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Prime Minister Justin Trudeau speaks during a Liberal Party of Canada fundraising event in Ottawa, on Nov. 21.Justin Tang/The Canadian Press

Finance Minister Chrystia Freeland’s fall economic statement acknowledges that the biggest worry keeping Canadians up at night – and, ahem, the biggest obstacle to Liberal re-election – is housing.

Introducing the mini budget, she said that Canada was always “a place where if you worked hard … there would be a home that you could afford. For generations, that promise was kept.”

But “for a generation that ranges from new high-school graduates to couples in their 30s making six-figure salaries, it is a promise that is under threat.”

That’s the politest way of describing a state of affairs where the average one-bedroom rents for more than $2,600 in Toronto and nearly $2,900 in Vancouver, and where someone in Toronto recently offered to sublet the vacant half of a queen-size bed – an exclusive manse of 8.3 square feet! call your interior decorator! – for just $900 a month.

Ms. Freeland’s mini budget contains a variety of new measures aimed at lowering housing costs, raising housing supply and getting new housing built – particularly rental housing. The biggest of these is $15-billion in loans for the Apartment Construction Loan Program. The funds are to spur building, with the money to be disbursed in – hang on, let me check the calendar here – ah yes: “starting in 2025-26.”

There’s also $1-billion for the Affordable Housing Fund, to support building more non-profit, co-op and public housing. That money also begins rolling out in 2025-26.

Then there’s the fall economic statement’s most apt housing affordability measure: removing the GST/HST from psychotherapy and counselling services, “to ensure that Canadians can receive the support they need.”

I admit that the government did not present this as a housing measure. I beg to differ.

There are a number of routes to tackling the problem of overpriced housing. We could, for example, drive down prices by making Canadians poorer, via a recession. Not ideal.

Or we could lower prices by building a lot more housing, which is what the federal government, most provincial governments and many big cities are increasingly trying to encourage and enable the private sector to do.

Canada Mortgage and Housing Corp. recently projected that Canada will have 18.2 million homes by 2030 – which the agency says will leave us 3.5 million homes short of what Canada needs. Building more is possible. But even under the most optimistic scenario that is going to take a long time – and no amount of government money or blarney, no matter how aggressively rolled out, can change that.

So, if you’re depressed because you can’t find a place that you can afford, the Trudeau government does not have a timely fix for the shelter issues at the root of your problems.

But if you need immediate help affording treatment for depression over your housing situation? Ottawa has your back.

Talking with the Taxman About Poetry is the title of an album from folk singer Billy Bragg. This is Talking to the Psychotherapist About Housing.

Beyond housing, the Liberals are every day attacked by Conservatives, conservatives and even erstwhile Liberal senators for an allegedly profligate fiscal policy. The allegations are not entirely untrue, but they’re also highly exaggerated.

The Trudeau government has increased program spending since the lean Harper era, and was right to. The goal of the previous administration was to make government smaller and less capable, bit by bit and year by year; the Liberals ran on a different approach. The result is the best parts of a record that Ms. Freeland touted on Tuesday, from the enriched Canada Pension Plan to the rollout of $10-a-day child care, to the unseen but vital poverty reduction of the Canada Child Benefit.

It is true, however, that the Liberals have time and again stepped a toe – but other than during the pandemic, never a whole leg – over their own fiscal guardrails. Ottawa should be aiming for a budget deficit of around 1 per cent; instead we’re marginally above that, at 1.5 per cent last year and 1.4 per cent this year. The feds should have a debt-to-GDP ratio that falls slightly in all non-recession and non-pandemic years; this year, it’s forecast to rise slightly.

Not perfect. Not exactly a crisis. Canada’s budget picture, which further improves when provincial finances are added in, is considerably better than that of the rest of the G7. Meanwhile, our peers, led by the Americans, are piling very large deficits on top of large debts. Washington is running annual budget shortfalls of four times Ottawa’s level, with no plan to stop.

That’s not sustainable, which is why some kind of a fiscal reckoning may some day land across the developed world. Canada will not be spared if it happens. But Canada will be among the least exposed.

This country has problems, but it’s important to put them in perspective. Responding in the House of Commons to Ms. Freeland’s speech, Conservative Leader Pierre Poilievre said that Canadians are living through “the worst economy since the Great Depression.” Come on. That’s as fact-based as a headline from the National Enquirer.

Unemployment has been edging up, but from rock-bottom lows not seen in decades. Inflation is falling back toward the 2-per-cent target, and if you take housing out of the equation it’s almost there. Plus, as Ms. Freeland noted, we have a million more jobs than before the pandemic (though she neglected to mention that, courtesy of Liberal policy, we also have more than two million more people).

But then there’s housing. The widespread unaffordability of shelter, for purchase or rent, is why, though we’re far from the Great Depression, a lot of Canadians are greatly depressed.

Ms. Freeland said the answer is that “our country needs more homes – and we need more of them, fast.” She is, of course, right. But she also knows that building a lot more homes “fast” is impossible.

Can we build millions of extra houses, condos and apartments in a decade? Maybe. In a year or three? That’s crazy talk.

There is, of course, another way. We could moderate housing demand, and thus moderate prices, by moderating population growth.

Here’s what Stéfane Marion, chief economist with National Bank of Canada, wrote on Tuesday. It’s worth quoting at length.

“Canada’s record housing supply imbalance, caused by an unprecedented increase in the working-age population (874,000 people over the past twelve months), means that there is currently only one housing start for every 4.2 people entering the working-age population. … Under these circumstances, people have no choice but to bid up the price of a dwindling inventory of rental units. The current divergence between rental inflation (8.2 per cent) and CPI inflation (3.1 per cent) is the highest in over 60 years. … There is no precedent for the peak in rental inflation to exceed the peak in headline inflation. Unless Ottawa revises its immigration quotas downward, we don’t expect much relief for the 37 per cent of Canadian households that rent.”

What are the odds of the Trudeau government taking that advice?

The odds that an hour with a shrink will find you an affordable home.

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