing options.
