Canada’s housing crisis: New financing not a ‘long-term’ solution, researcher warns

As a crippling housing shortage, record prices and skyrocketing rents drive an exodus from Canada’s largest cities, the federal government announced nearly $100 million in new funding to address rental affordability.

One researcher warns, however, that while additional support is “absolutely necessary,” it is not a long-term solution to a growing problem.

“The huge gap between affordable rents and what people earn… is not going to get much better with $99 million,” Carolyn Whitzman, a housing and social policy researcher, told CTV news channel on Tuesday. “Right now it’s not really part of the long-term solution.”

Announcing the new funding as part of Canada’s economic plan, Deputy Prime Minister and Finance Minister Chrystia Freeland characterized the housing crisis as “the central challenge” facing the country.

According to a government news release, the latest tranche of funding will “top off” the Canada Housing Benefit and help support low-income renters by “delivering rental support payments directly.”

However, Whitzman said it remains to be seen what this funding will actually be used for, adding that it is a “very small proportion of what is needed” to address critical and growing supply shortages.

Affordable supply urgently needed

According to Whitzman, there are steps Ottawa could take right now to start addressing the housing supply crisis: things like “expanding non-market housing” or building on the “most successful” part of the National Housing Strategy. federal government. Rapid housing initiatives.

However, without immediate action, Whitzman warned, Canada’s key cities could see an exodus similar to that of Toronto, where there has been an “absolute abandonment” of the city by families with children under five.

“That drive-to-qualify phenomenon has been noticed in recent years,” Whitzman told CTV news anchor Todd van der Heyden. “Until we build a more affordable offering in hot markets… we will continue to see the same trends.

“$99 million in housing benefits won’t significantly change that.”

What about foreign buyers?

The federal government also announced a two-year extension to the ban on foreigners buying homes in Canada.

“For years, foreign money has been coming into Canada to purchase residential real estate,” Freeland said. “By extending the ban to foreign buyers we will ensure that houses are used as homes… and not as a speculative asset class.”

Whitzman criticized that move, however, saying it is a “totally trivial” action to “divert attention from real problems.”

The ban came into effect in 2023 and prevented foreign commercial companies and non-Canadian citizens from purchasing residential properties.

“A lot of other things are being brought up to distract us from the real issues,” Whitzman said. “The real problems with our housing system are in terms of zoning, in terms of infrastructure funding, in terms of rent protection.”

“People are desperate to have a house”

The problems in Canada’s housing market and the pressure placed on the average resident are also causing undue financial stress on Canadian families.

“People are desperate for a home,” Whitzman said, “close to where they work, close to where there are daycares, close to where there are schools.”

The severe housing crisis is putting cost pressures on Canadians at all income levels and across the country, he said.

Whitzman warned that it is one of the main reasons behind the growing financial uncertainty and spiraling household debt faced by many families, both those who rent and those with a mortgage.

“I would be a little worried about people becoming homeless,” Whitzman said. “If property prices fell, I think those people would be very vulnerable.”

With files from Natasha O’Neill and Daniel Otis of CTV News

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