A construction worker works from a lift in a new housing development in Ottawa on Oct. 14, 2022.Sean Kilpatrick/The Canadian Press
Pascal Chan is senior director, transportation, infrastructure and construction for the Canadian Chamber of Commerce.
Housing was a hot topic long before federal Conservative Leader Pierre Poilievre released his recent mini-documentary on the subject. Housing Hell has now been viewed by millions of Canadians, discussed by pundits, applauded as a master-class in political communications and derided as inaccurate and ignorant of how COVID-19 affected our economy.
But regardless of your position on Mr. Poilievre’s video, it nonetheless continues down the same problematic path such discussions always take. Specifically, it leaves out the people who build the vast majority of houses for Canadians: the private sector.
The private sector builds all types, in all places, for all Canadians. This means they can accurately relay the range of cost-increasing barriers to creating more housing that have been put in place by governments at all levels and the changes needed to address them. It would follow, then, that consulting the private sector is essential.
But consider recent proposed solutions, such as those in November’s fall economic statement, which included new spending on housing, and last month’s announcement of a prefab home catalogue to address the shortage of homes. They all constitute grand visions that lack a commitment to work with the private sector to ensure sufficient construction.
We all know that housing has become a fundamental weakness in our economy, as pointed out by former Canada Mortgage and Housing Corporation (CMHC) chief executive officer Romy Bowers in a September conversation with the C.D. Howe Institute.
“We cannot succeed economically in the 21st century without Canadians having the housing that they need, and that’s really the bottom line,” Ms. Bowers said.
Canada’s global competitiveness and economic prosperity is intricately linked with our ability to attract investment. The Canadian Chamber of Commerce’s Business Data Lab has recently identified a correlation between housing affordability and business optimism in its most recent Canadian Survey on Business Conditions. After all, for companies to create jobs here, we need to show we can draw the best talent and give them somewhere affordable to live.
In a recent open letter, CMHC deputy chief economist Aled ab Iorwerth underlined the need to better consult the people – and businesses – who create housing.
“The scale of the challenge is so large that the private sector must be involved – governments cannot do this on their own,” he said.
If we agree that housing in Canada has reached a crisis point, then we need to shift toward true partnerships among all three levels of government, non-profit housing providers and of course, the private sector. This collaboration is crucial as we explore new financing models and execute on innovative ways to scale and build.
We also need to see structural change.
It’s not that the government hasn’t made some positive steps. The recent merging of the federal housing and infrastructure portfolios is one step in the right direction, as is its minister’s strategy of working directly with municipalities to ensure investments through the Housing Accelerator Fund tackle long-standing municipal barriers.
Changes to Express Entry, prioritizing candidates that add more workers to Canada’s home building sector, will also help address the industry’s labour shortage. The removal of goods and service tax for purpose-built rentals will incentivize more such housing.
But none of the government’s action, additional funding or creative solutions will get us far if they aren’t conceptualized in collaboration with the people who build the homes policy makers are talking about.
It’s the private sector that can help to address the outstanding issues that are holding back housing development. They are calling for an expansion of the removal of GST on purpose-built rentals. The removal should not be limited to completed buildings but expanded to projects that are under way but no longer viable due to interest rate increases, a shortage of skilled labour or lack of supply for raw materials.
The private sector wants to see the changes to immigration plans complemented by incentives to develop the skilled labour we need domestically. They are also proposing tax changes that would replicate the U.S. rules exempting capital gains on the sale of rental properties so proceeds can be reinvested into new rental housing. Too bad they seem to be left out of the conversation.